EXHIBIT 2.5
ASSET PURCHASE AGREEMENT
DATED OCTOBER 1, 2004
AMONG
COMPUWARE CORPORATION,
DEVSTREAM CORPORATION
XXXXX XXXXXXXX, XXXXXX XXXXXXXX
AND
XXXXXX XXXXX
TABLE OF CONTENTS
1. DEFINITIONS.....................................................................................1
2. TRANSFER OF ASSETS; ASSUMED LIABILITIES; EXCLUDED LIABILITIES...................................5
2.1 Transfer of Assets..............................................................................5
2.2 Excluded Assets.................................................................................7
2.3 Assumption of Liabilities.......................................................................7
2.4 Excluded Liabilities............................................................................7
3. CLOSING.........................................................................................8
3.1 Closing Date....................................................................................8
3.2 Purchase Price..................................................................................8
3.3 Closing Consideration...........................................................................8
3.4 Indemnity Escrow Amount.........................................................................8
3.5 Royalty Amount..................................................................................8
3.6 Purchase Price Allocation......................................................................10
3.7 Actions to be Taken and Documents to be Delivered at the Closing...............................10
3.8 [Intentionally Omitted]........................................................................14
3.9 Third Party Consents...........................................................................14
3.10 Further Assurances.............................................................................14
4. REPRESENTATIONS AND WARRANTIES OF DEVSTREAM AND THE KEY EMPLOYEE...............................14
4.1 Organization; Power and Authority; Authorization; Due Execution; No Conflicts..................14
4.2 Title..........................................................................................15
4.3 Properties and Improvements....................................................................15
4.4 Other Assets of DevStream......................................................................15
4.5 Claims; Litigation; Compliance with Laws; Approvals............................................16
4.6 Agreements; Contracts; Warranties..............................................................17
4.7 Proprietary Rights.............................................................................18
4.8 Employees; Employee Benefits...................................................................20
4.9 Insurance......................................................................................22
4.10 Financial Statements...........................................................................22
4.11 Undisclosed Liabilities........................................................................23
4.12 Taxes..........................................................................................23
4.13 Absence of Changes or Events...................................................................25
4.14 [Intentionally Omitted]........................................................................27
4.15 Subsidiaries...................................................................................27
4.16 Capitalization.................................................................................27
4.17 [Intentionally Omitted]........................................................................28
4.18 Guarantees.....................................................................................28
4.19 Related Parties................................................................................28
4.20 Accounts Receivable............................................................................29
4.21 Brokers........................................................................................29
4.22 Disclosure.....................................................................................29
5. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF KEY EMPLOYEE......................................29
6. COMPUWARE'S REPRESENTATIONS AND WARRANTIES.....................................................30
6.1 Organization; Power and Authority..............................................................30
6.2 Authorization; Due Execution; No Conflicts.....................................................30
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6.3 Brokers........................................................................................31
7. POST-CLOSING COVENANTS.........................................................................31
7.1 Non-Disclosure Agreement.......................................................................31
7.2 Post-Closing Use of Intellectual Property......................................................31
7.3 Work in Progress...............................................................................31
7.5 Employee Matters...............................................................................32
7.6 Maintenance of Books and Records...............................................................32
7.7 Covenant Not to Compete........................................................................32
7.8 Dissenter's Rights.............................................................................33
8. CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS TO CLOSE......................................33
8.1 Conditions Precedent of Compuware..............................................................33
8.2 Conditions Precedent of DevStream..............................................................33
9. DEFAULT; TERMINATION OF AGREEMENT..............................................................34
10. INDEMNIFICATION................................................................................34
10.1 Indemnification by the DevStream and the Key Employee..........................................34
10.2 Indemnification by Compuware...................................................................35
10.3 Additional Indemnification by DevStream........................................................35
10.4 Claims for Indemnification.....................................................................35
10.5 Third-Party Claims.............................................................................36
10.6 Limits on Indemnification......................................................................37
10.7 Tax Indemnification Procedure..................................................................39
11. MISCELLANEOUS..................................................................................41
11.1 Notices........................................................................................41
11.2 No Waiver......................................................................................42
11.3 Successors and Assigns.........................................................................42
11.4 Severability...................................................................................42
11.5 Entire Agreement; Amendment....................................................................43
11.6 Cost of Litigation.............................................................................43
11.7 Interpretation.................................................................................43
11.8 Counterparts; Facsimile Signatures.............................................................44
11.9 Applicable Law; Choice of Forum................................................................44
11.10 Expenses.......................................................................................45
11.11 Press Releases.................................................................................45
11.12 Further Assurances.............................................................................45
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Schedules and Exhibits
Schedules
Schedule 2.1 * - Transfers Requiring Consents
Schedule 3.3 * - Closing Consideration
Schedule 3.4 * - Indemnity Escrow Amount
Schedule 3.6 * - Purchase Price Allocation for DevStream Corporation
Schedule 4.1 * - No Conflicts; Jurisdictions Where Qualified
Schedule 4.2 * - Liens
Schedule 4.4 * - Leased Assets
Schedule 4.5 * - Claims; Litigation; Compliance with Laws; Approvals
Schedule 4.6 * - Agreements; Contracts; Warranties
Schedule 4.7 * - Proprietary Rights
Schedule 4.8 * - Employees; Employee Benefits
Schedule 4.9 * - Insurance
Schedule 4.11 * - Undisclosed Liabilities
Schedule 4.12 * - Taxes
Schedule 4.12(e) * - Waivers of Statute of Limitations
Schedule 4.13 * - Absence of Changes or Events
Schedule 4.13(o) * Material Price Discounts
Schedule 4.15 * - Subsidiaries
Schedule 4.16 * Capitalization
Schedule 4.18 * - Guarantees
Schedule 4.19 * - Related Parties
Schedule 4.20 * - Accounts Receivable
Schedule 4.21 * - Brokers (DevStream)
Schedule 5 * - Additional Representations and Warranties of the Key Employee
Exhibits
Exhibit A * - Indemnity Escrow Agreement
Exhibit B * - Officer's Certificate-- Compuware
Exhibit C * - Officer's Certificates-- DevStream
Exhibit D * - Xxxx of Sale
Exhibit E * - Assignment and Assumption Agreement
Exhibit F * Employment Agreement
Exhibit G * Trademark Assignment
Exhibit H * Copyright Assignment
Exhibit I * Patent Assignment
* The Company will furnish supplementally a copy of any omitted schedule to the
Commission upon request.
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ASSET PURCHASE AGREEMENT
This Agreement is made on October 1, 2004, among Compuware Corporation,
a Michigan corporation ("Compuware"), DevStream Corporation, a Colorado
corporation ("DevStream"), Xxxxx Xxxxxxxx, an individual ("Key Employee"),
Xxxxxx Xxxxxxxx, an individual ("Spouse"), and Xxxxxx Xxxxx ("Cross"). Certain
capitalized terms used in this Agreement are either defined or referenced in
Section 1 below.
RECITALS
A. DevStream is engaged in the business of developing and marketing
software products.
B. Key Employee is engaged in the business of developing and marketing
software products.
C. Cross, along with Key Employee, are the sole Shareholders of
DevStream.
D. Spouse is the wife of Key Employee.
E. Subject to the terms and conditions hereinafter set forth, DevStream
desires to sell to Compuware, and Compuware desires to purchase from DevStream,
substantially all assets and rights of DevStream except those assets and rights
specifically excluded by DevStream herein.
F. The Board of Directors of DevStream has determined that the
transactions contemplated herein are in the best interests of its shareholders,
and has approved the transactions contemplated herein, upon the terms and
subject to the conditions set forth in this Agreement.
G. Subject to the terms and conditions hereinafter set forth, Key
Employee desires to sell to Compuware and Compuware desires to purchase from Key
Employee, certain assets and rights of Key Employee.
H. Compuware, DevStream, Spouse, Cross and the Key Employee desire to
make certain representations, warranties, covenants and agreements in connection
with the transactions contemplated herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
of the parties hereto, the sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions. For all purposes hereunder and as used in this
Agreement the following terms shall have the meanings set forth below:
"Actually Realized" is defined in Section 10.7(h) of this
Agreement.
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"Affiliated Group" means any affiliated group within the
meaning of Code ss.1504(a) or any similar group defined under a similar
provision of state, local or foreign law.
"Agreement" means this Asset Purchase Agreement.
"Assets" is defined in Section 2.1 of this Agreement.
"Assumed Liabilities" is defined in Section 2.3 of this
Agreement.
"Benefit Plans" is defined in Section 4.8(d) of this
Agreement.
"Claim Notice" is defined in Section 10.4(c) of this
Agreement.
"Claimant" is defined in Section 10.4(a) of this Agreement.
"Closing" is defined in Section 3.1 of this Agreement.
"Closing Date" is the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Compuware" is defined in the introductory paragraph of this
Agreement.
"Contracts" is defined in Section 4.6 of this Agreement.
"Customers" is defined in Section 7.3 of this Agreement.
"DevStream" is defined in the introductory paragraph of this
Agreement and, unless the context requires otherwise, for the purposes of
Sections 4 and 7 shall mean DevStream and its subsidiaries.
"DevStream Products" means all software products commonly
known as "JView" or "MemoryScope" and any enhancements, bug fixes, error
corrections and improvements thereto, and any derivative products therefrom,
whether owned by DevStream or Key Employee.
"DevStream Shares" is a collective reference to the Voting
Common Stock and the Non-Voting Common Stock of DevStream.
"Employment Agreement" is defined in Section 3.7(b)(14) of
this Agreement and attached hereto as Exhibit F.
"ERISA" is defined in Section 4.8(d) of this Agreement.
"Excluded Liabilities" is defined in Section 2.4 of this
Agreement.
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"Fees and Costs" means reasonable legal (including attorneys'
and legal assistants') fees, disbursements and costs; reasonable fees,
disbursements and costs of third party consultants and experts; court costs; and
similar items.
"Final Determination" with respect to a Tax Proceeding means
(a) a final decision with respect to the proposed adjustment by an IRS agent or
officer, as evidenced by the issuance of a 90-day letter, IRS Form 870-AD or
like notice, unless judicial proceedings are timely initiated, (b) a final
decision with respect to the proposed adjustment by the United States Tax Court,
Court of Federal Claims or the appropriate Federal District Court, unless such
decision is timely appealed, (c) a final decision of a United States Court of
Appeals, unless such decision is timely appealed, or (d) a final decision by the
United States Supreme Court.
"Financial Statements" is defined in Section 4.10 of this
Agreement.
"GAAP" means United States generally accepted accounting
principles, consistently applied.
"Governmental Entity" is defined in Section 4.1(c) of this
Agreement.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnifying Party" is defined in Section 10.4(a) of this
Agreement.
"Indemnity Escrow Agent" means X.X. Xxxxxx Trust, National
Association, Institutional Trust Services.
"Indemnity Escrow Agreement" is defined in Section 3.4 of this
Agreement.
"Indemnity Escrow Amount" is defined in Section 3.4 of this
Agreement.
"Indemnity Escrow Fund" is the aggregate amount withheld from
the Purchase Price and delivered to the Indemnity Escrow Agent in accordance
with Section 3.6(a)(5) of this Agreement.
"IRS" means the Internal Revenue Service and any successor
federal agency.
"Key Employee" is defined in the introductory paragraph to
this Agreement.
"Laws" means all applicable federal, state or local laws,
zoning and other ordinances, rules, regulations, building and other codes, and
court or administrative orders, judgments or decrees.
"Liability" or "Liabilities" means any commitments,
liabilities, obligations, indebtedness, accounts payable and accrued expenses
(whether any of the foregoing are known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated and/or
due or to become due), including any Liability or obligation for Taxes.
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"Liens" is defined in Section 4.2 of this Agreement.
"Loss" or "Losses" mean and include any damage, liability,
loss, claim, cost, debt, expense, obligation, Tax, assessment, lawsuit or
deficiency of any kind or nature, fixed, actual, accrued or contingent,
liquidated or unliquidated, including, without limitation Fees and Costs
incident to proceedings or investigations or the defense of any of the
foregoing, whether or not litigation has commenced.
"Non-Disclosure Agreement" shall mean that certain
Non-Disclosure, Proprietary Information and Invention Assignment Agreement by
and among Xxxxxx Hag, DevStream and Softedge Systems, LLC, dated May 21, 2004.
"Non-Voting Common Stock" is defined in Section 4.16(a) of
this Agreement.
"Other Losses" is defined in Section 10.6(f) of this
Agreement.
"Permitted Lien" means (i) liens for Taxes not yet due and
payable or which are being contested in good faith by appropriate proceedings
and fully reserved against, (ii) encumbrances in the nature of zoning
restrictions, easements, rights or restrictions of record on the use of real
property if the same do not materially impair the use of such property in
DevStream's business as currently conducted or proposed to be conducted, (iii)
statutory or common law liens to secure landlords, lessors or renters under
leases or rental agreements confined to the premises rented, (iv) deposits or
pledges made in connection with, or to secure payment of, worker's compensation,
unemployment insurance, old age pension programs mandated under applicable Law
or other social security, (v) statutory or common law liens in favor of
carriers, warehousemen, mechanics and materialmen, statutory or common law liens
to secure claims for labor, materials or supplies and other like liens, and (vi)
restrictions on transfer of securities imposed by applicable state and federal
securities laws.
"Person" means an individual, firm, corporation, limited
liability company, syndicate, partnership, trust, association, joint venture,
unincorporated organization, Governmental Entity or other legal or business
entity.
"Proprietary Rights" are all know-how, marks, symbols,
trademarks, trade names, service marks, copyrights, patents, trade secrets,
licenses, source codes, object codes, inventions, logos and other intellectual
property owned or used by DevStream and/or Key Employee.
"Purchase Price" is defined in Section 3.2 of this Agreement.
"Recipient" is defined in Section 7.3 of this Agreement.
"Related Agreements" are all written agreements, other than
this Agreement, which are executed and delivered by Compuware, DevStream,
Spouse, Cross or Key Employee pursuant to this Agreement in connection with the
transactions contemplated by this Agreement.
"Representative" means Key Employee.
"Ruling" means a formal ruling, a determination letter, a
change in method of accounting letter or any similar announcement issued by the
IRS.
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"Sellers" shall be a collective reference to DevStream and Key
Employee.
"Shareholder" or "Shareholders" shall mean those persons that
are holders of capital stock of DevStream immediately prior to closing,
including without limitation Xxxxx Xxxxxxxx and Xxxxxx Xxxxx.
"Tax Authority" includes the IRS and any state, local, foreign
or other governmental authority (domestic or foreign) responsible for the
administration of any Taxes.
Tax Benefit" is defined in Section 10.7(h) of this Agreement.
"Tax Proceeding" is defined in Section 10.7(a) below.
"Tax Return" or "Tax Returns" means any return, declaration,
report, claim for refund, or information return or statement (including any
schedule or attachment thereto) and any amendment thereof required to be filed
with, or where none is required to be filed with a Tax Authority, the statement
or other document issued by, a Tax Authority in connection with any Tax.
"Taxes" means all taxes, however denominated, including any
interest, penalties or other additions to tax that may become payable in respect
thereof, imposed by any federal, territorial, state, local or foreign government
or any agency or political subdivision of any such government, which taxes will
include, without limiting the generality of the foregoing, all income or profits
taxes (including, but not limited to, federal income taxes and state income
taxes),single business taxes, real property gains taxes, payroll and employee
withholding taxes, unemployment insurance taxes, social security taxes, sales
and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts
taxes, business license taxes, occupation taxes, real and personal property
taxes, stamp taxes, environmental taxes, transfer taxes, workers' compensation,
Pension Benefit Guaranty Corporation premiums and other governmental charges,
and other obligations of the same or of a similar nature to any of the
foregoing, which DevStream or the Subsidiary is required to pay, withhold or
collect, whether disputed or not.
"Third-Party Claim" is defined in Section 10.5(a) of this
Agreement.
"Treasury Regulation" or "Treasury Regulations" means any
proposed, final or temporary regulation promulgated under the Code, including
any amendments or any substitute or successor provisions thereto.
"Voting Common Stock" is defined in Section 4.16(a) of this
Agreement.
2. Transfer of Assets; Assumed Liabilities; Excluded Liabilities
2.1 Transfer of Assets. At the Closing, Sellers will sell,
convey, transfer and assign to Compuware, free and clear of all Liens,
and Compuware will purchase, all rights, title and interest in and to
the business, assets (tangible and intangible) and rights of DevStream
(collectively referred to herein as the "Assets"), including Sellers'
respective rights, title and interest in and to the following:
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(a) All Contracts listed on Schedule 4.6 of this
Agreement;
(b) All owned Proprietary Rights in the DevStream
Products, including all patents, trademarks
(including but not limited to the names
"DevStream," "MemoryScope" and "JView"),
software, trade names, service marks, logos,
copyrights, trade secrets, technical
information and other know-how, and the
goodwill associated therewith;
(c) All telephone numbers used by DevStream,
except cellular telephone numbers used by
the Key Employee; and
(d) All customer lists and all purchase orders,
license agreements, maintenance agreements,
contracts, commitments and proposals for the
provision of services or software to
customers;
(e) All notes and accounts receivable;
(f) All prepaid and similar items, including,
without limitation, all prepaid expenses,
advance payments, security deposits,
employee travel and expense advances and
other prepaid items, all to the extent
assignable to Compuware; excluding pre-paid
maintenance under the Contracts;
(g) All business books and records, including,
without limitation, all financial, Tax,
operating, inventory, personnel, payroll and
customer records and all sales and
promotional literature, correspondence and
files; provided, however, that in the event
that any such books or records are subject
to any legal privilege, the parties agree to
cooperate to protect such privilege to the
extent practicable; and
(h) All owned personal property used by Sellers
in development and maintenance of the
DevStream Products, including all computer
equipment and systems, software, materials,
furniture, office equipment, including
without limitation that computer equipment.
Notwithstanding the above, any items listed in Schedule 2.1 to this
Agreement as requiring a consent for transfer or assignment and as to which
consent for such transfer or assignment has not been obtained by DevStream prior
to the Closing shall be treated in accordance with Section 3.9 and shall not be
deemed to be transferred or assigned to Compuware as part of the Assets.
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2.2 Excluded Assets. Notwithstanding the foregoing, the
following assets of Sellers shall not be sold, conveyed, transferred or
assigned to Compuware and shall not be included in the definition of
the Assets:
(a) Cash, cash equivalents and short-term
marketable securities, except for such cash
and cash equivalents related to performance
under the Contracts;
(b) All owned real property, including all land,
easements, buildings, improvements, rights
of way, fixtures and appurtenances thereto
and all such items under construction;
(c) All supplier lists and all orders, contracts
and commitments for the purchase of goods or
services, including all such items relating
to the purchase of capital assets, products
and supplies;
(d) All rights to any Tax refund, whether or not
applied for prior to the Closing Date.
2.3 Assumption of Liabilities. At the Closing, Compuware will
assume all Liabilities relating to Sellers' obligations to perform
under the Contracts from and after the Closing Date, other than
Liabilities resulting from Sellers' breach or default with respect to
any such Contracts (collectively, the "Assumed Liabilities").
2.4 Excluded Liabilities. Except as expressly set forth in
Section 2.3 above, Compuware is not assuming or agreeing to pay or
perform any Liabilities or contracts of Sellers, and all Liabilities
and contracts of Sellers not expressly set forth in Section 2.3 above
as being assumed by Compuware are referred to as the "Excluded
Liabilities." Without limiting the generality of the foregoing and
except as expressly set forth in Section 2.3 above, the following are
part of and constitute Excluded Liabilities:
(a) Any Liability of Sellers for Taxes, whether or
not reflected or reserved for in the Financial Statements of
DevStream;
(b) all brokerage commissions, finder's fees or
similar fees or commissions, any accounting, legal and other
professional fees, payable to any broker, finder, agent,
financial advisor accounts, attorneys, or other
representatives, acting or having acted on behalf of or
employed by either Sellers, Spouse, or Cross in connection
with this Agreement or any of the transactions contemplated
hereby;
(c) Any Liability of DevStream at the Closing Date
relating to severance pay of any employees; and
(d) Any Liability arising from, including any
Liability to any current or past employees of DevStream with
respect thereto or relating to any employee pension benefit
plan.
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All of the Excluded Liabilities will be the sole
responsibility and obligation of DevStream or Key Employee, as
appropriate. DevStream or Key Employee, as appropriate, will pay,
perform and discharge all of the Excluded Liabilities when due in
accordance with their respective terms and conditions.
3. Closing.
3.1 Closing Date. The closing of the transactions contemplated
by this Agreement (the "Closing") will take place at the offices of
Compuware Corporation at 10:00 a.m. on the date of this Agreement or at
such other mutually agreeable time and place; provided, however, that
at the mutual election of the parties hereto, the Closing may take
place through an exchange of documents via facsimile and overnight
delivery.
3.2 Purchase Price. Subject to the terms and conditions of
this Agreement, and except as provided below, the aggregate purchase
price (the "Purchase Price") payable for the Assets will be the sum of
the Closing Consideration, the Indemnity Escrow Amount, and the Royalty
Amount. The Purchase Price will be subject to adjustment under Section
3.4.
3.3 Closing Consideration. The amount set forth on Schedule
3.3 (the "Closing Consideration") will be delivered at the Closing to
the Sellers. Compuware will pay the Closing Consideration, by wire
transfer of immediately available funds, to an account or accounts as
designated by the Sellers prior to the Closing.
3.4 Indemnity Escrow Amount. The amount set forth on Schedule
3.4 (the "Indemnity Escrow Amount") will be delivered at the Closing to
the Indemnity Escrow Agent by Compuware, to be held in escrow for a
period of twelve (12) months from the Closing Date, at which time the
balance thereof remaining shall be disbursed to the Key Employee,
pursuant to the terms of an indemnity escrow agreement, the form of
which is attached to this Agreement as Exhibit A (the "Indemnity Escrow
Agreement").
3.5 Royalty Amount.
(a) For the twenty-seven (27) month period commencing
on the first day of the first full calendar month following
the Closing Date (the "Royalty Period") Compuware shall remit
to Key Employee twenty percent (20%) of the Software License
Billing (the "Per Sale Royalty Amount") of the DevStream
Products closed during the Royalty Period and approved as
Software License Billing transactions in accordance with
Compuware's then current revenue recognition policy
consistently applied. "Software License Billing" shall mean
the license and first year maintenance (or subscription)
portion of a transaction accepted as xxxxxxxx for commission
purposes as recorded in Compuware general ledger. Any software
license billing transaction that is subsequently reversed,
because new information becomes available that causes
Compuware to determine it no longer meets revenue recognition
criteria, is deducted from the Software License Xxxxxxxx. At
the end of the first fifteen (15) months of the Royalty
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Period, Compuware shall aggregate the individual Per Sale
Royalty Amounts including any applicable reversals, such
period and remit the same to Key Employee without deduction or
offset within 60 days thereafter. With regard to the final
twelve (12) month portion of the Royalty Period, Compuware
shall aggregate the Per Sale Royalty Amounts including any
applicable reversals, within such period, and remit the same
to Key Employee without deduction or offset within sixty (60)
days thereafter. In the event a Software License Billing in
the initial 15 months of the Royalty Period for which Per Sale
Royalty Amounts have been paid to Key Employee is reversed in
the remainder of the Royalty Period as dictated by Compuware
revenue recognition policy, such reversed amount shall be
deducted from Per Sale Royalty Amounts payable in the such
final portion.
All funds to be remitted by Compuware hereunder shall
be paid by wire transfer of immediately available funds as
directed by Key Employee. With each Royalty payment made under
this Section 3.5(a), Compuware shall deliver to Key Employee a
statement of the Chief Financial Officer of Compuware which
shall include at least the following information: (i) the
calendar months for which the report applies, (ii) the
quantity of DevStream Products sold during each such calendar
month on an invoice-by-invoice basis; (iii) the Software
License Billing accrued and/or paid by each purchaser of
DevStream Products; and (iv) Compuware's computation of the
Royalty Amounts due to Key Employee under this Agreement. Any
payment not received by Key Employee under this Section 3.5
when due, shall be subject to interest at the rate of one half
percent (1/2%) per month.
(b) For purposes of calculating the Per Sale Royalty
Amount, the Software License Billing value of each sale of the
products in a specific transaction shall be determined using
the following methodology: the amount of Software License
Billing value attributable to the DevStream Product in a
particular transaction equals the product of the Software
License Billing value of a transaction (not inclusive of
taxes) multiplied by the quotient of the list price of the
DevStream Products sold divided by the aggregated list prices
for all the products licensed to the customer in the
transaction.
The Royalty Amount calculation above is demonstrated
by the example below:
Scenario: Customer A purchases a DevStream Product
and a Compuware product for a combined $50,000 in license fees
and first year maintenance. The licensing documents indicate
that the DevStream Product is being licensed for $0. The list
price for the DevStream Product is $30,000 and the Compuware
Product is $70,000.
A. The aggregate license and first year
maintenance value of the transaction equals
$50,000
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B. The list price percentage allocated to the
DevStream Products equals 30% ---
$30,000/($30,000+$70,000)
C. Therefore, the Software License Billing
allocated to the DevStream Product is
$15,000 (A multiplied by B)
D. The royalty percentage is 20%
E. Therefore, the Royalty Amount on this
transaction is $3,000 (D multiplied by C)
Compuware shall keep, on a continuing basis, full and
accurate accounting records with respect to the sale and
distribution of DevStream Products in sufficient detail to
determine the Royalty Amount payable to Key Employee. Full and
complete copies of such records, together with all necessary
supporting data, shall be kept at Compuware's offices at Xxx
Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000. Compuware shall
retain such books and records for the retention period
required by applicable law. Upon reasonable advance notice,
during the Royalty Period, DevStream and its agents and
accountants shall have the right during normal business hours
to review such books records, and Compuware shall provide Key
Employee with full and complete access to such records. The
cost of such review shall be borne by Key Employee; provided,
however, if an error is determined in favor of Key Employee of
five percent (5%) or more, in the aggregate, then such costs
shall be paid by Compuware.
(c) Should the Key Employee resign or be terminated
for Cause (as defined in the Employment Agreement) during the
first year of employment, DevStream's right to receive any
Royalty Amount payments shall immediately terminate on the
effective date of such resignation or termination.
(d) During the Royalty Period, Compuware hereby
covenants that it shall use commercially reasonable efforts to
market the DevStream Products.
3.6 Purchase Price Allocation. The Purchase Price (including
Assumed Liabilities) shall be allocated among the acquired Assets in
accordance with Schedule 3.6 hereto. The parties shall file all Tax
Returns (including amended returns and claims for refund) and
information reports in a manner consistent with such allocation, and
shall use highest commercially reasonable efforts to sustain such
allocation in any subsequent Tax audit or Tax dispute. Without limiting
the foregoing, DevStream and Compuware each agrees to file an IRS Form
8594 in accordance with Schedule 3.6 hereto, and the parties agree to
promptly provide each other with the information and documentation
necessary to complete the IRS Form 8594 and Schedule 3.6 hereto.
3.7 Actions to be Taken and Documents to be Delivered at the
Closing.
(a) At the Closing, Compuware will execute and/or
deliver or cause to be executed and/or delivered the following
documents and will take or will cause to be taken the
following actions, as appropriate:
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(1) officers' certificates as provided in
Exhibit B;
(2) the Indemnity Escrow Agreement;
(3) deliver $1,000,000 in immediately
available funds to the Indemnity Escrow Agent to hold
pursuant to the Indemnity Escrow Agreement;
(4) deliver $7,000,000 in immediately
available funds to Sellers as directed by Sellers;
and
(5) assignment and assumption agreements
with DevStream and Key Employee substantially in the
form attached hereto and incorporated by reference
herein as Exhibit E (the "Assignment and Assumption
Agreement");
(6) Compuware will assume possession and
control of the Assets.
(7) such other documents as may be
reasonably requested by DevStream.
(b) At the Closing, DevStream will execute and/or
deliver or cause to be executed and/or delivered the following
documents and will take or will cause to be taken the
following actions, as appropriate:
(1) certified resolutions of its Board of
Directors authorizing the execution and delivery of
this Agreement and each Related Agreement to which
it is a party.
(2) such bills of sale, assignments,
endorsements, and other good and sufficient
instruments and documents of conveyance and transfer
in form reasonably satisfactory to counsel to
Compuware and DevStream, as shall be necessary and
effective to transfer and assign to, and vest in,
Compuware all of DevStream's right, title and
interest in and to the Assets, including, without
limitation, (A) good and valid, title in and to all
of the Assets, and (B) all of DevStream's rights
under all Contracts, instruments, proposals and
other documents included in the Assets (including,
without limitation, any rights and interests of
DevStream under the Non-Disclosure Agreement),
including, without limitation, a Xxxx of Sale in the
form as provided in Exhibit D, and an Assignment and
Assumption Agreement;
(3) all of the agreements, contracts,
commitments, leases, plans, business plans,
quotations, proposals, instruments, computer programs
and software, data bases whether in the form of
computer tapes or otherwise, related object and
source codes, manuals and guidebooks,
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price books and price lists, customer and subscriber
lists, supplier lists, sale records, files,
correspondence, legal opinions, rulings issued by
governmental entities, and other documents, books,
records, papers, files, office supplies and data
belonging to DevStream which are part of the Assets;
(4) certified resolutions of the
Shareholders approving this Agreement as provided by
law, the bylaws of DevStream, and the transactions
contemplated hereby;
(5) a copy of the Articles of Incorporation
of DevStream and a good standing certificate from its
state of incorporation and each jurisdiction in which
it is qualified to do business (certified by an
appropriate state official as of a date within 30
days of the Closing Date);
(6) a certificate of the Secretary or
Assistant Secretary of DevStream in such form and
substance as Compuware may reasonably request
attesting as to the incumbency of each officer of
DevStream who executes this Agreement or a Related
Agreement, the bylaws and the resolutions;
(7) officers' certificates as provided in
Exhibit C;
(8) the Indemnity Escrow Agreement;
(9) an assignment by DevStream of all of its
rights and interests under each of the
confidentiality agreements and similar agreements in
effect between DevStream and its current and former
employees and others performing services for or on
behalf of DevStream and all documents necessary to
effect the assignment of DevStream's patents,
trademarks and copyrights to the extent they are part
of the Assets (including the "Trademark Assignment"
in the form as provided in Exhibit G; and the
Copyright Assignment in the form as provided in
Exhibit H);
(10) an assignment by DevStream of all of
its rights and interests under each of the Contracts;
and
(11) such other documents and certificates
as are required by the terms of this Agreement and
the Related Agreements (including delivery of all
governmental and third party consents required in
order for DevStream to execute or deliver this
agreement and the Related Agreements to which it is a
party and to consummate the transactions contemplated
by this Agreement and such Related Agreements) or as
may be reasonably requested by Compuware.
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(c) At the Closing, Key Employee will execute and/or
deliver or cause to be executed and/or delivered the following
documents and will take or will cause to be taken the
following actions, as appropriate:
(1) the Employment Agreement.
(2) such bills of sale, assignments,
endorsements, and other good and sufficient
instruments and documents of conveyance and transfer
in form reasonably satisfactory to counsel to
Compuware and Key Employee, as shall be necessary
and effective to transfer and assign to, and vest
in, Compuware all of Key Employee's right, title and
interest in and to the Assets, including, without
limitation, (A) good and valid, title in and to all
of the Assets, and (B) all of Key Employee's rights
under all Contracts, instruments, proposals and
other documents included in the Assets, including,
without limitation, a Xxxx of Sale in the form as
provided in Exhibit D, and the Assignment and
Assumption Agreement;
(3) all of the agreements, contracts,
commitments, leases, plans, business plans,
quotations, proposals, instruments, computer programs
and software, data bases whether in the form of
computer tapes or otherwise, related object and
source codes, manuals and guidebooks, price books and
price lists, customer and subscriber lists, supplier
lists, sale records, files, correspondence, legal
opinions, rulings issued by governmental entities,
and other documents, books, records, papers, files,
office supplies and data belonging to Key Employee
which are part of the Assets; and
(4) the Indemnity Escrow Agreement; and
(5) an assignment by Key Employee of all of
its rights and interests under each of the
confidentiality agreements and similar agreements in
effect between Key Employee and others performing
services for or on behalf of Key Employee and all
documents necessary to effect the assignment of Key
Employee's patents, trademarks and copyrights to the
extent they are part of the Assets (including the
"Trademark Assignment" in the form as provided in
Exhibit G; the Copyright Assignment in the form as
provided in Exhibit H; and the Patent Assignment in
the form as provided in Exhibit I);
(6) such other documents and certificates as
are required by the terms of this Agreement and the
Related Agreements (including delivery of all
governmental and third party consents required in
order for DevStream to execute or deliver this
agreement and the Related Agreements to which it is a
party and to consummate the transactions contemplated
by this Agreement and such Related Agreements) or as
may be reasonably requested by Compuware.
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3.8 [INTENTIONALLY OMITTED]
3.9 Third Party Consents. To the extent that each of the
Sellers' rights under any Contract or other Asset to be assigned to
Compuware hereunder may not be assigned without the consent of another
person which has not been obtained, this Agreement shall not constitute
an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful, and each of the Sellers and
Compuware shall use reasonable commercial efforts to obtain any such
required consent as promptly as possible. If any such consent shall not
be obtained or if any attempted assignment would be ineffective or
would impair Compuware's rights under the Asset in question so that
Compuware would not in effect acquire the benefit of substantially all
such rights, the Sellers, to the maximum extent permitted by law and
the Asset, shall, if Compuware so requests, cooperate with Compuware in
any reasonable arrangement designed to provide such benefits thereunder
to Compuware.
3.10 Further Assurances. At and after the Closing, the
officers and directors of Compuware will be authorized to execute and
deliver, in the name and on behalf of each of the Sellers, any deeds,
bills of sale, assignments or assurances and to take and do, in the
name and on behalf of each Seller, any other actions and things to
vest, perfect or confirm of record or otherwise in Compuware any and
all right, title and interest in, to and under any of the rights or
Assets acquired or to be acquired by Compuware as a result of, or in
connection with, the transactions contemplated herein.
4. Representations and Warranties of DevStream and the Key Employee.
DevStream and Key Employee jointly and severally represent and warrant to
Compuware as follows as of the date of this Agreement and through and including
the Closing Date:
4.1 Organization; Power and Authority; Authorization; Due
Execution; No Conflicts.
(a) DevStream (1) is a corporation duly incorporated,
validly existing and in good standing under the laws of
Colorado, and (2) has the corporate power and authority to (A)
own, operate and lease the properties it owns, operates and
leases, (B) carry on its business as it is now being
conducted, (C) enter into this Agreement and the Related
Agreements to which it is a party and, (D) consummate the
transactions contemplated by this Agreement and the Related
Agreements, and (3) is duly qualified or licensed and is in
good standing to do business in each jurisdiction in which the
nature of the business conducted by it has made its
qualification or licensing a legal requirement, except for
those jurisdictions where the failure to be so qualified would
not have a material adverse effect on DevStream. DevStream has
delivered to Compuware true and correct copies of its Articles
of Incorporation and Bylaws.
(b) Other than the vote of the Shareholders required
by Law, this Agreement and each Related Agreement to which
DevStream is a party have been duly authorized by all
necessary corporate action of DevStream. Upon the execution
and delivery of this Agreement and the Related Agreements to
which
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DevStream is a party, this Agreement and each such Related
Agreement will constitute the legal, valid and binding
obligation of DevStream, enforceable against DevStream, in
accordance with their respective terms, subject to judicial
discretion regarding specific performance or other equitable
remedies, and except as may be limited by bankruptcy,
reorganization, insolvency, moratorium or other laws relating
to or affecting the enforcement of creditors' rights and
remedies generally. Other than the vote of the Shareholders
referred to above, no other corporate authorizations or
proceedings on the part of DevStream are necessary to
consummate any of the other transactions contemplated by this
Agreement.
(c) Except as set forth in Schedule 4.1(c) to this
Agreement, the execution, delivery and performance by
DevStream of this Agreement and the Related Agreements to
which DevStream is a party will not (l) constitute a breach or
violation of (A) DevStream's Articles of Incorporation or
Bylaws, (B) any Law, or (C) any material agreement, right,
license, franchise, lease, indenture, deed of trust, mortgage,
loan agreement or other material instrument to which DevStream
is a party or by which DevStream is bound; (2) constitute a
violation of any order, judgment or decree to which DevStream
is a party or by which DevStream's assets or properties are
bound or affected; (3) result in the acceleration of any
material debt owed by DevStream; (4) result in the creation of
any lien, charge or encumbrance upon any of DevStream's
properties or assets; or (5) require any consent, approval,
authorization or permit of or from, or filing with or
notification to, any court, government, governmental authority
or other regulatory or administrative agency or commission,
domestic or foreign (each, a "Governmental Entity").
(d) Set forth in Schedule 4.1(d) to this Agreement is
a true and complete list of each jurisdiction in which
DevStream is qualified or licensed to do business.
4.2 Title. DevStream has good and marketable title to the
Assets of DevStream, free and clear of all security interests,
mortgages, liens, pledges, charges or encumbrances of any nature
("Liens"), except as set forth in Schedule 4.2 to this Agreement and
other Permitted Liens. There are no special assessments against any of
the Assets by any Governmental Entity.
4.3 Properties and Improvements. DevStream does not own,
lease, or have an option to acquire or have any other rights or
interests in any real property.
4.4 Other Assets of DevStream.
(a) All of the furniture, fixtures and equipment
owned or leased by DevStream or Key Employee are suitable for
the operation of DevStream and/or Key Employee's business as
currently conducted, subject only to ordinary wear and tear.
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(b) All of the furniture, fixtures, equipment and
other personal property of DevStream or Key Employee are owned
by DevStream or Key Employee respectively and, except as set
forth on Schedule 4.4(b) to this Agreement, neither of the
Seller is leasing or holding on consignment, any equipment,
furniture, fixtures or other personal property with respect to
development, sales, or maintenance of the Assets.
4.5 Claims; Litigation; Compliance with Laws; Approvals.
(a) Except as disclosed in Schedule 4.5(a) to this
Agreement, neither of Sellers is : (1) a party to any
litigation, proceeding or administrative investigation, and,
to the knowledge of either of the Sellers, none is pending or
threatened in writing against or by either of Sellers or (2)
subject to any outstanding order, writ, injunction or decree
of any court, government or governmental authority or
arbitration against or affecting it.
(b) Except as disclosed in Schedule 4.5(b) to this
Agreement, neither of the Sellers is in violation of, nor was
it in violation of during the past five (5) years, and neither
of the Sellers' actions in the consummation of the
transactions contemplated by this Agreement do violate any
Law, including any Law relating to DevStream's employment or
employment practices or environmental or occupational safety
or health, or any right or concession, copyright, trademark,
trade name, patent, trade secret, know-how or other
proprietary right of others, except where noncompliance or
violation has not had or would not have a material adverse
effect on DevStream. The business and activities of DevStream
(1) are presently being conducted in material compliance with
all requirements of Law, including the filing with any
Governmental Entity or other third party of any statement,
report, information or form required by Law, and all
requirements of any Governmental Entities having jurisdiction
over the business or activities of DevStream and (2) were not
conducted in violation of any of such laws or such
requirements within the past five (5) years except where such
violation has not had or would not have a material adverse
effect on DevStream. Except as set forth in Schedule 4.5(b),
DevStream has not, within the past five (5) years, received a
notice of violation of, been threatened in writing with a
charge of violating, or, to the knowledge of DevStream, been
under investigation with respect to a possible violation of,
any Law which has not been complied with, rescinded or
resolved.
(c) DevStream has maintained all material licenses
and permits and has filed all registrations, reports and other
documents required by local, state and federal authorities and
regulating bodies in connection with its business, except
where the failure to maintain or file such licenses, permits,
registrations or reports would not have a material adverse
effect on DevStream. All such licenses and permits will remain
in full force and effect (without imposition of any material
adverse condition, restriction, limitation, cost or penalty)
notwithstanding the transactions contemplated by this
Agreement. DevStream is in material compliance with all such
licenses, permits and approvals, and there are no
-16-
proceedings pending or, to the knowledge of DevStream,
threatened in writing to DevStream, which may result in the
material limitation, termination, cancellation or suspension,
or any adverse modification of, any such license, permit or
approval. Schedule 4.5(c) to this Agreement contains a full
and complete list of all such licenses, permits and approvals.
4.6 Agreements; Contracts; Warranties.
(a) All of the agreements, contracts, arrangements,
purchase orders, licenses, franchises, leases, understandings
and commitments, written or otherwise, currently in effect and
relating to DevStream or any of the Assets are set forth on
Schedule 4.6(a) hereto (the "Contracts"). All of such
Contracts will be effectively transferred to Compuware at the
Closing. Except as set forth on Schedule 4.6(a), to this
Agreement, and with respect to the Assets (1) neither of Key
Employee or DevStream is obligated under any contract or
agreement (written or otherwise) which may not be terminated
without cost or penalty to DevStream or the Shareholders upon
thirty (30) days' notice of a desire to terminate and which
will require DevStream to spend more than $50,000 in the
aggregate; and (2) DevStream is not a party to any agreement
or commitment of any nature pursuant to which it will be
required to spend more than $50,000 in any 12 month period or
$100,000 in the aggregate.
(b) With respect to the Contracts identified on
Schedule 4.6 to this Agreement:
(1) neither DevStream or Key Employee, nor,
to the knowledge of DevStream or Key Employee, the
third parties to such Contracts, are in material
default nor has such default been asserted by any
party, and there has not occurred any event which,
with or without the passage of time or giving of
notice (or both), would constitute such a default;
(2) except as set forth on Schedule
4.6(b)(2) to this Agreement, each such Contract will
remain in full force and effect (without imposition
of any material restriction, limitation, cost or
penalty to Compuware) notwithstanding the
transactions contemplated by this Agreement;
(3) except as set forth on Schedule
4.6(b)(3) to this Agreement, DevStream or Key
Employee has performed in all material respects all
of its obligations required to be performed by
DevStream prior to the date of this Agreement and
prior to the Closing Date; and
(4) neither DevStream, Key Employee nor, to
the knowledge of DevStream, the third parties to such
Contracts, has repudiated any provision of any such
Contract.
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(c) DevStream and/or Key Employee have delivered to
Compuware a true and complete copy of each written instrument
or document (including all amendments thereto), and a true and
complete written summary of each unwritten understanding,
which is identified on Schedule 4.6 to this Agreement.
Schedule 4.6 includes true and correct copies of all forms of
customer agreements which are representative of those used by
DevStream and/or Key Employee.
4.7 Proprietary Rights. All of the Proprietary Rights are
listed or described on Schedule 4.7 to this Agreement and, except as
disclosed in Schedule 4.7 to this Agreement:
(a) All of the Proprietary Rights are valid and in
full force and effect; provided, however that Sellers hereby
disclaim any representation that the U.S. Patent and Trademark
Office will issue letters patent based upon provisional Patent
Application No. 60/519,076.
(b) Schedule 4.7(b) to this Agreement lists any
Proprietary Rights licensed by DevStream and/or Key Employee
from any third parties. DevStream and/or Key Employee own or
have the right to use all Proprietary Rights that are
necessary for the operation of the business related to the
DevStream Products as presently conducted, except where the
failure to own or have the right to use such Proprietary
Rights does not have a material adverse effect on such
DevStream Products' business.
(c) Schedule 4.7(c) to this Agreement contains a true
and complete list or description of all contracts, oral,
written or electronic pursuant to which DevStream and/or Key
Employee have authorized any person or entity to use, or
pursuant to which any person or entity has the right to use,
any of the Proprietary Rights, including, without limitation,
on a temporary or trial basis.
(d) Schedule 4.7(d) to this Agreement contains a true
and complete list and description of all royalty or contingent
compensation arrangements or other contracts, oral, written or
electronic, regarding or pertaining to any Proprietary Rights.
(e) To DevStream's knowledge, no Proprietary Right
presently being used, licensed or sold, or contemplated to be
used, licensed or sold, by DevStream or Key Employee violates
or infringes on any rights owned or held by any other person
or entity.
(f) There is no pending or, to the knowledge of
DevStream or Key Employee, threatened claim or litigation
against DevStream, Key Employee or any other person or entity
contesting or, if decided adversely, affecting the right of
DevStream or Key Employee to use, license or sell any
Proprietary Right.
(g) Except as set forth on Schedule 4.7(g), to
DevStream or Key Employee's knowledge, no patent, trademark,
service xxxx, trade name, copyright, license, trade secret,
invention, intellectual property right, know-how
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or other right presently being licensed, sold or employed, by
any person or entity violates or infringes on, or may violate
or infringe on, any Proprietary Rights.
(h) DevStream and Key Employee use and have used all
reasonable efforts to secure and maintain its rights in the
Proprietary Rights; provided that Compuware acknowledges that
Sellers have not filed any state or federal trademark
applications with regard to the DevStream Products. Without
limiting the generality of the foregoing, DevStream's
employees and independent contractors have executed, as
appropriate, agreements protecting the confidentiality of the
Proprietary Rights and assigning to DevStream any rights that
any such employees or independent contractors may otherwise
have in any intellectual property developed for DevStream by
such employees or independent contractors. Such agreements are
in substantially the forms provided to Compuware by DevStream
and attached as Schedule 4.7(h). Each such agreement is valid
and enforceable and in full force and effect, subject to
judicial discretion regarding specific performance or other
equitable remedies, except as may be limited by bankruptcy,
reorganization, insolvency, moratorium or other laws relating
to or affecting the enforcement of creditors' rights and
remedies generally and except for any noncompetition provision
of any such agreement which may not be enforceable under
applicable law of the jurisdiction where such provision is
being construed, and, to the knowledge of DevStream, none has
been violated by any signatory employee or independent
contractor. True and complete copies of each such agreement,
including, without limitation, all amendments or modifications
thereof have been delivered to Compuware prior to the date of
this Agreement.
(i) The software products currently licensed by
DevStream or Key Employee to customers are in substantial
conformance with the current documentation, whether
electronically embedded, written or otherwise, shipped with
such software products, except for errors and bugs of the
type, scope and nature generally acceptable in the software
industry for similar types of software products.
(j) Schedule 4.7(j) lists all software or other
material that is distributed as "free software," "open source
software" or under a similar licensing or distribution model
(including but not limited to the GNU General Public License,
GNU Lesser General Public License, Sun Community Source
License (SCSL) or the Sun Industry Standards License (SISL))
("Open Source Materials") that is used by DevStream or Key
Employee in connection with the DevStream Products in any way
and describes the manner in which the Open Source Materials
were used and, if appropriate, modified and distributed by the
DevStream or Key Employee. Except as set forth in Schedule
4.7(j), DevStream has not (1) incorporated Open Source
Materials into, or combined Open Source Materials with, the
DevStream Products, (b) distributed Open Source Materials in
conjunction with the DevStream Products, or (c) used Open
Source Materials that create, or purport to create,
obligations for DevStream or Key Employee with respect to the
Proprietary Rights or products or grant, or purport to grant,
to any third party, any rights or immunities under the
Proprietary Rights (including using
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any Open Source Materials that require, as a condition of use,
modification or distribution of such Open Source Materials
that other software incorporated into, derived from or
distributed with such Open Source Materials be (i) disclosed
or distributed in source code form, (ii) be licensed for the
purpose of making derivative works, or (iii) be
redistributable at no charge). No Proprietary Rights or
products of DevStream or Key Employee are subject to the terms
of license of any such Open Source Materials.
4.8 Employees; Employee Benefits.
(a) Attached as Schedule 4.8(a) to this Agreement is
a list, as of the date of this Agreement, of all employees of
DevStream, and their respective dates of hire, positions, base
salary and commission schedule (if applicable). Except as set
forth on Schedule 4.8(a) to this Agreement, none of such
employees has any agreement with DevStream. DevStream does not
have any collective bargaining or union contracts or
agreements. There have not been any unfair labor practice
complaints, material labor difficulties or work stoppages, or
threats thereof, affecting any of the employees or activities
of DevStream. To the knowledge of DevStream, there is no union
campaign presently being conducted to solicit employees to
authorize a union to request a national labor relations board
certification election with respect to the employees of
DevStream. Except as set forth in Schedule 4.8(a), any
employee of DevStream may be terminated at will, with or
without cause, without any severance obligation.
(b) DevStream has deducted and remitted to the
relevant Governmental Entities all income taxes, unemployment
insurance contributions and other Taxes and amounts which it
is required to deduct and remit to such Governmental Entities,
and DevStream has made all required filings in respect
thereof, except to the extent that any failure to deduct or
remit will not result in any liability.
(c) Except as set forth on Schedule 4.8(c) to this
Agreement, the consummation of the transactions contemplated
by this Agreement will not in and of itself (1) entitle any
current or former employee of DevStream to severance pay,
unemployment compensation or any other similar payment, or (2)
accelerate the time of payment or vesting or increase the
amount of compensation due to any such employee or former
employee.
(d) Schedule 4.8(d) lists all "employee benefit
plans" (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), and all
other material bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock
purchase, stock option, stock bonus, phantom stock,
retirement, vacation, severance, disability, death benefit,
welfare, holiday bonus, hospitalization, medical or other plan
or arrangement, providing benefits to any current or former
employee, officer or director of DevStream, or maintained or
contributed to by DevStream or by any member of its controlled
group(s) as defined in Code Sections 414(b), (c),
-20-
(m), or (o) for the benefit of any employee, officer or
director of DevStream (collectively, "Benefit Plans").
(e) Except as set forth on Schedule 4.8(e), each
Benefit Plan set forth in Schedule 4.8(d) which is intended by
DevStream to be tax qualified under Section 401(a) of the Code
has received a determination letter to that effect from the
Internal Revenue Service and a copy of the most recent
determination letter for each such Benefit Plan has been
delivered to Compuware.
(f) On or prior to the date of this Agreement,
DevStream has delivered to Compuware true and complete copies
of (1) each Benefit Plan or, in the case of any unwritten
Benefit Plans, descriptions thereof, (2) the most recent
annual report filed with the appropriate Governmental Entity
with respect to each Benefit Plan, if any such report was
required, (3) the most recent summary plan description for
each Benefit Plan for which such summary plan description is
required, (4) each trust agreement, group annuity contract or
insurance contract relating to any Benefit Plan, and (5) the
most recent actuarial report, if any, relating to any Benefit
Plan.
(g) Except as set forth on Schedule 4.8(g), to the
knowledge of DevStream, none of DevStream, any officer of
DevStream or any of the Benefit Plans, or any trusts created
thereunder, or any trustee or administrator thereof, has
engaged in a "prohibited transaction" (as defined in Code
Section 4975 or ERISA Section 406) or any other breach of
fiduciary responsibility that would subject DevStream or any
officer of DevStream to a material Tax or penalty on
prohibited transactions or to any liability under ERISA.
(h) Except as disclosed on Schedule 4.8(h), no such
Benefit Plan that is an employee welfare benefit plan (as
defined in ERISA Section 3(1)) provides benefits to current or
future retirees or current or future former employees and
their dependents, except as required by the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, or
applicable state continuation coverage law.
(i) Except as would not impose a material liability
on DevStream, or except as set forth on Schedule 4.8(i), each
Benefit Plan and all related trust or other agreements conform
in form and operation to, and comply with, all applicable laws
and regulations, including, without limitation, ERISA and the
Code, and all reports or information relating to each such
Benefit Plan required to be filed with any Governmental Entity
or disclosed to participants has been timely filed and
disclosed.
(j) Except as disclosed in Schedule 4.8(j), DevStream
has not announced a plan to create, nor does it have any
legally binding commitment to create, any new arrangement
which would, when established, constitute an employee benefit
plan, as defined in Section 3(3) of ERISA.
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(k) All insurance premiums or contributions required,
with respect to any Benefit Plan, have been paid or accrued in
full and there exist no funding deficiencies within the
meaning of Code Section 412 with respect to any Benefit Plan.
Except as disclosed on Schedule 4.8(k), there are no known
material retrospective adjustments provided for under any
insurance contracts maintained pursuant to any Benefit Plan
with regard to policy years or other periods ending on or
before the Closing Date. All Pension Benefit Guaranty
Corporation premiums have been timely paid and, except as
disclosed on Schedule 4.8(k), the assets of any Benefit Plan
which is a defined benefit plan are sufficient, as of the
Closing Date, to fund all of the benefit liabilities of such
Benefit Plan (determined on a plan termination basis) and
there has occurred no reportable event with respect to any
Benefit Plan which is subject to Title IV of ERISA.
(l) Except as disclosed on Schedule 4.8(l), no
Benefit Plan, or the Tax deduction of any contributions
thereto by DevStream, is, to the knowledge of DevStream, the
subject of an audit by any Governmental Entity, and no
litigation or asserted claims exist against DevStream or any
Benefit Plan or fiduciary with respect thereto, other than
such benefit claims as are made in the normal operation of a
Benefit Plan.
4.9 Insurance. Schedule 4.9 to this Agreement contains a true
and complete list of all policies of fire, liability, workers'
compensation and other forms of insurance owned or held by DevStream
(including coverages), and DevStream has made available for inspection
by Compuware true and complete copies of all such policies. All such
policies are in full force and effect, all premiums with respect
thereto covering all periods up to and including the Closing Date have
been paid, and no notice of cancellation or termination has been
received by DevStream with respect to any such policy. Such policies
(i) are sufficient for material compliance with all requirements of Law
and all agreements to which DevStream is a party; (ii) are valid,
outstanding and enforceable policies; (iii) will remain in full force
and effect through the Closing Date; and (iv) will not in any way be
affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement. Schedule 4.9 to this Agreement
identifies all risks that DevStream has designated as being
self-insured.
4.10 Financial Statements. DevStream has delivered to
Compuware (i) complete copies of its unaudited financial statements for
the years ended December 31, 2003, including balance sheets and
accompanying statements of profit and loss and related schedules of
cost and expense for the covered periods, as applicable, and (ii)
unaudited financial statements for the months ended January 31, 2004
through August 31, 2004. All of the foregoing are referred to as the
"Financial Statements." Each of the Financial Statements presents
fairly in all material respects the financial condition, and results of
operations of DevStream as of such dates and for the periods then
ended, and all of such statements were prepared in accordance with GAAP
(except, with respect to interim financial statements, for normal,
non-material year-end adjustments and lack of footnotes). DevStream has
provided Compuware with true and complete copies of all "management
letters" received by DevStream in connection with any prior audit
within the last three years. Additionally, as of the date of the most
recent Financial Statement
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submitted to Compuware and as of the Closing Date, DevStream has no
debt for borrowed money, whether long-term or short-term, that would be
required under GAAP to be reflected on such Financial Statement.
4.11 Undisclosed Liabilities. Neither Key Employee or
DevStream has any liability of any kind, whether accrued, absolute,
contingent or otherwise, except for such liabilities that (i) are
reflected or reserved for on the most recent Financial Statements; (ii)
are disclosed in Schedule 4.11; (iii) are not required to be set forth
in the Schedules to this Agreement or (iv) are commitments under
contracts disclosed in Schedule 4.6.
4.12 Taxes.
(a) DevStream has timely filed (or has caused, or
will cause, to be timely filed on its behalf either separately
or as a member of a consolidated, combined, unitary or similar
group of companies) all Tax Returns required to be filed by it
with any Tax Authority, taking into account any valid and
proper extension of time to file granted to or obtained on
behalf of DevStream and all such Tax Returns (i) are true,
correct and complete in all respects at the time of filing,
(ii) correctly reflect the liabilities of DevStream for Taxes
for the periods, properties or events covered thereby and
(iii) were prepared in accordance with applicable laws. All
Taxes (whether or not shown on such Tax Returns) owed by
DevStream have been timely paid in full. No deficiency for any
amount of Taxes has been asserted in writing or to the
knowledge of DevStream has been threatened or is likely to be
assessed by a Tax Authority against DevStream. No claim has
ever been made in writing by a Tax Authority in a jurisdiction
where DevStream does not file Tax Returns that DevStream is or
may be subject to taxation by that jurisdiction. Except as set
forth on Schedule 4.12(a), DevStream is not currently the
beneficiary of any extension of time within which to file any
Tax Return. There are no Liens or security interests (other
than Permitted Liens) on any of the assets of DevStream that
arose in connection with any failure (or alleged failure) to
pay Taxes.
(b) DevStream has accrued, adequately reserved and
shown on its Financial Statements as a current liability in
accordance with GAAP all Taxes of DevStream for all taxable
periods (or portions thereof) which end on or before the date
of such Financial Statements. Moreover, DevStream will accrue,
adequately reserve and show on the Financial Statements as a
current liability in accordance with GAAP all Taxes of
DevStream for all taxable periods (or portions thereof) which
end on or before the Closing Date, including all Taxes
attributable to the transactions contemplated by this
Agreement.
(c) DevStream has withheld and paid all Taxes
required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party, and has otherwise
complied with applicable laws relating thereto.
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(d) There is no audit or other dispute, examination,
claim or other proceeding concerning any Taxes or Tax Return
of DevStream either made or raised by, or involving, any Tax
Authority, nor is there any threat or expectation thereof.
Schedule 4.12(d) lists all federal, state, local, and foreign
income and other Tax Returns filed by DevStream for taxable
periods ended on or after December 31, 2003 that have been
audited by a Tax Authority, and indicates those Tax Returns
that currently are the subject of audit by a Tax Authority.
DevStream has delivered or made available to Compuware true,
correct and complete copies of all Tax Returns, examination
reports, and statements of deficiencies assessed against or
agreed to by the Key Employee (with respect to DevStream)
and/or DevStream since December 31, 2003.
(e) Except as set forth on Schedule 4.12(e),
DevStream has not waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency.
(f) Except as set forth on Schedule 4.12(f),
DevStream has disclosed on its Tax Returns all positions taken
therein, the nondisclosure of which could give rise to a
substantial understatement penalty within the meaning of Code
ss.6662 or any similar provision of state, local or foreign
law.
(g) Except as set forth on Schedule 4.12(g),
DevStream: (1) has not filed a consent under Code ss.341(f)
concerning collapsible corporations; (2) has not made any
payment, is not obligated to make any payment, and is not a
party to any agreement that under certain circumstances could
obligate it to make any payment that will not be deductible
under Code ss.280G; (3) is not and has not been a party to any
Tax allocation, Tax sharing or similar agreement; (4) has not
been a member of any consolidated, combined, unitary or
similar group for federal, state, local or foreign Tax
purposes; (5) has no liability for the Taxes of any person
under Treasury Regulation ss.1.1502-6 (or any similar
provision of state, local, or foreign law) or as a result of
being a transferee or successor, or by contract or otherwise;
(6) has not granted a power of attorney with respect to any
matter relating to Taxes of DevStream; (7) is not a party to
any safe harbor lease within the meaning of Code ss.168(f)(8)
as in effect prior to amendment by the Tax Equity and
Responsibility Act of 1982; (8) is not a party to any joint
venture, partnership or other arrangement or contract that
could be treated as a partnership for federal income tax
purposes; (9) has no property that is tax exempt use property
within the meaning of Code ss.168(h); (10) is not bound by any
closing agreement within the meaning of Code ss. 7121; (11)
has not agreed to and is not required to make any adjustments
under Code ss.481(a) or any similar provision of state, local
or foreign law and no Tax Authority has proposed in writing
any such adjustment that affects any taxable year ending after
the Closing Date ; (12) has no application pending with any
Tax Authority requesting permission for any change in
accounting method that relates to its business or operations
and that affects any taxable year ending after the Closing
Date; (13) has not at any time during the past five years used
the cash method of accounting; and (14) in the past five years
(A) has not been a party to a transaction that has been
reported as a
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reorganization within the meaning of Code ss.368, (B) has not
distributed a corporation in a transaction that is reported to
qualify under Code ss.355 and (C) was not distributed in a
transaction that is reported to qualify under Code ss.355.
(h) Except as set forth on Schedule 4.12(h), neither
the Code nor any other provision of law requires Compuware to
withhold any portion of the Purchase Price.
(i) There are no Rulings from, or requests for
Rulings with, any Tax Authority addressed to or involving
DevStream that are, or if issued would be, binding on
DevStream.
(j) At all times since January 25, 2004, DevStream
has been for Tax purposes a validly electing S corporation
within the meaning of Code ss.1361. DevStream will not be
liable for any Tax under Code ss.1374. Except for such S
corporation or as provided in Schedule 4.12(j), DevStream has
neither filed nor made any Tax election.
(k) For purposes of this Section 4.12, Section 4.8,
Section 10, Section 11.13, "DevStream" will be deemed to
include any subsidiary or affiliate of DevStream, any
predecessor of DevStream or any person or entity in respect of
whose obligation to pay Taxes DevStream may be liable for as a
result of transferee liability, joint and several liability,
contract or otherwise.
(l) DevStream has complied with all Tax-related
record keeping requirements.
4.13 Absence of Changes or Events. Except as disclosed on
Schedule 4.13 to this Agreement or as disclosed in the Financial
Statements, DevStream has operated its business only in the ordinary
course and, since July 1, 2004:
(a) DevStream has not made any change in its Articles
of Incorporation or Bylaws; adjusted, split, combined or
reclassified any of its capital stock or securities; entered
into any arrangement or contract with respect to the issuing
of any shares of its capital stock or securities; issued any
DevStream Options; or made any other changes in its capital
structure.
(b) DevStream has not borrowed any amount or
incurred, assumed, become subject to or guaranteed any
liability, whether absolute or contingent, other than in the
ordinary course of business.
(c) DevStream has not made any material changes in
its practices or methods of accounting including, but not
limited to, for Tax purposes.
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(d) DevStream has not made any material change in or
introduced any pension, retirement, profit sharing or bonus
arrangement or other employee welfare or benefit arrangement
or other benefit plan.
(e) DevStream has not suffered any material adverse
change in its business, operations, operating results,
properties, assets, liabilities or condition (financial or
otherwise).
(f) DevStream has not suffered any event or condition
of any character which, either individually or in the
aggregate, is reasonably likely to materially adversely affect
its business, operations, operating results, properties,
assets, liabilities or condition (financial or otherwise).
(g) DevStream has not suffered any damage,
destruction or Loss, whether covered by insurance or not,
which is reasonably likely to materially adversely affect its
business, operations, operating results, properties, assets,
liabilities or condition (financial or otherwise).
(h) DevStream has not declared, set aside, made or
paid any dividend, distribution or payment, whether in cash,
stock, property or any combination thereof with respect to any
of its securities, nor has it reclassified any of such
securities.
(i) DevStream has used highest commercially
reasonable efforts to preserve its business organizations and
to retain the services of its officers and Key Employee.
(j) DevStream has not increased any salary, wages,
compensation or fringe or other benefits payable or to become
payable to its officers, directors or employees, except for
such increases as are in the ordinary course of business
consistent with past practice or required by applicable
minimum wage laws.
(k) DevStream and Key Employee have exercised their
commercially reasonable efforts to maintain the good will of
suppliers, customers and employees of, and others having
material business relationships with, DevStream and Key
Employee.
(l) DevStream has not made any Tax election nor has
it settled or compromised any income or other Tax liability or
refund.
(m) DevStream has not paid, discharged or satisfied
any claim, liability or obligation, whether absolute, accrued,
asserted or unasserted, contingent or otherwise, other than
the payment, discharge or satisfaction, in the ordinary course
of business consistent with past practices or in accordance
with their terms,
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of liabilities reflected or reserved against in the Financial
Statements and trade payables incurred since the date of the
most recent Financial Statement.
(n) Neither DevStream or Key Employee have, except in
the ordinary course of business, entered into, amended,
modified or terminated any material agreement, commitment or
transaction.
(o) Except as otherwise provided in Schedule 4.13(o),
neither DevStream or Key Employee have made any provision for
material price discounts or other special considerations in
respect of their goods or services not in the ordinary course
of business consistent with past practices.
(p) Neither DevStream or Key Employee have sold,
transferred, leased, mortgaged, pledged, subjected to any lien
or otherwise disposed of any of its properties or assets,
real, personal or mixed, tangible or intangible, except in the
ordinary course consistent with past practices.
(q) Neither DevStream or Key Employee have entered
into any agreement or understanding to do any of the
foregoing.
4.14 [INTENTIONALLY OMITTED.]
4.15 Subsidiaries. Except as set forth on Schedule 4.15 to
this Agreement, DevStream does not have, nor has it had any equity
interest, or right to acquire any equity interest, whether direct or
indirect, in any corporation, joint venture, partnership, limited
liability company, firm or other entity.
4.16 Capitalization.
(a) The authorized capital stock of DevStream
consists of 4,000,000 shares of Class A voting common stock,
no par value ("Voting Common Stock"), and 1,000,000 shares of
Class B non-voting common stock, no par value ("Non-Voting
Common Stock").
(b) As of the close of business on the day proceeding
Closing, (1) 1,010,000 shares of Voting Common Stock were
issued and outstanding and (2) 0 shares of Non-Voting Common
Stock were issued and outstanding.
(c) All outstanding shares of capital stock of
DevStream are duly authorized, validly issued, fully paid and
non-assessable.
(d) The Shareholders are the sole holders of the
capital stock of DevStream.
(e) There are no plans, agreements, or arrangements
under which options, warrants or other rights to purchase or
acquire shares of capital stock of
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DevStream have been or may be granted. Except as set forth in
this Section 4.16 or as disclosed on Schedule 4.16(e) to this
Agreement, there are no outstanding options, warrants, rights,
calls, commitments or agreements calling for the issuance or
transfer, sale, or disposition by DevStream of any shares,
issued or unissued, of the capital stock of DevSteam, or of
any securities convertible or exchangeable, actually or
contingently, into any such capital stock, to which DevStream
is a party or by which DevStream is bound, or of which
DevStream has knowledge.
(f) As of the date of this Agreement, no bonds,
debentures, notes or other indebtedness of DevStream having
the right to vote on any matters on which Shareholders may
vote ("DevStream Voting Debt") are issued or outstanding.
(g) Except as otherwise set forth in this Section
4.16 or as disclosed on Schedule 4.16(g) to this Agreement, as
of the date of this Agreement, there are no securities,
options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which DevStream is
a party or by which DevStream is bound obligating DevStream to
issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting
securities of DevStream or obligating DevStream to issue,
grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the date of this Agreement, there are no
outstanding obligations of DevStream to repurchase, redeem or
otherwise acquire any shares of capital stock of DevStream.
(h) Except as set forth in this Section 4.16 or as
disclosed on Schedule 4.16(h) to this Agreement, no shares of
capital stock of DevStream are reserved for issuance.
(i) Except as disclosed on Schedule 4.16(i), there
are no voting trusts, proxies or other agreements, commitments
or understandings of any character to which DevStream is a
party or by which DevStream or, to DevStream's knowledge, any
of the holders of DevStream's capital stock is bound with
respect to the voting of any shares of capital stock of
DevStream.
4.17 [Intentionally Omitted]
4.18 Guarantees. Except as disclosed on Schedule 4.18 to this
Agreement, neither DevStream nor Key Employee have guaranteed any debt
or obligation of any third party and none of the debts or obligations
of DevStream or Key Employee are guaranteed by any third parties.
4.19 Related Parties. Schedule 4.19 to this Agreement is a
true and complete list and brief description of all contracts and
agreements or other transactions entered into or agreed to within the
past three (3) years (including, without limitation, all oral contracts
and outstanding bids or offers for the foregoing) involving amounts in
excess of $25,000, and all currently effective contracts and other
transactions to which DevStream,
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on the one hand, is or was a party, with respect to which any officer,
director or Shareholder of DevStream, or any person related to any of
the foregoing by blood or marriage, on the other hand, is or was a
party, other than arrangements related to the employment of such person
that are otherwise disclosed pursuant to this Agreement. True and
complete copies of all such contracts and all documentation relating to
such transactions, including, without limitation, all amendments
thereto and modifications thereof, have been delivered to Compuware
prior to the date of this Agreement. No Shareholder, director, officer
or employee of DevStream is indebted to DevStream in excess of $10,000
for any one person or in excess of $50,000 in the aggregate for all
persons.
4.20 Accounts Receivable. The accounts receivable of DevStream
which are shown on Schedule 4.20 to this Agreement arose in the
ordinary course of business, are valid and collectible in the ordinary
course (which, unless otherwise set forth with respect to a particular
account on Schedule 4.20, is no more than 30 days from invoice date),
net of the reserves set forth on the most recent Financial Statements,
subject to no counterclaims or setoffs, at the aggregate recorded
amount thereof as shown on the records of DevStream.
4.21 Brokers. Except as set forth on Schedule 4.21 to this
Agreement:
(a) DevStream (1) has not dealt with any broker or
finder in connection with this transaction; (2) has not caused
or created any liability to any broker or finder in connection
with this transaction; or (3) is not aware of any claim from
or right of any third party that it is entitled to brokerage,
finders or other similar fees in connection with this
transaction.
(b) DevStream is not aware of any broker or finder
that was instrumental or had any part in bringing about this
transaction.
4.22 Disclosure. The statements, representations and
warranties made by DevStream or Key Employee in this Agreement, and the
Schedules, attachments and Exhibits to this Agreement, do not contain
any untrue statement of any material fact or omit a material fact
necessary to make the statements contained in this Agreement, or such
Schedules, attachments or Exhibits, in light of the circumstances in
which they were made, not misleading.
5. Additional Representations and Warranties of Key Employee. In
addition to the representations and warranties set forth in Section 4 above, the
Key Employee represents and warrants to Compuware as follows, as of the date of
this Agreement and as of the Closing Date:
(a) Upon the execution and delivery of this Agreement
and each Related Agreement to which the Key Employee is a
party, this Agreement and each such Related Agreement will
constitute the legal, valid and binding obligation of the Key
Employee, enforceable against the Key Employee in accordance
with their respective terms, subject to judicial discretion
regarding specific performance or other equitable remedies,
and except as may be limited by
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bankruptcy, reorganization, insolvency, moratorium or other
laws relating to or affecting the enforcement of creditors'
rights and remedies generally.
(b) The Key Employee's execution, delivery and
performance of this Agreement and the Related Agreements to
which the Key Employee is a party will not (1) constitute a
breach or violation of (A) any Law or (B) any material
agreement, indenture, deed of trust, mortgage loan agreement
or other material instrument to which the Key Employee is a
party or is bound or affected; (2) constitute a violation of
any order, judgment or decree to which the Key Employee is a
party or by which the Key Employee is bound; or (3) result in
the acceleration of any material debt owed by the Key
Employee.
(c) Except as set forth in this Agreement or in the
Schedules attached hereto, there are no obligations of
DevStream to the Key Employee, and the Key Employee releases
DevStream and Compuware from any such claim, obligation or
liability.
(d) Except as set forth on Schedule 5(d) to this
Agreement, each Shareholder owns all of the DevStream Shares
shown on the stock transfer books of DevStream as belonging to
such Shareholder free and clear of any lien, claim, security
interest, pledge, charge, encumbrance or restriction of any
kind.
6. Compuware's Representations and Warranties. Compuware represents and
warrants to DevStream as follows, as of the date of this Agreement:
6.1 Organization; Power and Authority. Compuware is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Michigan, and has the corporate power
and authority to enter into this Agreement and the Related Agreements
and to consummate the transactions contemplated by this Agreement and
the Related Agreements.
6.2 Authorization; Due Execution; No Conflicts.
(a) This Agreement and each Related Agreement has
been duly authorized by all necessary corporate action on the
part of Compuware. Upon the execution and delivery by
Compuware of this Agreement and the Related Agreements, this
Agreement and the Related Agreements will each constitute the
legal, valid and binding obligation of Compuware, enforceable
against Compuware in accordance with their respective terms.
(b) Compuware's execution, delivery and performance
of this Agreement and the Related Agreements will not (1)
constitute a breach or violation of (A) Compuware's Articles
of Incorporation or Bylaws (B) any Law or (C) any material
agreement, indenture, deed of trust, mortgage, loan agreement
or other material instrument to which Compuware is a party or
by which Compuware is bound; or (2) constitute a violation of
any order, judgment or
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decree to which Compuware is a party or by which any of
Compuware's Assets are bound or affected.
6.3 Brokers.
(a) Compuware (1) has not dealt with any broker or
finder in connection with this transaction; (2) has not caused
or created any liability to any broker or finder in connection
with this transaction; and (3) is not aware of any claim from
any third party that it is entitled to brokerage, finders or
other similar fees in connection with this transaction.
(b) Compuware is not aware of any broker or finder
that was instrumental or had any part in bringing about this
transaction.
7. Post-Closing Covenants.
7.1 Non-Disclosure Agreement. DevStream and Compuware agree
that each party's non-disclosure obligations contained in any
non-disclosure agreement signed by DevStream and Compuware will remain
in full force and effect in accordance with the terms of such
agreement.
7.2 Post-Closing Use of Intellectual. Property DevStream will
not, and will not permit any of its affiliates (including directors,
officers, shareholder or entities in which DevStream, or any director,
officer or shareholder of DevStream, has a five percent (5%) or more
ownership interest) to, adopt, do business under, or use any
intellectual property that infringes, conflicts with or is confusingly
similar to the Proprietary Rights.
7.3 Work in Progress. From and after the Closing, Compuware
will have all communications with customers under any of the Contracts
and with customers who are licensing, sublicensing or otherwise using
any of the Proprietary Rights (collectively, "Customers"). Without
limiting the generality of the foregoing, Compuware will, in the
ordinary course of business, xxxx Customers for all services for which
Customers were not billed prior to the Closing, including for services
performed by DevStream. From and after the Closing, DevStream will
refer to Compuware all requests, communications and inquiries of any
Customers. DevStream will cooperate with Compuware, and take such
actions as Compuware reasonably requests, to ensure that Customers send
or deliver their payments directly to Compuware and to ensure that
payments from or on behalf of Customers which are improperly sent or
delivered to DevStream are not commingled with DevStream's assets. Each
party (the "Recipient") will promptly remit to the other party (the
"Entitled Party") all amounts paid to the Recipient but to which the
Entitled Party has the right, including insurance proceeds. To the
extent appropriate to accomplish the foregoing, the Recipient will
endorse all checks and other instruments in favor of the Entitled
Party. The Recipient will provide the Entitled Party with such
information as is necessary or reasonably requested to determine the
amounts to which the Entitled Party is entitled. DevStream will not
take any action that could interfere with Compuware's relationship with
any of the Customers.
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7.4 Changes and Use of the DevStream Name. On or promptly
following the Closing Date, DevStream shall take or cause to be taken
such action as may be required to change the corporate name of
DevStream to a name that is not the same as, or confusingly similar to,
DevStream's current corporate name or the other names or marks of
DevStream transferred to Compuware hereunder, and promptly thereafter
DevStream shall deliver to Compuware evidence that all necessary
filings in the jurisdictions in which DevStream is licensed or
qualified to do business to effect such name change have been made.
7.5 Employee Matters.
(a) At the Closing, Compuware shall offer employment
to Key Employee pursuant to the terms set forth in the
Employment Agreement attached hereto as Exhibit F.
(b) For a period of two (2) years from and after the
Closing Date, DevStream or the Key Employee shall not,
directly or indirectly, solicit the employment of any
Compuware employee, including former DevStream employees which
are employed by Compuware.
7.6 Maintenance of Books and Records. Each of Compuware, Key
Employee and DevStream shall preserve for seven (7) years from the
Closing Date all records possessed or to be possessed by such party
relating to any of the Assets or Assumed Liabilities prior to the
Closing Date. After the Closing Date, where there is a legitimate
purpose (which shall be deemed to include tax filings of either party),
such party shall provide the other party with access, upon prior,
written reasonable request specifying the need therefor, during regular
business hours, to (a) the officers and employees of such party and (b)
the books of account and records of such party, but, in each case, only
to the extent relating to the Assets or Assumed Liabilities prior to
the Closing Date, and the other party and its representatives shall
have the right to make copies of such books and records; provided,
however, that the foregoing right of access shall not be exercisable in
such a manner as to interfere unreasonably with the normal operations
and business of such party; and further provided that, as to so much of
such information as constitutes trade secrets or confidential business
information of such party, the requesting party and its officers,
directors and representatives will use due care to not disclose such
information except (i) as required by law, (ii) with the prior written
consent of such party, which consent shall not be unreasonably
withheld, or (iii) where such information becomes available to the
public generally, or becomes generally known to competitors of such
party, through sources other than the requesting party, its affiliates
or its officers, directors or representatives. Such records may
nevertheless be destroyed by a party if such party sends to the other
parties written notice of its intent to destroy records, specifying
with particularity the contents of the records to be destroyed. Such
records may then be destroyed after the thirtieth day after such notice
is given unless another party objects to the destruction, in which case
the party seeking to destroy the records shall deliver such records to
the objecting party.
7.7 Covenant Not to Compete. DevStream and the Key Employee
agree, for a period of five (5) years following the Closing Date, not
to develop, create, license, sell,
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distribute or otherwise commercially exploit any DevStream Product that
has the same principal function or features as the Assets, irrespective
of target platform.
7.8 Dissenter's Rights. By execution of this Agreement below,
Cross consents to the terms of this Agreement and agrees to waive any
available appraisal or similar rights of minority shareholders he may
have under applicable law with regard to the DevStream shares held by
him, directly or indirectly. Cross agrees that his sole and exclusive
remedies with regard to such rights shall lie with DevStream and/or Key
Employee.
8. Conditions Precedent to the Parties' Obligations to Close.
8.1 Conditions Precedent of Compuware. Compuware's obligations
under this Agreement are subject to the satisfaction at or before the
Closing Date of each of the following conditions (the fulfillment of
any of which may be waived in writing by Compuware):
(a) All terms, covenants and conditions of this
Agreement and the Related Agreements to be complied with or
performed by DevStream prior to or on the Closing Date will
have been fully complied with and performed by DevStream,
including DevStream's timely taking of all actions and
delivery of all documents required to be taken and delivered
by them under this Agreement and the Related Agreements.
(b) The representations and warranties of each of
DevStream contained in this Agreement will be true and correct
at and as of the Closing Date as if made at and as of such
time, with the same force and effect as if made at and as of
the Closing Date, except for (1) changes contemplated and
permitted by this Agreement and (2) those representations and
warranties which address matters only as of a particular date
which will have been true and correct as of such date.
(c) There will not have been any material adverse
change in the financial condition or business of DevStream.
(d) All courts of law, Governmental Entities and
other third parties, the consent, authorization or approval of
which is necessary under any applicable law, rule, order or
regulation or under any contract, commitment or other
agreement of DevStream, for the consummation of the
transactions contemplated by this Agreement, will have
consented to, authorized, permitted or approved such
transactions, except where the failure to obtain such consent,
authorization or approval will not have a material adverse
effect on DevStream.
8.2 Conditions Precedent of DevStream. The obligations of
DevStream under this Agreement are subject to the satisfaction at, or
prior to, the Closing Date of the following conditions precedent (the
fulfillment of any of which may be waived in writing by DevStream):
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(a) All terms, covenants and conditions of this
Agreement and the Related Agreements to be complied with or
performed by Compuware prior to or on the Closing Date will
have been fully complied with and performed by Compuware, as
appropriate, including Compuware's timely taking of all
actions and delivery of all documents required to be taken and
delivered by it under this Agreement and the Related
Agreements.
(b) The representations, warranties, disclosures and
statements of Compuware contained in this Agreement and the
Related Agreements will be true and complete as of the date of
this Agreement and on the Closing Date.
9. Default.
Compuware's, on the one hand, and DevStream's, on the other
hand, obligations under this Agreement with respect to Sections 3.5 and
7 are of a special and unique character and Compuware's, on the one
hand, or DevStream's, on the other hand, failure to perform the
above-referenced obligations will cause irreparable injury to the other
party, the amount of which would be extremely difficult, if not
impossible, to estimate or determine and which may not be adequately
compensable by monetary damages alone. Therefore, the injured party
will be entitled, as a matter of course, to an injunction, restraining
order, writ of mandamus or other equitable relief from any court of
competent jurisdiction, including specific performance, restraining any
violation or threatened violation of the foregoing Sections of this
Agreement, or requiring compliance with or performance of the
above-referenced obligations under this Agreement, by the violating
party or parties, or such other persons as the court may order. The
parties' rights under this Section 9 are cumulative and are in addition
to the rights and remedies otherwise available to them under any other
provision of this Agreement and any other agreement or applicable law.
10. Indemnification.
10.1 Indemnification by DevStream and the Key Employee. Upon
the terms and subject to the conditions of this Section 10, DevStream,
the Key Employee, and Spouse, jointly and severally, will indemnify and
hold Compuware harmless against any Loss which may be incurred by
Compuware as a result of:
(a) any breach by DevStream or the Key Employee of
any of their representations and warranties under Section 4 or
Section 5 above, respectively, or DevStream or Key Employee's
breach of any agreements made in this Agreement or any Related
Agreement or the Exhibits or Schedules to this Agreement or
any Related Agreement; and
(b) any action, suit, proceeding, investigation,
assessment or judgment relating to any of the matters
indemnified against in this Section 10.1, including Fees and
Costs (whether prior to or at trial or in appellate
proceedings).
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10.2 Indemnification by Compuware. Compuware will indemnify
and hold DevStream or Key Employee harmless against any Loss that may
be incurred by DevStream or Key Employee as a result of:
(a) any breach by Compuware of any of Compuware's
representations, warranties, covenants or agreements made in
this Agreement or any Related Agreement or the Exhibits or
Schedules to this Agreement or any Related Agreement; or
(b) any action, suit, proceeding, assessment or
judgment relating to any of the matters indemnified against in
this Section 10.2, including Fees and Costs (whether prior to
or at trial or in appellate proceedings).
10.3 Additional Indemnification by DevStream, Key Employee and
Spouse. Upon the terms and subject to the conditions of this Section
10, DevStream, the Key Employee and Spouse, jointly and severally, will
indemnify and hold Compuware harmless against any Loss which may be
incurred by Compuware as a result of:
(a) any Liabilities of DevStream not specifically
included in the Assumed Liabilities; or
(b) any action, suit, proceeding, assessment or
judgment relating to any of the matters indemnified against in
this Section 10.3, including Fees and Costs (whether prior to
or at trial or in appellate proceedings).
10.4 Claims for Indemnification.
(a) Whenever any claim is made for indemnification
(other than a Tax claim) under this Section 10, the person
claiming such indemnification (the "Claimant") will give
notice to the party against whom indemnification is sought
(the "Indemnifying Party") promptly after the Claimant has
actual knowledge of any event which might give rise to a claim
for indemnification under this Agreement; provided that if the
Claimant receives a complaint, petition or any other pleading
in connection with a claim which requires the filing of an
answer or other responsive pleading, it will furnish the
Indemnifying Party with a copy of such pleading as soon as
possible after receipt. DevStream, Key Employee, and Spouse
agree that notice provided to the Representative shall
constitute notice for purposes of Section 10 with respect to
them.
(b) Subject to the limitations on indemnification set
forth in Section 10.6, the failure by the Claimant to give
notice of a claim (other than a Tax claim) as required in
Section 10.4(a) above or a delay in giving such notice will
not affect the validity or amount of such claim and the
indemnification obligations of the Indemnifying Party will
remain in effect as to such claim, except to the extent that
the Indemnifying Party has been prejudiced or adversely
affected thereby.
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(c) If, after the amount of the claim of Loss (other
than a Tax claim) is specified by Claimant, and Claimant gives
notice with respect thereto to the Indemnifying Party (the
"Claim Notice"), the Indemnifying Party objects to any such
claim or amount set forth in the Claim Notice, it may give
notice to Claimant advising Claimant of its objection within
twenty (20) days of the Indemnifying Party's receipt of the
Claim Notice. If no such notice is timely given by the
Indemnifying Party to Claimant, then subject to the
limitations on indemnification set forth in Section 10.6,
Claimant will be entitled to payment from the Indemnifying
Party pursuant to this Agreement and the Indemnity Escrow
Agreement in the amount so specified. If the Indemnifying
Party advises Claimant within such period that it objects to
the claim, Claimant and the Indemnifying Party will promptly
meet and use their reasonable efforts to settle the dispute in
writing. If Claimant and the Indemnifying Party are unable to
reach agreement within thirty (30) days after the Indemnifying
Party objects to the claim, then either party may bring an
action to determine the disputed portion of such claim of
Loss, with the undisputed portion to be recovered pursuant to
the Indemnity Escrow Agreement, if applicable, or this
Agreement.
(d) The giving of the notice by Compuware to
DevStream, Key Employee or Spouse with respect to any
particular claim in accordance with Section 10.4 within the
period of survival of any representations or warranties will
toll said survival period (but only with respect to such claim
to the extent of the claim of Loss with respect to such claim)
until any liability under said notice is finally resolved and
determined.
10.5 Third-Party Claims.
(a) If the facts giving rise to the right of
indemnification under Sections 10.1, 10.2 or 10.3 above
involve any actual or threatened claim or demand by any third
party against the Claimant or any possible claim by the
Claimant against any third party ("Third-Party Claim"), the
Indemnifying Party may at its own expense undertake full
responsibility for the defense or prosecution of such
Third-Party Claim.
(b) So long as the Indemnifying Party has assumed and
is conducting the defense of the Third-Party Claim in
accordance with this Section 10.4, the Indemnifying Party will
not consent to the entry of any judgment or enter into any
settlement with respect to the Third-Party Claim without the
prior written consent of Claimant (which consent will not be
unreasonably withheld, conditioned or delayed) unless the
judgment or proposed settlement involves only the payment of
money damages by the Indemnifying Party and does not impose an
injunction or other equitable relief upon Claimant.
(c) If the Indemnifying Party fails to undertake full
responsibility for the defense or prosecution of a Third-Party
Claim, (1) the Claimant will be entitled to defend or
prosecute such Third-Party Claim with counsel of its own
choice (the reasonable Fees and Costs of such defense or
prosecution being
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indemnified under this Section 10), (2) the Indemnifying Party
at its own expense may nevertheless participate with the
Claimant in the defense or prosecution of such Third-Party
Claim and any settlement negotiations with respect thereto,
and (3) except as provided herein, the Claimant may settle the
Third-Party Claim on such terms as it may choose, although it
will not reach such a settlement until it has consulted in
good faith with the Indemnifying Party.
(d) An Indemnifying Party's defense or prosecution
of, or participation in, a Third-Party Claim will not in any
manner relieve the Indemnifying Party of its obligations to
indemnify the Claimant under this Section 10. The Indemnifying
Party and the Claimant will cooperate in good faith with each
other in connection with the defense or settlement of any
Third-Party Claim and will make available to each other all
information necessary or useful to the defense or settlement
of such matter.
10.6 Limits on Indemnification.
(a) With the exception of the representations and
warranties set forth in Section 4.12, the representations and
warranties of DevStream and the Key Employee set forth in this
Agreement will survive only for a period of one (1) year after
the Closing Date.
(b) Any covenant or agreement by the parties hereto
which by its terms contemplates performance after the Closing
Date will survive the Closing Date, including the obligations
and liabilities of DevStream, Key Employee and Spouse under
Section 10.3.
(c) DevStream, the Key Employee and Spouse will not
be obligated to indemnify Compuware under Section 10.1 unless
and until the aggregate of Losses for which indemnity is
provided under Section 10.1 reaches One Hundred Thousand
Dollars ($100,000), in which event DevStream, the Key Employee
and Spouse will be obligated to indemnify Compuware for all
applicable Losses; provided, however, that the indemnification
threshold of $100,000 will not apply to the indemnification
obligations of Sections 10.1 and 10.7 specifically relating to
Taxes nor will any amounts paid in respect of Sections 10.1,
or 10.7 specifically relating to Taxes reduce such
indemnification threshold or affect such indemnification
deductible as the same may apply to any other claims for
indemnification.
(d) Notwithstanding anything to the contrary
contained in this Agreement, Compuware's rights to
indemnification shall be made net of all insurance
reimbursement, third-party contribution and third-party
indemnification realized or to be realized by Compuware. If
any claim for indemnification asserted hereunder is, or may
be, the subject of any insurance coverage or other right to
indemnification or contribution from any third person, the
Indemnified Party expressly agrees that it will promptly
notify the applicable insurance carrier of any such claim or
Loss and tender defense thereof to such carrier, and will also
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promptly notify any third party indemnitor or contributor
which may be liable for any portion of such Losses or claims.
The Indemnified Party agrees to pursue, at the cost and
expense of the Indemnifying Party, each applicable insurance
carrier and third party indemnitor or contributor.
(e) The Indemnified Party will use all reasonable
efforts, consistent with normal practices and policies and
good commercial practice, to mitigate such Losses.
(f) If Compuware has received payment from the
Indemnity Escrow Fund with respect to Losses and, thereafter,
Compuware has received or is entitled to receive
indemnification for other Losses ("Other Losses"), which, in
the aggregate together with the Losses, exceed the Indemnity
Escrow Fund, Compuware will nonetheless be entitled to collect
from, and pursue, DevStream , the Key Employee and Spouse,
jointly and severally, for payment of, and DevStream, the Key
Employee and Spouse will, jointly and severally, pay to
Compuware any Other Losses to the extent unpaid.
(g) Notwithstanding anything herein to the contrary,
Losses will not include punitive damages. Notwithstanding the
preceding sentence, Losses will include amounts recoverable or
recovered from Compuware by a third party (which third party
will not include an affiliate of Compuware) which constitute
punitive damages. Notwithstanding anything herein to the
contrary, Losses will not include "lost profits" or "lost
revenues", unless "lost profits" or "lost revenues" are
included in claims of third parties against Compuware and/or
the surviving corporation. Notwithstanding the preceding
sentence, for purposes of this Section 10, "lost profits" or
"lost revenues" means a negative impact on future revenues or
profits of Compuware arising as an indirect or secondary
consequence of a breach of a representation, warranty,
covenant or agreement but "lost profits" or "lost revenues"
will be included in Losses to the extent they are the direct
consequence of a breach of a representation, warranty or
covenant.
(h) The parties agree that any indemnification
payment made by DevStream, Key Employee or Spouse under
Sections 10.1 or 10.7 to Compuware is an adjustment to the
Purchase Price, and they agree to consistently so treat any
such payment on any Tax Return or claim for refund that they
file, in any administrative or appeals procedure, judicial
proceedings, or any other situation in which a
characterization of such a payment is made.
(i) Each party hereby acknowledges and agrees that,
from and after the Closing Date, its sole and exclusive remedy
with respect to any and all claims relating to the subject
matter of this Agreement will be pursuant to the provisions
set forth in this Section 10 below, except as provided in
Section 10.3, any claims based on fraud and/or any claims
relating to Taxes and Proprietary Rights, for which Losses
will not be so limited. In furtherance of the foregoing, each
party hereby waives, from and after the Closing Date, to the
fullest extent permitted under applicable law, any and all
claims, rights and causes of action (other than
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claims of fraud and claims arising under this Section 10) it
may have relating to the subject matter of this Agreement
arising under or based upon any federal, state, local or
foreign statute, law, ordinance, rule or regulation or
otherwise.
10.7 Tax Indemnification Procedure. Notwithstanding anything
else in this Agreement to the contrary:
(a) Compuware will, as to any Taxes in respect of
which DevStream, the Key Employee and Spouse will indemnify
Compuware and/or its affiliates, promptly inform the
Representative of, and permit the participation of
Representative at its expense in, any investigation, audit,
controversy, litigation or other proceeding ("Tax Proceeding")
by or with a Tax Authority empowered to administer or enforce
such Tax and will not consent to the settlement or Final
Determination in such proceeding without the prior written
consent of the Representative, which will not be unreasonably
withheld, conditioned or delayed. Subject to the participation
and cooperation provisions of subsections (a) and (b) of this
Section 10.7, the Representative will be entitled to assume
control of any Tax Proceeding at its own expense; provided,
however, that (1) Representative shall not enter into any
settlement of a Tax Proceeding which would have an adverse
effect on Compuware or its affiliates without Compuware's
written consent which will not be unreasonably withheld, (2)
at Compuware's election, Representative shall provide
Compuware with an opinion in form and content reasonably
acceptable to Compuware from counsel reasonably acceptable to
Compuware that there is substantial authority for the position
that Representative is taking with respect to such Tax
Proceeding and Compuware need not and Representative shall not
take such position until such opinion is delivered to
Compuware, and (3) any Tax Proceeding shall be controlled
jointly by Representative and Compuware. Notwithstanding this
Section 10.7(b) to the contrary, Representative shall not have
the right to control any Tax Proceeding or to take any other
action if, as a result of such Tax Proceeding or other action,
the Taxes payable by Compuware or its affiliates for a taxable
period for which the Shareholders are not obligated to
indemnify Compuware and its affiliates would be likely to be
materially increased.
(b) (1) Compuware, on the one hand, and the
Representative, on the other hand, will (A) use
reasonable efforts to keep the other advised as to
the status of any Tax Proceeding, (B) promptly
furnish to the other a copy of any inquiry re quest
for information, a notice of proposed adjustment,
revenue agent's report or similar report or notice of
deficiency together with all relevant documents and
memos related to the foregoing documents, notices or
reports from any Tax Authority concerning any Tax
Proceeding, (C) timely notify the other regarding any
proposed written communication to any such Tax
Authority with respect to such Tax Proceeding, (D)
give the other the reasonable opportunity to review
and comment in advance on all written submissions,
filings and any other information relevant to
indemnifiable issues, and (E) consider in good faith
any suggestions made by the other to submit
documentation or attend
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those portions of any meetings and proceedings that
relate to such Tax Proceeding. Notwithstanding the
foregoing, Compuware, may make appropriate redactions
in any information provided to the Representative to
the extent reasonably required to preserve the
confidentiality of such information as to issues that
are not Tax Claims.
(2) Subject to the participation and
cooperation provisions of subsections (a) and (b)(1)
above, Compuware will have full responsibility for
and discretion in handling any Tax Proceeding. In the
event that Compuware or its affiliates is required to
pay any Tax, file any bond or deposit any amount in
order to undertake a Tax Proceeding, DevStream or the
Key Employee will loan to Compuware no later than
three business days before such payment is required
to be made, without interest and until a Final
Determination with respect to such Tax has occurred,
one hundred percent of the amount required to be
paid. Within three (3) business days of the receipt
by Compuware or its affiliates of a refund of any
amount loaned to it by DevStream or the Key Employee
(including any interest received by Compuware or its
affiliates), Compuware or its affiliates will pay
such refunded amount to DevStream or the Key Employee
net of any Tax cost and Fees and Costs incurred by
Compuware or its affiliates as a result of such
refund. Compuware and its affiliates will not be
obligated to settle or resolve any issue related to
Taxes for any taxable period, which, if so settled or
resolved, could have a negative effect on Compuware
or its affiliates.
(c) Whenever any claim is made for indemnification of
any Tax under this Agreement, Compuware will notify
Representative promptly after Compuware has actual knowledge
of any event which might give rise to a claim for
indemnification under this Agreement. The failure by Compuware
to give notice of a claim as required in this Section 10.7(d)
or a delay in giving such notice will not affect the validity
or amount of such claim and the indemnification obligations of
the DevStream, the Key Employee and Spouse will remain in
effect as to such claim (except to the extent that such
failure or delay shall have adversely affected DevStream's,
the Key Employee's or Spouse's ability to defend against any
liability or claim for Taxes that DevStream, the Key Employee
and Spouse are obligated to pay hereunder).
(d) Within sixty (60) days of any Final Determination
of Tax in a Tax Proceeding, or the written acquiescence of the
Representative with respect to a Tax Proceeding, Compuware
will provide a written notice to the Representative explaining
the calculation of the amount of such Tax claim. DevStream,
the Key Employee and Spouse will pay such amount of Tax to
Compuware within five (5) business days after receipt of such
notice.
(e) If any party for any reason fails or refuses to
perform fully its obligations or indemnifications under this
Section 10.7, in addition to its other rights under this
Agreement, Compuware will have the right of offset with
respect
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to any payments which are due or will become due under this
Agreement or any Related Agreement. The foregoing provisions
of this Section 10.7(e) are permissive, and a failure by
Compuware to exercise its rights under this Section 10.7(e)
will not affect its right to indemnification under this
Agreement.
(f) Except as otherwise specifically provided in this
Agreement, each party will bear its own Fees and Costs
incurred in connection with a Tax liability issue for which
such party and its affiliates are liable, and not entitled to
indemnification, under this Agreement.
(g) The provisions of this Section 10.7 will not be
governed by any limitations in Section 10 (except this Section
10.7) and to the extent of any inconsistency between this
Section 10.7 and Section 10 (except this Section 10.7), the
provisions of this Section 10.7 will control.
(h) For purposes of this Section 10, in computing the
aggregate amounts of Losses, the amount of each Loss will be
grossed up to take account of any Taxes incurred by the
Indemnified Party arising from the receipt of indemnity
payments hereunder (determined without regard to the
utilization of any net operating losses, tax credits or other
tax attributes of the Indemnified Party and based on the
assumption that, if taxable, the receipt of such payment is
taxed at the highest marginal rate then in effect with respect
to corporations) and will be reduced to take account of any
net Tax Benefit realized by the Indemnified Party arising from
the incurrence or payment of any such Loss. In computing the
amount of any such Tax Benefit, the Indemnified Party will be
deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item arising from
the receipt of any indemnity payment hereunder or the
incurrence or payment of any indemnified Loss. Any
indemnification payment hereunder will be made without regard
to any net Tax Benefit until after the Indemnified Party has
Actually Realized such benefit. For purposes of this
Agreement, an Indemnified Party will be deemed to have
"Actually Realized" a net Tax Benefit to the extent that, and
at such time as, the amount of Taxes payable by such
Indemnified Party is reduced below the amount of Taxes such
Indemnified Party would be required to pay but for the receipt
of the indemnity payment or the incurrence of payment of such
Loss, as the case may be. For purposes of this Agreement, "Tax
Benefit" shall mean the present value (calculated using a
7.75% discount rate) of the sum of any increased deductions,
losses, or credits then allowable or decreases in income,
gains or recapture of tax credits then allowable (including by
way of amended tax returns) or allowable in future years.
11. Miscellaneous.
11.1 Notices. Any notice required or permitted to be given
under this Agreement must be in writing and sent by recognized
overnight courier (such as Airborne or Federal Express) or by certified
or registered mail, postage prepaid, or delivered by hand, addressed as
follows:
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(a) To Compuware: Compuware Corporation
Xxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to Compuware Corporation
Xxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
(b) To DevStream, DevStream Corporation
Key Employee, 0000 Xxxxxx Xxxxxx Xxxx, Xxx 000
Xxxxxx, Xxxxxxxx Xxxxxxx, XX 00000
or Representative Attention: Xxxxx Xxxxxxxx
With a copy to: Xxxxxxx Xxxxx Xxxxxxx & Ingersoll LLP
Plaza 1000 - Suite 000
Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Esquire
Addresses for notices may be changed by notice given pursuant to this
Section 11.1. Notice will be deemed given on the date delivered if
delivered by hand. Notice sent by recognized overnight courier will be
deemed given on the business day following delivery to such recognized
overnight courier. Notice mailed as provided herein will be deemed
given on the third (3rd) business day following the date so mailed.
11.2 No Waiver. No waiver of any breach of any provision of
this Agreement will be deemed a waiver of any preceding or succeeding
breach or of any other provision of this Agreement. No extension of
time for performance of any obligations or acts will be deemed an
extension of the time for performance of any other obligations or acts.
11.3 Successors and Assigns. This Agreement will bind and
inure to the benefit of the parties and their successors and assigns;
provided that (i) DevStream will not assign this Agreement, any Related
Agreement or any rights under this Agreement or any Related Agreement
to any other person without the prior written consent of Compuware and
(ii) Compuware will have the right to assign this Agreement and the
Related Agreements to any direct or indirect wholly-owned subsidiary of
Compuware.
11.4 Severability. The provisions of this Agreement will be
deemed severable, and if any provision or part of this Agreement is
held illegal, void or invalid under applicable Laws, such provision or
part may be changed to the extent reasonably necessary to make the
provision or part, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its
entirety, the remaining provisions of this Agreement will not in any
way be affected or impaired but will remain binding in accordance with
their terms.
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11.5 Entire Agreement; Amendment.
(a) This Agreement, the Related Agreements and the
Schedules and the Exhibits attached to this Agreement and the
Related Agreements contain the entire agreement of the parties
with respect to the transactions contemplated by this
Agreement and the Related Agreements, and no representations
or warranties made by any party or its representatives,
whether made orally or in writing, may be relied on unless set
forth in this Agreement, the Related Agreements or in the
Exhibits and Schedules to this Agreement and the Related
Agreements and no representation or warranty made prior to the
date of this Agreement by any party will survive the execution
and delivery of this Agreement.
(b) Subject to applicable law, at any time prior to
the consummation of the transactions contemplated by this
Agreement, DevStream and Compuware may, by action authorized
by their respective Boards of Directors as appropriate, (1)
mutually amend this Agreement, (2) extend the time for the
performance of any of the obligations or other acts of any
other person or entity, (3) waive any inaccuracies in the
representations or warranties contained in the Agreement, or
(4) waive compliance with any of the agreements or conditions
contained herein. This Agreement may not be amended except by
a writing signed by all of the parties by persons authorized
to execute such writing. Any agreement of a party to any
extension or waiver will be valid only if set forth in a
writing signed on behalf of such party by a person authorized
to execute such writing, but any waiver or failure to insist
on strict compliance with any obligation, covenant, agreement
or condition will not operate as a waiver of or estoppel with
respect to, any subsequent or other failure.
11.6 Cost of Litigation. If any party breaches this Agreement
or any Related Agreement and if counsel is employed to enforce this
Agreement or a Related Agreement, the successful party will be entitled
to Fees and Costs associated with such enforcement, subject to the
limits on indemnification set forth in Section 10.5.
11.7 Interpretation.
(a) This Agreement and the Related Agreements are
being entered into among competent and experienced business
persons, represented by counsel, and have been reviewed by the
parties and their counsel. Therefore, any ambiguous language
in this Agreement or any Related Agreement will not
necessarily be construed against any particular party as the
drafter of such language. The headings contained in this
Agreement are solely for the purposes of reference, are not
part of the agreement of the parties and will not in any way
affect the meaning or interpretation of this Agreement.
(b) Any statement under this Agreement made "to the
knowledge" of a party will be deemed to have been made to the
knowledge of such party following due investigation or
inquiry. A statement under this Agreement made to the
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knowledge of DevStream means to the knowledge of any of the
Key Employee following due investigation or inquiry.
(c) Unless the context of this Agreement otherwise
requires: (1) words of any gender include each other gender;
(2) words using the singular or plural number also include the
plural or singular number, respectively; (3) the terms
"hereof", "herein", "hereby", "hereto" and similar words refer
to this entire Agreement and not any particular Section,
Clause, Exhibit, Appendix or Schedule or any other subdivision
of this Agreement; (4) references to "Section", "Clause",
"Exhibit", "Appendix" or "Schedule" are to the Sections,
Clauses, Exhibits, Appendices and Schedules, respectively, of
this Agreement; (5) the words "include" or "including" will be
deemed to be followed by "without limitation" or "but not
limited to" whether or not they are followed by such phrases
or words of like import; and (6) references to "this
Agreement" or any other agreement or document will be
construed as a reference to such agreement or document as
amended, modified or supplemented and in effect from time to
time and will include a reference to any document which
amends, modifies or supplements it, or is entered into, made
or given pursuant to or in accordance with its terms. All
accounting terms used herein and not expressly defined herein
will have the meanings given to them under generally accepted
accounting principles as in effect on the Closing Date.
(d) Disclosure of any item or information in a
Schedule is not an admission that such item or information is
material or is of a nature that would cause a material adverse
effect with respect to any person or entity. The disclosure of
one item in a Schedule will not by inference suggest that any
other item not so disclosed is material.
11.8 Counterparts; Facsimile Signatures. This Agreement may be
executed in counterparts, each of which, when taken together, will be
deemed an original of this Agreement. Facsimile signatures shall be
deemed originals for all purposes hereunder.
11.9 Applicable Law; Choice of Forum.
(a) This Agreement and any dispute arising hereunder
or related hereto will be construed in accordance with and
governed by the laws of the State of Michigan, without giving
effect to the choice of law provisions thereof.
(b) Any litigation based hereon, or arising out of,
under, or in connection with this Agreement will be brought
and maintained exclusively in the courts of the State of
Michigan or in the United States District Court for the
Eastern District of Michigan. Each party to this Agreement
hereby expressly and irrevocably submits to the jurisdiction
of the courts of the State of Michigan and of the United
States District Court for the Eastern District of Michigan for
the purpose of any such litigation as set forth in the
preceding sentence. Each party to this Agreement further
irrevocably consents to the service of process by registered
mail, postage prepaid, or by personal service within or
without the State of Michigan.
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(c) Each party to this Agreement hereby expressly and
irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying
of venue of any such litigation brought in any such court
referred to above and any claim that any such litigation has
been brought in an inconvenient forum. To the extent that any
party to this Agreement has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal
process (whether through service or notice or otherwise) such
party hereby irrevocably waives such immunity in respect of
its obligations under this Agreement.
11.10 Expenses. Each party will bear its own expenses in
connection with the transactions contemplated by this Agreement,
including costs of their respective brokers, financial advisors,
attorneys and accountants, regardless of whether any of the
transactions contemplated by this Agreement are consummated.
11.11 Press Releases. On or before the Closing Date, no party
will issue or authorize to be issued any press release or similar
announcement concerning the Agreement or any of the transactions
contemplated by this Agreement without the prior approval of the other
party; provided, however, that Compuware will be permitted to make such
disclosures as necessary to comply with any applicable securities laws
or stock exchange or NASDAQ Stock Market policies.
11.12 Further Assurances. At any time and from time to time
after the Closing Date, the parties agree to cooperate in all
reasonable respects with each other, to execute and deliver such other
documents, instruments of assignment, books and records, and do all
such further acts and things as may be reasonably required to carry out
the transactions contemplated hereby.
[Signatures appear on the next page]
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In Witness Whereof, the parties have executed this Agreement on the date set
forth in the introductory paragraph of this Agreement.
COMPUWARE CORPORATION,
a Michigan corporation
By: /s/ Xxxxx Xxxxxxxx
------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President &
Chief Financial Officer
DEVSTREAM CORPORATION,
a Colorado corporation
By: /s/ Xxxxx Xxxxxxxx
------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Technical Officer
"CROSS"
/s/ Xxxxxx Xxxxx
----------------
Xxxxxx Xxxxx
"SPOUSE"
/s/ Xxxxxx Xxxxxxxx
-------------------
Xxxxxx Xxxxxxxx
KEY EMPLOYEE
/s/ Xxxxx Xxxxxxxx
------------------
Xxxxx Xxxxxxxx
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