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EXHIBIT 2.5
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
effective as of September 30, 1998, by and among UOL PUBLISHING, INC., a
Delaware corporation ("UOL"), IVY SOFTWARE, INC., a Virginia corporation
("Ivy"), and XXXXXX X. XXXX (the "Purchaser"). UOL and Ivy shall sometimes
collectively be referred to as the "Transferors" and individually as a
"Transferor".
WITNESSETH:
WHEREAS, Ivy has authorized capital stock of 100,000 shares of Ivy Common
Stock (as defined below), of which 51,000 shares are issued and outstanding;
WHEREAS, UOL currently owns all of the outstanding shares of Ivy Common
Stock (collectively the "Ivy Shares");
WHEREAS, such Ivy Shares had been owned by Purchaser prior to UOL's
acquisition of such shares pursuant to that certain Stock Purchase Agreement
made and entered into effective March 1, 1997, by and among UOL, Ivy and
Purchaser (the "Original Agreement");
WHEREAS, UOL now desires to sell back to Purchaser, and Purchaser desires
to repurchase from UOL, all right, title and interest in and to the Ivy Shares;
NOW, THEREFORE, in reliance upon the premises, representations, warranties
and covenants made herein and in consideration of the mutual agreements herein
contained, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms shall
have the meaning set forth below:
"Acquiror Indemnitee" and "Acquiror Indemnitees" shall have the respective
meanings set forth in Section 10.1.
"Acquiror Indemnitor" and "Acquiror Indemnitors" shall have the respective
meanings set forth in Section 10.1.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by, or under common Control with such other
Person.
"Affiliated Group" means any affiliated group within the meaning of Code
Section 1504.
"Balance Sheet" shall have the meaning set forth in subsection 4.5(a).
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"CERCLA" shall have the meaning set forth in subsection 4.23(a).
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall have the meaning set forth in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" shall have the meaning set forth in Section 6.1.
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"Consulting Agreement" shall have the meaning set forth in Section 6.5.
"Controlled Group of Corporations" has the meaning set forth in Code
Section 1563.
"Control" (including, with correlative meanings, the terms "controlled by",
"controlling" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through ownership of voting securities, by contract or otherwise.
"Employee Benefit Plan" means any: (i) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan;
(ii) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan; (iii) qualified defined benefit retirement plan
or arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan); and (iv) Employee Welfare Benefit Plan or fringe benefit
plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).
"Encumbrances" means any and all restrictions on transfer, liens,
encumbrances, charges, pledges, security interests, taxes, options, warrants,
purchase rights, contracts, commitments, equities, claims and demands.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Intellectual Property" means: (i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice and the record of conception
documentation relating thereto), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissuances,
divisions, continuations, renewals, continuations-in-part, revisions,
extensions, and reexaminations thereof; (ii) all trademarks, service marks,
certification marks, collective marks, trade dress, trade styles, logos, trade
names, company names, and corporate names, together with all translations,
adaptions, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, recordings and
renewals in connection therewith; (iii) all copyrightable works, all copyrights,
rights and interests in copyrights and all applications, registrations,
recordings and renewals in connection therewith; (iv) all mask works and all
applications, registrations, recordings and renewals in connection therewith;
(v) all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals); (vi) all computer software
(including data and related documentation); (vii) all other proprietary rights;
(viii) all copies and tangible embodiments thereof (in whatever form or medium);
(ix) all income, royalties, damages or payments now and hereafter due and/or
payable under any of the foregoing with respect to any of the foregoing and the
right to xxx for past, present or future infringements of any of the foregoing;
(x) all licenses with respect to any of the foregoing; and (xi) all rights
corresponding to any of the foregoing throughout the world.
"Ivy Common Stock" means the Common Stock, $1.00 par value per share, of
Ivy.
"Knowledge" means knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether asserted
or unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
liability for Taxes.
"Litigation" shall have the meaning set forth in subsection 4.7(a).
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
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"New Contracts" shall have the meaning set forth in subsection 4.9(a).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means any individual, corporation, partnership, limited
partnership, limited liability company, trust, entity or unincorporated
organization or a government or any agency or political subdivision thereof.
"Prohibited Transaction" has the meaning set forth in ERISA Section 406 and
Code Section 4975.
"Proprietary Information" shall have the meaning set forth in subsection
4.15(g).
"RCRA" has the meaning set forth in subsection 4.23(a).
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"Subsidiary" means any corporation with respect to which a specified Person
(or Subsidiary thereof) owns a majority of the common stock or has the power to
vote or direct the voting of sufficient securities to elect a majority of the
directors.
"Tax" or "Taxes" means any federal, state, local, foreign or other income,
gross receipts, profits, franchise, license, transfer, sales, use, payroll,
withholding, occupation, property (real or personal), excise and similar taxes,
fees, duties, assessments, withholdings or governmental charges of any nature
(including interest, penalties or additions to such taxes).
"Tax Returns" means all returns, reports, estimates, information returns
and statements of any nature with respect to Taxes.
"Transferor Indemnitee" and "Transferor Indemnitees" shall have the
respective meanings set forth in Section 10.2.
"Transferor Indemnitor" and "Transferor Indemnitors" shall have the
respective meanings set forth in Section 10.2.
ARTICLE 2
BASIC TRANSACTION
2.1 Agreement to Sell and Purchase Securities. For the consideration
hereinafter provided and subject to the terms and conditions of this Agreement,
at the Closing, UOL shall sell, assign, transfer, convey and deliver to
Purchaser, free and clear of all liens and encumbrances, and Purchaser shall
purchase and acquire from UOL, all of the Ivy Shares.
2.2 Consideration at Closing. At the Closing, subject to the terms and
conditions hereof and subject to adjustment as set forth in Section 2.4 hereof:
(a) UOL shall cause to be delivered to Purchaser certificates
representing the Ivy Shares, together with stock powers duly endorsed in
blank for the transfer of the Ivy Shares to Purchaser, and, if applicable,
with all necessary transfer taxes paid or other revenue stamps affixed
thereto;
(b) Purchaser shall deliver to UOL by check or wire transfer the sum
of $25,000.00; and
(c) Ivy shall execute the $420,919.97 promissory note in favor of UOL
attached hereto as Exhibit A.
ARTICLE 3
CLOSING
3.1 Closing. The closing of the transactions provided for herein (the
"Closing") shall be effective as of 2:00 p.m. on September 30, 1998 (the
"Closing Date"), at the offices of UOL Publishing, Inc., 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 000, XxXxxx, Xxxxxxxx 00000.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF TRANSFERORS
Except as otherwise set forth in the Disclosure Schedule attached hereto as
Exhibit B, UOL and Ivy hereby jointly and severally represent and warrant to
Purchaser as follows:
4.1 Organization of Ivy; Authority. Ivy is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Virginia, with the full power and authority, corporate and otherwise, to enter
into this Agreement and to carry out and perform its obligations under the terms
of this Agreement. Ivy has the full and unrestricted power and authority,
corporate and otherwise, to own, operate and lease its assets and properties and
to carry on its business as currently conducted and in which it presently
proposes to engage. Ivy is not qualified to do business in any other
jurisdiction, and the nature of Ivy's business does not require it to be so
qualified. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all requisite
corporate or other action on the part of UOL and Ivy. This Agreement has been
duly executed and delivered by UOL and Ivy and constitutes the valid, binding
and enforceable obligation of UOL and Ivy, enforceable in accordance with its
terms and conditions.
4.2 Ability to Carry Out the Agreement. Neither UOL nor Ivy is subject to
or bound by any provision of:
(i) any law, statute, rule, regulation, ordinance or judicial or
administrative decision;
(ii) any articles or certificate of incorporation or bylaws;
(iii) any mortgage, deed of trust, lease, note, stockholders'
agreement, bond, indenture, other instrument or agreement, license, permit,
trust, custodianship, or other restriction of any kind or character
whatsoever, at any time entered into by UOL, or entered into by Ivy since
March 1, 1997;
(iv) any judgment, order, writ, injunction or decree of any court,
governmental body, administrative agency or arbitrator, at any time entered
against UOL, or entered against Ivy since March 1, 1997;
that would prevent or be violated by, or would result in any penalty, forfeiture
or contract termination as a result of, or under which there would be a default
as a result of, nor is the consent of any Person under any contract or agreement
disclosed in Schedule 4.9(a) which has not been obtained required for, the
execution, delivery and performance by UOL and Ivy of this Agreement and the
transactions contemplated hereby.
4.3 Capitalization of Ivy; Ownership; Investment. (a) The authorized
capital stock of Ivy consists solely of 100,000 shares of Ivy Common Stock. No
shares of Ivy Common Stock, nor any other securities of Ivy, have been issued
since March 1, 1997. None of the directors and officers of Ivy has any Basis to
believe that there are shares of Ivy Common Stock or other securities of Ivy
issued and outstanding other than the Ivy Shares. The Ivy Shares are held of
record by UOL. Since March 1, 1997, Ivy has neither authorized nor issued any
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, rights of first refusal, preemptive rights or other rights of
any kind to acquire, directly or indirectly, any shares of capital stock of Ivy
or securities convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire, any shares of capital stock or
securities of Ivy, nor, since March 1, 1997, has Ivy committed itself to issue
any such capital stock option, warrant, right or security. Prior to the Closing,
any and all notes and debts of Ivy to UOL or its Affiliates, any advances made
by UOL to Ivy, any similar or related rights or interests owed to UOL, and any
and all interest or dividends payable with respect to any of the foregoing
shall, without any liability on the part of Ivy, be repaid or converted into
shares of Ivy Common Stock. Since March 1, 1997, Ivy has neither authorized nor
issued any stock appreciation, phantom stock, profit participation or other
similar rights with respect to Ivy. UOL is not party to any voting trust, proxy,
or other agreement, commitment, obligation, or understanding with respect to the
voting of the Ivy Shares.
(b) The Ivy Shares are owned of record and beneficially by UOL. UOL has
good, valid, and marketable title to the Ivy Shares, free and clear of any and
all Encumbrances, with full right and lawful authority to transfer, assign,
deliver, convert and exchange the Ivy Shares pursuant to this Agreement. UOL is
not party to
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any option, warrant, purchase right, or other contract or commitment that could
require UOL to sell, transfer, or otherwise dispose of any capital stock of Ivy
(other than pursuant to this Agreement).
4.4 Subsidiaries and Affiliates. Since March 1, 1997, Ivy has formed no
Subsidiaries and has not acquired control, directly or indirectly, or any direct
or indirect equity participation or any interest in any corporation,
partnership, trust, venture, business, enterprise, firm or other business
association.
4.5 Balance Sheet; Liabilities. (a) Attached hereto as Exhibit C is Ivy's
unaudited balance sheet as of September 30, 1998 (the "Balance Sheet"). The
Balance Sheet (including the notes thereto) is true, correct, and complete,
fairly presents the financial position of Ivy at the date thereof, and is
consistent with the books and records of Ivy (which books and records are
correct and complete).
(b) None of the directors and officers of Ivy has any Basis to believe that
there are Liabilities of Ivy (and there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claims or
demand against Ivy since March 1, 1997, giving rise to any Liability), except
for those: (i) accrued or reflected on the face of the Balance Sheet; or (ii)
arising in the ordinary course of business (none of which results from, arises
out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort infringement, or violation of law).
4.6 Title to Tangible Personal Properties; Absence of Liens. (a) Ivy has
good, valid and marketable title to, or valid and subsisting leasehold interests
in, all buildings, machinery, equipment and other tangible personal properties
and assets acquired since March 1, 1997 that are used in the business of Ivy,
located on its premises, or shown on the Balance Sheet, free and clear of any
and all Encumbrances, except for Encumbrances reflected on the Balance Sheet.
All such personal property is free from defects, has been maintained in
accordance with normal industry practice, is in good operating condition and
repair, ordinary wear and tear excepted, and is suitable for the purposes for
which it presently is used and presently is proposed to be used.
(b) None of the directors and officers of Ivy has any Basis to believe that
Ivy does not have good, valid and marketable title to, or valid and subsisting
leasehold interests in, all buildings, machinery, equipment and other tangible
personal properties and assets acquired prior to March 1, 1997 that are used in
the business of Ivy, located on its premises, or shown on the Balance Sheet,
free and clear of any and all Encumbrances, except for Encumbrances reflected on
the Balance Sheet. Since March 1, 1997, all such personal property has been
maintained in accordance with normal industry practice, is in good operating
condition and repair, ordinary wear and tear excepted, and is suitable for the
purposes for which it presently is used and presently is proposed to be used.
(c) The assets and properties of Ivy as reflected on the Balance Sheet
constitute all of the assets and properties necessary to conduct the business of
Ivy in the manner in which it has previously been conducted and as presently
proposed to be conducted.
4.7 Litigation. (a) There is no charge, complaint, action, suit,
arbitration, proceeding, hearing, or investigation (collectively, "Litigation")
pending or, to the best knowledge and belief of Ivy and UOL, threatened against
Ivy in, before, or by any court or arbitrator or governmental agency or
authority. None of the directors and officers of Ivy has any Basis to believe
that any Litigation may be brought or threatened against Ivy. Since March 1,
1997, Ivy has not become subject to any injunction, judgment, order, decree,
ruling, or charge that remains outstanding.
(b) Ivy has not breached, and is not in default of, any of the legal
obligations it has undertaken since March 1, 1997, with respect to any of its
licensors, licensees, collaborative and other partners, joint venturers,
brokers, distributors, business consultants, franchisees, franchisors,
representatives or other independent contractors since that date. None of the
directors and officers of Ivy has any Basis to believe that Ivy has breached, or
is in default of, any other of its legal obligations with respect to any of its
licensors, licensees, collaborative and other partners, joint venturers,
brokers, distributors, business consultants, franchisees, franchisors,
representatives or other independent contractors.
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4.8 Compliance with Law. Since March 1, 1997, UOL and Ivy have complied in
all material respects with all applicable statutes, laws, ordinances,
regulations, rules, orders, determinations, writs, injunctions, awards,
judgments, and decrees of every kind whatsoever of any and all governmental
authorities applicable to Ivy (including all agencies thereof) or to the assets,
properties and business of Ivy, and no suit, action, proceeding, hearing,
investigation, charge, complaint, claim, demand or notice has been filed,
commenced or threatened against Ivy alleging any failure to so comply. All
material governmental approvals, permits and licenses required by Ivy in
connection with the conduct of its business have been obtained, are in full
force and effect, and are being complied with in all respects. Since March 1,
1997, neither Ivy nor any of its employees, agents, distributors or
representatives has paid or received any bribe or other unlawful, questionable
or unusual payment of money or other thing of more than nominal value, granted
or accepted any extraordinary discount, or furnished or been given any other
unlawful or unusual inducement to or from any person, business association or
governmental entity in the United States or elsewhere in connection with or in
furtherance of the business of Ivy, and such business, since March 1, 1997, is
not in any manner dependent upon the making or receipt of such payment,
discounts or other inducements.
4.9 Contracts. (a) Section 4.9(a) of the Disclosure Schedule sets forth a
list of each written and oral contract or agreement to which Ivy has become a
party since March 1, 1997 (collectively, the "New Contracts"):
(i) which involves the lease of personal property from or to third
parties providing for lease payments in excess of $1,000 per annum;
(ii) under which it has created, incurred, assumed or guaranteed (or
may create, incur, assume or guarantee) indebtedness for borrowed money
(including capitalized lease obligations) involving more than $1,000;
(iii) which is in the nature of an employment, consulting or severance
agreement or collective bargaining agreement involving the payment of more
than $1,000 or not entered into in the ordinary course of business;
(iv) which is with any of UOL and its Affiliates (other than Ivy);
(v) which concerns confidentiality, nondisclosure or noncompetition;
(vi) which is a profit sharing, stock option, stock appreciation,
deferred compensation, severance or other plan or arrangement for the
benefit of its current or former directors, officers and employees;
(vii) which by its terms is not terminable without liability and
involves the payment or receipt of $1,000 or more;
(viii) which the consequences of a default or termination could have
an adverse effect on the business, assets, financial condition, operations,
results of operations, or future prospects of Ivy;
(ix) which is in the nature of a partnership, joint venture, or
collaborative arrangement or relationship;
(x) which involves the purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or for the furnishing or
receipt of services, the performance of which shall extend over a period of
more than one year, result in financial loss to Ivy, or involves
consideration in excess of $1,000; or
(xi) which is outside of the ordinary course of business or contains
any provision requiring Ivy to indemnify any other party thereto.
(b) Ivy has delivered or made available to Purchaser a correct and complete
copy of each written New Contract, as amended to date, and a written summary
setting forth the terms and conditions of each oral New Contract. All of the New
Contracts are legal, valid, binding, enforceable in accordance with their
respective terms against Ivy and any other parties thereto, and are in full
force and effect on identical terms following the consummation of the
transactions contemplated in this Agreement. There is not under any New
Contract:
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(i) any existing default, breach or violation by Ivy or by any other party
thereto; (ii) an event which, after notice or lapse of time or both, would
constitute a default or breach by Ivy or by any other party, or permit
termination, modification, or acceleration, under the New Contract; or (iii) any
repudiation of any provision of any New Contract.
4.10 Brokers and Intermediaries. None of the Transferors has employed any
broker, finder, advisor, or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to a broker's, finder's,
or similar fee or commission in connection therewith or upon the consummation
thereof.
4.11 Tax Matters. Since March 1, 1997:
(a) Ivy has filed all Tax Returns that it has been required to file. All
such Tax Returns were correct and complete in all respects. All Taxes owed by
Ivy (whether or not shown on any Tax Return) have been paid. Ivy currently is
not the beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a jurisdiction where Ivy
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Encumbrances on any of the assets of Ivy that arose
in connection with any failure (or alleged failure) to pay any Tax.
(b) Ivy has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, consultant,
independent contractor, creditor, stockholder, or other third Person.
(c) No Transferor or director or officer (or employee responsible for Tax
matters) of Ivy expects any authority to assess any additional Taxes for any
period for which Tax Returns have been filed. There is no dispute or claim
concerning any Tax Liability of Ivy either: (i) claimed or raised by any
authority in writing; or (ii) as to which any of the Transferors or the
directors and officers (and employees responsible for Tax matters) of Ivy has
Knowledge based upon personal contact with any agent of such authority. No
federal, state, local, and foreign income Tax Returns filed with respect to Ivy
for the tax year ended December 31, 1997 are currently the subject of any audit.
The Transferors have delivered or made available to Purchaser correct and
complete copies of all federal, state and local income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by Ivy for
the tax year ended December 31, 1997.
(d) Ivy 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.
(e) Ivy has not filed a consent under Code Section 341(f) concerning
collapsible corporations. Ivy has not made any payments, is not obligated to
make any payments, and is not a party to any agreement that under certain
circumstances could obligate it to make any payments that shall not be
deductible under Code Section 280G. Ivy has not been a United States real
property holding corporation within the meaning of Code Section 897(c)(2) during
the applicable period specified in Code Section 897(c)(1)(A)(ii). Ivy has
disclosed on its Federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal income Tax within the
meaning of Code Section 6662. Ivy is not a party to any Tax allocation or
sharing agreement. Ivy is not a member of an Affiliated Group filing a
consolidated Federal income Tax Return and has no Liability for the Taxes of any
Person (other than Ivy) under Treas. Reg. sec. 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract, or otherwise.
(f) The unpaid Taxes of Ivy: (i) did not, as of the Most Recent Fiscal
Month End exceed the reserve for Tax Liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the face of the Balance Sheet (rather than in any notes
thereto); and (ii) do not exceed that reserve as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
Ivy in filing its Tax Returns.
(g) As of the Closing, Ivy shall not have outstanding any warrants,
options, convertible securities, or any other type of right pursuant to which
any Person could acquire stock in Ivy that, if exercised or converted, would
affect Purchaser's acquisition or retention of control of Ivy as defined in Code
Section 368(c)(1).
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(h) Ivy operates at least one significant historic business line or owns at
least a significant portion of its historic business assets, in each case within
the meaning of Treas. Reg. sec.1.368-1(d).
4.12 Employee Benefits. Section 4.12 of the Disclosure Schedule lists each
Employee Benefit Plan that Ivy maintains or to which Ivy contributes. Each such
Employee Benefit Plan (and each related trust, insurance contract, or fund)
complies in form and in operation in all respects with the applicable
requirements of ERISA, the Code, and other applicable laws. Since March 1, 1997:
(a) All required reports and descriptions (including Form 5500 Annual
Reports, Summary Annual Reports, PBGC-1's, and Summary Plan Descriptions) have
been filed or distributed appropriately with respect to each such Employee
Benefit Plan. The requirements of Part 6 of Subtitle B of Title I of ERISA and
of Code Section 4980B have been met with respect to each such Employee Benefit
Plan which is an Employee Welfare Benefit Plan.
(b) All contributions (including all employer contributions and employee
salary reduction contributions) which are due have been paid to each such
Employee Benefit Plan which is an Employee Pension Benefit Plan, and all
contributions for any period ending on or before the Closing Date which are not
yet due have been paid to each such Employee Pension Benefit Plan or accrued in
accordance with the past custom and practice of Ivy. All premiums or other
payments for all periods ending on or before the Closing Date have been paid
with respect to each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.
(c) None of the directors and officers of Ivy has any Basis to believe that
each such Employee Benefit Plan which is an Employee Pension Benefit Plan meets
the requirements of a "qualified plan" under Code Section 401(a) and has not
received, within the last two years, a favorable determination letter from the
Internal Revenue Service.
(e) The market value of assets under each such Employee Benefit Plan which
is an Employee Pension Benefit Plan (other than any Multiemployer Plan) equals
or exceeds the present value of all vested and nonvested Liabilities thereunder
determined in accordance with PBGC methods, factors, and assumptions applicable
to an Employee Pension Benefit Plan terminating on the date for determination.
(f) The Transferors have delivered or made available to Purchaser correct
and complete copies of the plan documents and summary plan descriptions, the
most recent determination letter received from the Internal Revenue Service, the
most recent Form 5500 Annual Report, and all related trust agreements, insurance
contracts, and other funding agreements which implement each such Employee
Benefit Plan.
(g) With respect to each Employee Benefit Plan that Ivy and the Controlled
Group of Corporations which includes Ivy maintains or has maintained within the
last five years, or has contributed, or been required to contribute within the
last five years:
(i) No such Employee Benefit Plan which is in Employee Pension Benefit
Plan (other than any Multiemployer Plan) has been completely or partially
terminated or been the subject of a Reportable Event as to which notices
would be required to be filed with the PBGC. No proceeding by the PBGC to
terminate any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or threatened.
(ii) There have been no Prohibited Transactions with respect to any
such Employee Benefit Plan. No Fiduciary has any Liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any such Employee Benefit
Plan. No action, suit, proceeding, hearing, or investigation with respect
to the administration or the investment of the assets of any such Employee
Benefit Plan (other than routine claims for benefits) is pending or
threatened. None of Purchaser and the directors and officers (and employees
with responsibility for employee benefits matters) of Ivy has any Knowledge
of any Basis for any such action, suit, proceeding, hearing, or
investigation.
(iii) Ivy has not incurred, and none of Purchaser and the directors
and officers (and employees with responsibility for employee benefits
matters) of Ivy has any reason to expect that Ivy shall incur, any
Liability to the PBGC (other than PBGC premium payments) or otherwise under
Title IV of ERISA
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(including any withdrawal Liability) or under the Code with respect to any
such Employee Benefit Plan which is an Employee Pension Benefit Plan.
(h) None of Ivy and the other members of the Controlled Group of
Corporations that includes Ivy contributes to, has contributed to, or has been
required to contribute to any Multiemployer Plan or has any Liability (including
withdrawal Liability) under any Multiemployer Plan.
(i) Ivy does not maintain or contribute and has not maintained or
contributed, and has not been required to contribute to any Employee Welfare
Benefit Plan providing medical, health, or life insurance or other welfare-type
benefits for current or future retired or terminated employees, their spouses,
or their dependents (other than in accordance with Code Sec. 4980B).
4.13 Articles of Incorporation and Bylaws. Ivy has delivered or made
available to Purchaser complete and correct copies of the Articles of
Incorporation and Bylaws of Ivy, as currently in effect. Since March 1, 1997,
the Transferors have not defaulted under or violated any provision of the
Articles of Incorporation or Bylaws of Ivy.
4.14 Insurance. Section 4.14 of the Disclosure Schedule sets forth the
following information with respect to each insurance policy (including policies
providing property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements) to which Ivy has been a party, a named insured, or
otherwise the beneficiary of coverage since March 1, 1997:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder, and the
name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the coverage was on
a claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage;
(v) a description of any retroactive premium adjustments or other
loss-sharing arrangements; and
(vi) any self-insurance arrangements affecting Ivy.
With respect to each such insurance policy: (i) the policy is legal, valid,
binding, enforceable, and in full force and effect; (ii) the policy shall
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
by this Agreement; (iii) Ivy is not nor is any other party to the policy in
breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the lapse of
time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (iv) no party to the policy
has repudiated any provision thereof. Ivy has been covered since March 1, 1997,
by insurance in scope and amount customary and reasonable for the businesses in
which it has engaged during the aforementioned period.
4.15 Intellectual Property. (a) Ivy hereby represents and warrants that it
owns or has the legal right to use pursuant to license, sublicense, agreement,
or permission all Intellectual Property reasonably necessary for the operation
of the businesses of Ivy as presently conducted and as presently proposed to be
conducted (except that Ivy so represents and warrants only with respect to
Intellectual Property that Ivy has acquired since March 1, 1997, and with
respect to Intellectual Property acquired before that date, Ivy only represents
and warrants that none of its directors and officers has any Basis to believe
that Ivy does not own or have the legal right to use such Intellectual
Property). Each item of Intellectual Property owned or used by Ivy immediately
prior to the Closing hereunder shall be owned or used by Ivy on identical terms
and conditions subsequent to the Closing, subject to the provisions of any
license agreement as to the term thereof. Since March 1, 1997, Ivy has taken
reasonable actions to maintain and protect each item of Intellectual Property
that it owns or uses.
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(b) Since March 1, 1997, Ivy has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with, any Intellectual Property
rights of third Persons, and none of the Transferors and the directors and
officers of Ivy has ever received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement, misappropriation, or
violation (including any claim that Ivy must license or refrain from using any
Intellectual Property rights of any third party), except where such action would
not have a material adverse effect upon Ivy. To the Knowledge of any of the
Transferors and the directors and officers of Ivy, no third Person has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of Ivy since March 1, 1997.
(c) Since March 1, 1997, Ivy has not utilized any inventions of any of its
employees (or people it currently intends to hire, if any) made prior to their
employment by Ivy. To its Knowledge, Ivy believes that all of the Intellectual
Property owned by it was conceived of during the corporate existence of Ivy and
was created by its employees within the scope of their employment with Ivy.
Section 4.15(c) of the Disclosure Schedule identifies each new trade name or
unregistered trademark used by Ivy in connection with its business since March
1, 1997, and each new patent or registration which has been issued to Ivy with
respect to any of its Intellectual Property since March 1, 1997, identifies each
pending patent application or application for registration which Ivy has made
since March 1, 1997, with respect to any of its Intellectual Property,
identifies any of its Intellectual Property since March 1, 1997, which is either
a trade secret or claimed as proprietary and not subject to a patent or pending
patent application, and identifies each license, agreement, or other permission
which Ivy has granted since March 1, 1997, to any third Person with respect to
any of its Intellectual Property (together with any exceptions). Ivy has
delivered to Purchaser correct and complete copies of all such registrations,
applications, licenses, agreements, and permissions (as amended to date) since
March 1, 1997, and has made available to Purchaser correct and complete copies
of all other written documentation evidencing ownership and prosecution (if
applicable) of each such item. With respect to each such item of Intellectual
Property:
(i) Ivy possesses all right, title, and interest in and to the item,
free and clear of any Encumbrance, license, or other restriction;
(ii) the item is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge;
(iii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or is threatened which challenges
the legality, validity, enforceability, use, or ownership of the item; and
(iv) Ivy has never agreed in writing, or to its Knowledge verbally, to
indemnify any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item, except as set
forth in the standard agreements with Ivy customers.
(d) Section 4.15(d) of the Disclosure Schedule identifies each item of
Intellectual Property that any third Person owns and that Ivy uses pursuant to
any license, sublicense, agreement, or permission entered into or materially
amended since March 1, 1997. Ivy has delivered to Purchaser correct and complete
copies of all such licenses, sublicenses, agreements, and permissions (as
amended to date). With respect to each such item of Intellectual Property:
(i) the license, sublicense, agreement, or permission covering the
item is legal, valid, binding, enforceable, and in full force and effect;
(ii) the license, sublicense, agreement, or permission shall continue
to be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the Closing, subject to the provisions of any
license agreements as to the term thereof;
(iii) to the Transferors' Knowledge, no party to the license,
sublicense, agreement, or permission is in breach or default, and no event
has occurred which with notice or lapse of time would constitute a breach
or default or permit termination, modification, or acceleration thereunder;
(iv) no party to the license, sublicense, agreement, or permission has
repudiated any provision thereof;
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(v) with respect to each sublicense, the representations and
warranties set forth in clauses (i) through (iv) immediately above are true
and correct with respect to the underlying license;
(vi) the underlying item of Intellectual Property is not subject to
any outstanding injunction, judgment, order, decree, ruling, or charge;
(vii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or is threatened which challenges
the legality, validity, or enforceability of the underlying item of
Intellectual Property; and
(viii) Ivy has not granted any sublicense or similar right with
respect to the license, sublicense, agreement, or permission which violates
any term or condition thereof.
(e) Ivy's ownership and/or right to the use of its Intellectual Property
acquired after March 1, 1997, shall not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any Intellectual Property
rights of third Persons as a result of the continued operation of its business
as presently conducted and as presently proposed to be conducted.
(f) None of the Transferors and the directors and officers (and employees
with responsibility for Intellectual Property matters) of Ivy has or had any
Knowledge of any new products, inventions, procedures, or methods of
manufacturing or processing that any competitors or other third Persons have
developed since March 1, 1997, which reasonably could be expected to supersede
or make obsolete any product or process of Ivy.
(g) Xxxxx Xxxxx 0, 0000, xxxx of the Transferors and the directors and
officers (and employees with responsibility for Intellectual Property matters)
of Ivy has done anything to compromise the secrecy, confidentiality or value of
any of its trade secrets, know-how, inventions, prototypes, designs, processes
or technical data (collectively "Proprietary Information") required to conduct
its business as now conducted and as proposed to be conducted. Since March 1,
1997, Ivy has taken reasonable security measures to protect the secrecy,
confidentiality, and value of its Proprietary Information important to the
conduct of its business, including requiring each employee and consultant to
acknowledge a requirement to safeguard proprietary or sensitive information of
Ivy in accordance with the employee handbook of Ivy.
(h) None of the Transferors and the directors and officers (or employees
with responsibility for Intellectual Property matters) of Ivy has any Knowledge
that any of Ivy's employees, officers, or consultants is in violation of his or
her obligations of confidentiality.
4.16 Bank Accounts. Section 4.16 of the Disclosure Schedule sets forth a
true and complete list of all bank accounts of Ivy and all authorized
signatories to each such account.
4.17 Directors, Officers and Employees. Ivy has heretofore delivered or
made available to Purchaser a correct and complete listing as of the date hereof
of all of the directors, officers and employees of Ivy, showing their names,
positions, and current wage or salary and bonuses.
4.18 Labor Relations; Employees. (a) Since March 1, 1997, Ivy has entered
no collective bargaining agreements with any of its employees; there has been no
labor union organizing activity pending or threatened with respect to Ivy; and
Ivy has not experienced any strikes, grievances, claims of unfair labor
practices, or other collective bargaining disputes. Since March 1, 1997, Ivy has
not committed any unfair labor practices. To the Knowledge of the Transferors,
no executive, key employee or group of employees has any plans to terminate
employment with Ivy. Copies of all personnel brochures or handbooks delivered to
employees or in effect since March 1, 1997, have been delivered or made
available to Purchaser.
(b) Since March 1, 1997, there has been no claim nor any Basis or grounds
for any claim by any Person or party (including, but not limited to,
governmental agencies of any kind) against Ivy arising out of any federal,
state, county, local or foreign statute, ordinance or regulation relating to
discrimination against employees or any other employee practices, including
without limitation retirement or labor relations, or occupational, safety and/or
health standards, sexual harassment or intentional infliction of emotional
distress.
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4.19 Transactions with Related Parties. Since March 1, 1997, none of UOL
or any present or former officer, director or shareholder of UOL, and no
Affiliate of UOL or of such officer, director or shareholder: (a) has been
involved in any business (excluding relationships and payments arising from the
employment or retention by Ivy of any such persons in the ordinary course of
business) arrangement or relationship with Ivy, including, without limitation,
any contract, agreement, or other arrangement providing for the employment of,
furnishing of services, by, rental of real or personal property from or
otherwise requiring payment to any such officer, director, shareholder or
Affiliate; or (b) owns any asset, tangible or intangible, which is used in the
business of Ivy.
4.20 Copies of Documents. True, correct, and complete copies of all
documents listed in the Disclosure Schedule have been heretofore delivered or
made available to Purchaser and identified in writing as constituting such
delivery.
4.21 Real Property. (a) Ivy owns no real estate.
(b) Section 4.21(b) of the Disclosure Schedule lists and describes briefly
all real property leased or subleased to or by Ivy since March 1, 1997. UOL has
delivered or made available to Purchaser correct and complete copies of such
leases and subleases, as amended to date. With respect to each such lease and
sublease:
(i) the lease or sublease is legal, valid, binding, enforceable, and
in full force and effect;
(ii) the lease or sublease shall continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby;
(iii) no party to the lease or sublease is in breach or default, and
no event has occurred which, with notice or lapse of time, would constitute
a breach or default or permit termination, modification, or acceleration
thereunder;
(iv) no party to the lease or sublease has repudiated any provision
thereof;
(v) there are no disputes, oral agreements, or forbearance programs in
effect as to the lease or sublease;
(vi) with respect to each sublease, the representations and warranties
set forth in clauses (i) through (v) above are true and correct with
respect to the underlying lease;
(vii) Ivy has not assigned, transferred, conveyed, mortgaged, deeded
in trust, or encumbered any interest in the leasehold or subleasehold;
(viii) all facilities leased or subleased thereunder have received all
approvals of governmental authorities (including licenses and permits)
required in connection with the operation thereof and have been operated
and maintained in accordance with applicable laws, rules, and regulations;
(ix) all facilities leased or subleased thereunder are supplied with
utilities and other services necessary for the operation of said
facilities; and
(x) the owner of the facility leased or subleased has good and
marketable title to the parcel of real property, free and clear of any
Encumbrance, easement, covenant, or other restriction, except for
installments of special easements not yet delinquent and recorded
easements, covenants, and other restrictions which do not impair the
current use, occupancy, or value, or the marketability of title, of the
property subject thereto.
4.22 Books and Records. The stock records of Ivy since March 1, 1997, are
in all respects complete and accurate, and the minute books of Ivy since March
1, 1997, accurately reflect the actions taken at shareholder and director
meetings or by unanimous written consent since that date and are in all respects
correct, complete, and accurate.
4.23 Environmental Matters. (a) Ivy has complied, since March 1, 1997, and
is in compliance with all local, state, and federal statutes, ordinances, and
regulations dealing with the protection of the environment or
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public health and safety, including, but not limited to, the Comprehensive
Environmental Response, Compensation, and Liability Act (codified as amended, 42
U.S.C. sections 9601 et seq.) ("CERCLA") and the Resource Conservation and
Recovery Act (codified as amended, 42 U.S.C. sections 6901 et seq.) ("RCRA").
(b) Since March 1, 1997, Ivy has obtained all required local, state and
federal permits, licenses, certificates and approvals relating to: (i) air
emissions; (ii) discharges to surface water or groundwater; (iii) noise
emissions, (iv) solid or liquid waste disposal; (v) the use, generation,
storage, transportation or disposal of toxic or hazardous substances or wastes
(intended hereby and hereafter to include any and all such materials listed in
any local, state or federal statute, ordinance, or regulation); (vi) the use,
storage, transportation or disposal of petroleum or petroleum products; or (vii)
other environmental, health and safety matters.
(c) Since March 1, 1997, Ivy has not caused, suffered, permitted or
sustained any emission, spill, release or discharge of any toxic or hazardous
substances or wastes, or any petroleum products, into or upon: (i) the air; (ii)
soils or any improvements located thereon, whether on Ivy' property or
elsewhere; (iii) surface water or groundwater; or (iv) a sewer, septic system or
waste treatment, storage or disposal system except in accordance with applicable
law or a valid government permit, license, certificate or approval.
(d) Since March 1, 1997, none of the Transferors or the officers and
directors (including employees responsible for environmental matters) of Ivy has
received written or oral notice of any actual or potential claims, orders,
directives, citations, or causes of action based on actual or alleged violations
of any local, state, or federal statutes, ordinances, or regulations dealing
with the protection of the environment or public health and safety, including,
but not limited to, CERCLA or RCRA, or oral or written notice of any actual or
potential common law claims or causes of action based upon Ivy' actual or
alleged involvement with or use of any substance regulated by local, state, or
federal statutes, ordinances, or regulations dealing with the protection of the
environment or public health and safety.
(e) Xxxxx Xxxxx 0, 0000, xxxx of the Transferors or the officers and
directors (including employees responsible for environmental matters) of Ivy has
received oral or written notice of any actual or potential claims, orders,
directives, citations or causes of action under any local, state, or federal
statutes, ordinances, or regulations dealing with the protection of the
environment or public health and safety, including, but not limited to, CERCLA
and RCRA, based upon or arising out of its actual or alleged disposal of
hazardous wastes or substances, whether on or off real property being operated
by Ivy.
(f) None of the Transferors and the officers and directors (including
employees responsible for environmental matters) of Ivy has any Knowledge of any
condition on any of the real property owned by Ivy which may give rise to any
claim, order, directive, citation, or cause of action based on any local, state,
or federal statute, ordinance, or regulation dealing with protection of the
environment or public health and safety, including, but not limited to, CERCLA
or RCRA.
4.24 Guaranties. Ivy is not a guarantor or otherwise liable for any
Liability or obligation of any Person other than itself (including indebtedness
of any other Person) accrued since March 1, 1997.
4.25 Government Consents. No consent, approval or authorization of or
designation, declaration or filing with any state, federal, or foreign
governmental authority on the part of UOL or Ivy because of any special
characteristic of UOL or Ivy is required in connection with the valid execution
and delivery of this Agreement and the consummation by UOL or Ivy of the
transactions contemplated hereby.
4.26 Manufacturing Rights. Since March 1, 1997, Ivy has not granted rights
to manufacture or sell its products, processes, Intellectual Property or
technology to any other Person.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to UOL that:
5.1 Authority. This Agreement has been duly executed and delivered by
Purchaser and constitutes the valid, binding and enforceable obligation of
Purchaser, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors' rights generally from time to
time in effect and to general equitable principles.
5.2 Ability to Carry Out the Agreement. Purchaser is not subject to or
bound by any provision of:
(i) any law, statute, rule, regulation, ordinance or judicial or
administrative decision;
(ii) any articles or certificate of incorporation or by-laws;
(iii) any mortgage, deed of trust, lease, note, stockholders'
agreement, bond, indenture, other instrument or agreement, license, permit,
trust, custodianship, other restriction, of any kind or character
whatsoever; or
(iv) any judgment, order, writ, injunction or decree of any court,
governmental body, administrative agency or arbitrator;
that would prevent or be violated by or would result in any penalty, forfeiture
or contract termination as a result of, or under which there would be a default
as a result of, nor is the consent of any Person under any material agreement
which has not been obtained required for, the execution, delivery and
performance by Purchaser of this Agreement and the transactions contemplated
hereby, other than violations, penalties, forfeitures, contract terminations,
defaults or failure to obtain consents which, singly or in the aggregate, shall
not have a material adverse effect on the enforceability or validity of this
Agreement or the ability of Purchaser to perform its obligations hereunder.
5.3 Brokers and Intermediaries. Purchaser has not employed any broker,
finder, advisor, or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to a broker's, finder's,
or similar fee or commission in connection therewith or upon the consummation
thereof.
5.4 Solvency of Ivy. Purchaser represents and warrants that Ivy is not
insolvent under any definition, and that the consummation of the transactions
contemplated hereby do not and will not render Ivy insolvent under any
definition.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
6.1 Confidentiality. Each party to this Agreement agrees and covenants to
the other that all information concerning the business and offices of the other
parties to the Agreement that is not generally available to the public
("Confidential Information") and obtained from such other party shall be deemed
confidential and shall not be disclosed to, or utilized by, any Person for any
reason or purpose whatsoever, except in connection with this Agreement, to the
parties and their representatives involved in this transaction, or as may by
required by law or stock exchange or market regulation. Notwithstanding any
provision herein to the contrary, any party failing to comply in a full and
timely fashion with Section 6.4 shall indemnify the other for all losses,
damages, claims or expenses of any nature whatsoever, including reasonable
attorneys' fees, incurred by the other party and related to the unauthorized
disclosure or use of Confidential Information.
6.2 Books and Records. Purchaser shall retain all books, records and other
documents pertaining to the business of Ivy in existence on the Closing Date for
a period of at least three years from the Closing Date and to make the same
reasonably available after the Closing Date for such three year period for
inspection and copying by UOL at UOL's expense during normal business hours,
upon reasonable request and upon reasonable notice.
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6.3 Best Efforts. Without limiting the specific obligations of any party
hereto under any agreement or covenant hereunder, each of the parties hereto
shall use its respective best efforts to take all action and do such acts and
things necessary in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
conditions to Closing set forth in Articles 7 and 8 below).
6.4 Cooperation in Litigation. Each party hereto shall fully cooperate
with the other in the defense or prosecution of any litigation or proceeding
already instituted or which may be instituted hereafter against or by such party
relating to or arising out of the conduct of the business of Ivy prior to or
after the Closing Date (other than litigation arising out of the transactions
contemplated by this Agreement). The party requesting such cooperation shall pay
the out-of-pocket expenses (including legal fees and disbursements) of the party
providing such cooperation and of its officers, directors, employees and agents
reasonably incurred in connection with providing such cooperation, but shall not
be responsible to reimburse the party providing such cooperation for such
party's time spent in such cooperation or the salaries or costs of fringe
benefits or similar expenses paid by the party providing such cooperation to its
officers, directors, employees and agents while assisting in the defense or
prosecution of any such litigation or proceeding.
6.5 Other Agreements. Each party to this Agreement hereby agrees and
covenants to the other that consummation of the transactions contemplated hereby
(a) shall terminate any and all obligations of the parties under the Original
Agreement, including but not limited to any obligation of UOL or Ivy to pay to
Purchaser any consideration; and (b) shall terminate the Consulting Agreement
dated March 1, 1997, between UOL and Purchaser (the "Consulting Agreement"),
other than the $35,000.00 payment currently due to Purchaser from UOL under the
Consulting Agreement, including but not limited to the consideration set forth
in Sections 1.3 and 1.4 of the Consulting Agreement, as well as Exhibit A
thereto. As and when his duties as owner, sole officer, and sole director of Ivy
may permit, Xxxxxx X. Xxxx agrees to provide consulting services upon request by
UOL at his current consulting rate of $2,500.00 per day (subject to reasonable
increases as may occur from time to time) from the date of this Agreement until
December 31, 2005, such services to specifically include advice concerning the
updating of Ivy products utilized by UOL and market guidance with respect to
such products.
ARTICLE 7
CONDITIONS PRECEDENT OF TRANSFERORS
The obligation of the Transferors to consummate the transactions to be
performed by them in connection with the Closing is subject to the satisfaction,
or written waiver by the Transferors, of each of the following conditions prior
to or at the Closing:
7.1 No Injunction. No injunction, restraining order or decree of any
nature of any court or governmental or regulatory authority shall exist against
Purchaser, the Transferors or any of their respective Affiliates, or any of the
principals, officers or directors of any of them, that restrains, prevents or
materially adversely changes the transactions contemplated hereby.
7.2 No Violation. The consummation of the transactions contemplated
hereunder shall not be in violation of any material applicable law, statute,
rule or regulation for which a waiver has not been obtained and where such
violation would make illegal or otherwise prevent the consummation of the
transactions contemplated hereby.
7.3 Consents. All material consents, approvals and authorizations of
governmental and regulatory authorities, and all material filings with and
notifications of governmental authorities and regulatory agencies or other
entities which regulate the business of Ivy or UOL, necessary on the part of Ivy
or UOL, or their respective Affiliates, to the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, shall
have been obtained or effected (and all applicable waiting periods, if any,
including any extensions thereof, under any applicable law, statute, regulation
or rule, including but not limited to the HSR Act, if applicable, shall have
expired or terminated, as applicable). UOL shall have
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received the written consents or approvals of any and all third Persons required
under the terms of the Contracts to the consummation of the transactions
contemplated hereunder.
7.4 No Proceedings. No claim, suit, action or other proceeding shall be
pending or threatened in writing before or by any court, governmental agency or
other entity against any of the parties to this Agreement with respect to the
transactions contemplated by this Agreement or which materially adversely affect
the assets, property, operations, results of operations, financial condition, or
prospects of Purchaser.
7.5 License Agreement. Ivy and UOL shall have entered into the license
agreement in form and substance as set forth in Exhibit D and the same shall be
in full force and effect.
7.6 Miscellaneous Closing Deliveries. The Transferors shall have received
such evidence as they may reasonably request in order to establish: (a) the
power and authority of Purchaser to consummate the transactions contemplated by
this Agreement; and (b) compliance with the conditions of Closing set forth
herein.
ARTICLE 8
CONDITIONS PRECEDENT OF THE PURCHASER
The obligation of Purchaser to consummate the transactions to be performed
by them in connection with the Closing is subject to the satisfaction, or
written waiver by Purchaser, of each of the following conditions prior to or at
the Closing:
8.1 No Injunction. No injunction, restraining order or decree of any
nature of any court or governmental or regulatory authority shall exist against
Purchaser, the Transferors or any of their respective Affiliates, or any of the
principals, officers or directors of any of them, that restrains, prevents or
materially adversely changes the transactions contemplated hereby.
8.2 No Violation. The consummation of the transactions contemplated
hereunder shall not be in violation of any material applicable law, statute,
rule or regulation for which a waiver has not been obtained.
8.3 Consents. All material consents, approvals and authorizations of
governmental and regulatory authorities, and all material filings with and
notifications of governmental authorities and regulatory agencies or other
entities which regulate the business of Ivy or UOL, necessary on the part of Ivy
or UOL, or their respective Affiliates, to the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, shall
have been obtained or effected (and all applicable waiting periods, if any,
including any extensions thereof, under any applicable law, statute, regulation
or rule, including but not limited to the HSR Act, if applicable, shall have
expired or terminated, as applicable). UOL shall have received the written
consents or approvals of any and all third Persons required under the terms of
the Contracts to the consummation of the transactions contemplated hereunder.
8.4 Resignations. Purchaser shall have received resignations, effective as
of the Closing, of each officer and director of Ivy other than those whom
Purchaser shall have specified in writing prior to the Closing.
8.5 No Proceedings. No claim, suit, action or other proceeding shall be
pending or threatened in writing before or by any court, governmental agency or
other entity against any of the parties to this Agreement with respect to the
transactions contemplated by this Agreement or which materially adversely affect
the assets, property, operations, results of operations, financial condition, or
prospects of Ivy.
8.6 License Agreement. Ivy and UOL shall have entered into the license
agreement in form and substance as set forth in Exhibit D and the same shall be
in full force and effect.
8.7 Miscellaneous Closing Deliveries. Purchaser shall have received such
evidence as Purchaser may reasonably request in order to establish: (a) the
power and authority of the Transferors to consummate the transactions
contemplated by this Agreement; and (b) compliance with the conditions of
Closing set forth herein.
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ARTICLE 9
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1 Survival of Representations and Warranties. All of the representations
and warranties of the parties hereto contained in the Agreement shall survive
the Closing (even if the damaged party knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect for a period of two years. Any claims with respect to the
foregoing sentence under Sections 10.1 and 10.2 below must be asserted in
writing with reasonable particularity by the party making such claim within two
years of the Closing, and the obligations of the indemnifying party under
Section 10.1 and 10.2 below with respect to such claims shall continue until
such claims have been resolved.
9.2 Survival of Covenants and Agreements. The respective covenants and
agreements of the parties contained in this Agreement shall survive the Closing
without limitation as to time. Any claims as to a breach of a covenant or
agreement under Sections 10.1 and 10.2 below must be asserted in writing with
reasonable particularity by the party making such claims.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification of Purchaser. UOL (the "Acquiror Indemnitor") agrees
to defend, indemnify and hold harmless Purchaser and its successors and assigns
(each individually an "Acquiror Indemnitee", and collectively the "Acquiror
Indemnitees") from, against, and in respect of the following:
(a) any and all losses, damages, deficiencies or liabilities caused by,
resulting or arising from, or otherwise relating to: (i) any breach of the
representations and warranties of the Transferors contained in this Agreement;
(ii) any failure by any of the Transferors to perform or otherwise fulfill or
comply with any undertaking or other agreement or obligation hereunder to be
performed, fulfilled or otherwise complied with by UOL after the Closing
(including but not limited to the undertakings, agreements and obligations to be
performed by UOL pursuant to Section 6.4); (iii) any unknown or undisclosed
Liabilities of Ivy arising out of or related to the conduct or operation of
Ivy's business prior to the Closing (other than Liabilities incurred in the
ordinary course of business subsequent to the execution of this Agreement); and
(iv) except as disclosed in Schedule 4.11, any and all legal, investment
banking, accounting, auditing, and other professional fees and expenses of Ivy
related to this Agreement and the transactions contemplated hereby; and
(b) any and all actions, suits, proceedings, claims, liabilities, demands,
assessments, judgments, interest, penalties, costs and expenses, including
reasonable attorneys' fees (whether or not incurred by the Acquiror Indemnitees
or in connection with investigating, defending, settling or prosecuting any
action, suit, proceeding or claim against the Acquiror Indemnitor hereunder),
incident to any of the items referred to herein or such indemnification;
provided, however, that if any action, suit, proceeding, claim, liability,
demand or assessment shall be asserted against any Acquiror Indemnitee in
respect of which such Acquiror Indemnitee proposes to demand indemnification,
such Acquiror Indemnitee shall notify UOL thereof within a reasonable period of
time after assertion thereof, and such notice shall include copies of all suit,
service and claim documents, all other relevant documents in the possession of
the Acquiror Indemnitee, and an explanation of the Acquiror Indemnitee's
contentions and defenses with as much specificity and particularity as the
circumstances permit, provided that the failure of the Acquiror Indemnitee to
give such notice shall not relieve UOL of its obligations under this Section
10.1, if the Acquiror Indemnitee shall have demonstrated that: (i) it acted in
good faith and without unreasonable delay; and (ii) UOL shall not have been
prejudiced thereby. Subject to rights of or duties to any insurer or other third
Person having liability therefor, UOL shall have (subject to the prior written
consent of Acquiror Indemnitee, which consent shall not be unreasonably
withheld) the right within 10 days after receipt of such notice to assume the
control of the defense, compromise or settlement of any such action, suit,
proceeding, claim, liability, demand, or assessment, including, at its own
expense, employment of counsel; provided further, however, that if UOL shall
have exercised his right to assume such
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control, the Acquiror Indemnitee: (x) may, in its sole discretion and expense,
employ counsel to represent it (in addition to counsel employed by UOL) in any
such matter, and in such event counsel selected by UOL shall be required to
cooperate with such counsel of the Acquiror Indemnitee in such defense,
compromise or settlement for the purpose of informing and sharing information
with such Acquiror Indemnitee; and (y) shall, at its own expense, make available
to UOL those employees of the Acquiror Indemnitees whose assistance, testimony
or presence is reasonably deemed by UOL necessary or beneficial to assist UOL in
evaluating and in defending any such action, suit, proceeding, claim, liability,
demand or assessment; provided further, however, that any such access shall be
conducted in such a manner as not to interfere unreasonably with the operations
of the businesses of the Acquiror Indemnitees.
Notwithstanding any other provisions of this Agreement to the contrary, UOL
shall have no liability under this Article 10 unless the aggregate amount of the
damages and losses to the Acquiror Indemnitees from all claims finally
determined and arising under the provisions of this Agreement exceed $10,000.00,
and in such event UOL shall be required to pay only the amount by which the
aggregate amount of such claims exceeds such amount. In calculating amounts
payable pursuant to this Article 10, UOL shall receive credit for (i) any
reduction of actual tax liabilities of any Acquiror Indemnitee arising from
facts giving rise to a claim of indemnification, and (ii) any insurance proceeds
received with respect to any damages or losses that are the subject of a claim
for indemnification hereunder.
10.2 Indemnification of UOL. Purchaser and Ivy (each individually a
"Transferor Indemnitor", and collectively the "Transferor Indemnitors") agree to
defend, indemnify and hold harmless UOL and its successors and assigns (each
individually a "Transferor Indemnitee", and collectively the "Transferor
Indemnitees") from, against and in respect of:
(a) any and all losses, damages, deficiencies or liabilities caused by,
resulting or arising from or otherwise relating to: (i) any breach of the
representations and warranties of Purchaser contained in this Agreement; and
(ii) any failure by Purchaser to perform or otherwise fulfill or comply with any
undertaking or other agreement or obligation hereunder to be performed,
fulfilled or otherwise complied with by Purchaser and Ivy after the Closing
(including, but not limited to, the undertaking, agreements and obligations to
be performed pursuant to Section 6.4 hereof); and
(b) any and all actions, suits, proceedings, claims, liabilities, demands,
assessments, judgments, interest, penalties, costs and expenses, including
reasonable attorneys' fees (whether or not incurred by the Transferor
Indemnitees in connection with investigating, defending, settling or prosecuting
any action, suit, proceeding or claim against any of the Transferor Indemnitors
hereunder), incident to any of the items referred to herein or such
indemnification;
provided, however, that if any action, suit, proceeding, claim, liability,
demand or assessment shall be asserted against any Transferor Indemnitee in
respect of which such Transferor Indemnitee proposes to demand indemnification,
such Transferor Indemnitee shall notify Purchaser thereof within a reasonable
period of time after assertion thereof, and such notice shall include copies of
all suit, service and claim documents, all other relevant documents in the
possession of the Transferor Indemnitees and an explanation of the Transferor
Indemnitees' contentions and defenses with as much specificity and particularity
as the circumstances permit, provided that the failure of the Transferor
Indemnitee to give such notice shall not relieve Purchaser of its obligations
under this Section 10.2 if the Transferor Indemnitee shall have demonstrated
that: (i) it acted in good faith and without unreasonable delay; and (ii)
Purchaser shall not have been prejudiced thereby. Subject to rights of or duties
to any insurer or other third Person having liability therefor, Purchaser shall
have (subject to the prior written consent of Transferor Indemnitee, which
consent shall not be unreasonably withheld) the right within 10 days after
receipt of such notice to assume the control of the defense, compromise or
settlement of any such action, suit, proceeding, claim, liability, demand, or
assessment, including, at its own expense, employment of counsel; provided
further, however, that if Purchaser shall have exercised its right to assume
such control, the Transferor Indemnitees: (x) may, in their sole discretion and
expense, employ one counsel to represent them (in addition to counsel employed
by Purchaser) in any such matter, and in such event counsel selected by
Purchaser shall be required to cooperate with such counsel of the Transferor
Indemnitees in such defense, compromise or settlement for the purpose of
informing and sharing information
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with such Transferor Indemnitees; and (y) shall, at its own expense, make
available to Transferor Indemnitees those employees of Purchaser or any
Affiliate of Purchaser whose assistance, testimony or presence is reasonably
deemed by the Transferor Indemnitees necessary or beneficial to assist the
Transferor Indemnitees in evaluating and in defending any such action, suit,
proceedings, claim, liability, demand or assessment; provided further, however,
that any such access shall be conducted in such a manner as not to interfere
unreasonably with the operations of the business of Purchaser or any of its
Affiliates.
Notwithstanding any other provisions of this Agreement to the contrary,
Transferor Indemnitors shall have no liability under this Article 10 unless the
aggregate amount of the damages and losses to the Transferor Indemnitees from
all claims finally determined and arising under the provisions of this Agreement
exceed $10,000.00, and in such event Transferor Indemnitors shall be required to
pay only the amount by which the aggregate amount of such claims exceeds such
amount. In calculating amounts payable pursuant to this Article 10, Transferor
Indemnitors shall receive credit for (i) any reduction of actual tax liabilities
of any Transferor Indemnitee arising from facts giving rise to a claim of
indemnification, and (ii) any insurance proceeds received with respect to any
damages or losses that are the subject of a claim for indemnification hereunder.
10.3 Remedies. The indemnification provisions of this Article 10 are in
addition to, and not in lieu or in derogation of, any other rights or remedies
any party may have in equity for a breach of representations, warranty or
covenant. Each of the parties acknowledges and agrees that the other parties
hereto would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the parties hereto agrees the other parties
hereto shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any competent court having jurisdiction over
the parties (subject to the provisions of Section 11.11 below), in addition to
any other remedy to which they may be entitled in equity.
10.4 Survival. Except as otherwise expressly set forth herein, this
Article 10 shall survive termination of this Agreement without limitation.
ARTICLE 11
MISCELLANEOUS
11.1 Further Assurances. From time to time at or after the Closing, each
of the parties agrees to take, or cause to be taken, such further actions, to
execute, deliver and file, or cause to be executed, delivered and filed, such
further documents and instruments, and to obtain consents, as may be necessary
or reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Agreement.
11.2 Expenses. Each of Purchaser and UOL shall bear its respective legal,
investment banking, accounting, audit, and other costs and expenses associated
with this Agreement and the consummation of the transactions contemplated
hereby.
11.3 Applicable Law. Except as otherwise expressly provided herein, this
Agreement shall be governed by, and construed in accordance with, the law of the
Commonwealth of Virginia without reference to any choice or conflict of law
principle, provision or rule, including all matters of construction, validity
and performance.
11.4 Notices. All notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (i) upon personal delivery or receipt of a telecopy transmission,
(ii) two days after being sent by registered or certified United States mail,
return receipt
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requested, or (iii) one day after being transmitted by a nationally recognized
overnight courier service, properly addressed and postage prepaid to the
intended recipient as follows:
If to Purchaser or Ivy to:
Ivy Software, Inc.
X.X. Xxx 0000
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
XxXxxxxx & Kudravetz, P.C.
000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to UOL, to:
UOL Publishing, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Chief Executive Officer
Chief Financial Officer
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
11.5 Entire Agreement. This Agreement (including the Exhibits and
Schedules attached hereto and the documents referred to herein, all of which are
a part hereof) constitutes the entire agreement and understanding of the parties
hereto with respect to the subject matter contained herein, supersedes and
cancels all prior agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting such subject matter.
There are no restrictions, promises, representations, warranties, agreements or
undertakings of any party hereto with respect to the transactions under this
Agreement other than those set forth herein or made hereunder.
11.6 Amendments. This Agreement may be amended only by a written
instrument executed by the parties or their respective successors or assigns.
11.7 Headings; References. The article, section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. All references
herein to "Articles", "Sections", "Exhibits" or "Schedules" shall be deemed to
be references to Articles or Sections hereof or Exhibits or Schedules hereto
unless otherwise indicated.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original.
11.9 Parties in Interest; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors. Nothing in this Agreement, express or implied, is intended
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to confer upon any Person not a party to this Agreement any rights or remedies
under or by reason of this Agreement. No party to this Agreement may assign or
delegate all or any portion of its rights, obligations or liabilities under this
Agreement without the prior written consent of the other parties to this
Agreement.
11.10 Severability; Enforcement. The invalidity of any portion hereof
shall not affect the validity, force or effect of the remaining portions hereof.
If it is ever held that any restriction hereunder is too broad to permit
enforcement of such restriction to its fullest extent, each party agrees that a
court of competent jurisdiction may enforce such restriction to the maximum
extent permitted by law, and each party hereby consents and agrees that such
scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
11.11 JURISDICTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OF THE
COMMONWEALTH OF VIRGINIA AND TO VENUE IN VIRGINIA AS THE SAME SHALL BE
DETERMINED.
11.12 Waiver. Any of the conditions to Closing set forth in this Agreement
may be waived at any time prior to or at the Closing hereunder by the party
entitled to the benefit thereof. The failure of any party hereto to enforce at
any time any of the provisions of this Agreement shall in no way be construed to
be a waiver of any such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of such party thereafter to enforce
each and every such provision. No waiver of any breach of or non-compliance with
this Agreement shall be held to be a waiver of any other or subsequent breach or
non-compliance.
11.13 Incorporation of Exhibits and Schedules. All of the Exhibits and
Schedules identified in this Agreement are incorporated by reference into this
Agreement and made a part hereof.
11.14 Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event of any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if grafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party hereto by virtue of the
authorship of any of the provisions of this Agreement.
[The next page is the signature page.]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Purchase Agreement effective as of the date first above written.
UOL:
UOL PUBLISHING, INC.
By: /s/ XXXXXXXXXX X. XXXXXX
--------------------------
Title: CEO
IVY SOFTWARE, INC.
By: /s/ XXXXXX X. XXXX
--------------------------
Title: President
PURCHASER:
/s/ XXXXXX X. XXXX
-----------------------------
Xxxxxx X. Xxxx
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