SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 24, 2000
ENGINEERING ANIMATION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-27670 42-1323712
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
2321 North Loop Drive
Ames, Iowa 50010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 296-9908
None
--------------------------------------------------------------------
(Former name or former address, if changed
since last report.)
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Item 2. Acquisition or Disposition of Assets.
Disposition of EAI-DELTA GmbH
On March 24, 2000, EAI-Holding GmbH, our wholly owned German sub-
sidiary, completed the sale of EAI-DELTA GMBH ("DELTA") to Dassault Systemes
S.A. for a negotiated purchase price of $31 million in cash. DELTA is a German
software company that develops solutions for integrated product and process
engineering. EAI-Holding acquired DELTA in December 1998 by purchasing all of
the outstanding shares of DELTA's capital stock from six stockholders in
exchange for 556,912 shares of our common stock, for a value of approximately
$24 million.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of businesses acquired
Not applicable.
(b) Pro forma financial information
(1) Unaudited pro forma condensed consolidated financial information of
Engineering Animation, Inc.
The following unaudited pro forma condensed consolidated financial
information is being filed herewith:
Page:
Unaudited Pro Forma Condensed Consolidated Balance
Sheet at September 30, 1999 4
Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the Nine Months ended
September 30, 1999 5
Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the Twelve months ended December 31, 1998 6
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Information 7
(c) Exhibits
The exhibit listed in the accompanying Exhibit Index is filed as
part of this Current Report on Form 8-K.
2
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The following Pro Forma Condensed Consolidated Balance Sheet was compiled
assuming that Delta was sold and the cash proceeds from the sale were received
on January 1, 1999.
The following Pro Forma Consolidated Statements of Operation were
compiled assuming that Delta was sold and the extraordinary gain from the sale
of subsidiary was recognized January 1, 1998.
3
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<TABLE>
<CAPTION>
ENGINEERING ANIMATION, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands; unaudited)
September 30, 1999
Pro Forma
Historical Adjustments Pro Forma
-------------------------------------------
Assets
Current assets:
<S> <C> <C> <C>
Cash and cash equivalents $18,832 $30,119 (1) $48,951
Short-term investments 995 -- 995
Accounts receivable:
Billed 17,444 (1,472) (2) 15,972
Unbilled 4,351 (1,551) (3) 2,800
Deferred income taxes 1,208 (136) (4) 1,072
Income taxes receivable 8,005 (8,005) (5) --
Prepaid expenses and other assets 2,504 (116) (6) 2,388
------- ------- -------
Total current assets 53,339 18,839 72,178
Property and equipment, net 21,624 (390) (7) 21,234
Other assets:
Note receivable 1,408 -- 1,408
Software development costs, net 2,433 -- 2,433
Deferred income taxes 776 35 (4) 811
Goodwill and developed technology, net 12,051 -- 12,051
Other 1,232 811 (8) 2,043
Net assets of discontinued operations 2,961 -- 2,961
------- ------- --------
Total assets $95,824 $19,295 $115,119
======= ======= ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 5,084 $ (176) (9) $ 4,908
Accrued compensation and other accrued expenses 9,485 2,075 (10) 11,560
Deferred revenue 3,605 -- 3,605
Income taxes payable -- 1,672 (5) 1,672
Bank debt, current portion of long-term debt and lease obligations 4,808 -- 4,808
------- ------- -------
Total current liabilities 22,982 3,571 26,553
Long-term debt and lease obligations due after one year 1,133 -- 1,133
Other long-term liabilities 179 (179) (11) --
Stockholders' equity 71,530 15,903 (12) 87,433
------- ------- --------
Total liabilities and stockholders' equity $95,824 $19,295 $115,119
======= ======= ========
See accompanying notes to unaudited pro forma condensed consolidated financial information
</TABLE>
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ENGINEERING ANIMATION, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data; unaudited)
<TABLE>
<CAPTION>
Nine months ended September 30, 1999
Pro Forma
Historical Adjustments Pro Forma
--------------------------------------------
<S> <C> <C> <C>
Revenues $ 54,267 $(6,067) (13) $ 48,200
Cost of revenues 23,634 (1,427) (14) 22,207
-------- -------- --------
Gross profit 30,633 (4,640) 25,993
Operating expenses:
Sales and marketing 21,515 (1,122) (15) 20,393
General and administrative 11,070 (1,040) (16) 10,030
Research and development 14,937 (1,932) (17) 13,005
Acquisition costs and non-recurring expenses 2,056 -- 2,056
-------- -------- --------
Total operating expenses 49,578 (4,094) 45,484
-------- -------- --------
Operating loss from continuing operations (18,945) (546) (19,491)
Interest and other income, net 715 (64) (19) 651
-------- -------- --------
Loss from continuing operations before income tax (18,230) (610) (18,840)
Income tax benefit (5,089) (838) (20) (5,927)
-------- -------- --------
Loss from continuing operations (13,141) 228 (12,913)
Discontinued operations:
Loss from discontinued operations, net of tax (1,927) -- (1,927)
Provision for exiting discontinued operations including
operating losses during phase out period, net of tax (8,930) -- (8,930)
-------- -------- --------
Net loss $(23,998) $ 228 $(23,770)
======== ======== ========
Loss per share:
Basic and diluted
Continuing operations $ (1.11) $ (1.09)
Extraordinary item -- --
Discontinued operations (0.91) (0.91)
-------- --------
Total $ (2.02) $ (2.00)
======== ========
Weighted average shares outstanding 11,859 11,859
See accompanying notes to unaudited pro forma condensed consolidated financial information
</TABLE>
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<TABLE>
<CAPTION>
ENGINEERING ANIMATION, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data; unaudited)
Twelve months ended December 31, 1998
Pro Forma
Historical Adjustments Pro Forma
-------------------------------------------------
<S> <C> <C> <C>
Revenues $ 89,911 $(7,689) (13) $82,222
Cost of revenues 23,120 (1,869) (14) 21,251
-------- -------- -------
Gross profit 66,791 (5,820) 60,971
Operating expenses
Sales and marketing 21,576 (1,068) (15) 20,508
General and administrative 11,326 (1,157) (16) 10,169
Research and development 15,949 (1,600) (17) 14,349
Acquisition costs and non-recurring expenses 14,075 (1,033) (18) 13,042
-------- -------- -------
Total operating expenses 62,926 (4,858) 58,068
-------- -------- -------
Operating income from continuing operations 3,865 (962) 2,903
Interest and other income, net 1,660 (5) (19) 1,655
-------- ------ -------
Income from continuing operations before income tax and extraordinary item 5,525 (967) 4,558
Income tax expense 5,517 (831) (20) 4,686
-------- -------- -------
Income(loss)from continuing operations before extraordinary item 8 (136) (128)
Extraordinary item:
Gain from sale of subsidiary, net of transaction costs before
income tax expense -- 25,677 (21) 25,677
Income tax expense -- 9,677 (22) 9,677
-------- ------- -------
Gain from sale of subsidiary, net of transaction costs and
income tax expense -- 16,000 16,000
Discontinued operations:
Income from discontinued operations, net of tax 372 -- 372
-------- -------- --------
Net income $ 380 $ 15,864 $16,244
======== ======== ========
Earnings (loss) per share
Basic
Continuing operations $ -- $ (0.01)
Extraordinary item -- 1.39
Discontinued operations 0.03 0.03
-------- --------
Total $ 0.03 $ 1.41
======== ========
Diluted
Continuing operations $ -- $ (0.01)
Extraordinary item -- 1.39
Discontinued operations 0.03 0.03
-------- --------
Total $ 0.03 $ 1.41
======== ========
Weighted average shares outstanding 11,549 11,549
Weighted average shares outstanding and
assumed conversion 12,772 11,549
See accompanying notes to unaudited pro forma condensed consolidated financial information
</TABLE>
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ENGINEERING ANIMATION, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(1)Represents proceeds received from the sale of DELTA less any operating cash
balances attributable to Delta.
(2)Represents billed accounts receivable attributable to DELTA.
(3)Represents unbilled accounts receivable attributable to DELTA.
(4)Represents deferred income taxes attributable to DELTA.
(5)Represents change from an $8.0 million income tax receivable to a $1.7
million income tax payable resulting from a $9.7 million tax expense arising
from the sale of DELTA.
(6)Represents prepaid expenses and other assets attributable to DELTA.
(7)Represents property and equipment, net of accumulated depreciation,
attributable to DELTA.
(8)Represents intercompany receivable from DELTA eliminated in consolidation.
(9)Represents accounts payable attributable to DELTA.
(10)Represents accrued compensation and other accrued expenses attributable to
DELTA.
(11)Represents other long-term liabilities attributable to DELTA.
(12)Represents equity of DELTA eliminated in sale of subsisidiary and change in
retained earnings due to extraordinary gain from sale of subsidiary, net of
transaction costs and tax.
(13)Represents revenues attributable to DELTA.
(14)Represents cost of revenues attributable to DELTA.
(15)Represents sales and marketing expenses attributable to DELTA.
(16)Represents general and administrative expenses attributable to DELTA.
(17)Represents research and development expenses attributable to DELTA.
(18)Represents acquisition costs incurred in Engineering Animation,Inc's.
original purchase of DELTA in 1998.
(19)Represents interest and other income, net, attributable to DELTA.
(20)Represents income tax expense attributable to the operations of DELTA.
(21)Represents extraordinary gain, net of transactions costs, from sale of
subsidiary assuming sale of DELTA at the beginning of period presented.
(22)Represents the tax effect on extraordinary gain, net of transaction costs,
from sale of subsidiary using an effective tax rate of 38%.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENGINEERING ANIMATION, INC.
Date: April 7, 2000 By:/s/ Michael K. O'Gara
----------------------------
Michael K. O'Gara
Vice President of Finance and
Chief Financial Officer
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ENGINEERING ANIMATION, INC.
EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K
Exhibit Description
2.1 Purchase and Sale Agreement *
* The schedules and exhibits to this document are not being filed herewith.
The registrant agrees to furnish supplementally a copy of any such schedule
or exhibit to the Securities and Exchange Commission upon request.
9
PURCHASE AND SALE AGREEMENT
among
ENGINEERING ANIMATION, INC.,
EAI HOLDING GMBH
and
DASSAULT SYSTEMES
-----------------
Dated as of February 29, 2000
-----------------
<PAGE>
v
<TABLE>
TABLE OF CONTENTS
PURCHASE AND SALE AGREEMENT
<S> <C>
ARTICLE I. PURCHASE AND SALE..........................................................................1
Section 1.1. Purchased Stock.......................................................................1
Section 1.2. Purchase Price........................................................................2
Section 1.3. Closing...............................................................................2
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER...................................................2
Section 2.1. Corporate Organization................................................................2
Section 2.2. Capitalization........................................................................3
Section 2.3. Authority; No Violation...............................................................3
Section 2.4. Consents and Approvals................................................................4
Section 2.5. Certain Customer Relationships........................................................4
Section 2.6. Compliance with Applicable Law........................................................4
Section 2.7. Financial Statements..................................................................4
Section 2.8. Absence of Certain Changes or Events..................................................5
Section 2.9. Legal Proceedings and Restrictions....................................................5
Section 2.10. Taxes and Tax Returns.................................................................5
Section 2.11. Delta Employee Benefits...............................................................6
Section 2.12. Employment and Labor Relations........................................................6
Section 2.13. Contracts.............................................................................6
Section 2.14. Undisclosed Delta Liabilities.........................................................7
Section 2.15. Environmental Liability...............................................................8
Section 2.16. Asset Ownership.......................................................................8
Section 2.17. Real Property.........................................................................8
Section 2.18. Intellectual Property.................................................................9
Section 2.19. Software.............................................................................11
Section 2.20. Ongoing Projects.....................................................................12
Section 2.21. General Terms and Conditions and License Agreement...................................12
Section 2.22. Broker's Fees........................................................................12
Section 2.23. Disclosure...........................................................................13
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER...................................................13
Section 3.1. Corporate Organization...............................................................13
Section 3.2. Authority; No Violation..............................................................13
Section 3.3. Consents and Approvals...............................................................13
Section 3.4. Broker's Fee.........................................................................14
ARTICLE IV. COVENANTS RELATING TO CONDUCT OF BUSINESS.................................................14
Section 4.1. Conduct of Business Prior to Closing.................................................14
Section 4.2. Seller Forbearances..................................................................14
ARTICLE V. ADDITIONAL AGREEMENTS.....................................................................15
Section 5.1. Regulatory and Other Matters.........................................................15
Section 5.2. Access to Information................................................................15
Section 5.3. Additional Agreements................................................................15
Section 5.4. Advice of Changes....................................................................15
Section 5.5. Post-Closing Remittances.............................................................15
Section 5.6. Intercompany Debt; Intercompany Agreements...........................................16
Section 5.7. Non-Competition......................................................................16
Section 5.8. Website Link; Name of Delta..........................................................16
Section 5.9. Other Employees......................................................................17
Section 5.10. Employee Stock Options...............................................................17
ARTICLE VI. CONDITIONS PRECEDENT......................................................................17
Section 6.1. Conditions to Each Party's Obligation To Close.......................................17
Section 6.2. Conditions to Obligations of Buyer...................................................18
Section 6.3. Conditions to Obligations of Seller..................................................18
ARTICLE VII. TERMINATION AND AMENDMENT.................................................................19
Section 7.1. Termination..........................................................................19
Section 7.2. Effect of Termination................................................................19
Section 7.3. Amendment; Extension; Waiver.........................................................19
ARTICLE VIII. SURVIVAL AND INDEMNIFICATION..............................................................20
Section 8.1. Survival of Representations, Warranties and Covenants................................20
Section 8.2. Indemnification by Buyer.............................................................20
Section 8.3. Indemnification by Seller............................................................20
Section 8.4. Claims for Indemnification...........................................................21
Section 8.5. Insurance Proceeds...................................................................22
ARTICLE IX. GENERAL PROVISIONS........................................................................22
Section 9.1. Expenses.............................................................................22
Section 9.2. Confidential Nature of Information...................................................22
Section 9.3. Notices..............................................................................22
Section 9.4. Interpretation.......................................................................23
Section 9.5. Counterparts.........................................................................24
Section 9.6. Entire Agreement.....................................................................24
Section 9.7. Governing Law........................................................................24
Section 9.8. Severability.........................................................................24
Section 9.9. Publicity............................................................................24
Section 9.10. Assignment; Third Party Beneficiaries................................................24
Section 9.11. Knowledge and Awareness..............................................................24
Section 9.12. Construction.........................................................................25
</TABLE>
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<TABLE>
INDEX OF DEFINED TERMS
<S> <C>
Agreement................................................................................................. Recitals
Buyer..................................................................................................... Recitals
Closing .................................................................................................. ss.1.3
Closing Date ............................................................................................. ss.1.3
Confidential Information..................................................................................ss.2.18(g)
Consents.................................................................................................. ss.2.4
Delta..................................................................................................... Recitals
Delta Benefit Plans....................................................................................... ss.2.11
Delta Contracts........................................................................................... ss.2.13
Delta Employees...........................................................................................ss.2.12(a)
Delta Financial Statements................................................................................ ss.2.7
Delta Software............................................................................................ss.2.19(c)
Disclosure Schedule ...................................................................................... Art. II
Environmental Laws .......................................................................................ss.2.15(c)
Expiration Date........................................................................................... ss.8.1
GAAP ..................................................................................................... ss.2.7
Governmental Authority ................................................................................... ss.2.4
Holding................................................................................................... Recitals
Intellectual Property .................................................................................... ss.2.18
Indemnified Party ........................................................................................ss.8.4(b)
Indemnifying Party .......................................................................................ss.8.4(b)
Licensed Intellectual Property ........................................................................... ss.2.18
Liens.....................................................................................................ss.2.2(c)
Loss or Losses............................................................................................ ss.8.2
Management Stock.......................................................................................... ss.1.1
Material Adverse Effect .................................................................................. ss.2.6
Minimum Claim ............................................................................................ss.8.4(a)
Non-Compete Period........................................................................................ ss.5.7
Owned Intellectual Property .............................................................................. ss.2.18
Person....................................................................................................ss.4.2(a)
Purchase Price............................................................................................ ss.1.2
Purchased Stock........................................................................................... ss.1.1
Primary Customers......................................................................................... ss.2.5
Requisite Regulatory Approvals............................................................................ss.6.1(a)
Seller ................................................................................................... Recitals
Software.................................................................................................. ss.2.19
Standard Forms............................................................................................ ss.2.21
Tax Returns............................................................................................... ss.2.10
Taxes..................................................................................................... ss.2.10
Territory.................................................................................................ss.5.7(a)
Total Delta Stock......................................................................................... Recitals
Transferred Assets........................................................................................ ss.1.1
Transferred Liabilities................................................................................... ss.1.1
</TABLE>
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DISCLOSURE SCHEDULE
ss.1.1 Transferred Assets Trial Balance
ss.2.1(a) Corporate Organization
ss.2.4 Required Consents
ss.2.5 Primary Customers
ss.2.7 Delta Financial Statements
ss.2.8 Exceptions to Absence of Change Representation
ss.2.9 Legal Proceedings
ss.2.11 Delta Benefit Plans
ss.2.11 Delta Employees
ss.2.13 Delta Contracts
ss.2.14 Undisclosed Liabilities
ss.2.17 Leased Real Property
ss.2.18 Intellectual Property and Exceptions to Representation
ss.2.20 Ongoing Projects
ss.2.21 Standard Forms of General Terms and Conditions of Delivery
and License Agreement
EXHIBITS
A Form of License Agreement
<PAGE>
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of February 29, 2000 (the
"Agreement"), by and among ENGINEERING ANIMATION, INC., a Delaware corporation
("Seller"), EAI HOLDING GMBH, a German corporation ("Holding"), and DASSAULT
SYSTEMES, a French corporation ("Buyer").
WHEREAS, Seller has an indirect subsidiary, EAI -- Delta GmbH (formerly
known as Delta Industrie Informatik GmbH) ("Delta"), which is engaged in the
business of developing, marketing, supporting, licensing, enhancing and
providing maintenance and other services with respect to, software tools to
design, analyze, visualize and simulate a factory and to plan, design, and
optimize manufacturing processes;
WHEREAS, Delta has a stated capital of DM 1,075,000 and such capital is
divided into eight shares (three shares with a nominal value of DM50,000, two
shares with a nominal value of DM16,700, and shares with a nominal value of
DM16,600, DM2,000 and DM873,000 (the "Total Delta Stock"), all of the Total
Delta Stock being owned by Holding;
WHEREAS, Seller and Buyer have determined that it is in the best
interests of their respective companies and stockholders to consummate the
transactions provided for in this Agreement in which, subject to the terms and
conditions set forth herein, Buyer or a wholly-owned subsidiary shall purchase
from a wholly-owned subsidiary of Seller capital stock of Delta;
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the transactions contemplated hereby and to
establish certain conditions thereto;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, the parties agree
as follows:
ARTICLE I.
PURCHASE AND SALE
Section 1.1. Purchased Stock. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, Holding shall sell, transfer, assign,
convey and deliver to Buyer, and Buyer shall purchase from Holding, free and
clear of all Liens, all of the outstanding share capital (Stammkapital) of Delta
(other than the DM33,400 capital being sold contemporaneously with the Closing
of the transactions contemplated by this Agreement to certain members of the
management of Delta) (the "Purchased Stock" (Geschaftsanteile)). The shares
being purchased by the management of Delta are hereinafter referred to as the
"Management Stock." The parties shall execute and deliver any other instruments,
documents and certificates that are required to be delivered pursuant to this
Agreement or are necessary to consummate the effective transfer of the Purchased
Stock, including, without limitation, a transfer deed in the Federal Republic of
Germany or Switzerland. Buyer acknowledges and agrees that prior to the Closing
or as soon thereafter as is practicable, Seller and Delta shall have transferred
to another subsidiary of Seller the employees and assets of Delta located in
Munich, Federal Republic of Germany, which were economically merged into Delta
as of January 1, 1999 when EAI--Deutschland GmbH merged with and into Delta, and
any contract or portion thereof to which Delta is a party relating to Seller's
other businesses and all liabilities associated with the foregoing. This
business and associated liabilities relate to the distribution and service
activity of Sellers' Open Enterprise Visualization business. Such transferred
assets and liabilities (the "Transferred Assets" and "Transferred Liabilities")
are set forth on the trial balance attached hereto as Section 1.1 of the
Disclosure Schedule.
Section 1.2. Purchase Price. The aggregate purchase price for the Purchased
Stock (the "Purchase Price") shall be US$30,036,837 and shall be payable to
Holding at Closing, by wire transfer of funds to a designated account of Seller.
In the event that the management of Delta does not purchase the Management
Stock, Buyer shall purchase 100% of the outstanding share capital of Delta at a
total price of US$31,000,000.
Section 1.3. Closing. Subject to the terms and conditions of this Agreement, the
closing of the transactions contemplated hereby (the "Closing") will take place
at the offices of Seller's counsel in Chicago, on the first business day
following the satisfaction or waiver of the latest to occur of the conditions
set forth in Article VI, unless extended by mutual agreement of the parties (the
"Closing Date"). The conditional (i.e., receipt of payment) transfer deed will
be notarized by a Swiss notary and the costs of such notarization will be borne
by Buyer. Buyer and Seller covenant and agree to work together to assure that
such notarization and the Closing shall be accomplished in a single day.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as disclosed by Seller in the disclosure schedule delivered
pursuant to this Agreement (the "Disclosure Schedule"), Seller represents and
warrants to Buyer as follows:
Section 2.1. Corporate Organization.
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Delta is a limited liability
company duly organized and validly existing under the laws of the Federal
Republic of Germany. Seller and Delta have the corporate power and authority to
own or lease all of their properties and assets and to carry on their businesses
as they are now being conducted. Section 2.1(a) of the Disclosure Schedule
contains a true and correct copy of Delta's Articles of Association.
(b) Delta does not own, and has not owned, of record or beneficially, directly
or indirectly, (i) any shares of outstanding capital stock or securities
convertible into capital stock of any other corporation or (ii) any
participating interest in any partnership, limited liability company, joint
venture or other non-corporate business. Since its inception, Delta has not
transferred any of its Intellectual Property to a third party other than through
licensing in the ordinary course of business.
Section 2.2. Capitalization.
(a) Delta has a total registered share capital (Stammkapital) in the nominal
amount of DM1,075,000 all of which are owned by Holding. No shares of Delta
capital stock are held in its treasury or reserved for issuance. All of the
issued and outstanding shares of Delta capital stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive
rights. Other than the obligation of Holding to sell the Management Stock, Delta
does not have and is not bound by any outstanding subscriptions, options,
convertible securities, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of its capital
stock. Holding acquired all of the capital stock of Delta in December 1998, and
Seller has not made, nor has the basis to make, any claim against the sellers of
the Delta capital stock for indemnification or guaranty.
(b) Delta is not bound by any control, profit transfer or other agreement
referred to in Sections 291 and 292 of the German Stock Corporation Act
(Aktiengesetz) and no silent participants (stille Beteiligungen) or profit
participating loans (partiarische Darlehen) exist with respect to the profits of
Delta.
(c) Except as set forth on Section 2.4 of the Disclosure Schedule, the Purchased
Stock is, and will be as of Closing, free and clear of all liens, pledges,
charges, encumbrances or security interests of any kind (collectively, "Liens").
There are no existing options, calls, pre-emptive rights, warrants,
subscriptions, convertible securities or other securities obligations or
commitments of any kind relating to the Purchased Stock, except for obligations
created hereunder.
Section 2.3. Authority; No Violation.
(a) Seller has the corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by the Board of
Directors of Seller. Assuming authorized officers of Seller and Holding execute
and deliver all documents, no other corporate proceedings on the part of Seller
or Holding are necessary to approve this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Seller and constitutes a valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms.
(b) The execution and delivery of this Agreement by Seller, the consummation by
Seller of the transactions contemplated hereby, and the compliance by Seller
with the terms or provisions hereof, shall not (i) violate any provision of the
Certificate of Incorporation or By-Laws of Seller or the Articles of Association
(Gesellschaftsvertrag) of Delta, (ii) violate any law, statute, code, ordinance,
rule, regulation, judgment, order, writ, decree or injunction applicable to
Seller or Delta or any of Delta's properties or assets, or (iii) violate,
conflict with, breach any provision of or result in the loss of any benefit or
the increase in the amount of any liability or obligation under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any Liens upon any of
Delta's properties or assets under any note, bond, mortgage, indenture, deed of
trust, license, lease, contract, agreement or other instrument or obligation to
which Delta is a party, or by which it or any of its properties or assets may be
bound or affected.
Section 2.4. Consents and Approvals Except as set forth on Section 2.4 of the
Disclosure Schedule, no consent, approval or authorization of, or withholding of
objection on the part of, or filing, registration or qualification with, or
notice to (collectively, the "Consents") any court, administrative agency,
commission or other governmental authority or instrumentality, whether Federal,
state, local or foreign (each a "Governmental Authority"), or with any third
party are necessary in connection with the execution and delivery by Seller of
this Agreement and the consummation by Seller of the transactions contemplated
by this Agreement.
Section 2.5. Certain Customer Relationships. Section 2.5 of the Disclosure
Schedule contains an accurate list of Delta's ten largest customers for fiscal
year 1999 (the "Primary Customers"), together with the total 1999 revenues from
each such Primary Customer. Delta has good relationships with each of the
Primary Customers and Delta has not received any notice or otherwise has
knowledge that any Primary Customer has or intends to cease to use the services
of Delta or to reduce substantially the use of Delta's products or services.
Section 2.6. Compliance with Applicable Law. Delta holds all licenses,
franchises, permits and authorizations necessary for the lawful conduct of its
business and has complied with and is not in default under any law, statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
of any Governmental Authority applicable to Delta, other than licenses,
franchises, permits or authorizations or failures to comply or defaults which,
individually or in the aggregate, could not have a material adverse effect on
the business, financial condition, assets, prospects or results of operation (a
"Material Adverse Effect") of Delta.
Section 2.7. Financial Statements. Attached as Section 2.7 of the Disclosure
Schedule are correct and complete copies of the following (collectively, the
"Delta Financial Statements"): (a) the audited balance sheet of Delta as of
December 31, 1997, and the related audited statement of income for the year
ended December 31, 1997, and (b) the unaudited balance sheets of Delta as of
December 31, 1998 and 1999 and the related unaudited statements of income for
the years then ended. The Delta Financial Statements do not include the
Transferred Assets or the Transferred Liabilities or the results of operation of
the business associated with the Transferred Assets or Transferred Liabilities.
The Delta Financial Statements fairly present, in all material respects, the
financial position of Delta (excluding the Transferred Assets and Transferred
Liabilities) as of the dates thereof, and the results of operations of Delta
(excluding the results of operations associated with the Transferred Assets and
Transferred Liabilities) for the respective fiscal periods or as of the
respective dates thereof. Each of the Delta Financial Statements, including, in
each case, any notes thereto, has been prepared in accordance with generally
accepted accounting principles in the United States ("GAAP") consistently
applied during the periods involved (except that the unaudited Delta Financial
Statements do not contain footnotes). The books and records of Delta have been,
and are being, maintained in all material respects in accordance with all
applicable legal and accounting requirements. All financial statements of Delta
have been duly and timely filed in proper form with the commercial register of
Delta in the Federal Republic of Germany.
Section 2.8. Absence of Certain Changes or Events.
(a) Since December 31, 1998, (i) Delta has not incurred any material liability
not in the ordinary course of business, (ii) no event has occurred which,
individually or in the aggregate, could have a Material Adverse Effect on Delta,
and (iii) the business of Delta has been carried on in the ordinary and usual
course.
(b) Except as set out in Section 2.8 of the Disclosure Schedule, since December
31, 1999, Delta has not (i) increased the salaries, wages, or other
compensation, or pensions, fringe benefits or other perquisites payable to any
director, executive officer or employee, or (ii) granted any severance or
termination pay, or (iii) paid or accrued any bonuses or commissions, or (iv)
suffered any strike, work stoppage, slowdown, or other labor disturbance.
Section 2.9. Legal Proceedings and Restrictions.
(a) Except as set forth on Section 2.9 of the Disclosure Schedule, there are no
actions, suits, proceedings, claims or investigations pending, or to the
knowledge of Seller, threatened against or affecting Delta at law or in equity
or before any Governmental Authority.
(b) There is no judgment, order, writ, decree, injunction or regulatory
restriction imposed upon Seller or Delta or Delta's assets which has had, or
could reasonably be expected to have, a Material Adverse Effect on Delta.
Section 2.10. Taxes and Tax Returns. All federal, state, local and foreign
income, excise, customs, social security, property, sales, use, information,
payroll and other tax returns and reports required to be filed by Seller or
Delta with respect to Delta or its business (the "Tax Returns") have been timely
filed with the appropriate governmental agencies in all jurisdictions in which
such returns and reports are required to be filed and (insofar as they relate to
the activities of Delta) are true and complete in all material respects. All
federal, state, local and foreign taxes, assessments, interest, penalties,
deficiencies, fees and other governmental charges or impositions, including
without limitation social security charges, excise taxes and customs charges,
which are shown to be due by the Tax Returns (the "Taxes") have been properly
paid or accrued. Seller has not received any notice of assessment or proposed
assessment by the Internal Revenue Service or any other taxing authority in
connection with any Tax Returns and there are no pending tax examinations of or
tax claims asserted against Seller, Delta or Delta's assets. Neither Seller nor
Delta has granted any waiver of any statute of limitations with respect to, or
any extension of a period for the assessment of, any Tax. The accruals and
reserves for Taxes reflected in the Delta Financial Statements are adequate to
cover all Taxes accruable for the periods covered therein (including interest
and penalties thereon, if any) in accordance with GAAP.
Section 2.11. Delta Employee Benefits. Set forth in Section 2.11 of the
Disclosure Schedule is a list and description of all material benefit plans
generally applicable to the Employees of Delta which are currently in effect
(the "Delta Benefit Plans"). Seller has made, or prior to the Closing Date will
make, available to Buyer copies of the Delta Benefit Plans and all applicable
amendments. All of the Delta Benefit Plans are in full force and effect as
written, and all premiums, contributions and other payments required to be made
by Delta under any of the Delta Benefit Plans have been made or accrued in
accordance with the terms thereof, and all of such plans comply in all material
respects with applicable laws.
Section 2.12. Employment and Labor Relations.
(a) Section 2.12 of the Disclosure Schedule lists each employee who works for
Delta (collectively, the "Delta Employees"), their respective places of work,
start dates and current base salaries. The Delta Employees do not include any
employee attributable to the Transferred Assets. There are no charges,
complaints, investigations or litigation currently pending, or to the knowledge
of Seller, threatened, against Delta, relating to alleged employment
discrimination, unfair labor practices, equal pay discrimination, affirmative
action noncompliance, occupational safety and health, breach of employment
contract, employee benefit matters, wrongful discharge or other
employment-related matters relating to the Delta Employees. There are no
outstanding orders or charges against Delta under any applicable occupational
safety and health laws in any jurisdiction in which Delta's business is
conducted. Delta is not a party to any contracts with any labor union or
employee association nor has Delta made commitments to or conducted negotiations
with any labor union or employee association with respect to any future
contracts. Delta is not aware of any current attempts to organize or establish
any labor union or employee association with respect to any Delta Employee, and
there is no existing or pending certification of any such union with regard to a
bargaining unit.
(b) Delta is not a party to collective bargaining agreements (Tarifvertrage) or
to shop agreements (Betriebsvereinbarungen) including by customary habit
(betriebliche Ubung).
(c) Neither Seller nor any affiliates have made, independently of Delta, any
undertakings to, or entered into any agreements with, any employee, labor union,
workers' council or similar organization having any effect on past, present or
future employees of Delta after the Closing.
Section 2.13. Contracts. Section 2.13 of the Disclosure Schedule lists or
describes the following contracts, agreements, licenses, permits, arrangements,
commitments or understandings (whether written or oral) which are currently in
effect or which will, without any further action on the part of Delta become
effective in the future, to which Delta is a party (collectively, the "Delta
Contracts"):
(a) any agreement for the lease of personal property or real property to or from
any person or entity that individually involves an expenditure by the lessee of
in excess of US$50,000 in any one year;
(b) any agreement for the purchase, sale or distribution of products, materials,
commodities, supplies or other personal property, or for the furnishing or
receipt of services, the performance of which will extend over a period of more
than one year or involve consideration payable by any party in excess of
US$50,000 in any one year;
(c) any agreement under which Delta has created, incurred, assumed or guaranteed
any indebtedness for borrowed money or any agreement under which Delta has
imposed a Lien on any of its assets which will not be released on or prior to
Closing;
(d) any agreement with any director, officer, employee or shareholder of Delta;
(e) any agreement for the employment of any Delta Employee or consultant on a
full-time, part-time, consulting or other basis;
(f) any agreement relating to any Intellectual Property (as that term is defined
in Section 2.18) used by Delta, or that is licensed by Delta for use by others,
including any joint development agreement with a university, governmental body
or other third party;
(g) any agreement under which the consequences of a default, termination,
non-renewal or acceleration could have a Material Adverse Effect on Delta; or
(h) any other agreement the performance of which involves consideration payable
by any party in excess of US$50,000 in any one year.
Seller has made available to the Buyer a correct and complete copy of
each Delta Contract. Seller represents that (i) each Delta Contract is legal,
valid, binding, enforceable and in full force and effect, (ii) the consummation
of the transactions contemplated hereby will not cause a breach or termination
of any Delta Contract nor effect a change in any of the terms of any Delta
Contract, (iii) Delta is not, and, to Seller's knowledge, no other party is, in
breach or default of any Delta Contract and no event has occurred which with
notice or lapse of time, or both, would constitute a breach or default that
would result in or permit termination, modification or acceleration under any
Delta Contract, and (iv) Delta has not, and, to Seller's knowledge, no other
party has, repudiated any provision of any Delta Contract.
Section 2.14. Undisclosed Delta Liabilities. Except for liabilities listed on
Section 2.14 of the Disclosure Schedule and except for liabilities (i) that are
fully reflected or reserved against on the December 31, 1999 unaudited balance
sheet of Delta, or (ii) that were incurred in the ordinary course of business
consistent with past practice since December 31, 1999 and do not exceed
individually US$50,000, Delta has not incurred any liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether due
or to become due).
Section 2.15. Environmental Liability.
(a) Seller has not received any notice, and does not otherwise have knowledge,
of any claim, and no proceeding has been instituted raising any claim, against
Delta or any predecessor of Delta or any of the real properties now or formerly
owned, leased or operated by Delta or any predecessor of Delta or other assets
of Delta or any predecessor of Delta alleging any damage to the environment or
violation of any Environmental Laws.
(b) Seller does not have knowledge of any facts which would give rise to any
claim, public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by Delta or any predecessor
of Delta or to other assets of Delta or any predecessor of Delta or their use.
(c) For purposes of this Agreement, "Environmental Laws" means any and all
German federal, state, county, local and foreign laws, statutes, codes,
ordinances, rules, regulations, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions, including, without limitation, those of all Member States of the
European Union, relating to pollution and the protection of the environment or
the release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
Section 2.16. Asset Ownership. Delta has, and will have at Closing, good and
marketable title to, or a valid leasehold interest in, its tangible and
intangible assets, except for the Transferred Assets or assets disposed of in
the ordinary course of business prior to Closing. Delta's assets have not been
pledged and are, and will be at Closing, free and clear of all Liens other than
Liens related to tangible property leases or purchase money Liens on tangible
property (e.g., car leases). Each of Delta's tangible assets is free from
defects (patent and latent) other than defects that do not individually or in
the aggregate materially impair its value or intended use, has been maintained
in accordance with normal industry practice, is in good operating condition and
repair (subject to normal wear and tear) and is suitable for the purposes for
which it presently is used.
Section 2.17. Real Property. Delta does not own any real property.
Section 2.17 of the Disclosure Schedule lists all real property which is leased
to Delta. Seller has made available to Buyer correct and complete copies of each
such lease. Seller represents that:
(a) each such lease is legal, valid, binding, enforceable and in full force and
effect;
(b) the consummation of the transactions contemplated hereby will neither cause
the termination of each such lease nor effect a change in any of its terms;
(c) Delta is not, and, to the knowledge of Seller, no other party to such lease
is, in breach or default, and no event has occurred which, with notice or lapse
of time, or both, would constitute a breach or default that would permit
termination, modification or acceleration thereunder;
(d) neither Delta nor, to the knowledge of Seller, any other party to each such
lease has repudiated or disputed any provision thereof;
(e) there are no oral agreements in effect as to each such lease; and
(f) Delta has not assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in any leasehold.
Section 2.18. Intellectual Property.
(a) Section 2.18(a) of the Disclosure Schedule sets forth a true and complete
list of all registered or defined Owned Intellectual Property (as defined below)
and a true and complete list of all Licensed Intellectual Property (as defined
below). Delta (i) owns all of the Owned Intellectual Property, free and clear of
any Liens, and (ii) has a valid license to all of the Licensed Intellectual
Property used or held by Delta and necessary in the conduct of Delta's business.
In the event that Buyer determines after the Closing that certain software
products of Seller or its affiliates are necessary for the operation of the
Software (whether embedded or as a prerequisite), Seller shall provide the
necessary licenses for such continued use at no cost to Buyer and under
conditions substantially similar to those of the License Agreement.
(b) The rights and/or use of Delta in or to Owned and/or Licensed Intellectual
Property do not conflict with or infringe on the Intellectual Property rights of
any other Person, and neither the Seller nor Delta has received any claim or
written notice from any Person to such effect, nor to the knowledge of the
Seller or Delta, has any such action been threatened.
(c) To the knowledge of the Seller and Delta, no Person is using any
Intellectual Property that is confusingly similar to the Owned and/or Licensed
Intellectual Property or that violates or infringes upon the Owned or Licensed
Intellectual Property or upon the rights of Delta therein.
(d) The consummation of the transactions contemplated by this Agreement will not
result in the termination or impairment of any of the Owned and/or Licensed
Intellectual Property.
(e) With respect to all Owned Intellectual Property, to the knowledge of the
Seller and Delta, the registered user provisions of nations requiring such
registrations have been complied with. There are no registrations for patents or
patents or applications for registration for patents and no patents held by
assignment.
(f) With respect to each license and sublicense for Licensed Intellectual
Property:
(i) Such license or sublicense is valid and binding and in full force and
effect and represents the entire agreement between the respective
licensor and licensee with respect to the subject matter of such
license or sublicense;
(ii) Such license or sublicense will not cease to be valid and binding and
in full force and effect on terms identical to those currently in
effect as a result of the consummation of the transactions contemplated
by this Agreement, nor will the consummation of the transactions
contemplated by this Agreement constitute a breach or default under
such license or sublicense or otherwise give the licensor or
sublicensor a right to terminate such license or sublicense;
(iii) With respect to each such license or sublicense: (A) neither the Seller
nor Delta has received any notice of termination or cancellation under
such license or sublicense and no licensor or sublicensor has any right
of termination or cancellation under such license or sublicense except
in connection with the default of Delta, and (B) neither the Seller nor
Delta has granted to any other Person any rights, adverse or otherwise,
under such license or sublicense;
(iv) Neither Delta (to the knowledge of the Seller) nor any other party to
such license or sublicense is in breach or default in any material
respect, and, to the knowledge of the Sellers, no event has occurred
that, with notice or lapse of time would constitute such a breach or
default, in any material respect, or permit termination, modification
or acceleration under such license or sublicense.
(v) Neither the Seller nor Delta has granted any license or other right to
any other Person with respect to the Owned Intellectual Property,
except licenses to Delta customers under terms and conditions similar
to the Standard Forms and the licenses with respect to the results of
research granted and obtained by Delta in connection with MORPHA and
IDEA Contracts, and except for the right to distribute Software granted
to Kx Verksamhetsutveckling AB, which can be terminated without penalty
by Delta on ninety (90) days' notice.
(g) Delta has taken all commercially reasonable steps customary in its business
to protect and preserve the confidentiality of all Intellectual Property not
otherwise protected by patents, patent applications or registered copyright
("Confidential Information"). All officers and employees of Delta are under
written obligation to Delta to maintain in confidence all Confidential
Information acquired by them in the course of their employment and to assign to
Delta all inventions made by them within the scope of their employment during
such employment and for a reasonable period thereafter. All use, disclosure or
appropriation of Confidential Information owned by Delta by or to a third party
has been either pursuant to the terms of a written agreement between Delta and
such third party or in circumstances where the lack of such written agreement
has been commercially reasonable. All use, disclosure or appropriation of
Confidential Information not owned by Delta has been pursuant to the terms of a
written agreement between Delta and the owner of such Confidential Information,
or is otherwise lawful.
"Intellectual Property" means (a) inventions, whether or not
patentable, whether or not reduced to practice, and whether or not yet made the
subject of a pending patent application or applications, (b) ideas and
conceptions of patentable subject matter, including, without limitation, any
patent disclosures, whether or not reduced to practice and whether or not yet
made the subject of a pending patent application or applications, (c) national
(including the United States, Germany and France) and multinational statutory
invention registrations, patents, patent registrations and patent applications
(including all reissues, divisions, continuations, continuations-in-part,
extensions and reexaminations) and all rights therein provided by international
treaties or conventions and all improvements to the inventions disclosed in each
such registration, patent or application, (d) trademarks, service marks, trade
dress, logos, trade names and corporate names, whether or not registered,
including all common law rights, and registrations and applications for
registration thereof, including, but not limited to, all marks registered in the
Trademark Offices of all nations throughout the world, and all rights therein
provided by international treaties or conventions, (e) copyrights (registered or
otherwise) and registrations and applications for registration thereof, and all
rights therein provided by international treaties or conventions, (f) data bases
(without limitation, data base architecture and data base content), files,
documentation and other materials related thereto, (g) trade secrets, (h)
confidential technology (including know-how and show-how), manufacturing and
production processes and techniques, research and development information,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works.
"Licensed Intellectual Property" means all Intellectual Property
licensed or sublicensed to Delta from any Person and necessary in the conduct of
the business of Delta.
"Owned Intellectual Property" means all Intellectual Property in and to
which Delta holds, or has a right to hold, right, title and interest and
necessary in the conduct of the business of Delta.
Section 2.19. Software.
(a) (i) The Software (as defined below) substantially conforms to the
specifications and operational requirements set forth in its user documentation
and related materials, and is free from material defects, errors, and faulty
workmanship in accordance with customary industry practices; (ii) the source
code of the Software is managed by a source management software which is
accessible to the user and which contains sufficient and detailed comments
regarding operation and revision history to enable a programmer of ordinary
skill to be able to maintain the Software and to be able to prepare derivative
versions of the Software; (iii) Delta has obtained all approvals necessary for
exporting the Software outside Germany and importing the Software into any
country in which the Software is now sold or licensed for use, and to the
knowledge of the Seller, all such approvals are valid, current, outstanding and
in full force and effect; and (iv) the Software, and every portion thereof, was
authored (A) by an employee or employees of Delta working within the scope of
their employment such that the contribution of such employee or employees to the
Software constitutes a "work made for hire" as that term is defined under United
States copyright law, or (B) by a Person that has executed a written assignment
assigning all right, title, and interest in and to the portion of the software
authored by that Person to Delta.
(b) All source code of the Software, software tools, library functions, and
other software developed by Delta or by any third party that is currently
utilized in the development of the Software or that is required to operate or
modify the Software is in the possession of Delta. Delta has the unlimited and
unfettered right to use such source code and has the right to use software
tools, library functions, and other software to the extent necessary to conduct
and to continue to conduct their business.
(c) As of the date hereof, all computer software used in the business of Delta
including, without limitation, all of the Software and the environment
(including without limitation, the operating systems) in which such Software was
developed (collectively, the "Delta Software"), operates without error relating
to the year 2000, specifically including any error relating to, or the product
of, date data which represents or references different centuries or more than
one century. All customers of Delta have been informed that the version of the
Software used by such customer is Year 2000 compliant as set forth in the
preceding sentences.
"Software" means all computer software and past and present versions
thereof developed, manufactured, sold, marketed or currently under development
by Delta, including, without limitation, Ergo Pro, Ergo DFA, Ergo TEK, Ergo MAS,
Ergo time, Ergo SIM, Ergo MAN, Ergo FAB, IPD, EU Check (all versions through
5.0) and Delta copyrightable work developed in connection with the MORPHA and
IDEA projects, as well as past and present versions of all computer software
developed by Delta for any Person, and including, but not limited to, source
code, object code, run time, data base, objects, comments, screens, user
interfaces, report formats, templates, menus, buttons and icons, and all files,
data, materials, manuals, design notes and other items and documentation related
thereto or associated therewith.
Section 2.20. Ongoing Projects. Section 2.20 of the Disclosure Schedule contains
a list of all significant ongoing business projects of Delta as of February 10,
2000 and all funded development as of February 27, 2000. Delta shall be entitled
to all revenues related to business projects and development work to be
performed after the Closing. All prepayments made by Delta customers for work to
be performed by Delta were made to Delta and accounted for as such. With respect
to pilot projects for Delta products, including those presented to customers by
distributors of Delta products, Seller shall use its reasonable best efforts to
give the benefit of such pilot projects and resulting customer relationship to
Delta.
Section 2.21. General Terms and Conditions and License Agreement. Attached to
Section 2.21 of the Disclosure Schedule are copies of Delta's General Conditions
and Terms of Delivery and its standard license agreement in English (the
"Standard Forms").
Section 2.22. Broker's Fees. Except for Goldman Sachs & Co. and Colonnade
Advisors LLC, neither Seller nor Delta has employed any person or entity as a
broker, finder or agent or incurred any liability for any broker's fees,
finder's fees or other commission in connection with the transactions
contemplated by this Agreement. Neither Delta nor Buyer shall be liable for any
such fees or commissions.
Section 2.23. Disclosure. No representation or warranty by Seller contained in
this Agreement (including the Disclosure Schedule referred to herein) contains
or will contain any untrue statement of a material fact, or omits or will omit
to state any material fact required to make the statements herein not
misleading, or necessary in order to provide a prospective purchaser of Delta
with adequate information as to Delta and its operations, liabilities or
condition (financial and otherwise).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 3.1. Corporate Organization. Buyer is a corporation duly organized and
validly existing under the laws of France. Buyer has the corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as it is now being conducted.
Section 3.2. Authority; No Violation.
(a) Buyer has the corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. No corporate
proceedings on the part of Buyer are necessary to approve this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Buyer and constitutes a valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
(b) The execution and delivery of this Agreement by Buyer, the consummation by
Buyer of the transactions contemplated hereby, and the compliance by Buyer with
the terms or provisions hereof, will not (i) violate any provision of the
charter or organic documents of Buyer, (ii) violate any law, statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Buyer or any of its properties or assets, or (iii) violate,
conflict with, breach any provision of or result in the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any Lien
upon any of the properties or assets of Buyer under any note, bond, mortgage,
indenture, deed of trust, license, lease, contract, agreement or other
instrument or obligation to which Buyer is a party, or by which it or any of its
properties or assets may be bound or affected.
Section 3.3. Consents and Approvals. Except for clearance under the competition
laws of the Federal Republic of Germany, no Consents from any Governmental
Authority or any third party are necessary in connection with the execution and
delivery by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated by this Agreement.
Section 3.4. Broker's Fees. Buyer has not employed any person or entity as a
broker, finder or agent or incurred any liability for any broker's fees,
finder's fees or other commission in connection with the transactions
contemplated by this Agreement.
ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1. Conduct of Business Prior to Closing. During the period from the
date of this Agreement to the Closing Date, except as expressly contemplated or
permitted by this Agreement, Seller and Delta shall (i) conduct Delta's business
in the usual, regular and ordinary course consistent with past practice, (ii)
use their reasonable efforts to maintain and preserve intact Delta's business
and its advantageous business relationships and retain the services of the Delta
Employees, and (iii) take no action which would adversely affect or delay the
ability of Buyer or Seller to obtain any necessary approvals of any Governmental
Authority required for the transactions contemplated hereby or to perform their
covenants and agreements under this Agreement.
Section 4.2. Seller Forbearances. During the period from the date of this
Agreement to the Closing Date, except as expressly contemplated or permitted by
this Agreement, neither Seller nor Delta shall, without the prior written
consent of Buyer:
(a) adjust, split, combine or reclassify any capital stock of Delta; (ii) make,
declare or pay any dividend, or make any other distribution on, or directly or
indirectly redeem, purchase or otherwise acquire, any shares of Delta capital
stock or any securities or obligations convertible into or exchangeable for any
shares of Delta capital stock, (iii) grant any other individual, partnership,
limited liability company, corporation or other entity (collectively, "Person")
any right to acquire any shares of Delta capital stock, or (iv) issue any
additional shares of Delta capital stock;
(b) sell, transfer, mortgage, encumber or otherwise dispose of any of Delta's
assets to any Person, or cancel or release any indebtedness or claims owed to or
held by Delta, except in the ordinary course of business consistent with past
practice;
(c) except for transactions in the ordinary course of business consistent with
past practice, enter into or terminate any Delta Contract, or change any terms
in any Delta Contract, other than renewals or changes in immaterial terms
thereof;
(d) increase in any manner the compensation or fringe benefits of any of the
Delta Employees other than in the ordinary course of business consistent with
past practice, pay any pension or retirement allowance not required by any
existing plan or agreement to any Delta Employee, or become a party to, amend or
commit itself to, any pension, retirement, profit-sharing or welfare benefit
plan or agreement or employment agreement with or for the benefit of any Delta
Employee;
(e) amend Delta's Articles of Association; or
(f) take any action that is intended or may reasonably be expected to result in
(i) any of its representations and warranties set forth in this Agreement being
or becoming untrue in any material respect, or (ii) any of the conditions to the
transactions contemplated hereby set forth in Article VI not being satisfied or
(iii) any violation of any provision of this Agreement, except, in each case, as
may be required by applicable law.
ARTICLE V.
ADDITIONAL AGREEMENTS
Section 5.1. Regulatory and Other Matters. The parties shall cooperate with each
other and use their best efforts to prepare and file promptly all necessary
documentation to effect all applications, notices, petitions and filings and to
obtain as promptly as practicable all Consents of Governmental Authorities and
third parties which are necessary or advisable to consummate the transactions
contemplated by this Agreement, and the parties shall keep each other apprised
of the status of matters relating to completion of the transactions contemplated
herein.
Section 5.2. Access to Information. Upon reasonable notice, Seller shall afford
to the officers, employees, accountants, counsel and other representatives of
Buyer access during normal business hours during the period prior to the Closing
Date to Delta's books and records, properties and contracts, and, during such
period, Seller shall make available to Buyer all information concerning Delta
and its assets and personnel as Buyer may reasonably request. Following the
Closing Date, Buyer shall afford the officers, employees, accountants, counsel
and other representatives of Seller access during normal business hours to Delta
and the books and records of Delta for the purposes of completing its financial
statement audits and its Tax Returns or any review or audit thereof.
Section 5.3. Additional Agreements. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest Buyer with full title to the Purchased Stock, the proper
officers and directors of each party to this Agreement shall take all such
necessary or advisable action.
Section 5.4. Advice of Changes. Seller shall promptly advise Buyer of any change
or event which is likely to have a Material Adverse Effect on Delta or which
Seller believes would or would be reasonably likely to cause or constitute a
material breach of any of its representations, warranties or covenants contained
herein.
Section 5.5. Post-Closing Remittances. If, after the Closing Date, Seller or
Delta shall receive any remittance from any account debtors owed to the other,
Seller or Delta, as the case may be, shall endorse such remittance or otherwise
forward it to the other promptly following receipt thereof.
Section 5.6. Intercompany Debt; Intercompany Agreements. Buyer agrees that (i)
all intercompany debt between Delta and Seller or one of Seller's subsidiaries
as it exists on the Closing Date (other than the debt invoiced by Seller for
Kurt Schifstad which shall be a Transferred Liability) shall become third party
debt as of the Closing, and (ii) Buyer shall repay such debt in full within
thirty (30) days of the Closing Date. Seller agrees and represents that the
intercompany debt shall not exceed US$2,750,000 as of the Closing Date. As of
closing, except for agreements related to such intercompany debt, the agreement
with Kx Verksamhetsutveckling AB and the License Agreement, any and all
agreements between Delta and Seller or one of Seller's subsidiaries shall
terminate.
Section 5.7. Non-Competition. As a material inducement for Buyer to enter into
and consummate the transactions contemplated by this Agreement, Seller shall
not, for the period set forth below (the "Non-Compete Period"):
(a) Directly or indirectly, on its own behalf, or on behalf of any other Person,
and whether acting as an owner, partner or agent, engage in a business in the
United States or any other place where Buyer conducts its business on the
Closing Date (the "Territory") that competes with the products of Delta as such
exist on the Closing Date;
(b) Directly or indirectly solicit, attempt to solicit, or otherwise divert, or
attempt to divert, any participant, supplier or customer of Delta for a purpose
or with a result that is competitive with the products of Delta as such exist on
the Closing Date; or
(c) Directly or indirectly recruit, solicit or otherwise induce any Delta
Employee to terminate his or her employment with Delta.
Notwithstanding any of the foregoing, Seller and its subsidiaries and
affiliates shall in no way be restricted by the provisions of this Section 5.7
from licensing its enterprise-wide visualization technology to end-users, either
directly or indirectly, for use in information sharing, information management,
visualization, collaboration or publishing of information functions. The
Non-Compete Period shall be five (5) years from the Closing Date.
If any court of competent jurisdiction shall finally hold that the
time, territory or any other provision set forth in this Section 5.7 constitutes
an unreasonable restriction, such provision of this Section 5.7 shall not be
rendered void, but shall apply as to such time, territory or to such other
extent as such court may determine constitutes a reasonable restriction under
the circumstances involved.
Section 5.8. Website Link; Name of Delta. Seller agrees that, for a reasonable
period not to exceed three (3) months after the Closing, Seller shall post a
notice on the "EAI-Delta.de" website regarding the sale of Delta and provide a
link to a website designated by Buyer. The content of such website shall be
Delta's to the extent that it relates to Delta or its products or services.
Buyer agrees that within four (4) weeks of the Closing, it shall change the name
of Delta to delete any reference to Seller.
Section 5.9. Other Employees. Seller shall cooperate with Buyer in its
solicitation of (i) Brian Barnes (Southfield), (ii) Richard Jackson
(Southfield), (iii) Peter Busch (France), (iv) William Grifen (Munich), and (v)
six to eight employees from Kx Verksamhetsutveckling AB to be agreed upon by the
parties, giving priority to those trained on Delta's products, to become
employees of Buyer or one of its subsidiaries.
Section 5.10. Employee Stock Options. As of the Closing, Seller shall accelerate
the vesting of all options granted to Delta Employees in November 1999 and shall
extend the exercise period for such options through June 30, 2000.
ARTICLE VI.
CONDITIONS PRECEDENT
Section 6.1. Conditions to Each Party's Obligation To Close. The respective
obligation of each party to close the transactions contemplated hereby shall be
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) Approvals and Consents. All regulatory approvals required to consummate the
transactions contemplated hereby, including, without limitation, German Cartel
Office clearance, shall have been obtained and shall remain in full force and
effect and all statutory waiting periods in respect thereof shall have expired
(all such approvals and the expiration of all such waiting periods being
referred to herein as the "Requisite Regulatory Approvals"), and all material
Consents, if any, required as a closing condition shall have been obtained and
shall remain in full force and effect.
(b) No Injunctions or Restraints; Illegality. No order, injunction or decree
issued by any Governmental Authority or other legal restraint or prohibition
preventing the consummation of the transactions contemplated by this Agreement
shall be in effect. No law, statute, rule, regulation, order, injunction or
decree shall have been enacted, entered, promulgated or enforced by any
Governmental Authority which prohibits, materially restricts or makes illegal
the consummation of the transactions contemplated by this Agreement.
(c) License Agreement. The parties shall have entered into the License
Agreement, substantially in the form Exhibit A and shall have agreed to the
listings required for Exhibits A and B to the License Agreement.
(d) German Process. The parties shall have entered into a transfer deed
satisfying the requirements of German law for the effective transfer of the
Purchased Stock and shall have taken any other steps necessary under applicable
German law to transfer the Purchased Stock.
Section 6.2. Conditions to Obligations of Buyer. The obligation of Buyer to
close the transactions contemplated hereby is also subject to the satisfaction
or waiver by Buyer at or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of Seller
set forth in this Agreement that are qualified with reference to a Material
Adverse Effect or materiality shall be true and correct, and the representations
and warranties of Seller that are not so qualified shall be true and correct in
all material respects, in each case as of the date of this Agreement and (except
to the extent such representations and warranties speak as of an earlier date)
as of the Closing Date as though made on and as of the Closing Date. Buyer shall
have received a certificate signed on behalf of Seller by an authorized officer,
to the foregoing effect.
(b) Performance of Obligations of Seller. Seller shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Buyer shall have received a
certificate signed on behalf of Seller by an authorized officer to such effect.
(c) Closing Certificates. Buyer shall have received from Seller such customary
closing documents and
certificates as Buyer or its counsel shall reasonably request.
(d) Material Adverse Change. There shall not have occurred any change which
would constitute a Material Adverse Effect on Delta.
Section 6.3. Conditions to Obligations of Seller. The obligation of Seller to
close the transactions contemplated hereby is also subject to the satisfaction
or waiver by Seller at or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of Buyer
set forth in this Agreement that are qualified with a reference to materiality
shall be true and correct, and the representations and warranties of Buyer that
are not so qualified shall be true and correct in all material respects, in each
case, as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date. Seller shall have received a
certificate signed on behalf of Buyer by an authorized officer to the foregoing
effect.
(b) Performance of Obligations of Buyer. Buyer shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Seller shall have received a
certificate signed on behalf of Buyer by an authorized officer to such effect.
(c) Closing Certificates. Seller shall have received from Buyer such customary
closing documents and certificates as Seller or its counsel shall reasonably
request.
ARTICLE VII.
TERMINATION AND AMENDMENT
Section 7.1. Termination. This Agreement may be terminated at any time prior to
the Closing:
(a) by mutual consent of Buyer and Seller in a written instrument;
(b) by either Buyer or Seller if any Governmental Authority which must grant a
Requisite Regulatory Approval has denied approval of the transactions
contemplated hereby, or any Governmental Authority of competent jurisdiction
shall have issued an order permanently enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement;
(c) by either Buyer or Seller if the Closing shall not have occurred on or
before April 3, 2000 unless the failure to close by such date shall be due to
the failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth in this Agreement;
or
(d) by Seller (after consulting with its legal counsel), if such action is
required for the Board of Directors to comply with its fiduciary duties to
Seller and its stockholders.
Section 7.2. Effect of Termination. In the event of termination of this
Agreement by either Buyer or Seller as provided in Section 7.1, this Agreement
shall forthwith become void and have no effect, and neither Buyer or Seller nor
any of their directors or officers shall have any liability of any nature
whatsoever hereunder, or in connection with the transactions contemplated
hereby, except that (i) this Section 7.2 and Sections 9.1 and 9.2 shall survive
any termination of this Agreement, and (ii) notwithstanding anything to the
contrary contained in this Agreement, neither Buyer nor Seller shall be relieved
or released from any liabilities or damages arising out of its willful breach of
any provision of this Agreement.
Section 7.3. Amendment; Extension; Waiver. At any time prior to the Closing
Date, the parties hereto may, to the extent legally allowed, (i) amend any term
or provision of this Agreement, (ii) extend the time for the performance of any
of the obligations or other acts of the parties hereto, (iii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, and (iv) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such amendment, extension or waiver shall be valid only if set
forth in a written instrument signed on behalf of such party, but such
amendment, extension or waiver or failure to insist on strict compliance with
any obligation, covenant, agreement or condition in this Agreement shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
ARTICLE VIII.
SURVIVAL AND INDEMNIFICATION
Section 8.1. Survival of Representations, Warranties and Covenants. All
representations and warranties of each party contained in this Agreement shall
survive the Closing, for a period ending on the second anniversary of the
Closing, except that: (a) the representations and warranties as to title to the
Purchased Stock shall survive without limitation, (b) the representations and
warranties set forth in Section 2.10 shall survive until the applicable statute
of limitations has run, and (c) the representations and warranties set forth in
Section 2.18 shall survive until the tenth anniversary of the Closing. The
covenants and agreements contained herein shall survive the Closing without
limitation as to time unless the covenant or agreement specifies a term, in
which case such covenant or agreement shall survive for such specified term. The
respective expiration dates for the survival of the representations and
warranties and the covenants shall be referred to herein as the relevant
"Expiration Date." The right to indemnification or any other remedy based on
representations, warranties, covenants and obligations in this Agreement shall
not be affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification or any other remedy based on such representations, warranties,
covenants and obligations.
Section 8.2. Indemnification by Buyer. Buyer agrees to indemnify, defend and
hold Seller and its officers, directors, employees and agents, harmless from and
against any and all Liabilities and against all claims in respect thereof
(including interest, penalties and fees and amounts paid in settlement and
reasonable costs of investigation herein referred to collectively as "Losses" or
individually as "Loss") suffered or incurred by reason of (a) any untrue
representation of, or breach of warranty by, Buyer in this Agreement, notice of
which is given to Buyer prior to 30 days following the relevant Expiration Date;
(b) any nonfulfillment of any covenant or agreement of Buyer in this Agreement;
and (c) enforcing the indemnification rights of the Sellers pursuant to this
Section 8.2.
Section 8.3. Indemnification by Seller. Seller agrees to indemnify, defend and
hold Buyer and Delta and their respective officers, directors, employees, and
agents harmless from and against all Losses suffered or incurred by reason of
(a) any untrue representation of, or breach of warranty by, Seller in this
Agreement, notice of which is given to Seller on or prior to 30 days following
the relevant Expiration Date; (b) any nonfulfillment of any covenant or
agreement of Delta (as to pre-closing covenants only) or Seller, in this
Agreement; (c) the Transferred Assets and Transferred Liabilities; and (d)
enforcing the indemnification rights of Buyer pursuant to this Section 8.3.
Section 8.4. Claims for Indemnification.
(a) General. Notwithstanding the provisions of Sections 8.2 and 8.3, to the
extent that (i) Buyer incurs a Loss under Section 8.3(a), or (ii) Seller incurs
a Loss under Section 8.2(a), the other party shall be required to indemnify and
hold harmless the party incurring the Loss with respect to such Loss only with
respect to any Loss which individually exceeds US$10,000 (each a "Minimum
Claim") and in any event only if the aggregate of all Minimum Claims by such
party exceeds US$350,000, in which case, the other shall be liable for the full
amount of all such claims up to an amount equal to the Purchase Price; provided,
that the foregoing limits do not apply with respect to any fraudulent breach of
any representation or warranty or any claims with respect to Transferred Assets
or Transferred Liabilities.
(b) Timing and Notice. The parties intend that all indemnification claims be
made as promptly as practicable by the party seeking indemnification (the
"Indemnified Party"). Whenever any claim shall arise for indemnification, the
Indemnified Party shall promptly notify the party from whom indemnification is
sought ("Indemnifying Party") of the claim, and the facts constituting the basis
for such claim. The failure to so notify the Indemnifying Party shall not
relieve the Indemnifying party of any liability that it may have to the
Indemnified Party, except to the extent the Indemnifying Party demonstrates that
the defense of such action is materially prejudiced thereby.
(c) Claims by Third Parties. With respect to claims made by third parties, the
Indemnifying Party, upon acknowledgment of its liability for the claim, shall be
entitled to assume control of the defense of such action or claim with counsel
reasonably satisfactory to the Indemnified Party; provided, that:
(i) the Indemnified Party shall be entitled to participate in the defense
of such claim and to employ counsel at its own expense to assist in the handling
of such claim;
(ii) no Indemnifying Party shall consent to the entry of any judgment or
enter into any settlement without the consent of the Indemnified Party (A) if
such judgment or settlement does not include as an unconditional term thereof
the giving by each claimant or plaintiff to each Indemnified Party of a release
from all liability in respect to such claim, (B) if such judgment or settlement
would result in the finding or admission of any wrongdoing or violation of Law,
or (C) if as a result of such consent or settlement, injunctive or other
equitable relief would be imposed against the Indemnified Party or such judgment
or settlement could interfere with or adversely affect the business, operations
or assets of the Indemnified Party; and
(iii) if the Indemnifying Party does not assume control of the defense of
such claim in accordance with the foregoing provisions within ten days after
receipt of notice of the claim or, if having taken over such defense does not in
the reasonable opinion of the Indemnified Party proceed diligently to defend
such claim, the Indemnified Party shall have the right to defend such claim in
such manner as it may deem appropriate at the cost and expense of the
Indemnifying Party pursuant to the terms of this Agreement. The Indemnifying
Party shall be bound by any defense or settlement that the Indemnified Party
shall make in good faith with respect to such claim, and the Indemnifying Party
shall promptly reimburse the Indemnified Party therefore in accordance with this
Article VIII.
Section 8.5. Insurance Proceeds. The amount of indemnity payable under Section
8.2 or 8.3 above shall be reduced by (or, if the indemnity has already been
paid, a refund given for) any insurance proceeds actually received by the
Indemnified Party to the extent the premiums with respect to such proceeds were
paid by the Indemnifying Party.
ARTICLE IX.
GENERAL PROVISIONS
Section 9.1. Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expense; provided that Delta shall not incur any expenses in
connection with this Agreement or the transactions contemplated herein.
Section 9.2. Confidential Nature of Information. Each party agrees that it will
treat in confidence all documents, materials and other information which it
shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated hereby
(whether obtained before or after the date of this Agreement), the investigation
provided for herein and the preparation of this Agreement and other related
documents, and, in the event the transactions contemplated hereby shall not be
consummated, each party will return to the other party all copies of nonpublic
documents and materials which have been furnished in connection therewith. Such
documents, materials and information shall not be communicated to any third
Person (other than to its counsel, accountants or financial advisors). No other
party shall use any confidential information in any manner whatsoever except
solely for the purpose of evaluating the proposed purchase and sale of the
Purchased Stock; provided, however, that after the Closing Buyer may use or
disclose any confidential information of Delta. The obligation of each party to
treat such documents, materials and other information in confidence shall not
apply to any information which (i) is or becomes available to such party from a
source other than such party, (ii) is or becomes available to the public other
than as a result of disclosure by such party or its agents, (iii) is required to
be disclosed under applicable law or judicial process, but only to the extent it
must be disclosed, or (iv) such party reasonably deems disclosure necessary to
obtain any of the consents or approvals contemplated hereby. Seller recognizes
that it has had access to confidential and proprietary information of Delta, in
particular trade secrets and know-how, and covenants and agrees that it shall
cease using such information for any purpose following the Closing and shall not
disclose such information to any Person.
Section 9.3. Notices. All notices and other required communications hereunder
shall be in writing and shall be deemed given: if delivered personally, when so
delivered; if telecopied, on the date telecopied (provided there is written
confirmation of receipt and a confirming notice or communication is delivered in
the manner set forth herein); if mailed by registered or certified mail (postage
prepaid and return receipt requested), on the date five days after deposit in
the mail; or if delivered by overnight courier (with written confirmation of
delivery to such courier), on the next business after such delivery, in each
case to the parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(a) if to Seller, to:
Engineering Animation, Inc.
2321 North Loop Drive
Ames, Iowa 50010
Attention: Jamie A. Wade
Fax: (515) 296-9020
with a copy to:
Gardner, Carton & Douglas
321 North Clark Street, 34th Floor
Chicago, Illinois 60610
Attention: George C. McKann
Fax: (312) 644-3381
and
(b) if to Buyer, to:
Dassault Systemes
9 quai Marcel Dassault, B.P. 310
Suresnes Cedex 92156
France
Attention: Thibault de Tersant and Martine Wallimann
Fax: 33 1 42 04 45 81
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Alfred M. Ross, Jr. and Howard Sutherland
Fax: (212) 848-7179
Section 9.4. Interpretation. When a reference is made in this Agreement to
Sections, Schedules or Exhibits, such reference shall be to a Section of or
Schedule or Exhibit to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." No provision of this Agreement shall be construed to require
Seller, Buyer or any of their respective affiliates to take any action which
would violate any applicable law, rule or regulation.
Section 9.5. Counterparts. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement.
Section 9.6. Entire Agreement. This Agreement (including the Disclosure
Schedule, Exhibit A, documents and instruments referred to herein) constitutes
the entire agreement of the parties and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
Section 9.7. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law which would result in the application of any other
law.
Section 9.8. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
Section 9.9. Publicity. Except as otherwise required by applicable law or the
rules of the Nasdaq National Market or other securities market, neither Buyer
nor Seller shall, or shall permit any of their respective affiliates to, issue
or cause the publication of any press release or other public announcement with
respect to, or otherwise make any public statement concerning, the transactions
contemplated by this Agreement without the prior consent of the other party,
which consent shall not be unreasonably withheld.
Section 9.10. Assignment; Third Party Beneficiaries. Neither this Agreement nor
any of the rights, interests or obligations set forth herein shall be assigned
by either of the parties (whether by operation of law or otherwise) without the
prior written consent of the other party. Subject to the preceding sentence,
this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns. This
Agreement (including the Disclosure Schedule, Exhibits, documents and
instruments referred to herein) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
Section 9.11. Knowledge and Awareness. As used in this Agreement, "knowledge" or
"awareness" of any entity means the actual knowledge or awareness of such
entity's senior executive officers and the knowledge such senior executive
officers would have after reasonable inquiry.
Section 9.12. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumptions or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement. Any reference to any Federal, state,
county, local or foreign law or statute shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise.
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<PAGE>
IN WITNESS WHEREOF, Seller and Buyer have caused this PURCHASE AND SALE
AGREEMENT to be executed by their respective officers thereunto duly authorized
as of the date first above written.
ENGINEERING ANIMATION, INC.
By:/s/ Jamie A. Wade
Name: Jamie A. Wade
Its: Vice President
EAI HOLDING GMBH
By:/s/ Jamie A. Wade
Name: Jamie A. Wade
Its: Managing Director
DASSAULT SYSTEMES
By:/s/ Thibault de Tersant
Name: Thibault de Tersant
Its: Executive
Vice President
