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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): May 30, 1997
AWARD SOFTWARE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
0-28904 94-2893462
(Commission File No.) (IRS Employer Identification No.)
777 E. MIDDLEFIELD ROAD
MOUNTAIN VIEW, CA 94043
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(415) 968-4433
___________________________
1.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 30, 1997, Award Software International, Inc. (the "Company")
acquired all of the outstanding stock of Unicore Software, Inc. ("Unicore")
through the merger of Unicore with and into a wholly owned subsidiary of the
Company pursuant to an Agreement and Plan of Merger and Reorganization (the
"Merger Agreement"), dated as of May 29, 1997, by and among the Company, its
wholly owned subsidiary, Unicore and Pierre A. Narath ("Narath) (the
"Acquisition"). Unicore is engaged in the business of providing basic
input/output software upgrades for personal computers and embedded systems.
Pursuant to the terms of the Merger Agreement, the Company issued to Narath, the
selling shareholder, 218,571 shares of the Company's common stock. The Merger is
intended to be a tax-free reorganization under the Internal Revenue Code of
1986, as amended, and is expected to be accounted for as a pooling of interests.
The terms of the Merger Agreement were determined through arms'-length
negotiations between the Company and Unicore and Narath. In addition, Mr. Narath
entered into an employment agreement with the Company pursuant to which Mr.
Narath shall serve as a vice president of the Company and president of Unicore,
the Company's wholly owned subsidiary.
2.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
Exhibit No. Description
2.1/*/ Agreement and Plan of Merger and Reorganization
dated as of May 29, 1997, by and among Award
Software International, Inc., Award Merger Sub
Corp., Unicore Software, Inc. and Pierre A. Narath.
10.18 Registration Rights Agreement dated as of May 30,
1997 between Award Software International, Inc.
and Pierre A. Narath.
10.19 Escrow Agreement dated as of May 30, 1997 among
Award Software International, Inc., Pierre A.
Narath and First Trust of California, N.A.
10.20 Employment Agreement dated as of May 30, 1997
between Pierre A. Narath and Award Software
International, Inc.
10.21 Employee Proprietary and Inventions Agreement
dated as of May 30, 1997 between Award Software
International, Inc. and Pierre A. Narath.
10.22 Noncompetition Agreement dated as of May 30, 1997
between Pierre A. Narath and Award Software
International, Inc.
10.23 General Release dated as of May 30, 1997 between
Pierre A. Narath and Award Software
International, Inc.
_____________________
/*/ Confidential Treatment Requested for portions of this document.
3.
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SIGNATURES
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.
AWARD SOFTWARE INTERNATIONAL, INC.
Dated: June 16, 1997 By: /s/ Kevin J. Berry
---------------------------------------
Kevin J. Berry
Vice President, Chief Financial
Officer, Treasurer and Secretary
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REDACTED COPY
________________________________________________________________________________
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among
AWARD SOFTWARE INTERNATIONAL, INC.,
a California corporation;
AWARD ACQUISITION SUB CORP.,
a Delaware corporation;
UNICORE SOFTWARE, INC.,
a Massachusetts corporation
and
PIERRE A. NARATH
____________________________
Dated As Of May 29, 1997
_____________________________
________________________________________________________________________________
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TABLE OF CONTENTS
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SECTION 1.DESCRIPTION OF TRANSACTION.................................... 1
1.1 Merger of the Company into Merger Sub...................... 1
1.2 Effect of the Merger....................................... 1
1.3 Closing; Effective Time.................................... 2
1.4 Certificate of Incorporation and Bylaws; Directors and
Officers................................................... 2
1.5 Conversion of Shares....................................... 2
1.6 Closing of the Company's Transfer Books.................... 3
1.7 Exchange of Certificates................................... 3
1.8 Tax Consequences........................................... 5
1.9 Accounting Treatment....................................... 5
1.10 Further Action............................................. 5
1.11 Certain Other Agreements................................... 5
SECTION 2.REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SHAREHOLDER........................................................ 6
2.1 Due Organization; No Subsidiaries; Etc..................... 6
2.2 Articles of Organization and Bylaws; Records............... 6
2.3 Capitalization, Etc........................................ 7
2.4 Financial Statements....................................... 8
2.5 Absence of Changes......................................... 8
2.6 Title to Assets............................................ 10
2.7 Bank Accounts; Receivables................................. 11
2.8 Equipment; Leasehold....................................... 11
2.9 Proprietary Assets......................................... 11
2.10 Contracts.................................................. 13
2.11 Liabilities................................................ 15
2.12 Compliance with Legal Requirements......................... 15
2.13 Governmental Authorizations................................ 15
2.14 Tax Matters................................................ 16
2.15 Employee and Labor Matters; Benefit Plans.................. 17
2.16 Environmental Matters...................................... 20
2.17 Insurance.................................................. 20
2.18 Related Party Transactions................................. 20
2.19 Legal Proceedings; Orders.................................. 21
2.20 Authority; Binding Nature of Agreement..................... 21
2.21 Non-Contravention; Consents................................ 22
2.22 Full Disclosure............................................ 22
2.23 Shareholder Capacity and Financial Capability.............. 23
2.24 Accounting Matters......................................... 23
SECTION 3.REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB....... 24
3.1 SEC Filings; Financial Statements.......................... 24
3.2 Authority; Binding Nature of Agreement..................... 24
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3.3 Valid Issuance............................................. 25
3.4 Organization; Subsidiaries................................. 25
3.5 Non-Contravention; Consents................................ 25
3.6 Business................................................... 26
3.7 Litigation................................................. 26
SECTION 4.CERTAIN COVENANTS OF THE COMPANY, THE SHAREHOLDER AND
PARENT............................................................. 26
4.1 Access and Investigation................................... 26
4.2 Operation of the Company's Business........................ 26
4.3 Notification; Updates to Disclosure Schedule............... 28
4.4 No Negotiation............................................. 29
4.5 Covenants of Parent........................................ 29
SECTION 5.ADDITIONAL COVENANTS OF THE PARTIES........................... 30
5.1 Filings and Consents....................................... 30
5.2 Public Announcements....................................... 30
5.3 Pooling of Interests....................................... 31
5.4 Tax Matters................................................ 31
5.5 Employment and Noncompetition Agreements................... 31
5.6 FIRPTA Matters............................................. 31
5.7 Release.................................................... 31
5.8 Termination of 401(k) Plan................................. 31
5.9 Tax Election............................................... 31
5.10 Tax Payments............................................... 32
5.11 Payment of Loan............................................ 32
SECTION 6.CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER
SUB................................................................ 32
6.1 Accuracy of Representations................................ 32
6.2 Performance of Covenants................................... 32
6.3 Consents................................................... 32
6.4 Agreements and Documents................................... 33
6.5 FIRPTA Compliance.......................................... 34
6.6 No Restraints.............................................. 34
6.7 No Material Adverse Change................................. 34
6.8 No Governmental Litigation................................. 34
6.9 No Other Litigation........................................ 34
6.10 Termination of 401(k) Plan................................. 34
6.11 Termination of Microid Distribution Agreement.............. 34
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SECTION 7.CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY............ 35
7.1 Accuracy of Representations................................ 35
7.2 Performance of Covenants................................... 35
7.3 Documents.................................................. 35
7.4 No Restraints.............................................. 35
7.5 No Material Adverse Change................................. 35
7.6 No Governmental Litigation................................. 36
7.7 No Other Litigation........................................ 36
SECTION 8.TERMINATION................................................... 36
8.1 Termination Events......................................... 36
8.2 Termination Procedures..................................... 37
8.3 Effect of Termination...................................... 37
SECTION 9.INDEMNIFICATION, ETC.......................................... 37
9.1 Survival of Representations, Etc........................... 37
9.2 Indemnification by the Shareholder......................... 38
9.5 No Contribution............................................ 38
9.6 Interest................................................... 39
9.7 Defense of Third Party Claims (Parent)..................... 39
9.8 Defense of Third Party Claims (Shareholder)................ 39
9.9 Exercise of Remedies by Indemnitees Other Than Parent
or the Shareholder......................................... 40
9.10 Method of Payment.......................................... 40
SECTION 10.MISCELLANEOUS PROVISIONS..................................... 40
10.1 Further Assurances......................................... 40
10.2 Fees and Expenses.......................................... 40
10.3 Brokers.................................................... 41
10.4 Attorneys' Fees............................................ 41
10.5 Notices.................................................... 41
10.6 Confidentiality............................................ 42
10.7 Time of the Essence........................................ 42
10.8 Headings................................................... 42
10.9 Counterparts............................................... 42
10.10 Governing Law.............................................. 43
10.11 Successors and Assigns..................................... 43
10.12 Remedies Cumulative; Specific Performance.................. 43
10.13 Waiver..................................................... 43
10.14 Amendments................................................. 43
10.15 Severability............................................... 44
10.16 Parties in Interest........................................ 44
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10.17 Entire Agreement........................................... 44
10.18 Construction............................................... 44
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iv.
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this
"Agreement") is made and entered into as of May 29, 1997, by and among AWARD
SOFTWARE INTERNATIONAL, INC., a California corporation ("Parent"); AWARD
ACQUISITION SUB CORP., a Delaware corporation and a wholly owned subsidiary of
Parent ("Merger Sub"); UNICORE SOFTWARE, INC., a Massachusetts corporation (the
"Company"); and PIERRE A. NARATH, an individual and sole shareholder of the
Company (the "Shareholder"). Certain other capitalized terms used in this
Agreement are defined in EXHIBIT A.
RECITALS
A. Parent, Merger Sub and the Company intend to effect a merger of
Merger Sub with the Company in accordance with this Agreement, the Delaware
General Corporation Law (the "DGCL"), the Massachusetts Business Corporation Law
("MBCL") and the California General Corporation Law (the "Merger"). Upon
consummation of the Merger, the Company will cease to exist, and Merger Sub will
be renamed Unicore Software, Inc. and operate as a wholly owned subsidiary of
Parent.
B. It is intended that the Merger qualify as a tax free
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"). For accounting purposes, it is intended that
the Merger be treated as a "pooling of interests."
C. This Agreement has been approved by the respective boards of
directors of Parent, Merger Sub and the Company.
D. The Shareholder owns fifty-one (51) shares of the Common Stock (no
par value) of the Company ("Company Common Stock"), constituting all of the
outstanding capital stock of the Company.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
SECTION 1. DESCRIPTION OF TRANSACTION
1.1 MERGER OF THE COMPANY INTO MERGER SUB. Upon the terms and
subject to the conditions set forth in this Agreement, at the Effective Time (as
defined in SECTION 1.3), Merger Sub shall be merged with the Company, and the
separate existence of Company shall cease. The Merger Sub will be renamed
Unicore Software, Inc. and will continue as the surviving corporation in the
Merger (the "Surviving Corporation").
1.2 EFFECT OF THE MERGER. The Merger shall have the effects set
forth in this Agreement and in the applicable provisions of the DGCL and the
MBCL.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
1.
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1.3 CLOSING; EFFECTIVE TIME. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Cooley Godward llp, Five Palo Alto Square, Palo Alto, California 94306 at
10:00 a.m. on May 30, 1997 (the "Scheduled Closing Time"). (The date on which
the Closing actually takes place is referred to in this Agreement as the
"Closing Date.") Contemporaneously with or as promptly as practicable after the
Closing, a properly executed certificate or agreement of merger conforming to
the requirements of the DGCL and MBCL shall be filed with the Secretaries of
State of the State of Delaware and the Commonwealth of Massachusetts. The
Merger shall become effective at the time such agreement of merger is filed with
and accepted by the Secretaries of State of the State of Delaware and the
Commonwealth of Massachusetts (the "Effective Time").
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS.
Unless otherwise determined by Parent and the Company prior to the Effective
Time:
(A) the Certificate of Incorporation and Bylaws of the Surviving
Corporation shall be amended and restated as of the Effective Time to conform to
EXHIBIT B; and
(B) the directors and officers of the Surviving Corporation
immediately after the Effective Time shall be the individuals identified on
EXHIBIT C.
1.5 CONVERSION OF SHARES.
(A) Subject to SECTION 1.7(C), at the Effective Time, by virtue
of the Merger and without any further action on the part of Parent, Merger Sub,
the Company or any shareholder of the Company:
(I) each share of Company Common Stock outstanding
immediately prior to the Effective Time (excluding any shares of Company Common
Stock held by the Company or any direct or indirect wholly owned subsidiary,
which, by virtue of the Merger and without any further action on part of such
holder thereof, shall cease to be outstanding, be canceled and retired without
payment of any consideration therefor and cease to exist) shall be converted
into the right to receive the "Applicable Fraction" (as defined in SECTION
1.5(B)(I)) of a share of the common stock (no par value) of Parent ("Parent
Common Stock"); and
(II) each share of the common stock (par value of $.01 per
share) of Merger Sub outstanding immediately prior to the Effective Time shall
be converted into one share of common stock of the Surviving Corporation.
(B) For purposes of this Agreement:
(I) The "Applicable Fraction" shall be determined by
multiplying (A) the quotient (1) 180,000 over (2) the Adjusted Fully Diluted
Company Share Amount (as defined in SECTION 1.5(B)(II)) by (B) the Exchange
Ratio (as defined in SECTION 1.5(B)(III)). If, between the date of this
Agreement and the Effective Time, the outstanding shares of Company Common Stock
or Parent Common Stock are changed into a different number or class of shares by
reason
2.
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of any stock split, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction, then the Applicable Fraction
shall be appropriately adjusted.
(II) The "Adjusted Fully Diluted Company Share Amount"
shall be the sum of (A) the aggregate number of shares of Company Common Stock
outstanding immediately prior to the Effective Time (including any such shares
that are subject to a repurchase option or risk of forfeiture under any
restricted stock purchase agreement or other agreement), and (B) the aggregate
number of shares of Company Common Stock issuable pursuant to or otherwise
subject to any subscription, option, warrant, call or any other right to acquire
any shares of capital stock of the Company outstanding immediately prior to the
Effective Time (including all shares of Company Common Stock that may ultimately
be issuable under any such right whether or not vested or currently
exercisable).
(III) The "Exchange Ratio" shall be determined by dividing
(A) $17.00 by (B) the Designated Parent Stock Price (as defined in SECTION
1.5(B)(IV)) rounded to six decimal places; provided, however, if the Designated
Parent Stock Price is greater than $15.30, such number shall be deemed to be
1.111111 and if the Designated Parent Stock Price is less than $14.00, such
shall be deemed to be 1.214285. Based on the Exchange Ratio, the minimum and
maximum numbers of shares of Parent Common Stock issuable pursuant to the Merger
as contemplated under this Agreement shall be 200,000 and 218,571, respectively.
(IV) The "Designated Parent Stock Price" shall be the
average of the closing sale prices of a share of Parent Common Stock (weighted
by the number of shares traded on each of such days) as reported on the Nasdaq
National Market for each of the five consecutive trading days immediately
preceding one business day prior to the Closing Date; provided, however, if such
price is greater than $15.30, the Designated Parent Stock Price shall be $15.30,
and if such price is less than $14.00, the Designated Parent Stock Price shall
be $14.00.
1.6 CLOSING OF THE COMPANY'S TRANSFER BOOKS. At the Effective Time,
holders of certificates representing shares of the Company's capital stock that
were outstanding immediately prior to the Effective Time shall cease to have any
rights as shareholders of the Company, and the stock transfer books of the
Company shall be closed with respect to all shares of such capital stock
outstanding immediately prior to the Effective Time. No further transfer of any
such shares of the Company's capital stock shall be made on such stock transfer
books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any of such shares of the Company's capital
stock (a "Company Stock Certificate") is presented to the Surviving Corporation
or Parent, such Company Stock Certificate shall be canceled and shall be
exchanged as provided in SECTION 1.7.
1.7 EXCHANGE OF CERTIFICATES.
(A) At the Closing the Shareholder shall surrender certificate(s)
evidencing the Company Common Stock in exchange for certificates representing
Parent Common Stock. Upon surrender of a Company Stock Certificate to Parent
for exchange, the holder of such Company Stock Certificate shall be entitled to
receive in exchange therefor at the Closing or as soon thereafter as reasonably
practicable a certificate representing the number of whole shares of
3.
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Parent Common Stock that such holder has the right to receive pursuant to the
provisions of SECTION 1.5 and the Company Stock Certificate so surrendered shall
be canceled. Until surrendered as contemplated by this SECTION 1.7, each Company
Stock Certificate shall be deemed, from and after the Effective Time, to
represent only the right to receive upon such surrender a certificate
representing shares of Parent Common Stock (and cash in lieu of any fractional
share of Parent Common Stock) as contemplated by this SECTION 1.7. If any
Company Stock Certificate shall have been lost, stolen or destroyed, Parent may,
in its discretion and as a condition precedent to the issuance of any
certificate representing Parent Common Stock, require the owner of such lost,
stolen or destroyed Company Stock Certificate to provide an appropriate
affidavit and to deliver a bond (in such sum as Parent may reasonably direct) as
indemnity against any claim that may be made against Parent or the Surviving
Corporation with respect to such Company Stock Certificate.
(B) No dividends or other distributions declared or made with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Company Stock Certificate with
respect to the shares of Parent Common Stock represented thereby, and no cash
payment in lieu of any fractional share shall be paid to any such holder, until
such holder surrenders such Company Stock Certificate in accordance with this
SECTION 1.7 (at which time such holder shall be entitled to receive all such
dividends and distributions and such cash payment).
(C) No fractional shares of Parent Common Stock shall be issued
in connection with the Merger, and no certificates for any such fractional
shares shall be issued. In lieu of such fractional shares, any holder of capital
stock of the Company who would otherwise be entitled to receive a fraction of a
share of Parent Common Stock (after aggregating all fractional shares of Parent
Common Stock issuable to such holder) shall, upon surrender of such holder's
Company Stock Certificate(s), be paid in cash the dollar amount (rounded to the
nearest whole cent), without interest, determined by multiplying such fraction
by the Designated Parent Stock Price.
(D) Parent and the Surviving Corporation shall be entitled to
deduct and withhold from any consideration payable or otherwise deliverable to
any holder or former holder of capital stock of the Company pursuant to this
Agreement such amounts as Parent or the Surviving Corporation may be required to
deduct or withhold therefrom under the Code or under any provision of state,
local or foreign tax law. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the Person to whom such amounts would otherwise have been
paid.
(E) Neither Parent nor the Surviving Corporation shall be liable
to any holder or former holder of capital stock of the Company for any shares of
Parent Common Stock (or dividends or distributions with respect thereto), or for
any cash amounts, delivered to any public official pursuant to any applicable
abandoned property, escheat or similar law.
(F) Each certificate representing shares of Parent Common Stock
to be issued in the Merger shall bear a legend substantially in the following
form:
4.
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH
SHARES ARE REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO AWARD SOFTWARE INTERNATIONAL, INC. IS OBTAINED TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
1.8 TAX CONSEQUENCES. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.9 ACCOUNTING TREATMENT. For accounting purposes, the Merger is
intended to be treated as a "pooling of interests."
1.10 FURTHER ACTION. If, at any time after the Effective Time, any
further action is determined by Parent to be necessary or desirable to carry out
the purposes of this Agreement or to vest the Surviving Corporation or Parent
with full right, title and possession of and to all rights and property of
Merger Sub and the Company, the officers and directors of the Surviving
Corporation and Parent shall be fully authorized (in the name of Merger Sub, in
the name of the Company and otherwise) to take such action.
1.11 CERTAIN OTHER AGREEMENTS. Concurrently with the execution and
delivery of this Agreement:
(A) the Company shall deliver to Parent:
(I) a copy of the Registration Rights Agreement in the
form of EXHIBIT D (the "Registration Rights Agreement") duly executed and
delivered by the Shareholder; and
(II) a copy of the Escrow Agreement in the form of EXHIBIT
E (the "Escrow Agreement") duly executed and delivered by the Shareholder.
(B) Parent shall deliver to the respective other parties thereto
copies of the Registration Rights Agreement and the Escrow Agreement duly
executed by Parent.
1.12 In order to provide indemnification in accordance with SECTION 9
and the Escrow Agreement, at the Effective Time, Parent shall deliver to First
Trust of California, National Association, or any successor escrow agent
appointed pursuant to the Escrow Agreement (the "Escrow Agent") that number of
shares of Parent Common Stock otherwise issuable to the Shareholder pursuant to
SECTION 1.7 equal to [*] of the total number of shares of Parent Common Stock
issuable to the Shareholder, rounded down to the nearest whole share, such
shares to be held and applied in accordance with the Escrow Agreement (the
"Escrow Shares").
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
5.
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SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDER
The Company and the Shareholder jointly and severally represent and
warrant, to and for the benefit of the Indemnitees, as follows:
2.1 DUE ORGANIZATION; NO SUBSIDIARIES; ETC.
(A) Each of the Company and Microid Research, Inc., a California
corporation (the "Subsidiary"), is a corporation duly organized, validly
existing and in good standing under the corporate laws of the jurisdiction of
its incorporation and has all necessary corporate power and authority: (i) to
conduct its business in the manner in which its business is currently being
conducted; (ii) to own and use its assets in the manner in which its assets are
currently owned and used; and (iii) to perform its obligations under all Company
Contracts.
(B) Except as set forth in PART 2.1 of the Disclosure Schedule,
neither the Company nor the Subsidiary has conducted any business under or
otherwise used, for any purpose or in any jurisdiction, any fictitious name,
assumed name, trade name or other name, other than the name "Unicore Software,
Inc." and "Microid Research, Inc."
(C) Neither the Company nor the Subsidiary is, nor has been, required
to be qualified, authorized, registered or licensed to do business as a foreign
corporation in any jurisdiction other than the jurisdictions identified in PART
2.1 of the Disclosure Schedule, except where the failure to be so qualified,
authorized, registered or licensed has not had and will not have a Material
Adverse Effect on the Company. Each of the Company and the Subsidiary is in
good standing as a foreign corporation in each of the jurisdictions identified
in PART 2.1 of the Disclosure Schedule.
(D) PART 2.1 of the Disclosure Schedule accurately sets forth (i) the
names of the members of the Company's and the Subsidiary's board of directors,
(ii) the names of the members of each committee of the Company's and the
Subsidiary's board of directors, and (iii) the names and titles of the Company's
and the Subsidiary's officers.
(E) Neither the Company nor the Subsidiary owns any controlling
interest in any Entity and, except for the equity interests identified in PART
2.1 of the Disclosure Schedule, neither the Company nor the Subsidiary has ever
owned, beneficially or otherwise, any shares or other securities of, or any
direct or indirect equity interest in, any Entity. Neither the Company nor the
Subsidiary has agreed nor is obligated to make any future investment in or
capital contribution to any Entity. Neither the Company nor the Subsidiary has
guaranteed nor is responsible or liable for any obligation of any of the
Entities in which it owns or has owned any equity interest.
2.2 ARTICLES OF ORGANIZATION AND BYLAWS; RECORDS. The Company has
delivered to Parent accurate and complete copies, in all material respects, of:
(1) the Company's and the Subsidiary's articles of organization/incorporation
and bylaws, including all amendments thereto; (2) the stock records of the
Company and the Subsidiary; and (3) except as set forth in
6.
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PART 2.2 of the Disclosure Schedule, the minutes and other records of the
meetings and other proceedings (including any actions taken by written consent
or otherwise without a meeting) of the shareholders of the Company and the
Subsidiary, the board of directors of the Company and the Subsidiary and all
committees of the board of directors of the Company. There have been no formal
meetings or other proceedings of the shareholders of the Company and the
Subsidiary, the board of directors of the Company or any committee of the board
of directors of the Company and the Subsidiary that are not reflected in all
material respects in such minutes or other records. There has not been any
violation of any of the provisions of the Company's or the Subsidiary's articles
of organization/incorporation or bylaws, and neither the Company nor the
Subsidiary has taken any action that is inconsistent in any material respect
with any resolution adopted by the Company's or the Subsidiary's shareholders,
the Company's or the Subsidiary's board of directors or any committee of the
Company's or the Subsidiary's board of directors. The books of account, stock
records, minute books and other records of the Company and the Subsidiary are
accurate, up to date and complete in all material respects, and have been
maintained in accordance with prudent business practices.
2.3 CAPITALIZATION, ETC.
(A) The authorized capital stock of the Company consists of one
thousand (1,000) shares of Common Stock (no par value), of which fifty-one (51)
shares have been issued and are outstanding as of the date of this Agreement.
The authorized capital stock of the Subsidiary consists of Twenty Million
(20,000,000) shares of Common Stock (no par value), of which Five Million
(5,000,000) shares have been issued and are outstanding and owned beneficially
and of record by the Company. All of the outstanding shares of Company Common
Stock and the Subsidiary Common Stock have been duly authorized and validly
issued, and are fully paid and non assessable. PART 2.3 of the Disclosure
Schedule provides an accurate and complete description of the terms of each
repurchase option which is held by the Company and to which any of such shares
is subject.
(B) Except as set forth in PART 2.3 of the Disclosure Schedule, and
except as contemplated by this Agreement, there is no: (i) outstanding
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire any shares of the capital stock or other securities of
the Company or the Subsidiary; (ii) outstanding security, instrument or
obligation that is or may become convertible into or exchangeable for any shares
of the capital stock or other securities of the Company or the Subsidiary;
(iii) Contract under which the Company or the Subsidiary is or may become
obligated to sell or otherwise issue any shares of its capital stock or any
other securities; or (iv) condition or circumstance that may give rise to or
provide a basis for the assertion of a claim by any Person to the effect that
such Person is entitled to acquire or receive any shares of capital stock or
other securities of the Company or the Subsidiary.
(C) Except as set forth in PART 2.3(C) of the Disclosure Schedule
there is no: (i) outstanding subscription, option, call, warrant or right
(whether or not currently exercisable) to acquire any shares of the capital
stock or other securities of the Company or the Subsidiary; (ii) outstanding
security, instrument or obligation that is or may become convertible into or
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exchangeable for any shares of the capital stock or other securities of the
Company or the Subsidiary; (iii) Contract under which the Company or the
Subsidiary is or may become obligated to sell or otherwise issue any shares of
its capital stock or any other securities; or (iv) condition or circumstance
that may give rise to or provide a basis for the assertion of a claim by any
Person to the effect that such Person is entitled to acquire or receive any
shares or capital stock or other securities of the Company or the Subsidiary.
(D) All outstanding shares of Company Common Stock have been issued
and granted in compliance with (i) all applicable securities laws and other
applicable Legal Requirements, and (ii) all material requirements set forth in
applicable Contracts.
(E) Except as set forth in PART 2.3 of the Disclosure Schedule, the
Company has never repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities of the Company. All securities so reacquired
by the Company were reacquired in compliance with (i) the applicable provisions
of the MBCL and all other applicable Legal Requirements, and (ii) all material
requirements set forth in applicable restricted stock purchase agreements and
other applicable Contracts.
2.4 FINANCIAL STATEMENTS.
(A) The Company has delivered to Parent the following financial
statements and notes (collectively, the "Company Financial Statements"):
(I) The consolidated unaudited balance sheet of the Company and
the Subsidiary as of December 31, 1996, and the unaudited balance sheets of the
Company as of 1995 and 1994, and the related income statements, statements of
shareholder's equity and statements of cash flows of the Company for the years
then ended, together with all footnotes thereto; and
(II) the consolidated unaudited balance sheet of the Company and
the Subsidiary as of March 31, 1996 (the "Unaudited Interim Balance Sheet"), and
the related consolidated unaudited income statement of the Company for the three
months then ended.
(B) The Company Financial Statements are accurate and complete in all
material respects and present fairly the financial position of the Company as of
the respective dates thereof and the results of operations and (in the case of
the financial statements referred to in SECTION 2.4(A)(I)) cash flows of the
Company for the periods covered thereby. The Company Financial Statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered (except (i) as the
footnotes to the financial statements referred to in SECTION 2.4(A)(I) may
expressly indicate otherwise and (ii) that the financial statements referred to
in SECTION 2.1(A)(II) do not contain footnotes and are subject to normal and
recurring year-end audit adjustments, which adjustments will not, individually
or in the aggregate, be material).
2.5 ABSENCE OF CHANGES. Except as set forth in PART 2.5 of the Disclosure
Schedule, since December 31, 1996:
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(A) there has not been any material adverse change in the Company's
business, condition, assets, liabilities, operations or financial performance
or, to the best knowledge of the Company and the Shareholder, prospects, and, to
the best of the knowledge of the Company and the Shareholder, no event has
occurred that will have a Material Adverse Effect on the Company;
(B) there has not been any material loss, damage or destruction to, or
any material interruption in the use of, any of the Company's assets, taken as a
whole (whether or not covered by insurance);
(C) the Company has not declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any shares of capital
stock, and has not repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities;
(D) the Company has not sold, issued or authorized the issuance of (i)
any capital stock or other security, (ii) any option or right to acquire any
capital stock or any other security, or (iii) any instrument convertible into or
exchangeable for any capital stock or other security;
(E) there has been no amendment to the Company's articles of
organization or bylaws, and the Company has not effected or been a party to any
Acquisition Transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction;
(F) the Company has not formed any subsidiary or acquired any equity
interest or other interest in any other Entity;
(G) the Company has not made any capital expenditure which, when added
to all other capital expenditures made on behalf of the Company since December
31, 1996, exceeds $10,000;
(H) the Company has not (i) entered into or permitted any of the
assets owned or used by it to become bound by any Contract that is or would
constitute a Material Contract (as defined in SECTION 2.10(A)), or (ii) amended
or prematurely terminated, or waived any material right or remedy under, any
such Material Contract;
(I) the Company has not (i) acquired, leased or licensed any right or
other asset from any other Person, (ii) sold or otherwise disposed of, or leased
or licensed, any right or other asset to any other Person other than sales of
inventory in the ordinary course of business, or (iii) waived or relinquished
any right, except for immaterial rights or other immaterial assets acquired,
leased, licensed or disposed of in the ordinary course of business and
consistent with the Company's past practices;
(J) the Company has not written off as uncollectible, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness except in the ordinary course of business and where the amount of
such uncollected receivables do not exceed $10,000 in the aggregate;
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(K) the Company has not made any pledge of any of its assets or
otherwise permitted any of its assets to become subject to any Encumbrance,
except for pledges of immaterial assets made in the ordinary course of business
and consistent with the Company's past practices;
(L) the Company has not (i) lent money to any Person (other than
pursuant to routine travel advances made to employees in the ordinary course of
business), or (ii) incurred or guaranteed any indebtedness for borrowed money;
(M) the Company has not (i) established or adopted any Employee
Benefit Plan, (ii) paid any bonus or made any profit sharing or similar payment
to, or increased the amount of the wages, salary, commissions, fringe benefits
or other compensation or remuneration payable to, any of its directors, officers
or employees, or (iii) hired any new employee;
(N) the Company has not changed any of its methods of accounting or
accounting practices in any respect;
(O) the Company has not made any Tax election;
(P) the Company has not commenced or settled any Legal Proceeding;
(Q) the Company has not entered into any material transaction or taken
any other material action outside the ordinary course of business or
inconsistent with its past practices; and
(R) the Company has not agreed or committed to take any of the actions
referred to in clauses "(c)" through "(r)" above.
2.6 TITLE TO ASSETS
(A) Except for assets held under capitalized leases set forth in PART
2.6 of the Disclosure Schedule and personal property sold in the ordinary course
of business since December 31, 1996, the Company owns, and has good, valid and
marketable title to, all assets purported to be owned by it, including: (i) all
assets reflected on the Unaudited Interim Balance Sheet; (ii) all assets
referred to in PARTS 2.1(E), 2.7(B) and 2.9 of the Disclosure Schedule and all
of the Company's rights under the Contracts identified in PART 2.10 of the
Disclosure Schedule; and (iii) all other assets reflected in the Company's books
and records as being owned by the Company. Except as set forth in PART 2.6 of
the Disclosure Schedule, all of said assets are owned by the Company free and
clear of any liens or other Encumbrances, except for (x) any lien for current
taxes not yet due and payable, (y) security interests identified in the
Unaudited Interim Balance Sheet or the footnotes thereto, and (z) minor liens
that have arisen in the ordinary course of business and that do not (in any case
or in the aggregate) materially detract from the value of the assets subject
thereto or materially impair the operations of the Company.
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(B) PART 2.6 of the Disclosure Schedule identifies all assets that are
material to the business of the Company and that are being leased or licensed to
the Company.
2.7 BANK ACCOUNTS; RECEIVABLES.
(A) PART 2.7(A) of the Disclosure Schedule provides accurate
information with respect to each account maintained by or for the benefit of the
Company at any bank or other financial institution.
(B) PART 2.7(B) of the Disclosure Schedule provides an accurate and
complete breakdown and aging of all accounts receivable, notes receivable and
other receivables of the Company as of December 31, 1996. Except as set forth
in PART 2.7(B) of the Disclosure Schedule, all existing accounts receivable of
the Company (including those accounts receivable reflected on the Unaudited
Interim Balance Sheet that have not yet been collected and those accounts
receivable that have arisen since December 31, 1996 and have not yet been
collected) represent valid obligations of customers of the Company arising from
bona fide transactions entered into in the ordinary course of business. Except
as set forth in PART 2.7(B) of the Disclosure Schedule, such accounts receivable
are collectible within 60 days (net of an allowance for doubtful accounts set
forth in PART 2.7(B) of the Disclosure Schedule) and are not subject to any
contest, claim or right of set-off other than refunds in the ordinary course of
business and consistent with past practice.
2.8 EQUIPMENT; LEASEHOLD.
(A) All material items of equipment and other tangible assets owned by
or leased to the Company which have a value, in the case of each item, of $1,000
or more are adequate for the uses to which they are being put, are in good
condition and repair (ordinary wear and tear excepted) and are adequate for the
conduct of the Company's business in the manner in which such business is
currently being conducted.
(B) The Company does not own any real property or any interest in real
property, except for the leasehold created under the real property lease
identified in PART 2.10 of the Disclosure Schedule.
2.9 PROPRIETARY ASSETS.
(A) PART 2.9(A)(I) of the Disclosure Schedule sets forth, with respect
to each Company Proprietary Asset registered with any Governmental Body or for
which an application has been filed with any Governmental Body, (i) a brief
description of such Proprietary Asset, and (ii) the names of the jurisdictions
covered by the applicable registration or application. PART 2.9(A)(II) of the
Disclosure Schedule identifies and provides a brief description of all other
Company Proprietary Assets owned by the Company. PART 2.9(A)(III) of the
Disclosure Schedule identifies and provides a brief description of each
Proprietary Asset licensed to the Company by any Person (except for any
Proprietary Asset that is licensed to the Company under any third party software
license generally available to the public at a cost of less than $10,000), and
identifies the license agreement under which such Proprietary Asset is being
licensed to the
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Company. Except as set forth in PART 2.9(A)(IV) of the Disclosure Schedule, the
Company has good, valid and merchantable title to all of the Company Proprietary
Assets identified in PARTS 2.9(A)(I) and 2.9(A)(II) of the Disclosure Schedule,
free and clear of all liens and other Encumbrances, and has a valid right to use
all Proprietary Assets identified in PART 2.9(A)(III) of the Disclosure
Schedule. Except as set forth in PART 2.9(A)(V) of the Disclosure Schedule, the
Company is not obligated to make any payment to any Person for the use of any
Company Proprietary Asset. Except as set forth in PART 2.9(A)(VI) of the
Disclosure Schedule, the Company has not developed jointly with any other Person
any Company Proprietary Asset with respect to which such other Person has any
rights.
(B) The Company has taken all reasonable measures and precautions
necessary to protect and maintain the confidentiality and secrecy of all Company
Proprietary Assets (except Company Proprietary Assets whose value would be
unimpaired by public disclosure) and otherwise to maintain and protect the value
of all Company Proprietary Assets. Except as set forth in PART 2.9(B) of the
Disclosure Schedule, the Company has not (other than pursuant to license
agreements identified in PART 2.10 of the Disclosure Schedule) disclosed or
delivered to any Person, or permitted the disclosure or delivery to any Person
of, (i) the source code, or any portion or aspect of the source code, of any
Company Proprietary Asset, or (ii) the object code, or any portion or aspect of
the object code, of any Company Proprietary Asset.
(C) None of the Company Proprietary Assets infringes or conflicts with
any Proprietary Asset owned or used by any other Person (provided, however,
notwithstanding anything contained in this SECTION 2.9(C) to the contrary, with
respect to any Proprietary Asset that is a patent, to the best knowledge of the
Company and the Shareholder, the foregoing is true). The Company is not
infringing, misappropriating or making any unlawful use of, and the Company has
not at any time infringed, misappropriated or made any unlawful use of, or
received any notice or other communication (in writing or otherwise) of any
actual, alleged, possible or potential infringement, misappropriation or
unlawful use of, any Proprietary Asset owned or used by any other Person
(provided, however, notwithstanding anything contained in this SECTION 2.9(C) to
the contrary, with respect to any Proprietary Asset that is a patent, to the
best knowledge of the Company and the Shareholder, the foregoing is true). To
the best of the knowledge of the Company and the Shareholder, no other Person is
infringing, misappropriating or making any unlawful use of, and no Proprietary
Asset owned or used by any other Person infringes or conflicts with, any Company
Proprietary Asset.
(D) Except as set forth in PART 2.9(D) of the Disclosure Schedule,
there has not been any written claim by any customer or other Person alleging
that any Company Proprietary Asset (including each version thereof that has ever
been licensed or otherwise made available by the Company to any Person) does not
conform in all material respects with any written specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of the Company, and, to the best of the knowledge of the Company and the
Shareholder, there is no basis for any such claim.
(E) The Company Proprietary Assets have been sufficient to enable the
Company to conduct its business in the manner in which such business has been
and is being
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conducted. Except as set forth in PART 2.9(E) of the Disclosure Schedule, (i)
the Company has not licensed any of the Company Proprietary Assets to any Person
on an exclusive basis, and (ii) the Company has not entered into any covenant
not to compete or Contract limiting its ability to exploit fully any of its
Proprietary Assets or to transact business in any market or geographical area or
with any Person.
(F) Except as set forth in PART 2.9(F) of the Disclosure Schedule all
current and former employees of the Company have executed and delivered to the
Company Non-Compete Agreements and Employment Agreements as previously delivered
to Parent.
2.10 CONTRACTS.
(A) PART 2.10 of the Disclosure Schedule identifies:
(I) each Company Contract relating to the employment of, or the
performance of services by, any employee, consultant or independent contractor;
(II) each Company Contract relating to the acquisition, transfer,
use, development, sharing or license of any technology or any Proprietary Asset;
(III) each Company Contract imposing any restriction on the
Company's right or ability (A) to compete with any other Person, (B) to acquire
any product or other asset or any services from any other Person, to sell any
product or other asset to or perform any services for any other Person or to
transact business or deal in any other manner with any other Person, or (C)
develop or distribute any technology;
(IV) each Company Contract creating or involving any agency
relationship, distribution arrangement or franchise relationship;
(V) each Company Contract relating to the acquisition, issuance
or transfer of any securities;
(VI) each Company Contract relating to the creation of any
Encumbrance with respect to any asset of the Company;
(VII) each Company Contract involving or incorporating any
guaranty, any pledge, any performance or completion bond, any indemnity or any
surety arrangement;
(VIII)each Company Contract creating or relating to any
partnership or joint venture or any sharing of revenues, profits, losses, costs
or liabilities;
(IX) each Company Contract relating to the purchase or sale of
any product or other asset by or to, or the performance of any services by or
for, any Related Party (as defined in SECTION 2.18);
(X) each Company Contract constituting or relating to a
Government Contract or Government Bid;
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(XI) any other Company Contract that was entered into outside
the ordinary course of business or was inconsistent with the Company's past
practices and which contemplates or involves (A) the payment or delivery of cash
or other consideration in an amount in excess of $10,000 in the aggregate, or
(B) the performance of services having a value in excess of $10,000 in the
aggregate;
(XII) any other Company Contract that has a term of more than 60
days and that may not be terminated by the Company (without penalty) within 60
days after the delivery of a termination notice by the Company and which
contemplates or involves (A) the payment or delivery of cash or other
consideration in an amount in excess of $10,000 in the aggregate, or (B) the
performance of services having a value in excess of $10,000 in the aggregate;
and
(XIII) any other Company Contract that contemplates or involves
(A) the payment or delivery of cash or other consideration in an amount or
having a value in excess of $10,000 in the aggregate, or (B) the performance of
services having a value in excess of $10,000 in the aggregate.
(Contracts in the respective categories described in clauses "(i)" through
"(xiii)" above are referred to in this Agreement as "Material Contracts.")
(B) The Company has delivered to Parent accurate and complete copies
in all material respects of all written Contracts identified in PART 2.10 of the
Disclosure Schedule, including all amendments thereto. PART 2.10 of the
Disclosure Schedule provides an accurate description of the material terms of
each Company Contract that is not in written form. Each Contract identified in
PART 2.10 of the Disclosure Schedule is valid and in full force and effect, and,
to the best of the knowledge of the Company and the Shareholder, is enforceable
by the Company in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies.
(C) Except as set forth in PART 2.10 of the Disclosure Schedule:
(I) the Company has not violated or breached, or committed any
material default under, any Material Contract, and, to the best of the knowledge
of the Company and the Shareholder, no other Person has violated or breached, or
committed any material default under, any Material Contract;
(II) to the best of the knowledge of the Company and the
Shareholder, no event has occurred, and no circumstance or condition exists,
that (with or without notice or lapse of time) will, or could reasonably be
expected to, (A) result in a violation or breach of any of the material
provisions of any Material Contract, (B) give any Person the right to declare a
default or exercise any remedy under any Material Contract, (C) give any Person
the right to accelerate the maturity or performance of any Material Contract, or
(D) give any Person the right to cancel, terminate or modify any Material
Contract;
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(III) since June 30, 1995, the Company has not received any notice
or other communication regarding any actual or possible violation or breach of,
or default under, any Material Contract; and
(IV) the Company has not waived any of its material rights under
any Material Contract.
(D) No Person is renegotiating, or has a right pursuant to the terms
of any Company Contract to renegotiate, any amount paid or payable to the
Company under any Material Contract or any other material term or provision of
any Material Contract.
(E) The Contracts identified in PART 2.10 of the Disclosure Schedule
collectively constitute all of the Contracts necessary to enable the Company to
conduct its business in the manner in which its business is currently being
conducted.
(F) PART 2.10 of the Disclosure Schedule identifies and provides a
brief description of each proposed Material Contract as to which any bid, offer,
award, written proposal, term sheet or similar document has been submitted or
received by the Company since December 31, 1996, except for proposals relating
to the acquisition of the Company.
(G) PART 2.10 of the Disclosure Schedule provides an accurate
description and breakdown of the Company's backlog under Company Contracts.
2.11 LIABILITIES. The Company has no accrued, contingent or other
liabilities of any nature, either matured or unmatured (whether or not required
to be reflected in financial statements in accordance with generally accepted
accounting principles, and whether due or to become due), except for: (a)
liabilities identified as such in the "liabilities" column of the Unaudited
Interim Balance Sheet and the footnotes thereto; (b) accounts payable or accrued
salaries that have been incurred by the Company since December 31, 1996 in the
ordinary course of business and consistent with the Company's past practices;
(c) liabilities under the Company Contracts identified in PART 2.10 of the
Disclosure Schedule, to the extent the nature and magnitude of such liabilities
can be specifically ascertained by reference to the text of such Company
Contracts; (d) the liabilities identified in PART 2.11 of the Disclosure
Schedule; and (e) liabilities referenced in PART 2.19 of the Disclosure
Schedule.
2.12 COMPLIANCE WITH LEGAL REQUIREMENTS. The Company is, and has at all
times since December 31, 1994 been, in compliance with all applicable Legal
Requirements, except where the failure to comply with such Legal Requirements
has not had a Material Adverse Effect on the Company. Except as set forth in
PART 2.12 of the Disclosure Schedule, since December 31, 1994, the Company has
not received any notice or other communication from any Governmental Body
regarding any actual or possible violation of, or failure to comply with, any
Legal Requirement.
2.13 GOVERNMENTAL AUTHORIZATIONS. PART 2.13 of the Disclosure Schedule
identifies each material Governmental Authorization held by the Company, and the
Company has delivered to Parent accurate and complete copies of all Governmental
Authorizations identified
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in PART 2.13 of the Disclosure Schedule. The Governmental Authorizations
identified in PART 2.13 of the Disclosure Schedule are valid and in full force
and effect, and collectively constitute all Governmental Authorizations
necessary to enable the Company to conduct its business in the manner in which
its business is currently being conducted. The Company is, and at all times
since December 31, 1992 has been, in substantial compliance with the terms and
requirements of the respective Governmental Authorizations identified in PART
2.13 of the Disclosure Schedule. Since December 31, 1992, the Company has not
received any notice or other communication from any Governmental Body regarding
(a) any actual or possible violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (b) any actual or possible
revocation, withdrawal, suspension, cancellation, termination or modification of
any Governmental Authorization.
2.14 TAX MATTERS.
(A) Except as set forth in PART 2.14(A) of the Disclosure Schedule,
all Tax Returns required to be filed by or on behalf of the Company with any
Governmental Body with respect to any taxable period ending on or before the
Closing Date (the "Company Returns") (i) have been filed on or before the
applicable due date (including any extensions of such due date), and (ii) have
been accurately and completely prepared in all material respects in compliance
with all applicable Legal Requirements. All amounts shown on the Company
Returns to be due on or before the Closing Date have been or will be paid on or
before the Closing Date. The Company has delivered to Parent accurate and
complete copies of all Company Returns filed since December 31, 1992 which have
been requested by Parent.
(B) The Company Financial Statements fully accrue all actual and
contingent liabilities for Taxes with respect to all periods through the dates
thereof in accordance with generally accepted accounting principles. The
Company will establish, in the ordinary course of business and consistent with
its past practices, reserves adequate for the payment of all Taxes for the
period from December 31, 1996 through the Closing Date, and the Company will
disclose the dollar amount of such reserves to Parent on or prior to the Closing
Date.
(C) No Company Return relating to income Taxes has ever been examined
or audited by any Governmental Body. Except as set forth in PART 2.14 of the
Disclosure Schedule, there have been no examinations or audits of any Company
Return. The Company has delivered to Parent accurate and complete copies of all
audit reports of Government Bodies (to which the Company has access) relating to
the Company Returns. Except as set forth in PART 2.14 of the Disclosure
Schedule, no extension or waiver of the limitation period applicable to any of
the Company Returns has been granted (by the Company or any other Person), and
no such extension or waiver has been requested from the Company.
(D) Except as set forth in PART 2.14 of the Disclosure Schedule, no
claim or Proceeding is pending or, to the best knowledge of the Company and
Shareholder, has been threatened against or with respect to the Company in
respect of any Tax. There are no unsatisfied liabilities for Taxes (including
liabilities for interest, additions to tax and penalties thereon and related
expenses) with respect to any notice of deficiency or similar document
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received by the Company with respect to any Tax (other than liabilities for
Taxes asserted under any such notice of deficiency or similar document which are
being contested in good faith by the Company and with respect to which adequate
reserves for payment have been established). There are no liens for Taxes upon
any of the assets of the Company except liens for current Taxes not yet due and
payable. The Company has not entered into or become bound by any agreement or
consent pursuant to Section 341(f) of the Code. Except as set forth in PART 2.14
of the Disclosure Schedule, the Company has not been, and the Company will not
be, required to include any adjustment in taxable income for any tax period (or
portion thereof) pursuant to Section 481 or 263A of the Code or any comparable
provision under state or foreign Tax laws as a result of transactions or events
occurring, or accounting methods employed, prior to the Closing.
(E) There is no agreement, plan, arrangement or other Contract
covering any employee or independent contractor or former employee or
independent contractor of the Company that, considered individually or
considered collectively with any other such Contracts, will, or could reasonably
be expected to, give rise directly or indirectly to the payment of any amount
that would not be deductible pursuant to Section 280G or Section 162 of the
Code. The Company is not, and has never been, a party to or bound by any tax
indemnity agreement, tax sharing agreement, tax allocation agreement or similar
Contract.
(F) Except for the period from April 17, 1996 to December 31, 1996,
the Company is, and has at all times since May 6, 1991 been, an S corporation
under Subchapter S of Subtitle A of the Code and under applicable state income
tax laws. The Shareholder shall be responsible for, and shall indemnify Parent
and Merger Sub against, any income tax liability of the Company through the
Closing Date.
2.15 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS.
(A) PART 2.15(A) of the Disclosure Schedule identifies each salary,
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance pay, termination pay, hospitalization, medical, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, program or agreement (collectively, the "Plans") sponsored,
maintained, contributed to or required to be contributed to by the Company for
the benefit of any current or former employee of the Company ("Employee"),
except for Plans which would not require the Company to make payments or provide
benefits having a value in excess of $25,000 in the aggregate.
(B) Except as set forth in PART 2.15(B) of the Disclosure Schedule,
the Company does not maintain, sponsor or contribute to, and, to the best of the
knowledge of the Company and the Shareholder, has not at any time in the past
maintained, sponsored or contributed to, any employee pension benefit plan (as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), whether or not excluded from coverage under specific
Titles or Subtitles of ERISA) for the benefit of Employees or former Employees
(a "Pension Plan").
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(C) The Company maintains, sponsors or contributes only to those
employee welfare benefit plans (as defined in Section 3(1) of ERISA, whether or
not excluded from coverage under specific Titles or Subtitles of ERISA) for the
benefit of Employees or former Employees which are described in PART 2.15(C) of
the Disclosure Schedule (the "Welfare Plans"), none of which is a multiemployer
plan (within the meaning of Section 3(37) of ERISA).
(D) With respect to each Plan, the Company has delivered to Parent:
(I) an accurate and complete copy of such Plan (including all
amendments thereto);
(II) an accurate and complete copy of the annual report filed,
if required under ERISA, with respect to such Plan since its inception.
(III) an accurate and complete copy of the most recent summary
plan description, together with each summary of material modifications, if
required under ERISA, with respect to such Plan, and all material employee
communications relating to such Plan;
(IV) if such Plan is funded through a trust or any third party
funding vehicle, an accurate and complete copy of the trust or other funding
agreement (including all amendments thereto) and accurate and complete copies
the most recent financial statements thereof;
(V) accurate and complete copies of all Contracts relating to
such Plan, including service provider agreements, insurance contracts, minimum
premium contracts, stop-loss agreements, investment management agreements,
subscription and participation agreements and recordkeeping agreements; and
(VI) an accurate and complete copy of the most recent
determination letter received from the Internal Revenue Service with respect to
such Plan (if such Plan is intended to be qualified under Section 401(a) of the
Code).
(E) The Company is not required to be, and, to the best of the
knowledge of the Company and the Shareholder, has never been required to be,
treated as a single employer with any other Person under Section 4001(b)(1) of
ERISA or Section 414(b), (c), (m) or (o) of the Code. The Company has never
been a member of an "affiliated service group" within the meaning of Section
414(m) of the Code. To the best of the knowledge of the Company and the
Shareholder, the Company has never made a complete or partial withdrawal from a
multiemployer plan, as such term is defined in Section 3(37) of ERISA, resulting
in "withdrawal liability," as such term is defined in Section 4201 of ERISA
(without regard to subsequent reduction or waiver of such liability under either
Section 4207 or 4208 of ERISA).
(F) The Company does not have any plan or commitment to create any
additional Welfare Plan or any Pension Plan, or to modify or change any existing
Welfare Plan or Pension Plan (other than to comply with applicable law) in a
manner that would affect any Employee.
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(G) Except as set forth in PART 2.15(G) of the Disclosure Schedule, no
Welfare Plan provides death, medical or health benefits (whether or not insured)
with respect to any current or former Employee after any such Employee's
termination of service (other than (i) benefit coverage mandated by applicable
law, including coverage provided pursuant to Section 4980B of the Code, (ii)
deferred compensation benefits accrued as liabilities on the Unaudited Interim
Balance Sheet, and (iii) benefits the full cost of which are borne by current or
former Employees (or the Employees' beneficiaries)).
(H) With respect to each of the Welfare Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the
provisions of Section 4980B of the Code ("COBRA") have been complied with in all
material respects.
(I) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including
but not limited to ERISA and the Code.
(J) Each of the Plans intended to be qualified under Section 401(a) of
the Code has received a favorable determination from the Internal Revenue
Service, and neither the Company nor the Shareholder is aware of any reason why
any such determination letter should be revoked.
(K) Except as set forth in PART 2.15(K) of the Disclosure Schedule,
neither the execution, delivery or performance of this Agreement, nor the
consummation of the Merger or any of the other transactions contemplated by this
Agreement, will result in any payment (including any bonus, golden parachute or
severance payment) to any current or former Employee or director of the Company
(whether or not under any Plan), or materially increase the benefits payable
under any Plan, or result in any acceleration of the time of payment or vesting
of any such benefits.
(L) PART 2.15(L) of the Disclosure Schedule contains a list of all
salaried employees of the Company as of the date of this Agreement, and
correctly reflects, in all material respects, their salaries, any other
compensation payable to them (including compensation payable pursuant to bonus,
deferred compensation or commission arrangements), their dates of employment and
their positions. The Company is not a party to, and never has been a party to,
any collective bargaining contract or other Contract with a labor union
involving any of its Employees. All of the Company's employees are "at will"
employees.
(M) PART 2.15(M) of the Disclosure Schedule identifies each Employee
who is not fully available to perform work because of disability or other leave
and sets forth the basis of such leave and the anticipated date of return to
full service.
(N) The Company is in compliance in all material respects with all
applicable Legal Requirements and Contracts relating to employment, employment
practices, wages, bonuses and terms and conditions of employment, including
employee compensation matters, except where the failure to so comply would not
have a Material Adverse Effect on the Company.
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(O) Except as set forth in PART 2.15(O) of the Disclosure Schedule,
the Company has good labor relations, and the Shareholder has no reason to
believe that any of the Company's employees intends to terminate his or her
employment with the Company.
2.16 ENVIRONMENTAL MATTERS. The Company is in compliance in all material
respects with all applicable Environmental Laws, which compliance includes the
possession by the Company of all permits and other Governmental Authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof. The Company has not received any notice or other
communication (in writing or otherwise), whether from a Governmental Body,
citizens group, employee or otherwise, that alleges that the Company is not in
compliance with any Environmental Law, and, to the best of the knowledge of the
Company and the Shareholder, there are no circumstances that may prevent or
interfere with the Company's compliance with any Environmental Law in the
future. To the best of the knowledge of the Company and the Shareholder, no
current or prior owner of any property leased or controlled by the Company has
received any notice or other communication (in writing or otherwise), whether
from a Government Body, citizens group, employee or otherwise, that alleges that
such current or prior owner or the Company is not in compliance with any
Environmental Law. All Governmental Authorizations currently held by the
Company pursuant to Environmental Laws are identified in PART 2.16 of the
Disclosure Schedule. For purposes of this Section 2.16: (i) "Environmental Law"
means any federal, state or local Legal Requirement relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata), including any law or
regulation relating to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern; and (ii) "Materials of
Environmental Concern" include chemicals, pollutants, contaminants, wastes,
toxic substances, petroleum and petroleum products and any other substance that
is now or hereafter regulated by any Environmental Law or that is otherwise a
danger to health, reproduction or the environment.
2.17 INSURANCE. PART 2.17 of the Disclosure Schedule identifies all
insurance policies maintained by, at the expense of or for the benefit of the
Company and identifies any material claims made thereunder since December 31,
1992, and the Company has delivered to Parent accurate and complete copies in
all material respects of the insurance policies identified on PART 2.17 of the
Disclosure Schedule. Each of the insurance policies identified in PART 2.17 of
the Disclosure Schedule is in full force and effect. Since December 31, 1992,
the Company has not received any notice or other communication regarding any
actual or possible (a) cancellation or invalidation of any insurance policy, (b)
refusal of any coverage or rejection of any claim under any insurance policy, or
(c) material adjustment in the amount of the premiums payable with respect to
any insurance policy.
2.18 RELATED PARTY TRANSACTIONS. Except as set forth in PART 2.18 of the
Disclosure Schedule: (a) no Related Party has, and no Related Party has at any
time since December 31, 1992 had, any direct or indirect interest in any
material asset used in or otherwise relating to the business of the Company; (b)
no Related Party is, or has at any time since December 31, 1992
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been, indebted to the Company; (c) since December 31, 1992, no Related Party has
entered into, or has had any direct or indirect financial interest in, any
material Contract, transaction or business dealing involving the Company; (d) no
Related Party is competing, or has at any time since December 31, 1992 competed,
directly or indirectly, with the Company; and (e) no Related Party has any claim
or right against the Company (other than rights to receive compensation for
services performed as an employee of the Company). For purposes of the Section
2.18 each of the following shall be deemed to be a "Related Party": (i) the
Shareholder; (ii) each individual who is, or who has at any time since December
31, 1992 been, an officer of the Company; (iii) each member of the immediate
family of each of the individuals referred to in clauses "(i)" and "(ii)" above;
and (iv) any trust or other Entity (other than the Company) in which any one of
the individuals referred to in clauses "(i)", "(ii)" and "(iii)" above holds (or
in which more than one of such individuals collectively hold), beneficially or
otherwise, a material voting, proprietary or equity interest.
2.19 LEGAL PROCEEDINGS; ORDERS.
(A) Except as set forth in PART 2.19 of the Disclosure Schedule, there
is no pending Legal Proceeding, and (to the best of the knowledge of the Company
and the Shareholder) no Person has threatened to commence any Legal Proceeding:
(i) that involves the Company or any of the assets owned or used by the Company
or any Person whose liability the Company has or may have retained or assumed,
either contractually or by operation of law; or (ii) that challenges, or that
may have the effect of preventing, delaying, making illegal or otherwise
interfering with, the Merger or any of the other transactions contemplated by
this Agreement. To the best of the knowledge of the Company and the
Shareholder, except as set forth in PART 2.19 of the Disclosure Schedule, no
event has occurred, and no claim, dispute or other condition or circumstance
exists, that will, or that could reasonably be expected to, give rise to or
serve as a basis for the commencement of any such Legal Proceeding.
(B) There is no order, writ, injunction, judgment or decree to which
the Company, or any of the assets owned or used by the Company, is subject. The
Shareholder is not subject to any order, writ, injunction, judgment or decree
that relates to the Company's business or to any of the assets owned or used by
the Company. To the best of the knowledge of the Company and the Shareholder,
no officer or other employee of the Company is subject to any order, writ,
injunction, judgment or decree that prohibits such officer or other employee
from engaging in or continuing any conduct, activity or practice relating to the
Company's business.
2.20 AUTHORITY; BINDING NATURE OF AGREEMENT. The Company has the absolute
and unrestricted right, power and authority to enter into and to perform its
obligations under this Agreement; and the execution, delivery and performance by
the Company of this Agreement have been duly authorized by all necessary action
on the part of the Company and its board of directors. This Agreement
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies.
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2.21 NON-CONTRAVENTION; CONSENTS. Except as set forth in PART 2.21 of the
Disclosure Schedule or where occurrence will not have a Material Adverse Effect,
neither (1) the execution, delivery or performance of this Agreement or any of
the other agreements referred to in this Agreement, nor (2) the consummation of
the Merger or any of the other transactions contemplated by this Agreement, will
directly or indirectly (with or without notice or lapse of time):
(A) contravene, conflict with or result in a violation of (i) any of
the provisions of the Company's articles of organization or bylaws, or (ii) any
resolution adopted by the Company's shareholders, the Company's board of
directors or any committee of the Company's board of directors;
(B) contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the transactions
contemplated by this Agreement or to exercise any remedy or obtain any relief
under, any Legal Requirement or any order, writ, injunction, judgment or decree
to which the Company, or any of the assets owned or used by the Company, is
subject;
(C) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held by the Company or that otherwise relates to the Company's business
or to any of the assets owned or used by the Company;
(D) contravene, conflict with or result in a violation or breach of,
or result in a default under, any provision of any Company Contract that is or
would constitute a Material Contract, or give any Person the right to (i)
declare a default or exercise any remedy under any such Company Contract, (ii)
accelerate the maturity or performance of any such Company Contract, or (iii)
cancel, terminate or modify any such Company Contract; or
(E) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by the Company
(except for minor liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of the Company).
Except as set forth in PART 2.21 of the Disclosure Schedule, the Company is not
and will not be required to make any filing with or give any notice to, or to
obtain any Consent from, any Person in connection with (x) the execution,
delivery or performance of this Agreement or any of the other agreements
referred to in this Agreement, or (y) the consummation of the Merger or any of
the other transactions contemplated by this Agreement.
2.22 FULL DISCLOSURE.
(A) This Agreement (including the Disclosure Schedule) does not, and
the Shareholder's Closing Certificate will not, (i) contain any representation,
warranty or information that is false or misleading with respect to any material
fact, or (ii) omit to state any
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material fact necessary in order to make the representations, warranties and
information contained herein and to be contained therein (in the light of the
circumstances under which such representations, warranties and information were
or will be made or provided) not false or misleading.
(B) Except as set forth in PART 2.22(B) of the Disclosure Schedule,
the financial projections on a consolidated basis relating to the Company and
the Subsidiary for the fiscal year ending December 31, 1997 of [*] and [*]
previously delivered to Parent were prepared in good faith by the Company on the
basis of information and assumptions that were fair, complete and reasonable,
and consistent with the Company's knowledge of its business and operations, as
of the date of such information, and remains so as of the date hereof.
2.23 SHAREHOLDER CAPACITY AND FINANCIAL CAPABILITY.
(A) The Shareholder has the capacity and financial capability to
comply with and perform all of his covenants and obligations under this
Agreement and any of the other agreements contemplated hereby to which the
Shareholder is or may become a party.
(B) The Shareholder:
(I) has not, at any time, (A) made a general assignment for the
benefit of creditors, (B) filed, or had filed against him, any bankruptcy
petition or similar filing, (C) suffered the attachment or other judicial
seizure of all or a substantial portion of his assets, (D) admitted in writing
his inability to pay his debts as they become due, (E) been convicted of, or
pleaded guilty to, any felony, or (F) taken or been the subject of any action
that may have an adverse effect on his ability to comply with or perform any of
his covenants or obligations under this Agreement or any of the other agreements
contemplated hereby; or
(II) is subject to any Legal Requirement that may have an
adverse effect on his ability to comply with or perform any of his covenants or
obligations under this Agreement or any of the other agreements contemplated
hereby.
(C) There is no Legal Proceeding pending, and, to the best of the
Shareholder's knowledge, no Person has threatened to commence any Legal
Proceeding, that may have an adverse effect on the ability of the Shareholder to
comply with or perform any of his covenants or obligations under this Agreement
or any of the other agreements contemplated hereby. To the best of the
Shareholder's knowledge, no event has occurred, and no claim, dispute or other
condition or circumstance exists, that might directly or indirectly give rise to
or serve as a basis for the commencement of any such Legal Proceeding.
2.24 ACCOUNTING MATTERS. Neither the Company nor the Shareholder has taken
or agreed to, or plans to, take any action that would prevent Parent from
accounting for the business combination to be effected by the Merger as a
"pooling of interests."
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
23.
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For purposes of the representations and warranties contained in SECTIONS
2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 2.15, 2.16, 2.17, 2.18,
2.19, 2.21 AND 2.24, "the Company" shall be deemed to mean each of the Company
and the Subsidiary.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to the
Company and the Shareholder as follows:
3.1 SEC FILINGS; FINANCIAL STATEMENTS.
(A) Parent has delivered to the Company accurate and complete copies
(excluding copies of exhibits) of each report (on a form other than Form S-8)
including, without limitation, the most recent annual report to stockholders and
Form 10-K and 10-Q reports, proxy statements and other periodic filings made
with the SEC and definitive proxy statement filed by Parent with the SEC between
January 1, 1996 and the date of this Agreement (the "Parent SEC Documents"). As
of the time it was filed with the SEC (or, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing): (i) each
of the Parent SEC Documents were filed in a timely manner and complied in all
material respects with the applicable requirements of the Exchange Act and the
rules and regulations promulgated thereunder; and (ii) none of the Parent SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(B) The consolidated financial statements contained in the Parent SEC
Documents: (i) complied as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered, except as may be indicated in the notes to
such financial statements and (in the case of unaudited statements) as permitted
by Form 10-Q of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to year-end audit adjustments; and (iii)
fairly present the consolidated financial position of Parent and its
subsidiaries as of the respective dates thereof and the consolidated results of
operations of Parent and its subsidiaries for the periods covered thereby.
3.2 AUTHORITY; BINDING NATURE OF AGREEMENT. Parent and Merger Sub have
the absolute and unrestricted right, power and authority to perform their
obligations under this Agreement; and the execution, delivery and performance by
Parent and Merger Sub of this Agreement (including the contemplated issuance of
Parent Common Stock in the Merger in accordance with this Agreement) have been
duly authorized by all necessary action on the part of Parent and Merger Sub and
their respective boards of directors. No vote of Parent's shareholders is
needed to approve the Merger. This Agreement constitutes the legal, valid and
binding obligation of Parent and Merger Sub, enforceable against them in
accordance with its terms, subject to (i) laws of general application relating
to bankruptcy, insolvency and the relief of
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debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
3.3 VALID ISSUANCE. Subject to SECTION 1.5(C), the Parent Common Stock to
be issued in the Merger will, when issued in accordance with the provisions of
this Agreement, be validly issued, fully paid and nonassessable, without
violation of any preemptive or dissenter's rights and in full compliance with
all applicable securities laws.
3.4 ORGANIZATION; SUBSIDIARIES. Parent and Merger Sub are corporations
duly organized, validly existing and in good standing under the laws of the
respective jurisdiction in which they are incorporated. Each of Parent and
Merger Sub has the corporate power and authority to own and lease its properties
and assets and to carry on its business as now being conducted and is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction in which the properties owned or leased by it or
the nature of the business conducted by it makes such qualification or licensure
necessary, except where the failure to be so qualified or licensed and in good
standing would not have a material adverse effect on its business, results of
operations or financial condition of Parent.
3.5 NON-CONTRAVENTION; CONSENTS. Except where occurrence of the foregoing
will not have a material adverse effect on Parent, the execution and delivery of
this Agreement and the consummation of any of the transactions contemplated
hereby by Parent and Merger Sub does not and will not:
(I) violate any provision of the Certificate of Incorporation or
Bylaws of Parent or Merger Sub;
(II) violate, or result with the passage of time in the violation
of, any provision of, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or lapse of time or both) any
obligation under, or result in the creation or imposition of any lien, charge,
pledge, security interest or other encumbrance upon any of the properties of
Parent or Merger Sub pursuant to any provision of any mortgage, lien, lease,
agreement, permit, indenture, license, instrument, law, order, arbitration
award, judgment or decree to which Parent or Merger Sub is a party or by which
it or any of its properties are bound;
(III) violate any law, order, judgment or decree to which Parent or
Merger Sub is subject;
(IV) violate or conflict with any other restriction of any kind or
character to which Parent or Merger Sub is subject, or by which any of its
assets may be bound; or
(V) constitute an event permitting termination of an agreement to
which Parent or Merger Sub is subject, if in any such circumstances,
individually or in the aggregate with all other such events, such termination
could have consequences materially adverse to Parent.
Except in connection with the organization of Merger Sub and other filings
necessary to effectuate the Merger and notification of listing of additional
shares to Nasdaq National Market,
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no consent, authorization, order or approval of, or filing or registration with
any governmental commission, board or other regulatory body is required for or
in connection with the execution, delivery and performance of this Agreement by
Parent or Merger Sub and the consummation by each of them of any of the
transactions contemplated hereby.
3.6 BUSINESS. Merger Sub has not engaged in any activities other than
those incident to its organization or as contemplated by the terms of this
Agreement.
3.7 LITIGATION. There is no action, suit, proceeding or investigation
pending, or, to the best knowledge of Parent or Merger Sub, threatened, against
or related to the respective properties or business of Parent or Merger Sub
which will materially adversely affect or prohibit consummation the transactions
contemplated thereby.
SECTION 4. CERTAIN COVENANTS OF THE COMPANY, THE SHAREHOLDER AND PARENT.
4.1 ACCESS AND INVESTIGATION. During the period from the date of this
Agreement through the Effective Time (the "Pre-Closing Period"), the Company
shall, and shall cause its Representatives to: (a) provide Parent and Parent's
Representatives with reasonable access to the Company's Representatives,
personnel and assets and to all existing books, records, Tax Returns, work
papers and other documents and information relating to the Company; and (b)
provide Parent and Parent's Representatives with copies of such existing books,
records, Tax Returns, work papers and other documents and information relating
to the Company, and with such additional financial, operating and other data and
information regarding the Company, as Parent may reasonably request. Except and
to the extent required by applicable law, each of the parties hereto will not
disclose or otherwise use, and will cause its Representatives not to use or
otherwise disclose, any Confidential Information (as defined below) furnished by
or on behalf of either Parent or the Company at any time or in any manner other
than in connection with the transactions contemplated hereby. "Confidential
Information" shall mean any information (written or oral) (i) pertaining to
either the Company or Parent, (ii) is confidential and proprietary in nature,
(iii) is furnished to any of the parties hereto and their Representatives, and
(iv) is conspicuously marked, or identified as, "CONFIDENTIAL" at the time of
its delivery; provided, that notwithstanding the foregoing, "Confidential
Information" shall not include any information or material (a) that is already
in the other party's possession prior to February 27, 1997, (b) that is obtained
by or that is or becomes available to any of the parties hereto or their
respective Representatives from a source other than pursuant to this Agreement
or in breach of this SECTION 4.1, (c) that is obtained or is or becomes
available through the normal course of any business dealings between the parties
hereto, (d) that is in or enters the public domain or that otherwise is or
becomes generally available other than in breach of this SECTION 4.1, or (e)
that is independently developed by any of the parties hereto or their respective
Representatives.
4.2 OPERATION OF THE COMPANY'S BUSINESS. During the Pre-Closing Period:
(A) the Company shall conduct its business and operations in the
ordinary course and in substantially the same manner as such business and
operations have been conducted prior to the date of this Agreement;
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(B) the Company shall use reasonable efforts to preserve intact its
current business organization, keep available the services of its current
officers and employees and maintain its relations and good will with all
suppliers, customers, landlords, creditors, employees and other Persons having
business relationships with the Company;
(C) the Company shall keep in full force all insurance policies
identified in PART 2.17 of the Disclosure Schedule;
(D) the Company shall not declare, accrue, set aside or pay any
dividend or make any other distribution in respect of any shares of capital
stock, and shall not repurchase, redeem or otherwise reacquire any shares of
capital stock or other securities;
(E) the Company shall not sell, issue or authorize the issuance of (i)
any capital stock or other security, (ii) any option or right to acquire any
capital stock or other security, or (iii) any instrument convertible into or
exchangeable for any capital stock or other security;
(F) neither the Company nor the Shareholder shall amend or permit the
adoption of any amendment to the Company's articles of organization or bylaws,
or effect or permit the Company to become a party to any Acquisition
Transaction, recapitalization, reclassification of shares, stock split, reverse
stock split or similar transaction;
(G) the Company shall not form any subsidiary or acquire any equity
interest or other interest in any other Entity;
(H) the Company shall not make any capital expenditure, except for
capital expenditures that, when added to all other capital expenditures made on
behalf of the Company during the Pre-Closing Period, do not exceed $1,000.00 per
month;
(I) the Company shall not (i) enter into, or permit any of the assets
owned or used by it to become bound by, any Contract that is or would constitute
a Material Contract, or (ii) amend or prematurely terminate, or waive any
material right or remedy under, any such Material Contract;
(J) except for transactions in the ordinary course of business and
that do not exceed $5,000, individually or in the aggregate, the Company shall
not (i) acquire, lease or license any right or other asset from any other
Person, (ii) sell or otherwise dispose of, or lease or license, any right or
other asset to any other Person, or (iii) waive or relinquish any right, except
for assets acquired, leased, licensed or disposed of by the Company pursuant to
Contracts that are not Material Contracts;
(K) the Company shall not (i) lend money to any Person (except that
the Company may make routine travel advances to employees in the ordinary course
of business and may, consistent with its past practices, allow employees to
acquire Company Common Stock in exchange for promissory notes upon exercise of
Company Options), or (ii) incur or guarantee any indebtedness for borrowed
money;
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(L) the Company shall not (i) establish, adopt or amend any Employee
Benefit Plan, (ii) pay any bonus or make any profit sharing payment, cash
incentive payment or similar payment to, or increase the amount of the wages,
salary, commissions, fringe benefits or other compensation or remuneration
payable to, any of its directors, officers or employees, or (iii) hire any new
employee whose aggregate annual compensation is expected to exceed $50,000;
(M) the Company shall not change any of its methods of accounting or
accounting practices in any material respect;
(N) the Company shall not make any Tax election;
(O) the Company shall not commence or settle any material Legal
Proceeding;
(P) the Company shall not agree or commit to take any of the actions
described in clauses "(e)" through "(o)" above.
For purposes of this SECTION 4.2, "the Company" shall be deemed to mean
each of the Company and the Subsidiary.
4.3 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE.
(A) During the Pre-Closing Period, the Company shall promptly notify
Parent in writing of:
(I) the discovery by the Company of any event, condition, fact
or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes a material inaccuracy in or material
breach of any representation or warranty made by the Company or the Shareholder
in this Agreement;
(II) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause or
constitute a material inaccuracy in or breach of any representation or warranty
made by the Company or the Shareholder in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement;
(III) any breach of any material covenant or obligation of the
Company or the Shareholder; and
(IV) any event, condition, fact or circumstance that would make
the timely satisfaction of any of the conditions set forth in SECTION 6 or
SECTION 7 impossible or unlikely.
(B) If any event, condition, fact or circumstance that is required to
be disclosed pursuant to SECTION 4.3(A) requires any change in the Disclosure
Schedule, or if any such event, condition, fact or circumstance would require
such a change assuming the Disclosure
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Schedule were dated as of the date of the occurrence, existence or discovery of
such event, condition, fact or circumstance, then the Company shall promptly
deliver to Parent an update to the Disclosure Schedule specifying such change.
For purposes of this SECTION 4.3, "the Company" shall be deemed to
mean each of the Company and the Subsidiary.
4.4 NO NEGOTIATION. During the Pre-Closing Period, neither the Company
nor the Shareholder shall, directly or indirectly:
(A) solicit or encourage the initiation of any inquiry, proposal or
offer from any Person (other than Parent) relating to a possible Acquisition
Transaction;
(B) participate in any discussions or negotiations or enter into any
agreement with, or provide any non-public information to, any Person (other than
Parent) relating to or in connection with a possible Acquisition Transaction; or
(C) accept any proposal or offer from any Person (other than Parent)
relating to a possible Acquisition Transaction.
The Company shall promptly notify Parent in writing of any material inquiry,
proposal or offer relating to a possible Acquisition Transaction that is
received by the Company or the Shareholder during the Pre-closing Period.
4.5 COVENANTS OF PARENT. Parent hereby covenants and agrees with the
Company and the Shareholder as follows:
(A) PRESERVATION OF BUSINESS ORGANIZATION. Parent shall use all
reasonable efforts to cause to preserve without material impairment the business
of Parent and its subsidiaries and their goodwill as to payors, providers,
suppliers, distributors, clients and others having business relations with
Parent and its subsidiaries.
(B) CARRY ON IN REGULAR COURSE. Parent shall carry on its business in
the ordinary and usual course in a manner consistent with its past practices.
(C) Documents and information to be Furnished. Parent shall furnish
to the Shareholder, promptly after filed with the SEC, its audited year-end
report in the form filed with the SEC on Form 10-K prescribed under the Exchange
Act, its unaudited quarterly financial reports in the form filed with the SEC on
Form 10-Q prescribed under the Exchange Act and such other reports, statements,
documents and other items Parent delivers, or is required to deliver, to any of
its shareholders.
(D) NOTICES OF CERTAIN EVENTS. During the Pre-Closing Period, Parent
shall promptly notify the Company of:
(I) the discovery by Parent of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or
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constitutes an inaccuracy in or breach of any representation or warranty made by
Parent in this Agreement;
(II) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause or
constitute an inaccuracy in or breach of any representation or warranty made by
Parent in this Agreement if (A) such representation or warranty had been made as
of the time of the occurrence, existence or discovery of such event, condition,
fact or circumstance, or (B) such event, condition, fact or circumstance had
occurred, arisen or existed on or prior to the date of this Agreement;
(III) any breach of any covenant or obligation of Parent; and
(IV) any event, condition, fact or circumstance that would make
the timely satisfaction of any of the conditions set forth in SECTION 6 or
SECTION 7 impossible or unlikely.
SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1 FILINGS AND CONSENTS. As promptly as practicable after the execution
of this Agreement, each party to this Agreement (a) shall make all filings (if
any) and give all notices (if any) required to be made and given by such party
in connection with the Merger and the other transactions contemplated by this
Agreement, and (b) shall use all commercially reasonable efforts to obtain all
Consents (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Material Contract, or otherwise) by such party in connection with
the Merger and the other transactions contemplated by this Agreement, except
where the failure to obtain such Consent would not, in the case of the Company,
have a Material Adverse Effect and, in the case of Parent, a material adverse
effect on its business, financial condition or results of operations. The
Company shall (upon request) promptly deliver to Parent a copy of each such
filing made, each such notice given and each such Consent obtained by the
Company during the Pre-Closing Period.
5.2 PUBLIC ANNOUNCEMENTS.
(A) During the Pre-Closing Period, neither the Company, the Subsidiary
nor the Shareholder shall (and the Company and the Subsidiary shall not permit
any of their Representatives to) issue any press release or make any public
statement regarding this Agreement or the Merger, or regarding any of the other
transactions contemplated by this Agreement, without Parent's prior written
consent.
(B) Parent shall not, and shall not permit any its Representatives to,
issue any press release or otherwise publicly disseminate any document or other
written material relating to the Merger or any of the other transactions
contemplated by this Agreement unless (i) the Company shall have approved such
press release or written material (it being understood that the Company shall
not unreasonably withhold its approval of any such press release or written
material), or (ii) Parent shall have been advised by its outside legal counsel
that the issuance of such press release or the dissemination of such written
material is required by any applicable law
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or regulation, and Parent shall have consulted with the Company prior to issuing
such press release or disseminating such written material; provided, however,
that notwithstanding anything to the contrary contained in this SECTION 5.2,
Parent shall be entitled to file with the SEC, after the execution and delivery
of this Agreement, a Report on Form 8-K, together with a copy of this Agreement
(including the exhibits hereto) and the press release (which shall have been
approved by the Company) announcing this Agreement.
5.3 POOLING OF INTERESTS. Before and after the Closing, no party to this
Agreement shall take any action that could reasonably be expected to have an
adverse effect on the ability of Parent to account for the Merger as a "pooling
of interests."
5.4 TAX MATTERS. Prior to the Closing, (a) Parent and the Company shall
execute and deliver, to Cooley Godward llp and to Devine, Millimet & Branch,
Professional Association, tax representation letters in substantially the form
of EXHIBIT F (which will be used in connection with the legal opinion
contemplated by SECTION 7.3(A)), and (b) the Shareholder shall execute and
deliver to Parent a Continuity of Interest Certificate in the form of EXHIBIT G.
5.5 EMPLOYMENT AND NONCOMPETITION AGREEMENTS. At or prior to the Closing,
the Shareholder shall execute and deliver to the Company and Parent an
Employment Agreement in the form of EXHIBIT H and a Noncompetition Agreement in
the form of EXHIBIT I. The Company shall use all commercially reasonable
efforts to cause Jason K. Raza to execute and deliver to the Company and Parent,
at the Closing, an Employment and Noncompetition Agreement in the form of
EXHIBIT J.
5.6 FIRPTA MATTERS. At the Closing, (a) the Company shall deliver to
Parent a statement (in such form as may be reasonably requested by counsel to
Parent) conforming to the requirements of Section 1.897 - 2(h)(1)(i) of the
United States Treasury Regulations, and (b) the Company shall deliver to the
Internal Revenue Service the notification required under Section 1.897 - 2(h)(2)
of the United States Treasury Regulations.
5.7 RELEASE. At the Closing, the Shareholder shall execute and deliver to
the Company a Release in the form of EXHIBIT K.
5.8 TERMINATION OF 401(K) PLAN. Immediately prior to the Closing, the
Company shall terminate its 401(k) Plan, and shall ensure that no employee or
former employee of the Company has any rights under such Plan after termination
thereof and that any liabilities of the Company under such Plan (including any
such liabilities relating to services performed prior to the Closing) are fully
extinguished at no cost to the Company. Following the Closing Date, Parent and
Merger Sub shall take all commercially reasonable actions as are necessary to
provide for a direct rollover of the accounts of the Company's employees in the
Company's 401(k) Plan to a qualified retirement plan maintained by Parent for
all such employees who request such direct rollover.
5.9 TAX ELECTION. After the Closing, Parent, the Company and the
Shareholder shall make an election under Section 1377(a)(2) of the Code to treat
the Company or Surviving
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Corporation as having two taxable years, the first of which will be deemed to
terminate on the Closing Date.
5.10 TAX PAYMENTS. Prior to April 15, 1998, Parent shall cause the
Surviving Corporation to distribute to the Shareholder cash in an amount equal
(i) the amount of K-1 income recognized from the Company for the period from
January 1, 1997 through the date immediately preceding the Closing Date
multiplied by (ii) the combined maximum marginal rate of federal and applicable
state income tax applicable to individuals (taking into account the
deductibility of state income taxes and any distributions in respect of such tax
liability previously made to the Shareholder).
5.11 PAYMENT OF LOAN. Within 60 days following the Closing Date, Merger
Sub agrees, and Parent agrees to cause Merger Sub, to prepay the amounts
outstanding under that certain loan agreement, dated April 17, 1996, between
Lawrence Savings Bank and the Company for the original principal amount of
$450,000 (the "Loan Agreement"). The Company and the Shareholder represent that
as of the Closing Date, the principal balance outstanding under the Loan
Agreement shall not exceed $352,500. Except as set forth in PART 2.10(C) of the
Disclosure Schedule, the Company and the Shareholder represent that neither the
Company nor the Shareholder has violated, breached or committed any default
under the Loan Agreement nor any other agreements entered into in connection
with the Loan Agreement. The Company and the Shareholder further represent that
prepayment of the amounts under the Loan Agreement or any agreement contemplated
thereby shall not subject the Company, Merger Sub, the Shareholder or Parent to
any prepayment penalty, make whole payment provision or other similar fee
whether or not pursuant to the terms of the Loan Agreement.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB
The obligations of Parent and Merger Sub to effect the Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
6.1 ACCURACY OF REPRESENTATIONS. Each of the representations and
warranties made by the Company and the Shareholder in this Agreement and in each
of the other agreements and instruments delivered to Parent in connection with
the transactions contemplated by this Agreement shall have been accurate in all
material respects as of the date of this Agreement and shall be accurate in all
material respects as of the Scheduled Closing Time as if made at the Scheduled
Closing Time.
6.2 PERFORMANCE OF COVENANTS. All of the covenants and obligations that
the Company and the Shareholder is required to comply with or to perform at or
prior to the Closing shall have been complied with and performed in all material
respects.
6.3 CONSENTS. All Consents required to be obtained in connection with the
Merger and the other transactions contemplated by this Agreement (including the
Consents identified in PART 2.21 of the Disclosure Schedule) shall have been
obtained and shall be in full force and
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effect, except when failure to obtain such Consent will not have a Material
Adverse Effect on the Company or Parent.
6.4 AGREEMENTS AND DOCUMENTS. Parent and the Company shall have received
the following agreements and documents, each of which shall be in full force and
effect:
(A) Employment Agreement and Noncompetition Agreement in the form of
EXHIBITS H and I, executed respectively, by Pierre A. Narath;
(B) Employment and Noncompetition Agreement in the form of EXHIBIT J,
executed by Jason K. Raza
(C) Release in the form of EXHIBIT K, executed by the Shareholder;
(D) confidential information and assignment agreements, reasonably
satisfactory in form and content to Parent, executed by those employees listed
in PART 6.4(D) of the Disclosure Schedule;
(E) the statement referred to in SECTION 5.6(A), executed by the
Company;
(F) Continuity of Interest Certificates in the form of EXHIBIT G,
executed by the Shareholder;
(G) an estoppel certificate, dated as of a date not more than five
days prior to the Closing Date and satisfactory in form and content to Parent,
executed by 114 Executive Park Trust (the "Landlord") and an Amendment to
Commercial Lease, dated January 5, 1996, between the Company and the Landlord
satisfactory in form and content to Parent;
(H) a legal opinion of Devine, Millimet & Branch, Professional
Association, dated as of the Closing Date, in the form of EXHIBIT L;
(I) a letter from Price Waterhouse LLP, dated as of the Closing Date,
confirming that no transaction entered into by the Company, and no other fact or
circumstance relating to the Company, will prevent Parent from accounting for
the Merger as a "pooling of interests" in accordance with generally accepted
principles, Accounting Principles Board Opinion No. 16 and all published rules,
regulations and policies of the SEC;
(J) a certificate executed by the Shareholder and containing the
representation and warranty of the Shareholder that each of the representations
and warranties set forth in Section 2 is accurate in all material respects as of
the Closing Date as if made on the Closing Date and that the conditions set
forth in Sections 6.1, 6.2 and 6.3 have been duly satisfied (the "Shareholder's
Closing Certificate"); and
(K) written resignations of all directors of the Company and the
Subsidiary, effective as of the Effective Time.
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6.5 FIRPTA COMPLIANCE. The Company shall have filed with the Internal
Revenue Service the notification referred to in SECTION 5.6(B).
6.6 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
6.7 NO MATERIAL ADVERSE CHANGE. There shall have been no material adverse
change in the business, condition, assets, liabilities, operation or financial
performance, or, to the best knowledge of the Company and the Shareholder,
prospects of the Company since December 31, 1996, except for (a) any such
material adverse change that is demonstrated by the Company to have resulted
from changes that occurred after the date of this Agreement in general business
conditions in the personal computer industry, and (b) any material adverse
change in the Company's financial performance that is temporary in nature and is
demonstrated by the Company to have resulted directly from the public
announcement or the pendency of the Merger.
6.8 NO GOVERNMENTAL LITIGATION. There shall not be pending or threatened
any Legal Proceeding in which a Governmental Body is or is threatened to become
a party or is otherwise involved: (a) challenging or seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement; (b) relating to the Merger and seeking to obtain
from Parent or any of its subsidiaries any damages that may be material to
Parent; (c) seeking to prohibit or limit in any material respect Parent's
ability to vote, receive dividends with respect to or otherwise exercise
ownership rights with respect to the stock of the Surviving Corporation; or (d)
which would materially and adversely affect the right of Parent, the Surviving
Corporation or any subsidiary of Parent to own the assets or operate the
business of the Company.
6.9 NO OTHER LITIGATION. There shall not be pending or threatened to
commence any Legal Proceeding (a) challenging or seeking to restrain or prohibit
the consummation of the Merger or any of the other transactions contemplated by
this Agreement; (b) relating to the Merger and seeking to obtain from Parent or
any of its subsidiaries any damages that may be material to Parent; (c) seeking
to prohibit or limited in any material respect Parent's ability to vote, receive
dividends with respect to or otherwise exercise ownership rights with respect to
the stock of the Surviving Corporation; or (d) which would affect adversely the
right of Parent, the Surviving Corporation or any subsidiary of Parent to own
the assets or operate the business of the Company.
6.10 TERMINATION OF 401(K) PLAN. The Company shall have provided Parent
with evidence, reasonably satisfactory to Parent, as to the termination of its
401(k) plan referred to in SECTION 5.8.
6.11 TERMINATION OF MICROID DISTRIBUTION AGREEMENT. The Company shall have
provided Parent with evidence, reasonably satisfactory to Parent, as to the
termination of that certain Domestic Mail Order Distribution Agreement, dated
April 11, 1994, between the
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Company and the Subsidiary, as amended by Modification No. 1 to Domestic Mail
Order Distribution Agreement, dated September 16, 1994. Pursuant to such
termination, neither the Company, the Subsidiary, Merger Sub nor Parent shall
have any further obligations, and shall not be subject to any liability, under
such agreement as amended.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company and Shareholder to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of the following conditions:
7.1 ACCURACY OF REPRESENTATIONS. Each of the representations and
warranties made by Parent and Merger Sub in this Agreement shall have been
accurate in all material respects as of the date of this Agreement, and shall be
accurate in all material respects as of the Scheduled Closing Time as if made at
the Scheduled Closing Time.
7.2 PERFORMANCE OF COVENANTS. All of the covenants and obligations that
Parent and Merger Sub are required to comply with or to perform at or prior to
the Closing shall have been complied with and performed in all material
respects.
7.3 DOCUMENTS. The Shareholder shall have received the following
documents:
(A) a legal opinion of Cooley Godward LLP, dated as of the Closing
Date, in the form of EXHIBIT M.
(B) Employment Agreement and Noncompetition Agreement of Pierre A.
Narath in the form of Exhibits H and I, each executed on behalf of the Parent;
(C) Employment and Noncompetition Agreement of Jason K. Raza in the
form of EXHIBIT J, executed on behalf of Parent;
(D) A certificate executed by Parent and Merger Sub containing the
representation and warranty of each entity that each of the representations and
warranties set forth in SECTION 3 is accurate in all respects as of the Closing
Date as if made on the Closing Date and that the conditions set forth in
SECTIONS 7.1, 7.2 and 7.3 have been duly satisfied.
7.4 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
7.5 NO MATERIAL ADVERSE CHANGE. There shall have been no material adverse
change in Parent's business, condition, assets, liabilities, operations or
financial performance since the date of this Agreement, except for (a) any such
material adverse change that is demonstrated by Parent to have resulted directly
from changes that occurred after the date of this
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Agreement in general business conditions in the personal computer industry, and
(b) any material adverse change in Parent's financial performance that is
temporary in nature and is demonstrated by Parent to have resulted directly from
the public announcement or the pendency of the Merger (it being understood that
a decline in Parent's stock price shall not, in and of itself, constitute a
"material adverse change in Parent's business, condition, assets, liabilities,
operations or financial performance").
7.6 NO GOVERNMENTAL LITIGATION. There shall not be pending or threatened
any Legal Proceeding in which a Governmental Body is or is threatened to become
a party or is otherwise involved: (a) challenging or seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement; (b) relating to the Merger and seeking to obtain
from the Company or any of its subsidiaries any damages that may be material to
the Company; (c) seeking to prohibit or limit in any material respect the
Company's ability to vote, receive dividends with respect to or otherwise
exercise ownership rights with respect to the stock of the Surviving
Corporation; or (d) which would materially and adversely affect the right of the
Parent, the Surviving Corporation or any subsidiary of Parent to own the assets
or operate the business of the Company.
7.7 NO OTHER LITIGATION. There shall not be pending or threatened to
commence any Legal Proceeding (a) challenging or seeking to restrain or prohibit
the consummation of the Merger or any of the other transactions contemplated by
this Agreement; (b) relating to the Merger and seeking to obtain from the
Company or any of its subsidiaries any damages that may be material to the
Company; (c) seeking to prohibit or limited in any material respect the
Company's ability to vote, receive dividends with respect to or otherwise
exercise ownership rights with respect to the stock of the Surviving
Corporation; or (d) which would affect adversely the right of Parent, the
Surviving Corporation or any subsidiary of Parent to own the assets or operate
the business of the Company.
SECTION 8. TERMINATION
8.1 TERMINATION EVENTS. This Agreement may be terminated prior to the
Closing:
(A) by Parent if Parent reasonably determines that the timely
satisfaction of any condition set forth in SECTION 6 has become impossible
(other than as a result of any failure on the part of Parent or Merger Sub to
comply with or perform any covenant or obligation of Parent or Merger Sub set
forth in this Agreement);
(B) by the Company if the Company reasonably determines that the
timely satisfaction of any condition set forth in SECTION 7 has become
impossible (other than as a result of any failure on the part of the Company or
the Shareholder to comply with or perform any covenant or obligation set forth
in this Agreement or in any other agreement or instrument delivered to Parent);
(C) by Parent at or after the Scheduled Closing Time if any condition
set forth in SECTION 6 has not been satisfied by the Scheduled Closing Time;
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(D) by the Company and the Shareholder at or after the Scheduled
Closing Time if any condition set forth in SECTION 7 has not been satisfied by
the Scheduled Closing Time;
(E) by Parent if the Closing has not taken place on or before May 30,
1997 (other than as a result of any failure on the part of Parent to comply with
or perform any covenant or obligation of Parent set forth in this Agreement);
(F) by the Company and the Shareholder if the Closing has not taken
place on or before May 30, 1997 (other than as a result of the failure on the
part of the Company or the Shareholder to comply with or perform any covenant or
obligation set forth in this Agreement or in any other agreement or instrument
delivered to Parent); or
(G) by the mutual consent of Parent and the Company.
8.2 TERMINATION PROCEDURES. If Parent wishes to terminate this Agreement
pursuant to SECTION 8.1(A), SECTION 8.1(C) or SECTION 8.1(E), Parent shall
deliver to the Company a written notice stating that Parent is terminating this
Agreement and setting forth a brief description of the basis on which Parent is
terminating this Agreement. If the Company wishes to terminate this Agreement
pursuant to SECTION 8.1(B), SECTION 8.1(D) or SECTION 8.1(F), the Company shall
deliver to Parent a written notice stating that the Company is terminating this
Agreement and setting forth a brief description of the basis on which the
Company is terminating this Agreement.
8.3 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
SECTION 8.1, all further obligations of the parties under this Agreement shall
terminate; provided, however, that: (a) neither the Company nor Parent shall be
relieved of any obligation or liability arising from any prior breach by such
party of any provision of this Agreement; (b) the parties shall, in all events,
remain bound by and continue to be subject to the provisions set forth in
SECTION 10 (except SECTION 10.1); and (c) the Company shall, in all events,
remain bound by and continue to be subject to SECTION 5.2.
SECTION 9. INDEMNIFICATION, ETC.
9.1 SURVIVAL OF REPRESENTATIONS, ETC.
(A) The representations and warranties made by the Shareholder
(including the representations and warranties set forth in SECTION 2 and the
representations and warranties set forth in the Shareholder's Closing
Certificate) shall survive the Closing and shall expire on the [*] of the
Closing Date; provided, however, that the representations and warranties of the
Company and the Shareholder set forth in [*] shall survive the Closing until
[*]; provided, further, that if, at any time prior to the [*] of the Closing
Date, any Indemnitee (acting in good faith) delivers to the Shareholder a
written notice alleging the existence of an inaccuracy in or a breach of any of
the representations and warranties made by the Shareholder (and setting forth in
reasonable detail the basis for such Indemnitee's belief that such an inaccuracy
or breach may exist) and asserting a
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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claim for recovery under SECTION 9.2 based on such alleged inaccuracy or breach,
then the claim asserted in such notice shall survive the first anniversary of
the Closing until such time as such claim is fully and finally resolved.
(B) The Disclosure Schedule, the representations, warranties,
covenants and obligations of the Company and the Shareholder, and the rights and
remedies that may be exercised by the Indemnitees, shall not be limited or
otherwise affected by or as a result of any information furnished to (except as
set forth in the Disclosure Schedule), or any investigation made by or knowledge
of, any of the Indemnitees or any of their Representatives.
(C) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made by
the Company and the Shareholder in this Agreement.
(D) [*]
9.2 INDEMNIFICATION BY THE SHAREHOLDER.
(A) From and after the Effective Time (but subject to SECTIONS 9.1(A)
and 9.4), the Shareholder, shall hold harmless and indemnify each of the
Indemnitees from and against, and shall compensate and reimburse each of the
Indemnitees for, any Damages which are directly or indirectly suffered or
incurred by any of the Indemnitees or to which any of the Indemnitees may
otherwise become subject (regardless of whether or not such Damages relate to
any third party claim) and which arise from or as a result of, or are directly
or indirectly connected with: (i) any inaccuracy in or breach of any
representation or warranty set forth in SECTION 2 or in the Shareholder's
Closing Certificate; (ii) any breach of any covenant or obligation of the
Company or the Shareholder (including the covenants set forth in SECTIONS 4 and
5); or (iii) any Legal Proceeding relating to any inaccuracy or breach of the
type referred to in clause "(i)" or "(ii)" above (including any Legal Proceeding
commenced by any Indemnitee for the purpose of enforcing any of its rights under
this SECTION 9).
(B) The Shareholder acknowledges and agrees that, if the Surviving
Corporation suffers, incurs or otherwise becomes subject to any Damages as a
result of or in connection with any inaccuracy in or breach of any
representation, warranty, covenant or obligation, then Parent shall also be
deemed, by virtue of its ownership of the stock of the Surviving Corporation, to
have incurred Damages as a result of and in connection with such inaccuracy or
breach (provided, however, Parent and the Surviving Corporation together shall
not be entitled to recover more than once for the same Damages).
9.3 [*]
9.4 [*]
9.5 NO CONTRIBUTION. The Shareholder waives, and acknowledges and agrees
that he shall not have and shall not exercise or assert (or attempt to exercise
or assert), any right of
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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contribution, right of indemnity or other right or remedy against the Surviving
Corporation in connection with any indemnification obligation or any other
liability to which he may become subject under or in connection with this
Agreement or the Shareholder's Closing Certificate.
9.6 INTEREST. Any Person who is required to hold harmless, indemnify,
compensate or reimburse any other Person (whether an Indemnitee or the
Shareholder) pursuant to this SECTION 9 with respect to any Damages shall also
be liable for interest on the amount of such Damages (for the period commencing
as of the date on which such Person first received notice of a claim for
recovery and ending on the date on which the liability of the indemnifying party
is fully satisfied) at a floating rate equal to the rate of interest publicly
announced by Bank of America, N.T. & S.A. from time to time as its prime, base
or reference rate.
9.7 DEFENSE OF THIRD PARTY CLAIMS (PARENT). In the event of the assertion
or commencement by any Person of any claim or Legal Proceeding (whether against
the Surviving Corporation, against Parent or against any other Person) with
respect to which the Shareholder may become obligated to hold harmless,
indemnify, compensate or reimburse any Indemnitee pursuant to this SECTION 9,
Parent shall have the right, at its election, to proceed with the defense of
such claim or Legal Proceeding on its own. If Parent so proceeds with the
defense of any such claim or Legal Proceeding:
(A) all reasonable expenses relating to the defense of such claim or
Legal Proceeding shall be borne and paid exclusively by the Shareholder;
(B) the Shareholder shall make available to Parent any documents and
materials in his possession or control that may be necessary to the defense of
such claim or Legal Proceeding; and
(C) Parent shall have the right to settle, adjust or compromise such
claim or Legal Proceeding with the consent of the Shareholder; provided,
however, that such consent shall not be unreasonably withheld.
Parent shall give the Shareholder prompt notice of the commencement of any such
Legal Proceeding against Parent or the Surviving Corporation; provided, however,
that any failure on the part of Parent to so notify the Shareholder shall not
limit any of the obligations of the Shareholder under this SECTION 9 (except to
the extent such failure materially prejudices the defense of such Legal
Proceeding).
9.8 DEFENSE OF THIRD PARTY CLAIMS (SHAREHOLDER). In the event of the
assertion or commencement by any Person of any claim or Legal Proceeding with
respect to which Parent may become obligated to hold harmless, indemnify,
compensate or reimburse the Shareholder pursuant to this SECTION 9, the
Shareholder shall have the right, at his election, to proceed with the defense
of such claim or Legal Proceeding on his own. If the Shareholder so proceeds
with the defense of any such claim or Legal Proceeding:
(A) all reasonable expenses relating to the defense of such claim or
Legal Proceeding shall be borne and paid exclusively by the Parent;
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(B) Parent shall make available to Parent any documents and materials
in his possession or control that may be necessary to the defense of such claim
or Legal Proceeding; and
(C) the Shareholder shall have the right to settle, adjust or
compromise such claim or Legal Proceeding with the consent of Parent; provided,
however, that such consent shall not be unreasonably withheld.
The Shareholder shall give Parent prompt notice of the commencement of any such
Legal Proceeding against the Shareholder; provided, however, that any failure on
the part of the Shareholder to so notify the Parent shall not limit any of the
obligations of the Shareholder under this SECTION 9 (except to the extent such
failure materially prejudices the defense of such Legal Proceeding).
9.9 EXERCISE OF REMEDIES BY INDEMNITEES OTHER THAN PARENT OR THE
SHAREHOLDER. Parent (or any successor thereto or assign thereof) and the
Shareholder shall be the only Persons permitted to assert any indemnification
claim or exercise any other remedy under this Agreement unless Parent (or any
successor thereto or assign thereof) or the Shareholder, as the case may be,
shall have consented to the assertion of such indemnification claim or the
exercise of such other remedy.
9.10 METHOD OF PAYMENT. In the event the Designated Parent Stock Price
(calculated at the time of claim for indemnification) is greater than $15.30,
any claims for indemnification against the Shareholder pursuant to SECTION 9.2
may first be satisfied from the Escrow Shares at the Shareholder's option.
Notwithstanding the preceding sentence, for purposes of the payment of Escrow
Shares in satisfaction of such indemnification obligations, the Escrow Shares
shall be valued at the Designated Parent Stock Price.
SECTION 10. MISCELLANEOUS PROVISIONS
10.1 FURTHER ASSURANCES. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.
10.2 FEES AND EXPENSES. Each party to this Agreement shall bear and pay
all fees, costs and expenses (including legal fees and accounting fees) that
have been incurred or that are incurred by such party in connection with the
transactions contemplated by this Agreement, including all fees, costs and
expenses incurred by such party in connection with or by virtue of (a) the
investigation and review conducted by Parent and its Representatives with
respect to the Company's business (and the furnishing of information to Parent
and its Representatives in connection with such investigation and review), (b)
the negotiation, preparation and review of this Agreement (including the
Disclosure Schedule) and all agreements, certificates, opinions and other
instruments and documents delivered or to be delivered in connection with the
transactions contemplated by this
40.
<PAGE>
Agreement, (c) the preparation and submission of any filing or notice required
to be made or given in connection with any of the transactions contemplated by
this Agreement, and the obtaining of any Consent required to be obtained in
connection with any of such transactions, and (d) the consummation of the
Merger; provided, however, that, to the extent the total amount of all such
fees, costs and expenses incurred by or for the benefit of the Company
(including all such fees, costs and expenses incurred prior to the date of this
Agreement and including the amount of all special bonuses and other amounts that
may become payable to any officers of the Company or other Persons in connection
with the consummation of the transactions contemplated by this Agreement,
excluding amounts payable pursuant to Employment Agreements referenced at
Exhibit H and J) exceeds [*] in the aggregate, such fees, costs and expenses
shall be borne and paid by the Shareholder and not by the Company.
10.3 BROKERS. None of the parties hereto has agreed or become obligated to
pay, or has taken any action that might result in any party claiming to be
entitled to receive, any brokerage commission, finder's fee or similar
commission or fee in connection with any of the transactions contemplated by
this Agreement. The Shareholder agrees to indemnify and hold harmless the
Indemnitees from and against, and shall compensate and reimburse any of the
Indemnitees for, Damages suffered or incurred as a result of a breach of the
foregoing representation on behalf of the Company of the Shareholder. Parent
agrees to indemnify and hold harmless the Shareholder from and against, and
shall compensate and reimburse the Shareholder for, Damages suffered or incurred
as a result of a breach of the foregoing representation on behalf of Parent.
10.4 ATTORNEYS' FEES. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
10.5 NOTICES. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
IF TO PARENT:
Award Software International, Inc.
777 East Middlefield Road
Mountain View, CA 94043-4023
Attn: Kevin J. Berry
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
41.
<PAGE>
with a copy (not constituting notice) to:
James C. Kitch, Esq.
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
IF TO THE COMPANY:
Unicore Software, Inc.
1538 Turnpike Street
North Andover, MA 01845
Attn: President
IF TO THE SHAREHOLDER:
Pierre A. Narath
c/o Unicore Software, Inc.
1538 Turnpike Street
North Andover, MA 01845
Attn: Pierre A. Narath
with a copy (not constituting notice) to:
Mark E. Tully, Esq.
Devine, Millimet & Branch, Professional Association
12 Essex Street
Andover, MA 01810
10.6 CONFIDENTIALITY. Without limiting the generality of anything
contained in SECTION 5.2, on and at all times after the Closing Date, the
Shareholder and the Company shall keep confidential, and shall not use or
disclose to any other Person, any non-public document or other non-public
information in such Shareholder's possession that relates to the business,
financial condition, results of operations or prospects of the Company or
Parent. In the event the Closing does not occur, Parent shall continue to abide
by its obligations under SECTION 4.1.
10.7 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
10.8 HEADINGS. The underlined headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
10.9 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
42.
<PAGE>
10.10 GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed in all respects by, the internal laws of the State of
California (without giving effect to principles of conflicts of laws).
10.11 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon: the
Company and its successors and assigns (if any); the Shareholder and its
respective personal representatives, executors, administrators, estates, heirs,
successors and assigns (if any); Parent and its successors and assigns (if any);
and Merger Sub and its successors and assigns (if any). This Agreement shall
inure to the benefit of: the Company; the Company's shareholders (to the extent
set forth in SECTION 1.5); the holders of assumed Company Options (to the extent
set forth in SECTION 1.6); Parent; Merger Sub; the other Indemnitees (subject to
SECTION 9.6); and the respective successors and assigns (if any) of the
foregoing. Parent may freely assign any or all of its rights under this
Agreement (including its indemnification rights under SECTION 9), in whole or in
part, to any other Person without obtaining the consent or approval of any other
party hereto or of any other Person; provided, however, that Parent shall have
no right to assign its obligations under this Agreement.
10.12 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). The parties to
this Agreement agree that, in the event of any breach or threatened breach by
any party to this Agreement of any covenant, obligation or other provision set
forth in this Agreement for the benefit of any other party to this Agreement,
such other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision, and (b) an injunction restraining such breach or threatened breach.
10.13 WAIVER.
(A) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(B) No Person shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
10.14 AMENDMENTS. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.
43.
<PAGE>
10.15 SEVERABILITY. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
10.16 PARTIES IN INTEREST. Except for the provisions of SECTIONS 1.5, 1.6
and 9, none of the provisions of this Agreement is intended to provide any
rights or remedies to any Person other than the parties hereto and their
respective successors and assigns (if any).
10.17 ENTIRE AGREEMENT. This Agreement and the other agreements referred
to herein set forth the entire understanding of the parties hereto relating to
the subject matter hereof and thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter hereof and thereof.
10.18 CONSTRUCTION.
(A) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
(B) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(C) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
(D) Except as otherwise indicated, all references in this Agreement
to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.
44.
<PAGE>
The parties hereto have caused this Agreement to be executed and delivered
as of May 29, 1997.
AWARD SOFTWARE INTERNATIONAL, INC.,
a California corporation
By: \s\ Kevin J. Berry
-------------------------------------------
Name: Kevin J. Berry
-----------------------------------------
Title: Chief Financial Officer
----------------------------------------
AWARD ACQUISITION SUB CORP.,
a Delaware corporation
By: \s\ Kevin J. Berry
-------------------------------------------
Name: Kevin J. Berry
-----------------------------------------
Title: President
----------------------------------------
UNICORE SOFTWARE, INC.,
a Massachusetts corporation
By: \s\ Pierre A. Narath
-------------------------------------------
Pierre A. Narath, President and Treasurer
\s\ Pierre A. Narrath
----------------------------------------------
PIERRE A. NARATH
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
45.
<PAGE>
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction involving:
(A) the sale, license, disposition or acquisition of all or a material
portion of the Company's or the Subsidiary's business or assets;
(B) the issuance, disposition or acquisition of (i) any capital stock
or other equity security of the Company, (ii) any option, call, warrant or right
(whether or not immediately exercisable) to acquire any capital stock or other
equity security of the Company or the Subsidiary, or (iii) any security,
instrument or obligation that is or may become convertible into or exchangeable
for any capital stock or other equity security of the Company or the Subsidiary;
or
(C) any merger, consolidation, business combination, reorganization or
similar transaction involving the Company or the Subsidiary.
AGREEMENT. "Agreement" shall mean the Agreement and Plan of Merger and
Reorganization, as it may be amended from time to time.
COMPANY CONTRACT. "Company Contract" shall mean any Contract: (a) to
which the Company or the Subsidiary is a party; (b) by which the Company or the
Subsidiary or any of their assets is or may become bound or under which the
Company or the Subsidiary has, or may become subject to, any obligation; or (c)
under which the Company or the Subsidiary has or may acquire any right or
interest.
COMPANY PROPRIETARY ASSET. "Company Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Company or the Subsidiary or
otherwise used by the Company or the Subsidiary.
CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTRACT. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan or legally binding commitment or undertaking of
any nature.
DAMAGES. "Damages" shall include any loss, damage, injury, liability,
claim, demand, settlement, judgment, award, fine, penalty, Tax, fee (including
reasonable attorneys' fees), charge, cost (including costs of investigation) or
expense of any nature.
A-1
<PAGE>
DISCLOSURE SCHEDULE. "Disclosure Schedule" shall mean the schedule (dated
and delivered as of the date of the Agreement), which is arranged in parts
corresponding to the numbered and lettered subsections in SECTION 2 and
identifies the exception with particularity, describes the relevant facts in
reasonable detail and states with specificity the subsection to which each
disclosure or exception is made, delivered to Parent on behalf of the Company
and the Shareholder. No disclosure or exception in the Disclosure Schedule
shall be adequate to disclose an exception to a representation or warranty
unless such disclosure satisfies the requirements set forth in the preceding
sentence.
ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
ENTITY. "Entity" shall mean any corporation (including any non profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.
(I) nation, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign or other government; or (c) governmental or quasi
governmental authority of any nature (including any governmental division,
department, agency, commission, instrumentality, official, organization, unit,
body or Entity and any court or other tribunal).
(II) Parent; (b) Parent's current and future affiliates (including the
Surviving Corporation); (c) the respective Representatives of the Persons
referred to in clauses "(a)" and "(b)" above; and (d) the respective successors
and assigns of the Persons referred to in clauses "(a)", "(b)" and "(c)" above;
provided, however, that the Shareholder shall not be deemed to be "Indemnitees."
A-2
<PAGE>
GOVERNMENTAL BODY. "Governmental Body" shall mean any:
(A) nation, principality, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature;
(B) federal, state, local, municipal, foreign or other government.
(C) governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department, agency, bureau,
branch, office, commission, council, board, instrumentality, officer, official,
representative, organization, unit, body or Entity and any court or other
tribunal);
(D) multi-national organization or body; or
(E) individual, Entity or body exercising, or entitled to exercise,
any executive, legislative, judicial, administrative, regulatory, police,
military or taxing authority or power of any nature.
INDEMNITEES. "Indemnitees" shall mean the following Persons: (a) Parent;
(b) Parent's current and future affiliates (including the Surviving
Corporation); (c) the respective Representatives of the Persons referred to in
clauses "(a)" and "(b)" above; and (d) the respective successors and assigns of
the Persons referred to in clauses "(a)", "(b)" and "(c)" above; provided,
however, that the Shareholder shall not be deemed to be an "Indemnitee."
LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body.
MATERIAL ADVERSE EFFECT. An event, violation, inaccuracy, circumstance or
other matter will be deemed to have a "Material Adverse Effect" on the Company
if such event, violation, inaccuracy, circumstance or other matter (considered
together with all other matters that would constitute exceptions to the
representations and warranties set forth in the Agreement or in the
Shareholder's Closing Certificate but for the presence of "Material Adverse
Effect" or other materiality qualifications, or any similar qualifications, in
such representations and warranties) could be reasonably expected to have a
material adverse effect on the Company's or the Subsidiary's business,
condition, assets, liabilities, operations or financial performance or, in the
reasonable good faith belief of the Company or the Shareholder, the Company's or
the Subsidiary's prospects.
A-3
<PAGE>
PERSON. "Person" shall mean any individual, Entity or Governmental Body.
PROPRIETARY ASSET. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service mark (whether
registered or unregistered), service mark application, copyright (whether
registered or unregistered), copyright application, trade secret, know-how,
customer list, franchise, system, computer software, computer program,
invention, design, blueprint, engineering drawing, proprietary product,
technology, proprietary right or other intellectual property right or intangible
asset; or (b) right to use or exploit any of the foregoing.
REPRESENTATIVES. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
TAX. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
TAX RETURN. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
A-4
<PAGE>
REGISTRATION RIGHTS AGREEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Section 1.General......................................................... 1
1.1 Definitions................................................ 1
Section 2.Registration.................................................... 2
2.1 Piggyback Registrations.................................... 2
2.2 Form S-3 Registration...................................... 3
2.3 Expenses of Registration................................... 4
2.4 Obligations of the Company................................. 4
2.5 Termination of Registration Rights......................... 5
2.6 Delay of Registration; Furnishing Information.............. 5
2.7 Indemnification............................................ 6
2.8 "Market Stand-Off" Agreement............................... 8
2.9 Amendment of Registration Rights........................... 8
2.10 Rule 144 Reporting......................................... 8
Section 3.Miscellaneous................................................... 9
3.1 Governing Law.............................................. 9
3.2 Assignment................................................. 9
3.3 Entire Agreement........................................... 9
3.4 Severability............................................... 9
3.5 Amendment and Waiver....................................... 9
3.6 Delays or Omissions........................................ 9
3.7 Notices.................................................... 9
3.8 Attorneys' Fees............................................ 10
3.9 Titles and Subtitles....................................... 10
3.10 Counterparts............................................... 10
3.11 Parties in Interest........................................ 10
</TABLE>
i.
<PAGE>
Exhibit 10.18
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of May 30, 1997, by and among AWARD SOFTWARE INTERNATIONAL,
INC., a California corporation (the "Company" or "Award"), and PIERRE A. NARATH,
an individual and sole shareholder of Unicore Software, Inc. ("Narath").
RECITALS
A. Execution and delivery of this Agreement is made as a condition to
closing a certain Agreement and Plan of Merger and Reorganization ("Merger
Agreement") dated as of May 29, 1997 by and among Award, Award Acquisition Sub
Corp., a Delaware corporation and a wholly owned subsidiary of Award ("Merger
Sub"), Unicore Software, Inc., a Massachusetts corporation ("Unicore"), and
Narath, an individual and sole shareholder of Unicore pursuant to which Unicore
will merge with and into Merger Sub (the "Merger"). Upon consummation of the
Merger, Unicore will cease to exist, and Merger Sub will be a wholly owned
subsidiary of Award.
B. This Agreement is entered into as a condition to Merger
Agreement.
AGREEMENT
NOW, THEREFORE, the parties hereto, intending to be legally bound,
mutually agree as follows:
SECTION 1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"HOLDER" means any person owning of record Registrable Securities.
"REGISTER," "REGISTERED," AND "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"REGISTRABLE SECURITIES" means the Shares; provided, however,
notwithstanding the foregoing, Registrable Securities shall not include any
securities sold to the public either pursuant to a registration statement or
Rule 144 or sold in a private transaction, or securities eligible for resale
pursuant to Rule 144(k).
1.
<PAGE>
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 2.1, 2.2 and 2.3 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements not
to exceed Twenty-five Thousand Dollars ($25,000) of a single special counsel for
the Holder, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"SHARES" shall mean shares of the Company's Common Stock issued to
Narath, a Holder, pursuant to the Merger Agreement.
"FORM S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"SEC" OR "COMMISSION" means the Securities and Exchange Commission.
SECTION 2. REGISTRATION
2.1 PIGGYBACK REGISTRATIONS. The Company shall notify the Holder of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) and will afford the Holder an opportunity to
include in such registration statement all of such Registrable Securities held
by the Holder. The Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by it shall, within
fifteen (15) days after the above-described notice from the Company, so notify
the Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities by the Holder. If the Holder decides
not to include all of its Registrable Securities in any registration statement
thereafter filed by the Company, the Holder shall nevertheless continue to have
the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.
(A) UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 2.1 is for an underwritten offering, the
Company shall so advise the Holder of Registrable Securities. In such event,
the right of the Holder to be included in a registration pursuant to this
Section 2.1 shall be conditioned upon the Holder's participation in such
underwriting and the inclusion of the Holder's Registrable Securities in the
underwriting to
2.
<PAGE>
the extent provided herein. The Holder shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by the Company. Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to any shareholder of the Company (other than the Holder)
possessing rights entitling such shareholder to have its shares of Common Stock
registered on a pro rata basis; and third, to the Holder. No such reduction
shall reduce the securities being offered by the Company for its own account to
be included in the registration and underwriting.
(B) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.1 prior to the effectiveness of such registration whether or not the
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.3 hereof.
2.2 FORM S-3 REGISTRATION. In case the Company shall receive from the
Holder a written request or requests that the Company effect a registration on
Form S-3 (or any successor to Form S-3) or any similar short-form registration
statement and any related qualification or compliance with respect to all or a
part of the Registrable Securities owned by the Holder, the Company will:
(A) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of the Holder's
Registrable Securities as are specified in such request; provided, however, that
the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 2.2:
(I) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holder, or
(II) if the Holder, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at an aggregate
price to the public of less than $1,000,000, or
(III) if the Company shall furnish to the Holder a certificate
signed by the Chairman of the Board of Directors of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholder for such Form S-3
registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than one hundred eighty (180) days after receipt of the
request of the Holder under this Section 2.2: provided, that such right to delay
a request shall be exercised by the Company not more than once in any twelve
(12) month period, or
3.
<PAGE>
(IV) if the Company has, within the twelve (12) month period
preceding the date of such request, already effected one (1) registration on
Form S-3 for the Holder pursuant to this Section 2.2, or
(V) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent to service
of process in effecting such registration, qualification or compliance.
(B) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request by the Holder. All such Registration Expenses incurred in connection
with registrations requested pursuant to this Section 2.2 after the first
registration shall be paid by the Holder.
2.3 EXPENSES OF REGISTRATION. Except as specifically provided herein, all
Registration Expenses incurred in connection with the registration,
qualification or compliance pursuant to any registration under Section 2.1 or
the first registration under Section 2.2 herein shall be borne by the Company.
All Selling Expenses incurred in connection with any registrations hereunder,
shall be borne by the Holder. The Company shall not, however, be required to pay
for expenses of any registration proceeding begun pursuant to Section 2.2, the
request of which has been subsequently withdrawn by the Holder unless the
withdrawal is based upon material adverse information concerning the Company of
which the Holder was not aware at the time of such request.
2.4 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
(A) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all commercially reasonable
efforts to cause such registration statement to become effective.
(B) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement and deliver a copy of such amendments and supplements to
Holder as may be reasonably requested.
(C) Furnish to the Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities.
(D) Use all commercially reasonable efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holder, provided that the Company
4.
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shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.
(E) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. The Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(F) Notify the Holder of Registrable Securities covered by such
registration statement at any time when a prospectus (including any information
incorporated therein by reference pursuant to Form S-3) relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(G) Furnish, at the request of the Holder participating in the
registration, on the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through underwriters,
or, if such securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes effective,
(i) an opinion, dated as of such date, of the counsel representing the Company
for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering and reasonably
satisfactory to the Holder requesting registration, addressed to the
underwriters, if any, and to the Holder requesting registration of Registrable
Securities and (ii) a letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering and reasonably satisfactory to the Holder
requesting registration, addressed to the underwriters, if any, and if permitted
by applicable accounting standards, to the Holder requesting registration of
Registrable Securities.
2.5 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect five
(5) years after the date hereof.
2.6 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(A) The Holder shall not have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(B) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.1 or 2.2 that the Holder
furnish to the Company such information regarding himself, the Registrable
Securities held by him and the intended method of disposition of such securities
as shall be required to effect the registration of the Registrable Securities.
5.
<PAGE>
(C) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.1 or Section 2.2 if, due to the
operation of subsection 2.6(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in Section 2.2.
2.7 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.1 or 2.2:
(A) To the extent permitted by law, the Company will indemnify and
hold harmless the Holder and legal counsel of the Holder, any underwriter (as
defined in the Securities Act) for the Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company will reimburse the
Holder, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided however, that the
indemnity agreement contained in this Section 2.7(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person of the
Holder.
(B) To the extent permitted by law, the Holder will, if Registrable
Securities held by the Holder are included in the securities as to which such
registration qualifications or compliance is being effected, indemnify and hold
harmless the Company, each of its directors, its officers, and legal counsel and
each person, if any, who controls the Company within the meaning of the
Securities Act, and any underwriter, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, or underwriter may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
6.
<PAGE>
extent) that the Violation occurs in reliance upon and in conformity with
written information furnished by the Holder under an instrument duly executed by
the Holder and stated to be specifically for use in connection with such
registration; and the Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, or underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action if it is judicially determined that
there was such a Violation; provided, however, that the indemnity agreement
contained in this Section 2.7(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not be
unreasonably withheld; provided further, that in no event shall any indemnity
under this Section 2.7 exceed the proceeds from the offering received by the
Holder.
(C) Promptly after receipt by an indemnified party under this Section
2.7 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.7, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.7, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.7.
(D) If the indemnification provided for in this Section 2.7 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by the
Holder hereunder exceed the proceeds from the offering received by the Holder.
7.
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(E) The obligations of the Company and the Holder under this Section
2.7 shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
2.8 "MARKET STAND-OFF" AGREEMENT. If requested by the Company as the
representative of the underwriters of Common Stock (or other securities) of the
Company, the Holder shall not sell or otherwise transfer or dispose of any
Shares of Common Stock (or other securities) of the Company held by the Holder
(other than those included in the registration) for a period specified by the
representative of the underwriters not to exceed one hundred eighty (180) days
following the effective date of a registration statement of the Company filed
under the Securities Act, provided that all officers and directors of the
Company shall enter into similar agreements.
The obligations described in this Section 2.8 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose stop-
transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.
2.9 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2 may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 2.9 shall be
binding upon the Holder and the Company. By acceptance of any benefits under
this Section 2, Holder of Registrable Securities hereby agree to be bound by the
provisions hereunder.
2.10 RULE 144 REPORTING. With a view to making available to the Holder the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:
(A) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
(B) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act;
(C) So long as the Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to
its compliance with
8.
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the reporting requirements of said Rule 144 of the Securities Act, and of the
Exchange Act (at any time after it has become subject to such reporting
requirements); a copy of the most recent annual or quarterly report of the
Company; and such other reports and documents as the Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
SECTION 3. MISCELLANEOUS.
3.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
3.2 ASSIGNMENT. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto.
Neither party hereto may assign any of its rights or delegate any of its
obligations under this Agreement to any other person or entity without the prior
written consent of the other party hereto.
3.3 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules hereto,
the Merger Agreement and the other documents delivered pursuant thereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
3.4 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
3.5 AMENDMENT AND WAIVER. Except as otherwise expressly provided, this
Agreement may be amended or modified, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only upon the written consent of the Company
and the Holder.
3.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to the Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
the Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to the Holder, shall be cumulative and
not alternative.
3.7 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent
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by confirmed telex or facsimile if sent during normal business hours of the
recipient; if not, then on the next business day, (iii) five (5) days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (iv) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the party to be notified at the
address as set forth on the signature pages hereof or at such other address as
such party may designate by ten (10) days advance written notice to the other
parties hereto.
3.8 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
3.9 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
3.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
3.11 PARTIES IN INTEREST. Nothing in this Agreement is intended to
provide any rights or remedies to any person or entity other than the parties
hereto.
10.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date set forth in the first paragraph hereof.
AWARD SOFTWARE INTERNATIONAL, INC.
By:_________________________________
Kevin J. Berry
Chief Executive Officer
Address: 777 E. Middlefield Road
Mountain View, CA 94043
Telephone: (415) 968-4433
Fax: (415) 968-0274
Attn: President
_____________________________________
PIERRE A. NARATH
Address: __________________________
__________________________
__________________________
Telephone: (___) ________
Fax: (___) ________
11.
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ESCROW AGREEMENT EXHIBIT 10.19
ESCROW AGREEMENT (this "Agreement") dated as of May 30, 1997 among AWARD
SOFTWARE INTERNATIONAL, INC., a California corporation ("Award"), PIERRE A.
NARATH (the "Shareholder"), and FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
as escrow agent (the "Escrow Agent").
RECITALS
A. Award and its wholly owned subsidiary, Award Acquisition Sub Corp., a
Delaware corporation ("Merger Sub"), have executed a definitive Agreement and
Plan of Merger and Reorganization dated as of May 29, 1997 (the "Merger
Agreement") with Unicore Software, Inc. ("Unicore") and the Shareholder pursuant
to which Merger Sub will merge with and into Unicore. Capitalized terms used
herein unless otherwise defined herein shall have the meanings set forth in the
Merger Agreement.
B. Pursuant to the Merger Agreement, a certain number of the shares of
Common Stock of Award, no par value, otherwise issuable to the Shareholder under
the Merger Agreement (the "Escrow Shares"), will be deposited by Award into the
escrow fund created hereby.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
agree as follows:
SECTION 1. ESTABLISHMENT OF ESCROW.
(A) Pursuant to Section 1.12 of the Merger Agreement, simultaneously
with the Closing, Award will deposit with the Escrow Agent a stock certificate
in the name of the Escrow Agent (or its nominee) representing the Escrow Shares,
to be held in an account designated as "Award Software International, Inc.
Escrow Account" or having a similar designation and disbursed in accordance with
the terms hereof. The Escrow Agent agrees to accept the Escrow Shares and to
hold and distribute them in the manner provided herein.
(B) All dividends and distributions (other than cash dividends and
distributions) made by Award with respect to the Escrow Shares will be paid or
made to the Escrow Agent to be held in escrow with the other Escrow Shares as
provided herein as additional assets of the escrow to satisfy indemnification
claims in accordance with Section 9 of the Merger Agreement. Such dividends and
distributions shall be deemed to be a part of the Escrow Shares to which they
relate. Cash dividends and distributions, if any, with respect to the Escrow
Shares will be made by Award directly to the Shareholder for whose account such
shares are being held hereunder. If a meeting or written action of shareholders
of Award occurs while this Escrow Agreement is still in effect, the Escrow Agent
shall promptly send to the Shareholder copies of any notices, proxies and proxy
materials in connection with such meeting or written action. The Escrow Agent
shall vote the Escrow Shares in accordance with the instructions set forth in
any proxies returned to
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the Escrow Agent by the Shareholder. If no proxy is received, the Escrow Agent
shall not vote such shares.
(C) The Merger shall become effective as of the Effective Time.
SECTION 2. PAYMENT BY ESCROW AGENT WITH RESPECT TO THE ESCROW SHARES.
(A) NOTICES OF CLAIMS AND DISPUTE NOTICES.
(I) If Award reasonably believes that it, or any other Indemnitee
entitled to indemnification under Section 9.2 of the Merger Agreement (the
"Award Indemnitees"), has or may suffer a loss that entitles or may entitle it
to indemnification under the Merger Agreement, Award may deliver to the Escrow
Agent a written notice (a "Notice of Claim") setting forth in reasonable detail
the nature of the claim, an estimate of the aggregate amount at that time to
which Award believes such Award Indemnitee is, or may be, entitled to be paid
pursuant to the Merger Agreement. Award shall send a copy of each Notice of
Claim to the Shareholder no later than the date on which such Notice of Claim
was sent to the Escrow Agent. Each Notice of Claim delivered to the Escrow
Agent shall include a certification that Award has sent a copy of such Notice of
Claim to the Shareholder.
(II) The Escrow Agent shall deliver to Award's transfer agent (the
"Transfer Agent") Escrow Shares in exchange for a new stock certificate
representing a number of shares of Award Common Stock (which will remain Escrow
Shares) equal to the number of Escrow Shares previously held by the Escrow
Agent, less the number of Escrow Shares having a value (such value to be
determined pursuant to Section 2(e) hereof) equal to the amount set forth in a
Notice of Claim as soon as practicable, but no earlier than 20 business days
following receipt by the Escrow Agent of such Notice of Claim; provided,
however, that if within the period of 20 business days following receipt by the
Escrow Agent of such Notice of Claim the Escrow Agent shall have received from
the Shareholder a written notice (a "Dispute Notice") stating that he disputes
the validity or the amount specified in such Notice of Claim or any portion
thereof (a "Disputed Amount"), the Escrow Agent shall not deliver the Escrow
Shares as provided above for any such disputed amount other than pursuant to
Section 2(b). Any fractional interests will be carried forward until the
distribution of Escrow Shares to the Shareholder, at which time fractional
interests will be rounded in the discretion of Award. Without altering the
Escrow Agent's obligations set forth herein, the Shareholder shall include in
each Dispute Notice, reasonable detail of the nature of the Shareholder's
dispute. The Shareholder shall send a copy of each Dispute Notice to Award no
later than the date on which such Dispute Notice was sent to the Escrow Agent.
Each Dispute Notice delivered to the Escrow Agent shall include a certification
that the Shareholder has sent a copy of such Dispute Notice to Award.
(III) If the Escrow Agent shall not have received a Dispute Notice with
respect to the validity or amount specified in a Notice of Claim, or a portion
thereof, within the period of 20 business days following its receipt of such
Notice of Claim, the Shareholder and Award agree that the Escrow Agreement shall
deliver to the Transfer Agent the number of Escrow Shares having a value equal
to the amount set forth in the Notice of Claim. In the event of a Disputed
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Amount or any other dispute regarding this Escrow Agreement, Award and the
Shareholder shall in good faith negotiate to settle such Disputed Amount.
(B) DISPUTED AMOUNTS. Upon receipt by the Escrow Agent of a notice (a
"Resolution Notice") from Award and/or the Shareholder with respect to a
Disputed Amount specifying the amount of such Disputed Amount to which any Award
Indemnitee is entitled, accompanied by (A) a written agreement between Award and
the Shareholder with respect to such Disputed Amount, or (B) a final non-
appealable order of a court of competent jurisdiction determining that Award is
entitled to indemnification, the Escrow Agent shall cause to be delivered to
such Award Indemnitee the Escrow Shares having a value equal to the amount to
which such Award Indemnitee, or any other Award Indemnitee is entitled, if any.
(C) DISTRIBUTION OF ESCROW SHARES TO THE SHAREHOLDER.
(I) Within 20 business days after the Termination Date (as
defined below), the Escrow Agent shall deliver the stock certificate
representing the Escrow Shares to the Transfer Agent in exchange for:
(1) stock certificate for and in the name of the
Shareholder; provided, however, that the Escrow Agent shall exclude from such
number of Escrow Shares a number of Escrow Shares equal to the number of Escrow
Shares subject to any outstanding and unresolved Notices of Claim (based on the
amounts set forth in the Notice of Claim, whether or not a Dispute Notice has
been delivered with respect thereto, unless such dispute has been subsequently
resolved);
(2) if applicable, a new stock certificate in the name of
the Escrow Agent representing the aggregate number of Escrow Shares as to which
Notices of Claim are outstanding and not resolved.
In the event that on the Termination Date (as defined below)
all the matters set forth in any previously delivered Notice of Claim have not
been finally resolved, then a number of Escrow Shares shall be withheld from the
distribution described above in order to provide for the remaining
indemnification obligations of the Shareholder. The "Termination Date" shall
mean the first anniversary of the date hereof.
Upon receipt of such stock certificates from the Transfer
Agent, the Escrow Agent will promptly deliver such stock certificates for and in
the name of the Shareholder at such address as the Shareholder shall direct, and
the Escrow Agent will retain the new stock certificate in its name pending
resolution of all outstanding and unresolved claims.
(II) If at any time after the Termination Date there are Escrow
Shares in excess of outstanding Notices of Claim due to the resolution of such
outstanding claims, either Award or the Shareholder may deliver a certificate to
that effect to the Escrow Agent with a copy to the other party, and if no
written objection has been delivered within 20 business days by the other party,
a distribution will be effected, as provided in clause (i).
3.
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(D) VALUATION OF ESCROW SHARES. For purposes of this Section 2,
Escrow Shares shall be valued at $14.00 per share (i.e. the Designated Parent
Stock Price, as defined in the Merger Agreement). The Escrow Agent shall be
under no duty or responsibility with regard to the valuation of the Escrow
Shares.
(E) GENERAL PROVISIONS.
(I) The Shareholder will not offer, sell, assign, pledge,
hypothecate, transfer or otherwise dispose of any Escrow Shares until released
from the Escrow Account.
(II) Award and the Shareholder shall have the right to inspect
and obtain copies of the records of the Escrow Agent upon reasonable notice and
during reasonable business hours and to receive monthly reports of the status of
the Escrow Shares.
SECTION 3. CONCERNING THE ESCROW AGENT.
(A) Escrow Agent shall not be under any duty to give the Escrow
Shares held by it hereunder any greater degree of care than it gives its own
similar property.
(B) Escrow Agent shall not be liable, except for its own gross
negligence or willful misconduct and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against Escrow Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless Escrow Agent (and any successor Escrow Agent) from
and against any and all losses, liabilities, claims, actions, damages and
expenses, including reasonable attorneys' fees and disbursements, arising out of
and in connection with this Agreement. Without limiting the foregoing, Escrow
Agent shall in no event be liable in connection with its investment or
reinvestment of any cash held by it hereunder in good faith, in accordance with
the terms hereof, including, without limitation, any liability for any delays
(not resulting from its gross negligence or willful misconduct) in the
investment or reinvestment of the Escrow Shares, or any loss of interest
incident to any such delays.
(C) Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned representative of any party
hereto which is an entity other than a natural person has full power and
authority to instruct Escrow Agent on behalf of that party unless written notice
to the contrary is delivered to Escrow Agent.
(D) Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Agreement and shall not be liable for any
action taken or omitted by it in good faith in accordance with such advice.
4.
<PAGE>
(E) Escrow Agent does not have any interest in the Escrow Shares
deposited hereunder but is serving as Escrow Agent only and having only
possession thereof. Any payments of income from this Escrow Shares shall be
subject to withholding regulations then in force with respect to United States
taxes. The parties hereto will provide Escrow Agent with appropriate Internal
Revenue Service Forms W-9 for tax identification number certification, or non-
resident alien certifications and a form of Shareholder "Non-Objection" Letter
hereto attached as Exhibit A and Exhibit B, respectively. This Section 4(e) and
Section 4(b) shall survive notwithstanding any termination of this Agreement or
the resignation of Escrow Agent.
(F) Escrow Agent makes no representation as to the validity, value,
genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
(G) Escrow Agent shall not be called upon to advise any party as to
the wisdom in selling or retaining or taking or refraining from any action with
respect to any securities or other property deposited hereunder.
(H) Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Shares to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon Escrow Agent shall be discharged of and from
any and all further obligations arising in connection with this Agreement. The
resignation of Escrow Agent will take effect on the earlier of (a) the
appointment of a successor (including a court of competent jurisdiction) or (b)
the day which is thirty (30) days after the date of delivery of its written
notice of resignation to the other parties hereto. If at that time Escrow Agent
has not received a designation of a successor Escrow Agent, Escrow Agent's sole
responsibility after that time shall be to retain and safeguard the Escrow
Shares until receipt of a designation of successor Escrow Agent or a joint
written disposition instruction by the other parties hereto or a final
non-appealable order of a court of competent jurisdiction.
(I) In the event of any disagreement between the other parties hereto
resulting in adverse claims or demands being made in connection with the Escrow
Shares or in the event that Escrow Agent is in doubt as to what action it should
take hereunder, Escrow Agent shall be entitled to retain the Escrow Shares until
Escrow Agent shall have received (i) a final non-appealable order of a court of
competent jurisdiction directing delivery of the Escrow Shares or (ii) a written
agreement executed by the other parties hereto directing delivery of the Escrow
Shares, in which event Escrow Agent shall disburse the Escrow Shares in
accordance with such order or agreement. Escrow Agent shall act on such court
order without further question.
(J) Award shall pay Escrow Agent compensation (as payment in full)
for the services to be rendered by Escrow Agent hereunder pursuant to the fee
schedule attached hereto as Exhibit C.
(K) The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States central
securities depository it reasonably deems appropriate, including, without
limitation, the Depository Trust Company and the Federal Reserve Book Entry
System.
5.
<PAGE>
(L) Escrow Agent may resign at any time upon giving at least thirty
(30) days written notice to the Parties; provided, however, that no such
resignation shall become effective until the appointment of a successor escrow
agent which shall be accomplished as follows: The Parties shall use their best
efforts to mutually agree on a successor escrow agent within thirty (30) days
after receiving such notice. If the Parties fail to agree upon a successor
escrow agent within such time, Escrow Agent shall have the right to appoint a
successor escrow agent authorized to do business in the state of California. The
successor escrow agent shall execute and deliver an instrument accepting such
appointment and it shall, without further acts, be vested with all the estates,
properties, rights, powers, and duties of the predecessor escrow agent as if
originally named as escrow agent. Escrow Agent shall be discharged from any
further duties and liability under this Agreement.
(M) Any company into which the Escrow Agent may be merged or with
which it may be consolidated, or any company to whom Escrow Agent may transfer a
substantial amount of its Global Escrow business, shall be the Successor the
Escrow Agent without the execution or filing of any paper or any further act on
the part of any of the Parties, anything herein to the contrary notwithstanding.
SECTION 4. LIMITED RESPONSIBILITY
This Agreement expressly sets forth all the duties of Escrow Agent
with respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this Agreement against Escrow Agent. Escrow
Agent shall not be bound by the provisions of any agreement among the other
parties hereto except this Agreement.
SECTION 5. MISCELLANEOUS PROVISIONS.
(A) All notices, consents and other communications under this Escrow
Agreement shall be in writing and shall, except as otherwise provided herein, be
deemed to have been duly given when (i) delivered by hand, (ii) sent by telex or
telecopier (with receipt confirmed), provided that a copy is mailed by certified
mail, return receipt requested, or (iii) when received by the addressee, if sent
by Express Mail, Federal Express or other express delivery service (receipt
requested), in each case, at the appropriate addresses, telex numbers and
telecopier numbers as set forth below:
6.
<PAGE>
ESCROW AGENT:
First Trust of California, National Association
One California Street
4th Floor
San Francisco, CA 94111
Attention: Carol Andreacci
Telephone: (415) 273-4536
Telecopier: (415) 273-4593
TRANSFER AGENT:
Boston EquiServe
150 Royall Street
Canton, MA 02021
Attention: Jane Leech
Telephone: (617) 575-4190
Telecopier: (617) 575-2549
AWARD:
Award Software International, Inc.
777 East Middlefield Road
Mountain View, CA 94043-4023
Attention: Kevin J. Berry
Telephone: (415) 968-4433
Telecopier: (415) 968-0274
WITH A COPY TO:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
Attention: James C. Kitch
Telephone: (415) 843-5027
Telecopier: (415) 857-0663
7.
<PAGE>
THE SHAREHOLDER:
Pierre A. Narath
c/o Unicore Software, Inc.
1538 Turnpike Street
North Andover, MA 01845
Attention: Pierre A. Narath
Telephone: (508) 686-6468
Telecopier: (508) 887-4942
WITH A COPY TO:
Devine, Millimet & Branch, Professional Associates
12 Essex Street
Andover, MA 01810
Attention: Mark E. Tully, Esq.
Telephone: (508) 475-9100
Telecopier: (508) 470-0618
(or to such other addresses, telex numbers and telecopier numbers as a party may
designate as to itself by notice to the other parties). Notwithstanding any of
the foregoing, no notice or instructions to the Escrow Agent shall be deemed to
have been received by it prior to actual receipt, no notice to the Escrow Agent
shall be deemed effective until such receipt by it, and any computation of a
time period which is to begin after receipt of a notice by the Escrow Agent
shall run from the date of such receipt by it.
SECTION 6. OWNERSHIP FOR TAX PURPOSES
The Shareholder agrees that, for purposes of federal and other taxes
based on income, the Shareholder will be treated as the owner of the Escrow
Shares, respectively, and that it will report all income, if any, that is earned
on, or derived from, the Escrow Shares as its income, in such proportions, in
the taxable year or years in which such income is properly includible and pay
any taxes attributable thereto.
SECTION 7. JURISDICTION; SERVICE OF PROCESS
If any legal proceeding or other legal action relating to this Agreement
is brought or otherwise initiated, the venue therefor shall be in San Francisco,
California, which shall be deemed to be a convenient forum. The Shareholder and
Award hereby expressly and irrevocably consent and submit to the jurisdiction of
the courts in San Francisco, California. The Shareholder hereby expressly and
irrevocably agrees that any notice given in compliance with the provisions of
Section 5(a) shall be deemed to constitute valid service of process in
connection with any legal proceeding or other legal action relating to this
Agreement.
8.
<PAGE>
SECTION 8. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original and all of which, when taken together,
will be deemed to constitute one and the same.
SECTION 9. TABLE OF CONTENTS; SECTION HEADINGS
The headings contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement and shall not
be referred to in connection with the construction or interpretation of this
Agreement.
SECTION 10. WAIVER; SEVERABILITY
No failure on the part of any party hereto to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any party
hereto in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver thereof; and no single or partial exercise of any such
power, right, privilege or remedy shall preclude any other or further exercise
thereof or of any other power, right, privilege or remedy. In the event that
any provision of this Agreement, or the application of such provision to any
Person or set of circumstances, shall be determined to be invalid, unlawful,
void or unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
SECTION 11. EXCLUSIVE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the parties with
respect to its subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the Shareholder,
Award and the Escrow Agent.
SECTION 12. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed in
all respects by, the laws of the State of California (without giving effect to
principles of conflicts of law).
9.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Escrow Agreement
as of the date first written above.
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
By:________________________________________
Name:
Title:
AWARD SOFTWARE INTERNATIONAL, INC.
By:________________________________________
Name:
Title:
___________________________________________
PIERRE A. NARATH
ESCROW AGREEMENT
<PAGE>
EXHIBIT 10.20
AWARD SOFTWARE INTERNATIONAL, INC.
EMPLOYMENT AGREEMENT
FOR
PIERRE A. NARATH
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of May 30, 1997,
by and between PIERRE A. NARATH ("Narath") and AWARD SOFTWARE INTERNATIONAL,
INC. a California corporation (the "Company").
RECITALS
A. Execution and delivery of this Agreement is made as a closing
condition to that certain Agreement and Plan of Merger and Reorganization
("Merger Agreement") dated as of May 29, 1997 by and among Award, Award
Acquisition Sub Corp., a Delaware corporation and a wholly owned subsidiary of
Award ("Merger Sub"), Unicore Software, Inc., a Massachusetts corporation
("Unicore"), and Narath, an individual and sole shareholder of Unicore, pursuant
to which Merger Sub will merge with Unicore (the "Merger"). Upon consummation
of the Merger, Unicore will cease to exist, and Merger Sub will be the surviving
corporation and renamed "Unicore Software, Inc." (the "Surviving Corporation").
B. Execution and delivery of this Agreement is an inducement to Award to
consummate the Merger.
C. The Company desires to employ Narath to provide personal services to
the Company, and wishes to provide Narath with certain compensation and
benefits, in return for his services; and
D. Narath wishes to be employed by the Company and provide personal
services to the Company in return for certain compensation and benefits.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. EMPLOYMENT BY THE COMPANY.
-------------------------
1.1 Subject to terms set forth herein, the Company agrees to employ
Narath in the position of President of Unicore and Vice President of the Company
and Narath hereby accepts such employment effective as of the date first written
above (the "Effective Date"). During the term of his employment with the
Company, Narath will devote his best efforts and substantially all of his
business time and attention (except for
1.
<PAGE>
vacation periods as set forth herein and reasonable periods of illness or other
incapacities permitted by the Company's general employment policies) to the
business of the Company.
1.2 Narath shall serve in an executive officer and shall perform such
duties as are customarily associated with his then current title, consistent
with the Bylaws of the Company and as required by the Company's Board of
Directors (the "Board").
1.3 The employment relationship between the parties shall also be
governed by the general employment policies and practices of the Company,
including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
practices, this Agreement shall control.
1.4 The term of this Agreement shall be two (2) years commencing with
the Effective Date hereof. Subject to Section 5.1, the term of employment shall
be automatically extended for consecutive additional periods of one (1) year
each unless either the Company or Narath provides written notice to the other of
an intention not to renew not less than thirty (30) days prior to the expiration
of the then current term.
2. COMPENSATION.
------------
2.1 SALARY. Narath shall receive for services to be rendered
------
hereunder an annualized base salary of $180,000 less standard deductions and
withholdings, payable in installments in accordance with Company policy. The
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") shall perform an annual review and shall increase such
annual salary as the Compensation Committee deems appropriate in its sole
discretion; provided, however, that Narath's salary shall be increased annually
by a percentage amount equal to at least the percentage increase during the
immediately preceding twelve (12) months in the Consumer Price Index (All Items)
For All Urban Consumers For Boston, Massachusetts area, as published by the
Bureau of Labor Statistics, or if such Index is not available, the U.S.
Government Index which is the most similar thereto. At no time during the term
of this Agreement shall Narath's annual base salary fall below one hundred and
eighty thousand ($180,000.00) dollars. In addition, if Narath's annual base
salary is increased at any time during the term of this Agreement, Narath's
increased annual base salary shall become a floor below which Narath's annual
base salary shall not fall at any future time during the term of this Agreement.
2.2 COMMISSION. Narath shall be entitled to receive a sales
----------
commission payable monthly based on net revenues of the Surviving Corporation.
For the fiscal year ending December 31, 1997, Narath shall be entitled to
receive three percent (3.0%) of Unicore net revenues and one and one-half
percent (1.5%) of Award net revenues for the calendar year. For purposes of
this Section 2.2, "Unicore net revenues" shall mean the revenues of the
Surviving Corporation and its wholly owned subsidiary corporation, Microid
Research, Inc., net of returns and allowances determined in accordance with
generally accepted accounting principles ("GAAP") as applied by the Company.
For
2.
<PAGE>
purposes of this Section 2.2, "Award net revenues" shall mean the revenues of
the Company from the sale of the Company's products through the Company's German
branch office net of returns and allowances determined in accordance with GAAP
as applied by the Company; provided, however, notwithstanding anything contained
herein to the contrary, Award net revenues shall not include for purposes of
calculating the sales commission in respect thereof Unicore net revenues. After
the fiscal year ending December 31, 1997, the Compensation Committee shall
determine in its discretion the amount of sales commission Narath shall be
entitled to earn taking into consideration Narath's responsibilities and
performance goals; provided, however, at no time during the term of this
Agreement shall Narath's Target Compensation to which he shall be entitled to
receive be less than his Target Compensation for the fiscal year ending December
31, 1997. For purposes of this Agreement, Target Compensation shall be annual
compensation composed of (a) annual base salary described in Section 2.1 and (b)
the sales commission compensation described in this Section 2.2; provided,
however, notwithstanding anything contained herein to the contrary, Target
Compensation shall not mean a guaranteed payment owed to Narath, but the right
to earn and receive (if earned) sales commission compensation. The Target
Compensation for fiscal year ending December 31, 1997 shall be $285,000.
2.3 PARTICIPATION IN BENEFIT PLANS. Narath shall be entitled to
------------------------------
participate in, and receive benefits under, all the Company's employee benefit
plans and arrangements as set forth on Exhibit A hereto and as modified and in
effect from time to time (including, but not limited to, participation in any
pension, profit sharing, stock bonus or employee stock ownership plan adopted by
the Company, and all life, health, dental, disability and other insurance). For
purposes of determining vacation accrual under such benefits, Narath shall be
credited with his years of employment with Unicore.
2.4 STOCK OPTIONS. Narath shall be eligible to receive stock options
-------------
under the Company's 1997 Equity Incentive Plan (the "Options") to purchase
55,000 shares of the Company's common stock. The Options shall be "nonstatutory
stock options" within the meaning of the Internal Revenue Code of 1986, as
amended. The Options shall have an exercise price equal to the fair market
value at the time of grant as determined by the Compensation Committee. The
Options shall vest 25% on the first anniversary of the date of grant and 1/48th
per month thereafter during Narath's employment with the Company.
2.5 EXPENSES. The Company shall assume Narath's obligations under
--------
that certain Vehicle Lease Agreement, dated November 7, 1996, between Narath and
Peabody Motor Sports evidencing the lease of a 1997 BMW 740IL, which lease shall
terminate on November 7, 1998. Thereafter, Narath shall be entitled to receive
a monthly reimbursement for all automobile lease payments, customary insurance,
gas, taxes, maintenance and other automobile related expenses consistent with
past practice by Narath. Narath shall be entitled to receive reimbursement for
all reasonable travel and entertainment expenses in connection with his
employment hereunder and shall be entitled to travel by business or first class
means for domestic flights and business class means for international flights
and to lodging and accommodations of his choice.
3.
<PAGE>
2.6 RELOCATION. The Company shall not require Narath to have his
----------
principal business office at a location more than 25 miles from the location
where Narath is employed immediately prior to the Effective Date. In the event
that the Company requests that Narath relocate from Massachusetts, such
relocation shall be made upon mutually agreeable terms negotiated in good faith
by Narath and the Company at such time.
2.7 DIRECTOR. During the term of this Agreement, so long as
Surviving Corporation is a wholly owned subsidiary of the Company, Narath shall
serve as a Director of the Surviving Corporation and the Company agrees to
nominate and vote for Narath for such Director position.
2.8 LIFE INSURANCE. During the term of this Agreement, the Company
shall maintain and pay the premiums on the existing Unicore Software, Inc. one
million ($1,000,000) dollar term life insurance policy on Narath, or such other
life insurance policy with substantially similar coverage, and, upon execution
of this Agreement, will name the beneficiary designated by Narath in a
Beneficiary Designation to be filed with the insurance company.
3. PROPRIETARY INFORMATION OBLIGATIONS.
-----------------------------------
3.1 AGREEMENT. Narath agrees to execute and abide by the Proprietary
---------
Information and Inventions Agreement attached hereto as Exhibit A.
3.2 REMEDIES. Narath's duties under the Proprietary Information and
--------
Inventions Agreement shall survive termination of his employment with the
Company. Narath acknowledges that a remedy at law for any breach or threatened
breach by him of the provisions of the Proprietary Information and Inventions
Agreement would be inadequate, and he therefore agrees that the Company shall be
entitled to injunctive relief in case of any such breach or threatened breach.
4. OUTSIDE ACTIVITIES.
------------------
4.1 Except with the prior written consent of the Company's Board of
Directors, Narath will not during the term of this Agreement undertake or engage
in any other employment, occupation or business enterprise, other than ones in
which Narath is a passive investor. Narath may engage in civic and not-for-
profit activities so long as such activities do not materially interfere with
the performance of his duties hereunder.
4.2 Nothing contained herein shall prevent Narath's continued
engagement in the management and ownership of business entities in the health
club and fitness business so long as such activities do not materially interfere
with the performance of his duties hereunder.
4.
<PAGE>
5. TERMINATION OF EMPLOYMENT.
-------------------------
5.1 TERMINATION WITHOUT CAUSE.
-------------------------
(A) The Company shall have the right to terminate Narath's
employment with the Company at any time without cause after the first
anniversary of the Effective Date.
(B) In the event Narath's employment is terminated without cause
after the first anniversary, but on or prior to the second anniversary of the
Effective Date, the Company shall pay Narath, and Narath shall be entitled to
receive, an amount equal to the sum of (a) six months of his then current annual
base salary and (b) the aggregate amount of sales commission earned during the
immediately preceding full calendar six-month period.
(C) After the second anniversary of the Effective Date, in the
event Narath's employment is terminated without cause, he will not be entitled
to severance pay, pay in lieu of notice or any other compensation (including any
amounts described in Section 2 hereof).
5.2 TERMINATION FOR CAUSE.
---------------------
(A) The Company shall have the right to terminate Narath's
employment with the Company at any time for cause.
(B) "Cause" for termination shall mean: (a) indictment or
conviction of any felony or of any crime involving moral turpitude or
dishonesty; (b) participation in any fraud against the Company; (c) breach of
Narath's duties to the Company, including breach of his Proprietary Information
and Inventions Agreement and persistent unsatisfactory performance of job duties
after written notice (which may be delivered by facsimile or e-mail) to Narath
specifying such breach or unsatisfactory performance and Narath fails to cure
such breach or unsatisfactory performance within thirty (30) days after such
written notice; (d) intentional damage to any property of the Company; or (e)
willful breach of the Company's policies.
(C) In the event Narath's employment is terminated at any time
with cause, he will not be entitled to severance pay, pay in lieu of notice or
any other compensation (including any amounts described in Section 2 hereof).
5.3 VOLUNTARY OR MUTUAL TERMINATION.
-------------------------------
(A) Narath may voluntarily terminate his employment with the
Company at any time upon tendering thirty (30) days prior written notice to the
Company, after which no further compensation will be paid to Narath.
5.
<PAGE>
(B) In the event Narath voluntarily terminates his employment, he
will not be entitled to severance pay, pay in lieu of notice or any other such
compensation (including any amounts described in Section 2 hereof).
6. GENERAL PROVISIONS.
------------------
6.1 NOTICES. Any notices provided hereunder must be in writing and
-------
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex) or the third day after mailing by first class mail,
to the Company at its primary office location and to Narath at his address as
listed on the Company payroll.
6.2 SEVERABILITY. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
6.3 WAIVER. If either party should waive any breach of any
------
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
6.4 COMPLETE AGREEMENT. This Agreement and its Exhibit, together
------------------
with the Merger Agreement of even date herewith and its Exhibits, constitute the
entire agreement between Narath and the Company and it is the complete, final
and exclusive embodiment of their agreement with regard to this subject matter.
It is entered into without reliance on any promise or representation other than
those expressly contained herein, and it cannot be modified or amended except in
a writing signed by an officer of the Company.
6.5 COUNTERPARTS. This Agreement may be executed in separate
------------
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
6.6 HEADINGS. The headings of the sections hereof are inserted for
--------
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
6.
<PAGE>
6.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
----------------------
inure to the benefit of and be enforceable by Narath and the Company, and their
respective successors, assigns, heirs, executors and administrators, except that
Narath may not assign any of his duties hereunder and he may not assign any of
his rights hereunder without the written consent of the Company, which shall not
be withheld unreasonably.
6.8 ATTORNEY FEES. If either party hereto brings any action to
-------------
enforce his or its rights hereunder, the prevailing party in any such action
shall be entitled to recover his or its reasonable attorneys' fees and costs
incurred in connection with such action.
6.9 CHOICE OF LAW. All questions concerning the construction,
-------------
validity and interpretation of this Agreement will be governed by the law of the
Commonwealth of Massachusetts (without giving effect to principles of conflicts-
of-law).
7.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
AWARD SOFTWARE INTERNATIONAL, INC.
By:____________________________________
Kevin J. Berry
Chief Financial Officer
____________________________________
Pierre A. Narath
EMPLOYMENT AGREEMENT FOR
PIERRE A. NARATH
<PAGE>
EXHIBIT A
<PAGE>
AWARD SOFTWARE INTERNATIONAL, INC. EXHIBIT 10.21
EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by AWARD
SOFTWARE INTERNATIONAL, INC. (the "COMPANY"), and the compensation now and
hereafter paid to me, I hereby agree as follows:
1. NONDISCLOSURE
1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all times during
my employment and thereafter, I will hold in strictest confidence and will not
disclose, use, lecture upon or publish any of the Company's Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing. I will obtain Company's
written approval before publishing or submitting for publication any material
(written, verbal, or otherwise) that relates to my work at Company and/or
incorporates any Proprietary Information. I hereby assign to the Company any
rights I may have or acquire in such Proprietary Information and recognize that
all Proprietary Information shall be the sole property of the Company and its
assigns.
1.2 PROPRIETARY INFORMATION. The term "PROPRIETARY INFORMATION" shall
mean any and all confidential and/or proprietary knowledge, data or information
of the Company. By way of illustration but not limitation, "PROPRIETARY
INFORMATION" includes (a) trade secrets, inventions, mask works, ideas,
processes, formulas, source and object codes, data, programs, other works of
authorship, know-how, improvements, discoveries, developments, designs and
techniques (hereinafter collectively referred to as "INVENTIONS"); and (b)
information regarding plans for research, development, new products, marketing
and selling, business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers; and (c) information
regarding the skills and compensation of other employees of the Company.
Notwithstanding the foregoing, it is understood that, at all such times, I am
free to use information which is generally known in the trade or industry, which
is not gained as result of a breach of this Agreement, and my own, skill,
knowledge, know-how and experience to whatever extent and in whichever way I
wish.
1.3 THIRD PARTY INFORMATION. I understand, in addition, that the Company
has received and in the future will receive from third parties confidential or
proprietary information ("THIRD PARTY INFORMATION") subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. During the term of my employment and
thereafter, I will hold Third Party Information in the strictest confidence and
will not disclose to anyone (other than Company personnel who need to know such
information in connection with their work for the Company) or use, except in
connection with my work for the Company, Third Party Information unless
expressly authorized by an officer of the Company in writing.
1.4 NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS AND OTHERS. During
my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or any
other person to whom I have an obligation of confidentiality, and I will not
bring onto the premises of the Company any unpublished documents or any property
belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only information
which is generally known and used by persons with training and experience
comparable to my own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company.
2. ASSIGNMENT OF INVENTIONS.
2.1 PROPRIETARY RIGHTS. The term "PROPRIETARY RIGHTS" shall mean all
trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.
2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which I
made prior to the commencement of my employment with the Company are
1.
<PAGE>
excluded from the scope of this Agreement. To preclude any possible uncertainty,
I have set forth on Exhibit A (Previous Inventions) attached hereto a complete
list of all Inventions that I have, alone or jointly with others, conceived,
developed or reduced to practice or caused to be conceived, developed or reduced
to practice prior to the commencement of my employment with the Company, that I
consider to be my property or the property of third parties and that I wish to
have excluded from the scope of this Agreement (collectively referred to as
"PRIOR INVENTIONS"). If disclosure of any such Prior Invention would cause me to
violate any prior confidentiality agreement, I understand that I am not to list
such Prior Inventions in Exhibit A but am only to disclose a cursory name for
each such invention, a listing of the party(ies) to whom it belongs and the fact
that full disclosure as to such inventions has not been made for that reason. A
space is provided on Exhibit A for such purpose. If no such disclosure is
attached, I represent that there are no Prior Inventions. If, in the course of
my employment with the Company, I incorporate a Prior Invention into a Company
product, process or machine, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with
rights to sublicense through multiple tiers of sublicensees) to make, have made,
modify, use and sell such Prior Invention. Notwithstanding the foregoing, I
agree that I will not incorporate, or permit to be incorporated, Prior
Inventions in any Company Inventions without the Company's prior written
consent.
2.3 ASSIGNMENT OF INVENTIONS. Subject to Section 2.6, I hereby assign and
agree to assign in the future (when any such Inventions or Proprietary Rights
are first reduced to practice or first fixed in a tangible medium, as
applicable) to the Company all my right, title and interest in and to any and
all Inventions (and all Proprietary Rights with respect thereto) whether or not
patentable or registrable under copyright or similar statutes, made or conceived
or reduced to practice or learned by me, either alone or jointly with others,
during the period of my employment with the Company. Inventions assigned to the
Company, or to a third party as directed by the Company pursuant to this Section
2, are hereinafter referred to as "COMPANY INVENTIONS."
2.4
[Intentionally Left Blank]
2.5 OBLIGATION TO KEEP COMPANY INFORMED. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me, either alone or
jointly with others. In addition, I will promptly disclose to the Company all
patent applications filed by me or on my behalf within a year after termination
of employment. The Company will keep in confidence and will not use for any
purpose or disclose to third parties without my consent any confidential
information disclosed in writing to the Company pursuant to this Agreement.
2.6 GOVERNMENT OR THIRD PARTY. I also agree to assign all my right, title
and interest in and to any particular Invention to a third party, including
without limitation the United States, as directed by the Company.
2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are "works made for hire,"
pursuant to United States Copyright Act (17 U.S.C., Section 101).
2.8 ENFORCEMENT OF PROPRIETARY RIGHTS. I will assist the Company in every
proper way to obtain, and from time to time enforce, United States and foreign
Proprietary Rights relating to Company Inventions in any and all countries. To
that end I will execute, verify and deliver such documents and perform such
other acts (including appearances as a witness) as the Company may reasonably
request for use in applying for, obtaining, perfecting, evidencing, sustaining
and enforcing such Proprietary Rights and the assignment thereof. In addition, I
will execute, verify and deliver assignments of such Proprietary Rights to the
Company or its designee. My obligation to assist the Company with respect to
Proprietary Rights relating to such Company Inventions in any and all countries
shall continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after my termination for the time actually
spent by me at the Company's request on such assistance.
In the event the Company is unable for any reason, after reasonable effort,
to secure my signature on any document needed in connection with the actions
specified in the preceding paragraph, I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney
in fact, which appointment is coupled with an interest, to act for and in
2.
<PAGE>
my behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Proprietary Rights assigned
hereunder to the Company.
3. RECORDS. I agree to keep and maintain adequate and current records (in the
form of notes, sketches, drawings and in any other form that may be required by
the Company) of all Proprietary Information developed by me and all Inventions
made by me during the period of my employment at the Company, which records
shall be available to and remain the sole property of the Company at all times.
4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by
the Company I will not, without the Company's express written consent, engage in
any employment or business activity which is competitive with, or would
otherwise conflict with, my employment by the Company. I agree further that for
the period of my employment by the Company and for one (l) year after the date
of termination of my employment by the Company I will not induce any employee of
the Company to leave the employ of the Company.
5. NO CONFLICTING OBLIGATION. I represent that my performance of all the terms
of this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence information acquired by me in confidence or
in trust prior to my employment by the Company. I have not entered into, and I
agree I will not enter into, any agreement either written or oral in conflict
herewith.
6. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I will
deliver to the Company any and all drawings, notes, memoranda, specifications,
devices, formulas, and documents, together with all copies thereof, and any
other material containing or disclosing any Company Inventions, Third Party
Information or Proprietary Information of the Company. I further agree that any
property situated on the Company's premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice. Prior to
leaving, I will cooperate with the Company in completing and signing the
Company's termination statement.
7. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique
and because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other
equitable relief, without bond and without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.
8. NOTICES. Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing. Such notice shall be deemed given upon personal
delivery to the appropriate address or if sent by certified or registered mail,
three (3) days after the date of mailing.
9. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the
Company, I hereby consent to the notification of my new employer of my rights
and obligations under this Agreement.
10. GENERAL PROVISIONS.
10.1 GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement will
be governed by and construed according to the laws of the Commonwealth of
Massachusetts, as such laws are applied to agreements entered into and to be
performed in Massachusetts. I hereby expressly consent to the personal
jurisdiction of the state and federal courts located in Santa Clara County,
California for any lawsuit filed there against me by Company arising from or
related to this Agreement.
10.2 SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear.
10.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.
3.
<PAGE>
10.4 SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.
10.5 EMPLOYMENT. I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company's right
to terminate my employment at any time, with or without cause.
10.6 WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right. The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.
10.7 ENTIRE AGREEMENT. The obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously employed,
or am in the future employed, by the Company as a consultant if no other
agreement governs nondisclosure and assignment of inventions during such period.
This Agreement and that certain Employment Agreement dated May 30, 1997 by and
between the Company and Pierre A. Narath are the final, complete and exclusive
agreements of the parties with respect to the subject matter hereof and
supersedes and merges all prior discussions between us. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing and signed by the party to be charged. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.
This Agreement shall be effective as of the first day of my employment with
the Company, namely: May 30, 1997.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.
Dated:_______________
_____________________________________________
SIGNATURE
_____________________________________________
(PRINTED NAME)
ACCEPTED AND AGREED TO:
AWARD SOFTWARE INTERNATIONAL, INC.
By:__________________________________________
Title:_______________________________________
_____________________________________________
(Address)
_____________________________________________
4.
<PAGE>
EXHIBIT A
---------
TO: AWARD SOFTWARE INTERNATIONAL, INC.
FROM: ___________________
DATE: ___________________
SUBJECT: PREVIOUS INVENTIONS
1. Except as listed in Section 2 below, the following is a complete list
of all inventions or improvements relevant to the subject matter of my
employment by Award Software International, Inc. (the "COMPANY") that have been
made or conceived or first reduced to practice by me alone or jointly with
others prior to my engagement by the Company:
[_] No inventions or improvements.
[_] See below:
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
[_] Additional sheets attached.
2. Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):
INVENTION OR IMPROVEMENT PARTY(IES) RELATIONSHIP
1. _______________________ ___________________ _____________________
2. _______________________ ___________________ _____________________
3. _______________________ ___________________ _____________________
[_] Additional sheets attached.
B-1.
<PAGE>
EXHIBIT 10.22
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of May
30, 1997, by and between PIERRE A. NARATH ("Narath"), and AWARD SOFTWARE
INTERNATIONAL, INC., a California corporation ("Award").
RECITALS
A. Execution and delivery of this Agreement is made as a condition to
closing a certain Agreement and Plan of Merger and Reorganization ("Merger
Agreement"), dated as of May 29, 1997, by and among Award, Award Acquisition Sub
Corp., a Delaware corporation and a wholly owned subsidiary of Award ("Merger
Sub"), Unicore Software, Inc., a Massachusetts corporation (the "Company"), and
Narath, an individual and sole shareholder of the Company pursuant to which the
Company will merge with and into Merger Sub (the "Merger"). Upon consummation
of the Merger, the Company will cease to exist, and Merger Sub will be the be
the renamed "Unicore Software, Inc." and operate as a wholly owned subsidiary of
Award.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein
contemplated and intending to be legally bound hereby, Award and Narath agree as
follows:
1. ACKNOWLEDGEMENTS BY NARATH. Narath acknowledges that by virtue
(direct or indirect) of his position with, and ownership interest in the
Company, he has developed considerable expertise in the business operations of
the Company, has established the goodwill of the Company and has had access to
extensive confidential information with respect to the Company. Narath
recognizes that Award would be irreparably damaged, and its substantial
investment in the Merger materially impaired, if Narath were to enter into an
activity competing with Award's business in violation of the terms of this
Agreement or if Narath were to disclose or make unauthorized use of any
confidential information concerning the business of Award. Accordingly, Narath
expressly acknowledges that he is voluntarily entering into this Agreement and
that the terms and conditions of this Agreement are fair and reasonable to
Narath in all respects.
2. NONCOMPETITION. For a period of two (2) years after Closing (as
defined in the Merger Agreement) or termination of employment with Award or any
of its subsidiaries (the "Period"), whichever is longer, Narath shall not,
directly or indirectly, without the prior written consent of Award, (i) own,
manage, operate, join, control, finance or participate in the ownership,
management, operation, control or financing of, or be connected as an officer,
director, employee, partner, principal, agent, representative, consultant,
licensor, licensee or otherwise with, any business or enterprise engaged in any
business which is competitive with the business of Award (as defined in Appendix
B hereto), within the Territory (as defined in Appendix A hereto), or (ii)
engage in any other manner, within the Territory, in any business
1
<PAGE>
which is competitive with the business of Award. For the purposes of this
Section 2, the "business of Award" shall be defined as set forth in Appendix B
hereto. Notwithstanding the above, Narath shall not be deemed to be engaged
directly or indirectly in any business in contravention of subparagraphs (i) or
(ii) above, if he participates in any such business solely as a passive investor
in up to 1% of the equity securities of a company or partnership, the securities
of which are publicly traded.
3. NONINTERFERENCE. Narath further agrees that during the Period he will
not, without the prior written consent of Award, (i) interfere with the business
of Award by soliciting, attempting to solicit, inducing, or otherwise causing
any employee or consultant of Award to terminate his or her employment as such
in order to become an employee, consultant or independent contractor to or for
any competitor of the business of Award; or (ii) induce or attempt to induce any
customers, suppliers, distributors, resellers, or independent contractor of
Award to terminate their relationships with, or to take any action that would be
disadvantageous to the business of, Award.
4. INDEPENDENCE OF OBLIGATIONS. The covenants of Narath set forth in
this Agreement shall be construed as independent of any other agreement or
arrangement between Narath, on the one hand, and Award, on the other, and the
existence of any claim or cause of action by Narath against Award, shall not
constitute a defense to the enforcement of such covenants against Narath.
5. EQUITABLE RELIEF. Narath expressly acknowledges that damages alone
will not be an adequate remedy for any breach by Narath of the covenants set
forth in Sections 2 and 3 hereof and that the other parties hereto, in addition
to any other remedies which they may have, shall be entitled, as a matter of
right, to injunctive relief, including specific performance, in any court of
competent jurisdiction with respect to any actual or threatened breach by Narath
of any of said covenants.
6. SEVERABILITY, ETC.
A. If any provision of this Agreement shall be held by a court of
competent jurisdiction to be excessively broad as to duration, activity or
subject, it shall be deemed to extend only over the maximum duration, activity
and/or subject as to which such provision shall be valid and enforceable under
applicable law. If any provisions shall, for any reason, be held by a court of
competent jurisdiction to be invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
B. Narath and Award intend that the covenant contained in Section 2
above shall be construed as a series of separate covenants, one for each
geographical unit specified. Except for geographical coverage, each such
separate covenant shall be deemed identical in terms to the covenant contained
in Section 2 above. If, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants deemed included in this Agreement, then
the
2
<PAGE>
unenforceable covenant shall be deemed eliminated from these provisions for the
purpose of those proceedings to the extent necessary to permit the remaining
separate covenants to be enforced.
7. NOTICES. All notices or other communications hereunder shall be in
writing and deemed given if and when delivered to a party in person, or if and
when mailed by registered or certified mail, return receipt requested, to the
parties at the addresses set forth below or such other addresses as shall be
specified by notice to the other party hereunder:
To Award at: Award Software International, Inc.
777 East Middlefield Road
Mountain View, CA 94043-4023
Attn: President
If to Narath: Pierre A. Narath
c/o Unicore Software, Inc.
1538 Turnpike Street
North Andover, MA 01845
Attn: President
8. WAIVER OF BREACH. The failure or delay by Award in enforcing any
provision of this Agreement shall not operate as a waiver thereof, and the
waiver by Award or a breach of any provision of this Agreement by Narath shall
not operate or be construed as a waiver of any subsequent breach or violation
thereof. All waivers shall be in writing and signed by the party to be bound.
9. ASSIGNMENT. This Agreement shall be assignable by Award only to any
person, firm or corporation which may become a successor in interest by
purchase, merger or otherwise to Award or the business operated by Award. This
Agreement is not assignable by Narath.
10. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Merger Agreement
represent the entire agreement and understanding of the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings
of the parties in connection therewith. They may not be altered or amended
except by an agreement in writing signed by the parties to be bound.
11. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of Award and its subsidiaries and its permitted successors and assigns
and Narath, his heirs and legal representatives.
12. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced (without giving effect to principles of conflicts of law) in accordance
with the laws of the Commonwealth of Massachusetts.
3
<PAGE>
13. DEFINITIONS. Unless otherwise defined herein, the capitalized terms
used herein shall have the same meanings specified in the Merger Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Noncompetition
Agreement as of the date first above written.
___________________________________
PIERRE A. NARATH
AWARD SOFTWARE INTERNATIONAL,
INC.
By:________________________________
Kevin J. Berry
Chief Financial Officer
<PAGE>
APPENDIX A
TERRITORY
WORLDWIDE
<PAGE>
APPENDIX B
BUSINESS OF AWARD
The "business of Award" shall mean the design, development and marketing of
system management software for the global computing market, including, without
limitation, the upgrade of basic input/output system software and support
services, engaged in by Award or any of its subsidiaries.
<PAGE>
Exhibit 10.23
GENERAL RELEASE
THIS GENERAL RELEASE ("General Release") is being executed and
delivered as of May 30, 1997, on behalf of the parties identified on Annex I
hereto (all of whom are referred to collectively as the "Releasors," and each of
whom is referred to individually as a "Releasor") to and in favor of, and for
the benefit of AWARD SOFTWARE INTERNATIONAL, INC., a California corporation
("Purchaser"), and the other Releasees (as defined in Section 2).
RECITALS
A. Contemporaneously with the execution and delivery of this General
Release, Purchaser intends to effectuate a merger (the "Merger") of Award
Acquisition Sub Corp., a Delaware corporation and a wholly owned subsidiary of
Purchaser, with Unicore Software, Inc., a Massachusetts corporation (the
"Company") in accordance with a certain Agreement and Plan of Merger and
Reorganization ("Merger Agreement"), dated May 29, 1997. Upon consummation of
the Merger, the Company will cease to exist, and Merger Sub will be renamed
"Unicore Software, Inc." and operate as a wholly owned subsidiary of Purchaser.
B. Purchaser has required, as a condition to consummating the
transactions contemplated by the Merger Agreement, that the Releasors execute
and deliver this General Release.
C. The parties hereto acknowledge that this General Release shall not
apply to the Merger Agreement and the transactions contemplated thereby.
AGREEMENT
In order to induce Purchaser to consummate the transactions
contemplated by the Merger Agreement, and for other valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by the Releasors), the
Releasors hereby covenant and agree as follows:
1. RELEASE. Each Releasor, for himself and for each of such
Releasor's Associated Parties (as defined in Section 2), hereby generally,
irrevocably, unconditionally and completely releases and forever discharges each
of the Releasees (as defined in Section 2) from, and hereby irrevocably,
unconditionally and completely waives and relinquishes, each of the Released
Claims (as defined in Section 2).
2. DEFINITIONS.
(A) The term "Associated Parties," when used herein with respect
to a Releasor, shall mean and include: (i) such Releasor's predecessors,
successors, executors, administrators, heirs and estate; (ii) such Releasor's
past, present and future assigns, agents and representatives; (iii) each entity
that such Releasor has the power to bind (by such Releasor's acts or signature)
or over which such Releasor directly or indirectly exercises control; and (iv)
each
1.
<PAGE>
entity of which such Releasor owns, directly or indirectly, at least 50% of the
outstanding equity, beneficial, proprietary, ownership or voting interests.
(B) The term "Releasees" shall mean and include: (i) Purchaser;
(ii) the Company; (iii) each of the direct and indirect subsidiaries of the
Company; (iv) each other affiliate of the Company; and (v) the successors and
past, present and future assigns, directors, officers, employees, agents,
attorneys and representatives of the respective entities identified or otherwise
referred to in clauses "(i)" through "(iv)" of this sentence, other than the
Releasors.
(C) The term "Claims" shall mean and include all past, present
and future disputes, claims, controversies, demands, rights, obligations,
liabilities, actions and causes of action of every kind and nature, including:
(i) any unknown, unsuspected or undisclosed claim; (ii) any claim or right that
may be asserted or exercised by a Releasor in such Releasor's capacity as a
stockholder, director, officer or employee of the Company or in any other
capacity; and (iii) any claim, right or cause of action based upon any breach of
any express, implied, oral or written contract or agreement.
(D) The term "Released Claims" shall mean and include each and
every Claim that (i) any Releasor or any Associated Party of any Releasor may
have had in the past, may now have or may have in the future against any of the
Releasees, and (ii) has arisen or arises directly or indirectly out of, or
relates directly or indirectly to, any circumstance, agreement, activity,
action, omission, event or matter occurring or existing on or prior to the date
of this General Release.
3. CIVIL CODE (S)1542. Each Releasor (a) represents, warrants and
acknowledges that such Releasor has been fully advised by his attorney of the
contents of Section 1542 of the Civil Code of the State of California, and (b)
hereby expressly waives the benefits thereof and any rights such Releasor may
have thereunder. Section 1542 of the Civil Code of the State of California
provides as follows:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor."
Each Releasor also hereby waives the benefits of, and any rights such Releasor
may have under, any statute or common law principle of similar effect in any
jurisdiction.
4. REPRESENTATIONS AND WARRANTIES. Each Releasor represents and
warrants that:
(A) such Releasor has not assigned, transferred, conveyed or
otherwise disposed of any Claim against any of the Releasees, or any direct or
indirect interest in any such Claim, in whole or in part;
(B) to the best of such Releasor's knowledge, no other person or
entity has any interest in any of the Released Claims;
2.
<PAGE>
(C) no Associated Party of such Releasor has or had any Claim
against any of the Releasees;
(D) no Associated Party of such Releasor will in the future have
any Claim against any Releasee that arises directly or indirectly from or
relates directly or indirectly to any circumstance, agreement, activity, action,
omission, event or matter occurring or existing on or before the date of this
General Release;
(E) this General Release has been duly and validly executed and
delivered by such Releasor;
(F) this General Release is a valid and binding obligation of
such Releasor and such Releasor's Associated Parties, and is enforceable against
such Releasor and each of such Releasor's Associated Parties in accordance with
its terms;
(G) there is no action, suit, proceeding, dispute, litigation,
claim, complaint or investigation by or before any court, tribunal, governmental
body, governmental agency or arbitrator pending or, to the best of the knowledge
of such Releasor, threatened against such Releasor or any of such Releasor's
Associated Parties that challenges or would challenge the execution and delivery
of this General Release or the taking of any of the actions required to be taken
by such Releasor under this General Release;
(H) neither the execution and delivery of this General Release
nor the performance hereof will (i) result in any violation or breach of any
agreement or other instrument to which such Releasor or any of such Releasor's
Associated Parties is a party or by which such Releasor or any of such
Releasor's Associated Parties is bound, or (ii) result in a violation or any
law, rule, regulation, treaty, ruling, directive, order, arbitration award,
judgment or decree to which such Releasor or any of such Releasor's Associated
Parties is subject; and
(I) no authorization, instruction, consent or approval of any
person or entity is required to be obtained by such Releasor or any of such
Releasor's Associated Parties in connection with the execution and delivery of
this General Release or the performance hereof.
(J) such Releasor is not relying on any representation or
promise of any other person in executing this General Release, or in making the
release provided for herein, and assumed the risk of any misrepresentation,
concealment or mistake. If a Releasor should subsequently discover that a fact
relied upon by it in entering into this General Release was untrue, or that a
fact was concealed from it, or that is understanding of the facts or of the law
was incorrect, such party shall not be entitled to any relief in connection
therewith, including, without limitation, any alleged right or claim to set
aside or rescind this General Release. This General Release is intended to be
and is final and binding, regardless of any claims of misrepresentation, promise
made without the intention to perform, concealment of fact, mistake of fact or
law, or of any other circumstance.
5. INDEMNIFICATION. Without in any way limiting any of the rights or
remedies otherwise available to any Releasee, each Releasor shall indemnify and
hold harmless each
3.
<PAGE>
Releasee against and from any loss, damage, injury, harm, detriment, lost
opportunity, liability, exposure, claim, demand, settlement, judgment, award,
fine, penalty, tax, fee, charge or expense (including attorneys' fees) that is
directly or indirectly suffered or incurred at any time by such Releasee, or to
which such Releasee otherwise becomes subject at any time, and that arises
directly or indirectly out of or by virtue of, or relates directly or indirectly
to, (a) any failure on the part of such Releasor to observe, perform or abide
by, or any other breach of, any restriction, covenant, obligation,
representation, warranty or other provision contained herein, or (b) the
assertion or purported assertion of any of the Released Claims by such Releasor
or any of such Releasor's Associated Parties.
6. MISCELLANEOUS.
(A) This General Release sets forth the entire understanding of
the parties relating to the subject matter hereof and supersedes all prior
agreements and understandings among or between any of the Releasors and
Releasees relating to the subject matter hereof.
(B) If any provision of this General Release or any part of any
such provision is held under any circumstances to be invalid or unenforceable in
any jurisdiction, then (i) such provision or part thereof shall, with respect to
such circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (ii) the invalidity or unenforceability of such provision or part
thereof under such circumstances and in such jurisdiction shall not affect the
validity or enforceability of such provision or part thereof under any other
circumstances or in any other jurisdiction, and (iii) such invalidity or
enforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this General Release. If any provision
of this General Release or any part of such provision is held to be
unenforceable against any Releasor, then the unenforceability of such provision
or part thereof against such Releasor shall not affect the enforceability
thereof against any other Releasor. Each provision of this General Release is
separable from every other provision of this General Release, and each part of
each provision of this General Release is separable from every other part of
such provision.
(C) This General Release shall be construed in accordance with,
and governed in all respects by, the laws of the State of California (without
giving effect to principles of conflicts of laws).
(D) Any legal action or other legal proceeding relating to this
General Release or the enforcement of any provision of this General Release may
be brought or otherwise commenced by any Releasee in any state or federal court
located in the State of California. Each Releasor:
(I) expressly and irrevocably consents and submits to the
jurisdiction of each state and federal court located in the State of California
in connection with any such legal proceeding;
4.
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(II) agrees that each state and federal court located in
the State of California shall be deemed to be a convenient forum; and
(III) agrees not to assert (by way of motion, as a defense
or otherwise), in any such legal proceeding commenced in any state or federal
court located in the State of California, any claim that such Releasor is not
subject personally to the jurisdiction of such court, that such legal proceeding
has been brought in an inconvenient forum, that the venue of such proceeding is
improper or that this General Release or the subject matter of this General
Release may not be enforced in or by such court.
Nothing contained in this General Release shall be deemed to limit or otherwise
affect the right of any Releasee (1) to commence any legal proceeding or to
otherwise proceed against any of the Releasors or any other person or entity in
any other forum or jurisdiction, or (2) to raise this Release as a defense in
any legal proceeding in any other forum or jurisdiction.
(E) This General Release may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
(F) Each Releasor shall execute and/or cause to be delivered to
each Releasee such instruments and other documents, and shall take such other
actions, as such Releasee may reasonably request for the purpose of carrying out
or evidencing any of the actions contemplated by this General Release.
(G) If any legal action or other legal proceeding relating to
this General Release or the enforcement of any provision hereof is brought by
any Releasor or Releasee, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements to the extent actually
incurred (in addition to any other relief to which the prevailing party may be
entitled).
(H) This General Release shall be effective with respect to, and
shall be binding upon and enforceable against, each Releasor who executes this
General Release, regardless of whether any of the other Releasors executes this
General Release.
(I) Whenever required by the context, the singular number shall
include the plural, and vice versa; the masculine gender shall include the
feminine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.
(J) Any rule of construction to the effect that ambiguities are
to be resolved against the drafting party shall not be applied in the
construction or interpretation of this General Release.
(K) As used in this General Release, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, and shall be deemed to be followed by the words "without
limitation."
5.
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IN WITNESS WHEREOF, the Releasors have caused this General Release to
be executed as of the date first above written.
RELEASORS:
____________________________
PIERRE A. NARATH
GENERAL RELEASE
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ANNEX I
LIST OF RELEASORS
Pierre A. Narath
