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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
International CompuTex, Inc.
(Name of Issuer)
Common Stock, Par Value $.001 Per Share
(Title of Class of Securities)
4 59337 10 1
(CUSIP Number)
Thybo New Ventures Limited With a copy to
Par La Ville Place Robert Rosenman, Esq.
14 Par La Ville Road Cravath, Swaine & Moore
Hamilton HM JK Bermuda 825 Eighth Avenue
New York, New York 10019
(212) 474-1300
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 10, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition that is the subject of this
Schedule 13D, and is filing this schedule because of
ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box [ ].
NOTE: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
ss.240.13d-7(b) for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
Continued on following pages
Page 1 of 206 Pages
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<PAGE>
SCHEDULE 13D
CUSIP NO. 4 59337 10 1
1 Name of Reporting Person I.R.S. Identification No. of Above
Person (entities only)
Thybo New Ventures Limited
2 Check the Appropriate Box If a Member of a Group (See
Instructions) (a) [ ]
(b) [ ]
3 SEC Use Only
4 Source of Funds (See Instructions)
OO
5 Check Box If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Bermuda
7 Sole Voting Power
30,000 Shares
8 Shared Voting Power
0 Shares
9 Sole Dispositive Power
330,000 Shares
10 Shared Dispositive Power
0 Shares
11 Aggregate Amount Beneficially Owned by Each Reporting
Person 330,000
12 Check Box If the Aggregate Amount in Row (11) [ ]
Excludes Certain Shares (See Instructions)
13 Percent of Class Represented by Amount in Row (11) 9.2%
14 Type of Reporting Person (See Instructions)
OO
<PAGE>
SCHEDULE 13D
CUSIP NO. 4 59337 10 1
1 Name of Reporting Person I.R.S. Identification No. of Above
Person (entities only)
Thyssen - Bornemisza Continuity Trust
2 Check the Appropriate Box If a Member of a Group (See
Instructions) (a) [ ]
(b) [ ]
3 SEC Use Only
4 Source of Funds (See Instructions)
Not Applicable
5 Check Box If Disclosure of Legal Proceedings Is Required
Pursuant To items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Bermuda
7 Sole Voting Power
0 Shares
8 Shared Voting Power
0 Shares
9 Sole Dispositive Power
0 Shares
10 Shared Dispositive Power
0 Shares
11 Aggregate Amount Beneficially Owned by Each Reporting
Person 330,000
12 Check Box If the Aggregate Amount in Row (11) [ ]
Excludes Certain Shares (See Instructions)
13 Percent of Class Represented by Amount in Row (11) 9.2%
14 Type of Reporting Person (See Instructions)
OO
<PAGE>
This Amendment No. 2 further amends and supplements the
Statement on Schedule 13D (the "Original Statement") filed by Thybo
New Ventures Limited ("Thybo") and Thyssen-Bornemisza Continuity Trust
(the "Trust") with the United States Securities and Exchange
Commission (the "Commission") on February 6, 1998, as amended and
supplemented by Amendment No. 1 to the Original Statement ("Amendment
No. 1") filed by Thybo and the Trust with the Commission on November
10, 1998, with respect to the common stock, par value $0.001 per
share, of International CompuTex, Inc. (the "Common Stock"), a Georgia
corporation (the "Issuer"). Except as set forth in this Amendment No.
2 to the Original Statement ("Amendment No. 2"), there are no changes
to the information set forth in the Original Statement, as amended by
Amendment No. 1. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Original
Statement.
Item 4 is hereby amended to read in its entirety as follows:
Item 4. Purpose of Transaction.
Thybo acquired 300,000 shares of Common Stock (the "Initial
Shares") pursuant to a Common Stock Purchase Agreement dated as of
January 29, 1998, between the Issuer and Thybo (the "Purchase
Agreement"). Pursuant to the Purchase Agreement, Thybo appointed Haim
E. Dahan, the Chairman of the Board and Chief Executive Officer of the
Issuer ("Dahan"), as its proxy and attorney-in-fact to vote or
otherwise act with respect to the Initial Shares on behalf of Thybo in
all respects in connection with any matter on which shareholders of
the Issuer are entitled to vote or consent. Dahan's voting rights
under the Purchase Agreement expire on the earlier of (i) February 2,
2000, (ii) the date on which Thybo and its "Affiliates", as such term
is defined in the Securities Act of 1933, on a collective basis,
beneficially own less than 150,000 shares of the Common Stock or (iii)
the death or incapacity of Dahan. Dahan may exercise the voting rights
granted under the Purchase Agreement in his uncontrolled discretion. A
copy of the Purchase Agreement is filed as Exhibit 1 hereto and is
incorporated herein by reference. The description of the terms of the
Purchase Agreement set forth herein is qualified in its entirety by
reference to the Purchase Agreement. In addition to the Initial
Shares, Thybo has acquired 30,000 shares of Common Stock through
purchases made in the Nasdaq National Market (such shares, together
with the Initial Shares, the "Thybo Shares").
<PAGE>
(a), (b), (c) and (f). On January 10, 1999, Information
Handling Services Inc., a Delaware corporation and an affiliate of
Thybo ("IHS"), entered into a Formation Agreement (the "Formation
Agreement") with Dahan, Michael J. Galvin, a director and the Vice
President of Research and Development of the Issuer ("Galvin"),
Patricia Tuxbury Salem, a director and the Treasurer and Director of
Product Data Management Services of the Issuer ("Tuxbury Salem"), and
certain other shareholders of the Issuer (collectively, the
"Founders"). Thybo intends to transfer the Thybo Shares to IHS prior
to the consummation of transactions contemplated by the Formation
Agreement.
Pursuant to the Formation Agreement, IHS has agreed, upon
the terms and subject to the conditions set forth in the Formation
Agreement, to contribute to IHS Itemquest Holdings Inc., a Delaware
corporation and a wholly owned subsidiary of IHS ("Holdings"), (i)
certain assets and liabilities related to the CAPSXpert product lines
of IHS, (ii) the Thybo Shares received from Thybo and (iii) cash in
exchange for 7,989,877 shares of common stock, par value $0.001 per
share, of Holdings (the "Holdings Common Stock"). In addition, the
Founders have agreed, upon the terms and subject to the conditions set
forth in the Formation Agreement, to contribute to Holdings 1,566,153
shares of Common Stock (representing, for each Founder, approximately
74% of the shares of Common Stock owned by such Founder) in exchange
for 1,566,153 shares of Holdings Common Stock. Following these
contributions and exchanges (the "Formation Transaction"), and upon
the terms and subject to the conditions set forth in a Merger
Agreement to be entered into among IHS, Holdings, a wholly owned
subsidiary of Holdings ("Merger Sub") and the Issuer (the "Merger
Agreement"), each outstanding share of Common Stock (other than shares
of Common Stock held by Holdings or shareholders who exercise
dissenters' rights) will be converted into the right to receive $9.50
in cash in a merger (the "Merger") of Merger Sub with and into the
Issuer such that the Issuer will be the surviving corporation (the
"Surviving Corporation") in the Merger. As a result of the Formation
Transaction and the Merger, (i) IHS will own 83.611% of the
outstanding shares of Holdings Common Stock and the Founders will
collectively own 16.389% of the outstanding shares of Holdings Common
Stock and (ii) the Issuer, as the Surviving Corporation, will be a
wholly owned subsidiary of Holdings.
The Founders have agreed, pursuant to the Formation
Agreement, to refrain from (i) directly or indirectly, soliciting,
initiating or encouraging the submission of (A) any proposal or offer
for a merger, consolidation, dissolution, recapitalization or other
<PAGE>
business combination involving the Issuer, (B) any proposal for the
issuance by the Issuer of a material amount of its equity securities
as consideration for the assets or securities of another entity or (C)
any proposal or offer to acquire in any manner, directly or
indirectly, a material equity interest in, any voting securities of,
or a substantial portion of the assets of, the Issuer, other than as
contemplated by the Formation Agreement and the Merger Agreement (any
such proposal, a "Takeover Proposal"), (ii) entering into any
agreement with respect to any Takeover Proposal or (iii) directly or
indirectly, participating in any discussions or negotiations
regarding, or furnishing to any person or entity any information with
respect to, or taking any other action to facilitate any inquiries or
the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Takeover Proposal. In addition, the Founders
have agreed to refrain from (i) withdrawing or modifying, or proposing
to withdraw or modify, in a manner adverse to IHS, the approval or
<PAGE>
recommendation by the Issuer of the Merger Agreement, (ii) approving
any letter of intent, agreement in principle, acquisition agreement or
similar agreement relating to any Takeover Proposal or (iii) approving
or recommending, or proposing to approve or recommend, any Takeover
Proposal.
The Founders have also agreed, pursuant to the Formation
Agreement, to, within five business days after receipt thereof, advise
IHS orally and in writing of any Takeover Proposal or any inquiry with
respect to, or that could reasonably be expected to lead to, any
Takeover Proposal, and the identity of the person or entity making any
such Takeover Proposal or inquiry (including any change to the
material terms of any such Takeover Proposal or inquiry). In addition,
the Founders have agreed to (i) keep IHS fully informed of the status
(including any change to the details) of any Takeover Proposal or
inquiry and (ii) provide to IHS as soon as practicable after receipt
or delivery thereof with copies of all correspondence and other
written material sent or provided to the Founders or the Issuer from
any third party in connection with any Takeover Proposal or sent or
provided by the Founders or the Issuer to any third party in
connection with any Takeover Proposal.
Each Founder has agreed, pursuant to the Formation
Agreement, that, unless the Formation Agreement shall have been
earlier terminated in accordance with its terms, at any meeting of the
shareholders of the Issuer for the purpose of obtaining the
affirmative vote of holders of shares of Common Stock representing a
majority of the votes entitled to be cast by holders of the
outstanding shares of Common Stock, voting as a single class (the
"Shareholders'
<PAGE>
Approval"), with respect to the Merger Agreement or the Merger, or in
any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger Agreement or
the Merger is sought, such Founder will, including by executing a
written consent, vote (or cause to be voted) all shares of Common
Stock such Founder is entitled to vote in favor of granting the
Shareholders' Approval.
Each Founder has also agreed, pursuant to the Formation
Agreement, that, at any meeting of the shareholders of the Issuer, at
any adjournment thereof, and in any other circumstances upon which the
vote, consent or other approval of the Founders is sought, such
Founder will vote (or cause to be voted) all shares of Common Stock
such Founder is entitled to vote against (i) any merger agreement or
merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding
up of or by the Issuer, (ii) any Takeover Proposal and (iii) any
amendment of the Restated Articles of Incorporation of the Issuer, the
By-laws of Issuer or other proposal or transaction involving the
Issuer, which amendment or other proposal or transaction would in any
manner impede, frustrate, prevent or nullify any provision of the
Merger Agreement or the Merger or change in any manner the voting
rights of any class of Common Stock. In addition, each Founder has
agreed to refrain from committing or agreeing to take any action
inconsistent with the foregoing.
The consummation of the Formation Transaction and the
consummation of the Merger are subject to the satisfaction or waiver
of certain conditions, including: (i) the Merger Agreement and the
Merger being approved by the affirmative vote of holders of shares of
Common Stock representing a majority of the votes entitled to be cast
by holders of Common Stock, voting as a single class, (ii) the Issuer
having entered into agreements with employees (and certain former
employees) of the Issuer who hold options to purchase shares of Common
Stock and certain directors of the Issuer who hold options to purchase
shares of Common Stock to amend the agreements evidencing such options
to provide that, upon the effectiveness of the Merger, such employees
(but not former employees) and directors will receive, for each option
held by such employee or director, and such former employees will
receive, for each option held by such former employee that was vested
on the date on which the employment of such former employee was
terminated, an amount in cash equal to (A) the excess, if any, of (1)
the consideration paid in the Merger in respect of each
<PAGE>
outstanding share of Common Stock over (2) the exercise price per
share of Common Stock subject to such option multiplied by (B) the
number of shares of Common Stock subject to such option, (iii) the
Issuer having entered into an employment agreement with each of Dahan,
Galvin and Tuxbury Salem, (iv) IHS and Holdings having entered into a
services agreement pursuant to which IHS will provide certain services
to Holdings in respect of the CAPSXpert product lines of IHS, (v)
Holdings and the Founders having entered into a stockholders'
agreement relating to the transfer and sale of shares of Holdings
Common Stock, the members of the Board of Directors of Holdings and
certain other matters and (vi) certain other conditions that are
customary in transactions similar to the Formation Transaction and the
Merger.
A copy of the Formation Agreement is filed as Exhibit 2
hereto and is incorporated herein by reference. The description of the
terms of the Formation Agreement set forth herein is qualified in its
entirety by reference to the Formation Agreement.
A copy of the form of Merger Agreement is included as
Exhibit C to the Formation Agreement and is incorporated herein by
reference. The description of the terms of the Merger Agreement set
forth herein is qualified in its entirety by reference to the form of
Merger Agreement.
(d), (e) and (g). As a result of the Formation Transaction
and the Merger, (i) IHS will own 83.611% of the outstanding shares of
Holdings Common Stock and the Founders will collectively own 16.389%
of the outstanding shares of Holdings Common Stock and (ii) the
Issuer, as the Surviving Corporation, will be a wholly owned
subsidiary of Holdings.
Pursuant to the Merger Agreement, Dahan will become a
director of the Surviving Corporation. Other than Dahan, the directors
of Merger Sub immediately prior to the consummation of the Merger,
which directors will be elected by Holdings, will become the directors
of the Surviving Corporation. In addition, Dahan will become the
President and Chief Technology Officer of the Surviving Corporation,
and Galvin and Tuxbury Salem will become vice presidents, but not
directors, of the Surviving Corporation. Other than Dahan, Galvin and
Tuxbury Salem, the officers of Merger Sub immediately prior to the
consummation of the Merger, which officers will be appointed by the
directors of Merger Sub, will become the officers of the Surviving
Corporation.
Pursuant to the Merger Agreement, the Restated Articles of
Incorporation of the Issuer will be amended to
<PAGE>
provide that the Issuer will have authority to issue not more than
110,000,000 shares of Common Stock, and, as so amended, such Restated
Articles of Incorporation will be the articles of incorporation of the
Surviving Corporation. In addition, the By-laws of Merger Sub will
become the By-laws of the Surviving Corporation.
Upon consummation of the Merger, the Surviving Corporation
will have an authorized capital stock of 110,000,000 shares of common
stock, par value $0.001 per share, of which 100,000,000 shares (which
shares will constitute all the issued and outstanding shares of common
stock of the Surviving Corporation) will be owned by Holdings. The
capitalization and dividend policy of the Surviving Corporation will
be determined by the directors of the Surviving Corporation.
A copy of the form of Merger Agreement is included as
Exhibit C to the Formation Agreement and is incorporated herein by
reference. The description of the terms of the Merger Agreement set
forth herein is qualified in its entirety by the form of Merger
Agreement.
(h) and (i). Upon consummation of the Merger, the Common
Stock will cease to be authorized to be quoted in the Nasdaq National
Market and will be eligible for termination of registration pursuant
to Section 12(g)(4) of the Securities Exchange Act of 1934 (the
"Exchange Act").
(j) Except as described herein or as contemplated by the
Formation Agreement or the Merger Agreement, neither Thybo nor the
Trust has any other present plans or proposals which relate to, or
would result in, (a) the acquisition by any person of additional
securities of the Issuer, or the disposition of securities of the
Issuer, (b) an extraordinary corporate transaction involving the
Issuer, (c) a sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries, (d) any change in the present board
of directors or management of the Issuer, (e) any material change in
the present capitalization or dividend policy of the Issuer, (f) any
material change in the Issuer's business or corporate structure, (g)
changes to the Issuer's charter, by-laws or instruments corresponding
thereto or other actions which may impede the acquisition of control
of the Issuer by any person, (h) a class of securities of the Issuer
ceasing to be listed on a national securities exchange or ceasing to
be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (i) a class of equity
securities of the Issuer becoming eligible for termination of
registration pursuant to Section 12(g)(4) of
<PAGE>
the Exchange Act or (j) any action similar to any of the foregoing
actions. Thybo or the Trust may, however, discuss one or more of the
foregoing actions with the Founders, any other person or entity who
holds, or has the right to purchase, shares of Common Stock or the
Issuer or formulate a plan or proposal relating to, or resulting in,
any of the foregoing actions. In addition, Thybo and the Trust are
considering the purchase by Thybo (or any affiliate of the Trust) of
shares of Common Stock in the Nasdaq National Market, and Thybo or the
Trust (or any affiliate of the Trust) may purchase shares of Common
Stock in the Nasdaq National Market at any time prior to the
consummation of the Merger.
Item 5 is hereby amended to read in its entirety as follows:
Item 5. Interest in Securities of the Issuer.
(a) and (b). Thybo beneficially owns 330,000 shares of
Common Stock, which shares constitute approximately 9.2% of the
outstanding shares of Common Stock.
As discussed in Item 4, Thybo acquired 300,000 shares of
Common Stock pursuant to the Purchase Agreement, and, pursuant to the
Purchase Agreement, granted to Dahan the right to vote or otherwise
act with respect to such shares on behalf of Thybo in all respects in
connection with any matter on which shareholders of the Issuer are
entitled to vote or consent. Consequently, with respect to 300,000
shares of Common Stock beneficially owned by Thybo, Thybo has (i) no
voting power and (ii) sole dispositive power. The Trust, as the entity
that ultimately controls Thybo, may be deemed to be the beneficial
owner of, but has no voting power or dispositive power with respect
to, 300,000 shares of Common Stock beneficially owned by Thybo.
As also discussed in Item 4, Thybo acquired 30,000 shares of
Common Stock pursuant to purchases made in the Nasdaq National Market.
With respect to 30,000 shares of Common Stock beneficially owned by
Thybo, Thybo has (i) sole voting power and (ii) sole dispositive
power. The Trust, as the entity that ultimately controls Thybo, may be
deemed to be the beneficial owner of, but has no voting power or
dispositive power with respect to, 30,000 shares of Common Stock
beneficially owned by Thybo.
(c). On February 2, 1998, Thybo acquired 300,000 shares of
Common Stock, at a price of $9.50 per share, in a private placement
transaction. On March 24,
<PAGE>
1998, Thybo purchased 3,000 shares of Common Stock, at a price of
$7.08 per share, in the Nasdaq National Market. On April 17, 1998,
Thybo purchased 3,000 shares of Common Stock, at a price of $6.96 per
share, in the Nasdaq National Market. On June 8, 1998, Thybo purchased
3,000 shares of Common Stock, at a price of $6.94 per share, in the
Nasdaq National Market. On June 15, 1998, Thybo purchased 10,000
shares of Common Stock, at a price of $6.08 per share, in the Nasdaq
National Market. On August 20, 1998, Thybo purchased 5,000 shares of
Common Stock, at a price of $4.33 per share, in the Nasdaq National
Market. On August 26, 1998, Thybo purchased 6,000 shares of Common
Stock, at a price of $4.78 per share, in the Nasdaq National Market.
Neither Thybo nor the Trust, nor, to the knowledge of Thybo, any of
the persons listed on Schedule I hereto, has effected any transaction
in the Common Stock during the past 60 days.
(d). None.
(e). Not applicable.
Item 6 is hereby amended to read in its entirety as follows:
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Reference is made to the description of the agreements,
arrangements, understandings and relationships set forth in Item 4 of
this Statement on Schedule 13D, as amended by Amendment No. 1 and this
Amendment No. 2. Except as contemplated by the Purchase Agreement, the
Formation Agreement or the Merger Agreement, or as indicated herein,
there are no contracts, arrangements, understandings or relationships
(legal or otherwise) among Thybo, the Trust and the persons listed on
Schedule I hereto or between Thybo, the Trust or, to the knowledge of
Thybo, any of the persons listed on Schedule I hereto, on the one
hand, and any other persons, on the other hand, with respect to any
securities of the Issuer.
<PAGE>
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Common Stock Purchase Agreement dated as
of January 29, 1998, between
International CompuTex, Inc. and Thybo
New Ventures Limited
Exhibit 2 Formation Agreement dated January 10,
1999, among Information Handling
Services Inc. and certain Shareholders
of International CompuTex, Inc.
identified therein
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: January 19, 1999
THYBO NEW VENTURES LIMITED,
By /s/ Johannes A.M. Vijverberg
-------------------------------
Name: Johannes A.M. Vijverberg
Title: President
THYBO TRUSTEES LIMITED
(as Trustee of the THYSSEN-
BORNEMISZA CONTINUITY TRUST),
By /s/ Frank Mutch
-------------------------------
Name: Frank Mutch
Title: Director
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Page
1 Common Stock Purchase 18
Agreement dated as of
January 29, 1998, between
International CompuTex, Inc.
and Thybo New Ventures Limited
2 Formation Agreement dated as 45
of January 10, 1999, among
Information Handling Services
Inc. and certain Shareholders
of International CompuTex,
Inc. identified therein
<PAGE>
SCHEDULE I
The following is a list of the directors and executive
officers of Thybo and the Trustee, setting forth the residence or
business address, citizenship, principal occupation or employment and
the name, principal business and address of any corporation or other
organization in which such employment is conducted for each such
person.
A. Directors and Executive Officers of Thybo
Name, Title and Address Citizenship Present Principal Occupation
and Business Address
Johannes A. M. Vijverberg Dutch President
Director and President Thybo Investments
c/o TBG Management SAM c/o TBG Management SAM
29 Bd Princess Charlotte 29 Bd Princess Charlotte
MC 98007 Monaco MC 98007 Monaco
Carl Hughes British Executive Director
Director, Assistant Thybo Investments
Treasurer and c/o TBG Management SAM
Assistant Secretary 29 Bd Princess Charlotte
c/o TBG Management SAM MC 98007 Monaco
29 Bd Princess Charlotte
MC 98007 Monaco
Frank Mutch British Attorney
Director and Assistant Secretary Conyers, Dill & Pearman
c/o Conyers, Dill & Pearman P.O. Box HM 666
P.O. Box HM 666 Clarendon House
Clarendon House Church Street
Church Street Hamilton HM CX
Hamilton HM CX Bermuda
Bermuda
Arthur E. M. Jones British Chief Financial Officer
Director and Vice President Consolidated Group of
Par La Ville Place Companies
14 Par La Ville Road Par La Ville Place
Hamilton, Bermuda 14 Par La Ville Road
Hamilton, Bermuda
<PAGE>
B. Directors and Executive Officers of the Trustee
Name, Title and Address Citizenship Present Principal Occupation
and Business Address
Arne Hovdesven U.S.A. Retired
Director and President
1425 Regatta Drive
Wilmington, North Carolina
Frank Mutch British Attorney
Director and Assistant Secretary Conyers, Dill & Pearman
c/o Conyers, Dill & Pearman P.O. Box HM 666
P.O. Box HM 666 Clarendon House
Clarendon House Church Street
Church Street Hamilton HM CX
Hamilton HM CX Bermuda
Bermuda
Eric P. Pfaff British Attorney
Director, Vice President and Maitland & Co.
Assistant Secretary 44-48 Dover Street
Maitland & Co. (5th Floor)
44-48 Dover Street (5th Floor) London W1X 3RF
London W1X 3RF England
England
Cummings V. Zuill British Vice President of the Bank of
Director and Vice President Bermuda,
The Bank of Bermuda Limited The Bank of Bermuda Limited
6, Front Street 6, Front Street
Hamilton 5-31 Hamilton 5-31
Bermuda Bermuda
<PAGE>
EXHIBIT 1
COMMON STOCK PURCHASE AGREEMENT (this
"Agreement") is made as of January 29, 1998 by and
between International CompuTex, Inc., a Georgia
corporation ("Seller"), and Thybo New Ventures
Limited, a Bermuda corporation ("Purchaser").
The parties hereby agree as follows:
ARTICLE I
Purchase and Sale of Common Stock
SECTION 1.01. Sale and Issuance of Common Stock. Subject to
the terms and conditions of this Agreement, Purchaser agrees to
purchase at the Closing and Seller agrees to issue and sell to
Purchaser at the Closing 300,000 shares (the "Shares") of Seller's
Common Stock, par value $0.001 per share (the "Common Stock") at a
purchase price of $2,850,000 ($9.50 per share).
SECTION 1.02. Closing. (a) The purchase and sale of the
Shares shall take place via telecopy on February 2, 1998 at 10:00 a.m.
New York City time, or at such other time as Seller and the Purchaser
mutually agree upon, orally or in writing (which time and place are
designated as the "Closing"). At the Closing, Seller shall deliver to
the Purchaser certificates representing the Shares being purchased
hereby against delivery by the Purchaser to Seller of the purchase
price therefor by wire transfer payable in same-day funds to an
account specified by Seller. Delivery shall be made through the
facilities of the Depository Trust Company unless Purchaser shall
otherwise instruct.
ARTICLE II
Representations and Warranties of Seller
Seller hereby represents and warrants to the Purchaser that:
SECTION 2.01. Organization, Good Standing and Qualification.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia and has all requisite
corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. Seller is duly qualified to
transact business and is in good standing in each jurisdiction in
which the failure so to qualify would have a
<PAGE>
material adverse effect on its business or properties. Seller does not
have any subsidiaries.
SECTION 2.02. Capitalization. The authorized capital of
Seller consists, or will consist, immediately prior to the Closing,
of:
(a) Common Stock. 20,000,000 shares of Common
Stock, of which 3,250,690 shares are issued and
outstanding.
(b) Options and Warrants. Except for (i) options
issued or issuable for an aggregate of 499,310 shares of
Common Stock under the 1995 Restricted Non-qualified
Incentive Stock Option Plan, dated August 1, 1995, and the
1996 Stock Option Plan, dated December 20, 1996, as proposed
to be amended, and (ii) the Warrant dated May 5, 1997 to
purchase 112,500 shares of Common Stock issued pursuant to
the Underwriting Agreement dated April 29, 1997, there are no
outstanding options, warrants, rights (including conversion
or preemptive rights) or agreements, orally or in writing,
for the purchase or acquisition from Seller of any shares of
its capital stock (the rights and options in clauses (i) and
(ii) above being collectively called the "Existing Equity
Rights"). There exist no rights of first refusal or similar
rights in respect of shares of Seller's capital stock issued
or sold by Seller.
SECTION 2.03. Authorization. All corporate action on the
part of Seller, its officers, directors and shareholders necessary for
the authorization, execution and delivery of this Agreement, the
performance of all obligations of Seller hereunder and the
authorization, issuance and delivery of the Shares has been taken or
will be taken prior to the Closing, and the Agreement, when executed
and delivered by Seller, shall constitute a valid and legally binding
obligation of Seller, enforceable against Seller in accordance with
its terms.
SECTION 2.04. Valid Issuance of Shares. The Shares being
issued to Purchaser hereunder, when issued, sold and delivered in
accordance with the terms hereof for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable
and free of restrictions on transfer other than restrictions on
transfer under this Agreement and applicable state and federal
securities laws and not subject to any preemptive rights of others.
The issued and outstanding shares of Seller's Common Stock are duly
and validly issued, fully paid and nonassessable and have been issued
in compliance with
<PAGE>
applicable state and federal securities laws and are approved for
quotation on the Nasdaq National Market ("NNM") under the symbol
"ICIQ". Based in part upon the representations of Purchaser in this
Agreement, the Shares will be issued in compliance with all applicable
federal and state securities laws and will be listed on the NNM.
SECTION 2.05. Governmental Consents. No consent, approval,
order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of Seller is required in connection
with the consummation of the transactions contemplated by this
Agreement.
SECTION 2.06. Litigation. Except as described in the SEC
Documents (as defined in Section 2.12) or Schedule 2.06 hereto, there
is no action, suit, proceeding or investigation pending or, to
Seller's knowledge, currently threatened against Seller that questions
the validity of this Agreement or the right of Seller to enter into
it, or to consummate the transactions contemplated hereby, or that
would reasonably be expected to result, either individually or in the
aggregate, in any material adverse change in the business, assets,
condition, affairs or prospects of Seller, financially or otherwise,
or any change in the current equity ownership of Seller, nor is Seller
aware that there is any basis for the foregoing. Seller does not
warrant, however, that the litigation described in Schedule 2.06 will
not become material, either favorably or unfavorably to Seller, as
such litigation progresses, it having been filed recently and no
discovery having been performed. The foregoing includes, without
limitation, any actions pending or threatened (or any basis therefor
known to Seller) involving the prior employment of any of Seller's
employees, their use in connection with Seller's business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior
employers. Except as described in Schedule 2.06, Seller is not a party
or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or government agency or instrumentality.
SECTION 2.07. Patents and Trademarks. The SEC Documents
disclose all material information pertaining to all patents,
registered trademarks and trade names, and pending applications
therefor, owned by Seller. Seller has title and ownership of all
patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and process material to its
business as now conducted without, to the best of Seller's knowledge,
<PAGE>
any conflict with or infringement of the rights of others. Except as
included in the SEC Documents, and except for software licensed from
Neuron Data, Inc. and NobleNet, Inc., distributor for IONA
Technologies, Inc., Seller is not party to and has not granted any
options, licenses, or agreements of any kind relating to the
foregoing, nor is Seller bound by or a party to any options, licenses
or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights or processes of any other person or
entity. Seller has not received any communications alleging that
Seller has violated or, by conducting its business as proposed, would
violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other
person or entity. To Seller's knowledge, none of its employees is
obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that
would interfere in any material respect with the use of his or her
best efforts to promote the interests of Seller or that would conflict
with Seller's business as proposed to be conducted. Neither the
execution nor delivery of this Agreement, nor the carrying on of
Seller's business by the employees of Seller, will conflict with or
result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under
which any of such employees is now obligated.
SECTION 2.08. Compliance with Other Instruments. Seller is
not, nor will it be on the date of Closing, in violation or default in
any respect of any provisions of its Restated Articles of
Incorporation or By-laws or, in any material respect, of any
instrument, judgment, order, writ, decree or contract to which it is a
party or by which it is bound or of any provision of federal or state
statute, rule or regulation applicable to Seller. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in any such violation
or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event
which results in the creation of any material lien, charge or
encumbrance upon any assets of Seller.
SECTION 2.09. Agreements; Action. (a) Except as described in
the SEC Documents and as listed in Schedule 2.09, there have been no
material agreements, understandings or proposed transactions between
Seller and
<PAGE>
any of its officers, directors, affiliates, or any affiliate thereof.
(b) Except as included in the SEC Documents, there are no
agreements, understandings, instruments, contracts or proposed
transactions to which Seller is a party or by which it is bound that
involve (i) obligations (contingent or otherwise) of, or payments to
or by, Seller in excess of, $50,000, other than in the ordinary course
of Seller's business, or (ii) the license of any patent, copyright,
trade secret or other proprietary right to or from Seller other than
in the ordinary course of Seller's business.
(c) Since April 29, 1997, Seller has not (i) except for
dividends in the amount of $2,418,765 distributed in accordance with
the S Corporation Termination, Tax Allocation and Indemnification
Agreement dated March 24, 1997, paid any dividends, or authorized or
made any distribution upon or with respect to any class or series of
its capital stock, (ii) except as disclosed in the SEC Documents,
incurred any indebtedness for money borrowed or incurred any other
liabilities individually in excess of $50,000 or in excess of $200,000
in the aggregate, (iii) made any loans or advances to any person,
other than ordinary advances for travel expenses, or (iv) other than
in the ordinary course of business and consistent with past practice,
sold, exchanged or otherwise disposed of any of its assets or rights.
(d) Seller is not a party to, and is not bound by, any
contract, agreement or instrument, or subject to any restriction under
its Restated Articles of Incorporation or By-laws, that materially and
adversely affects its business as now conducted, its properties or its
financial condition.
SECTION 2.10. Registration Rights. Except as contemplated
herein, in the Warrants for 112,500 shares of Common Stock issued to
the Underwriters in the April 1997 public offering, and with respect
to the 117,368 shares that may be acquired by holders of the Debenture
Holder Warrants (as such term was defined in Seller's April 29, 1997
Prospectus), Seller has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or
entity.
SECTION 2.11. Title to Property and Assets. Seller owns its
property and assets free and clear of all mortgages, liens, loans and
encumbrances, except such encumbrances and liens which arise in the
ordinary course of business and do not materially impair Seller's
ownership or
<PAGE>
use of such property or assets. With respect to the property and
assets it leases, Seller is in compliance with such leases in all
material respects and holds a valid leasehold interest free of any
liens, claims or encumbrances.
SECTION 2.12. SEC Documents, Financial Statements. Since
becoming registered under the Securities Exchange Act of 1934 (the
"Exchange Act") on April 29, 1997, Seller has filed all reports,
schedules, forms, statements, exhibits and other documents required to
be filed by it with the Securities and Exchange Commission (the
"Commission") pursuant to the reporting requirements of the Exchange
Act (all of the foregoing, together with Registration Statement No.
333-21647, as amended, being referred to herein as the "SEC
Documents"). As of their respective dates, the SEC Documents complied
in all material respects with the applicable requirements of the
Securities Act of 1933 (the "Securities Act") and the Exchange Act and
the rules and regulations of the Commission promulgated thereunder
applicable to such SEC Documents, and, as of their respective dates,
none of the SEC Documents taken as a whole (when read together with
all exhibits included therein and financial statement schedules
thereto and documents (other than exhibits) incorporated by reference
therein) 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 light of the circumstances
under which they were made, not misleading. As of their respective
dates, the financial statements of Seller included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the
financial position of Seller as of the dates thereof and the results
of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit
adjustment).
SECTION 2.13. Employee Benefit Plans. Seller is in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no
<PAGE>
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which Seller would have
any liability; Seller has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Section 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which Seller would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
SECTION 2.14. Tax Returns and Payments. Seller has filed all
tax returns and reports as required by law. These returns and reports
are true and correct in all material respects. Seller has paid all
taxes and other assessments due.
SECTION 2.15. Insurance. Seller has in full force and effect
fire and casualty insurance policies, with extended coverage,
sufficient in amount (subject to reasonable deductibles) to allow it
to replace any of its properties that might be damaged or destroyed.
SECTION 2.16. Labor Agreements and Actions. Seller is not
bound by or subject to (and none of its assets or properties is bound
by or subject to) any written or oral, express or implied, contract,
commitment or arrangement with any labor union, and no labor union has
requested or, to the knowledge of Seller, has sought to represent any
of the employees, representatives or agents of Seller. There is no
strike or other labor dispute involving Seller pending, or to the
knowledge of Seller threatened, which could have a material adverse
effect on the assets, properties, financial condition, operating
results or business of Seller (as such business is presently conducted
and as it is proposed to be conducted), nor is Seller aware of any
labor organization activity involving its employees. Seller is not
aware that any officer or key employee intends to terminate their
employment with Seller, nor does Seller have a present intention to
terminate the employment of any of the foregoing. Seller has complied
in all material respects with all applicable state and federal equal
employment opportunity laws and with other laws related to employment.
SECTION 2.17. Offering. Subject to the truth and accuracy of
Purchaser's representations set forth in this
<PAGE>
Agreement, the offer, sale and issuance of the Shares as contemplated
by this Agreement are exempt from the registration requirements of the
Securities Act of 1933 (the "Securities Act"), and neither Seller nor
any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.
SECTION 2.18. Permits. Seller has all franchises, permits,
licenses and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which could
materially and adversely affect the business, properties, prospects or
financial condition of Seller and believes that it can obtain, without
undue burden or expense, any similar authority for the conduct of its
business as planned to be conducted. Seller is not in default in any
material respect under any of such franchises, permits, licenses or
other similar authority.
ARTICLE III
Representations and Warranties of Purchaser
The Purchaser hereby represents, warrants and covenants to
and for the benefit of Seller that:
SECTION 3.01. Authorization. All corporate action on the
part of Purchaser, its officers, directors and shareholders necessary
for the authorization, execution and delivery of this Agreement, the
performance of all obligations of Purchaser hereunder has been taken
prior to Closing, and delivered by Purchaser and shall constitute a
valid and legally binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
SECTION 3.02. Purchase Entirely for Own Account. The Shares
to be acquired by it will be acquired for investment for its own
account, not as a nominee or agent, and not with a view to the resale
or distribution of any part thereof, and it has no present intention
of selling, granting any participation in, or otherwise distributing
the same. It does not presently have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to
any of the Shares. It understands that this sale of the Shares has not
been, and will not be, registered under the Securities Act by reason
of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide
nature of its investment intent and the accuracy of its
<PAGE>
representations as expressed herein. It represents that it has not
been formed for the specific purpose of acquiring the Shares.
SECTION 3.03. Disclosure of Information. It has received all
the information it considers necessary or appropriate for deciding
whether to acquire the Shares. It further represents that it has had
an opportunity to ask questions and receive answers from Seller
regarding the terms and conditions of the offering of the Shares. The
foregoing, however, does not limit or modify the representations and
warranties of Seller in Article II of this Agreement or the right of
the Purchaser to rely thereon.
SECTION 3.04. Investment Experience. It has substantial
experience in evaluating and investing in private placement
transactions so that the Purchaser is capable of evaluating the merits
and risks of its investment in Seller. By reason of its business or
financial experience or the business or financial experience of its
professional advisors who are unaffiliated with and who are not
compensated by Seller or any affiliate or selling agent of Seller,
directly or indirectly, it has the capacity to protect its own
interests in connection with the purchase of the Shares hereunder.
SECTION 3.05. Restricted Securities. It understands that the
Shares are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from Seller in a
transaction not involving a public offering and that under such laws
and applicable regulations such Shares may be resold without
registration under the Securities Act only in certain limited
circumstances. In this respect, it represents that it is familiar with
Rule 144 promulgated under the Securities Act, as presently in effect,
and understands the resale limitations imposed thereby and otherwise
by the Securities Act.
SECTION 3.06. Further Limitations on Disposition. Without in
any way limiting the representations set forth above, the Purchaser
further agrees not to make any disposition of all or any portion of
the Shares unless and until the conditions set forth in paragraphs (a)
and (b) are satisfied:
(a) Either (x) there is in effect a Registration
Statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with
such Registration Statement; or (y)
<PAGE>
(i) the Purchaser shall have notified Seller of the proposed
disposition and shall have furnished Seller with a detailed
statement of the circumstances surrounding the proposed
disposition, and (ii) if reasonably requested by Seller, the
Purchaser shall have furnished Seller with an opinion of
counsel, reasonably satisfactory to Seller, that such
disposition will not require registration under the
Securities Act or any applicable state securities laws. It is
agreed that Seller will not require opinions of counsel for
transactions made pursuant to Rule 144 except in unusual
circumstances; provided, however, the Purchaser acknowledges
that the transfer agent for the Common Stock may require
opinions of counsel for any transactions made pursuant to
Rule 144.
(b) Any resale prior to February 2, 2001, pursuant
to paragraph (a) will be limited to no more than 100,000
shares in any six month period.
Notwithstanding the foregoing provisions of this Section 3.06, a
transfer by the Purchaser to a constituent shareholder (including any
constituent of a constituent) of the Purchaser if such transferee is
an accredited investor (as defined in Rule 501(a) under the Securities
Act) shall be permitted if the transferee or transferees agree in
writing to be subject to the terms hereof to the same extent as if
they were the Purchaser hereunder.
SECTION 3.07. Legends. It is understood that the Shares may
bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
(b) Any legend required by the Blue Sky laws of any
state to the extent such laws are applicable to the shares
represented by the certificate so legended.
SECTION 3.08. Accredited Investor. It is an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under
the Securities Act.
SECTION 3.09. Organization and Good Standing. Purchaser is
a corporation duly organized and in good
<PAGE>
standing under the laws of Bermuda and has all requisite corporate
power and authority to carry on its business as now conducted and to
execute and deliver this Agreement.
ARTICLE IV
Conditions of Purchaser's Obligations at Closing
The obligations of the Purchaser to Seller under this
Agreement at the Closing are subject to the fulfillment, on or before
such Closing, of each of the following conditions:
SECTION 4.01. Representations and Warranties. The
representations and warranties of Seller contained in Article II shall
be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of such date.
SECTION 4.02. Performance. Seller shall have performed and
complied with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by
it on or before such Closing.
SECTION 4.03. Certificates of Officers. Seller shall deliver
to Purchaser at such Closing certificates of the officers of Seller
certifying that the conditions specified in Sections 4.01 and 4.02
have been fulfilled and as to such other matters as the Purchaser may
reasonably request.
SECTION 4.04. Proceedings and Documents. All corporate and
other proceedings in connection with the transactions contemplated at
the Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Purchaser, and the Purchaser
shall have received all such counterpart original and certified or
other copies of such documents as they may reasonably request.
SECTION 4.05. Opinion of Counsel. The Purchaser shall have
received from Gambrell & Stolz, counsel for Seller, an opinion, dated
as of the Closing, in the form attached hereto as Exhibit A.
SECTION 4.06. No Material Adverse Change. (i) Seller shall
not have sustained since September 30, 1997, any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered
<PAGE>
by insurance, or from any labor dispute or court or governmental
action, order or decree, and (ii) there shall not have been any change
in the capital stock or long-term debt of Seller or any change, or any
development involving a prospective change, in or affecting the
condition (financial or other), earnings, general affairs, business,
operations, properties, management, stockholders' equity, results of
operations or prospects of Seller, taken as a whole, the effect of
which, in any such case described in clause (i) or (ii), is in
Purchaser's sole judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the purchase of the
Shares.
ARTICLE V
Conditions of Seller's Obligations at Closing
The obligations of Seller to the Purchaser under this
Agreement are subject to the fulfillment, on or before the Closing, of
each of the following conditions:
SECTION 5.01. Representations and Warranties. The
representations and warranties of the Purchaser contained in Article
III shall be true on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of
such date.
ARTICLE VI
Covenants of Seller
SECTION 6.01. Agreement as to Voting of the Shares.
Purchaser hereby agrees and covenants that, through February 2, 2000
(or such earlier date as may apply as set forth in Section 6.04), on
each occasion on which shareholders of Seller are entitled to vote or
consent on any issue, whether at an annual or special meeting of
shareholders, by written consent or otherwise (hereinafter
collectively referred to as "Shareholder Votes"), Purchaser shall
designate Haim E. Dahan, who currently is Chief Executive Officer of
Seller ("Dahan"), as its proxy or attorney-in-fact to vote or
otherwise act with respect to the Shares on behalf of Purchaser in all
respects in connection with the Shareholder Votes, including without
limitation granting to him a proxy to vote in his discretion on any
action that may be taken at an annual or special meeting of
shareholders whether or not such action was
<PAGE>
described in any proxy statement or solicitation prepared on behalf of
Seller. The term "Shares" as used in this Article VI shall include
also any other shares of Common Stock or other securities of Seller
that are issued to Purchaser with respect to the Shares pursuant to a
stock dividend, stock split or otherwise.
SECTION 6.02. Execution of Proxies and Powers of Attorney.
Promptly upon request of Dahan or of Seller, but in any event within
not more than 10 days after written notice is given to Purchaser
requesting execution of an enclosed or previously furnished proxy,
power of attorney or other written authorization that would grant to
Dahan the right to vote or consent with respect to the Shares with
respect to any Shareholder Vote, Purchaser shall duly execute such
proxy, power of attorney or other written authorization and cause such
proxy, power of attorney or other written authorization to be
delivered to Dahan at the address for Seller as established pursuant
to Section 8.06, or to such other address as Dahan may furnish to
Purchaser by not less than 10 days prior written notice. Purchaser
shall not make any attempt to revoke or supersede any such proxy,
power of attorney or other written authorization given to Dahan
pursuant to this Article VI, nor may Purchaser make any attempt to
vote the Shares directly or through any other person, proxy or
attorney-in-fact with respect to any Shareholder Vote as to which a
proxy, power of attorney or other written authorization has been given
to or has been requested by or on behalf of Dahan. Any attempt by
Purchaser to do so in violation of this Article VI shall be void and
ineffective, and Seller is hereby authorized to so notify the transfer
agent for the common stock and any inspector(s) of election with
respect to any Shareholder Vote. Purchaser hereby designates Dahan as
its attorney-in-fact (which designation is hereby deemed to be coupled
with an interest) for the limited purpose of providing notices,
casting votes and taking any other actions, including the execution of
any ballots, instruments or other documents necessary to effectuate
the purposes of this Article VI.
SECTION 6.03. Scope of Voting Rights. In his exercise of the
voting rights established pursuant to this Article VI, Dahan shall, in
his uncontrolled discretion, in respect of any and all of the Shares,
possess and be entitled to exercise the right to vote thereon for
every purpose, in person or by proxy, to waive any share privilege in
respect thereof (excluding any right or privilege to subscribe for any
additional shares of Common Stock, which shall remain vested in
Purchaser notwithstanding any other provision of this Article VI), and
to consent to any lawful
<PAGE>
corporate act of Seller, as though absolute owner of the Shares. Dahan
is specifically authorized by way of example, without limiting his
rights hereunder, to vote the Shares for, or to consent in respect
thereof to, any increase or reduction of the shares of Seller, any
agreement of consolidation, merger, share exchange or the sale or
other disposition of all, substantially all, or any part of the
property, assets and franchises of Seller and the granting,
ratification or confirmation of any option or options therefor
(whether or not such option or options extend(s) beyond the term of
this Agreement), or the dissolution of Seller, and the judgment of
Dahan as to the adequacy of the consideration thereby to be received
by the Seller and Purchaser (provided each shareholder is treated
uniformly, share for share) shall be conclusive and binding upon
Purchaser and all persons claiming through or under Purchaser. Dahan
may, directly or indirectly, transact any lawful business with Seller,
notwithstanding the rights granted to him hereunder. Dahan may also
serve as director and compensated officer of Seller and may vote the
Shares for himself, as such. The granting of voting rights to Dahan
under this Article VI shall not constitute him as a fiduciary under
applicable law.
SECTION 6.04. Termination of Voting Rights. The voting
rights granted under this Article VI shall extend through the earlier
of (i) the date set forth in Section 6.01, or (ii) the date on which
Purchaser and Purchaser's "Affiliates", as such term is defined in the
Securities Act, on a collective basis beneficially own less than
150,000 shares of Common Stock, or (iii) the death or incapacity of
Dahan, at which time the voting rights granted under this Article VI
shall terminate automatically. For purposes of this Section 6.04, the
number of shares shall be adjusted appropriately to reflect any stock
dividend, stock split or similar transaction.
SECTION 6.05. Applicability to Transferees; Legend on
Certificates. The voting rights granted under this Article VI shall
apply to Purchaser and Purchaser's Affiliates during the period set
forth in this Article VI. Any Shares transferred during such period to
a transferee that is not an Affiliate of Purchaser shall be free from
any of the provisions of this Article VI, provided that such transfer
is in compliance with all of the terms of this Agreement. Each
certificate representing the Shares shall, during the period in which
this Article VI remains applicable as to such Shares, bear on its
front or reverse a prominent legend referring to the terms of this
Article VI, as follows:
<PAGE>
THE VOTING RIGHTS WITH RESPECT TO THESE SECURITIES ARE
LIMITED BY THE TERMS OF AN AGREEMENT BETWEEN THE HOLDER
HEREOF AND THE COMPANY, TERMINATING, WITH RESPECT TO SUCH
VOTING RESTRICTIONS, NOT LATER THAN FEBRUARY 2, 2000. A COPY
OF SUCH AGREEMENT IS MAINTAINED AT THE EXECUTIVE OFFICES OF
THE COMPANY AND A COPY THEREOF IS AVAILABLE TO THE HOLDER
FROM THE COMPANY UPON REQUEST.
SECTION 6.06. Enforcement, Third Party Beneficiary. Either
the Seller or Dahan shall have the right to enforce the terms of this
Article VI by specific performance, in addition to any other legal or
equitable remedies that may be available to Seller or Dahan.
Notwithstanding any other provision of this Agreement to the contrary,
any legal action related to this Article VI, whether brought by
Purchaser, Seller or Dahan, shall be brought in a state or federal
court in Fulton County, Georgia, which the parties agree shall have
exclusive jurisdiction over any such action. Purchaser, on its own
behalf and on behalf of any Affiliate of Purchaser that is a
transferee of the Shares, hereby waives any argument or claim that
such courts are not a convenient forum for any such action or that
jurisdiction or venue is not proper for any reason whatsoever. The
parties specifically intend that Haim E. Dahan is and shall be deemed
to be a third-party beneficiary of this Article VI and shall have the
full right to enforce the provisions hereof in his own behalf.
ARTICLE VII
Registration Rights
SECTION 7.01. Definitions. As used herein, "Holders" means
Purchaser and any persons or entities to whom the rights granted under
this Article VII are transferred by any Purchaser, their successors or
assigns, and "Registrable Securities" shall mean, with regard to the
exercise of any right pursuant to Section 7.02, (i) the 90,000 Shares
bearing the legend specified in Section 7.08 and (ii) any other shares
of Common Stock of Seller issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange
for or in replacement of, the Shares referred to in clause (i).
SECTION 7.02. Incidental Registration. If Seller at any time
proposes to file prior to February 2, 2003, on its behalf or on behalf
of any of its security holders (other than Holders of Registrable
Securities) (the
<PAGE>
"demanding security holders") a registration statement under the
Securities Act on any form (other than a Registration Statement on
Form S-4 or S-8 or any successor form for securities to be offered in
a transaction of the type referred to in Rule 145 under the Securities
Act or to employees of Seller pursuant to any employee benefit plan,
respectively) for the general registration of securities to be sold
for cash with respect to its Common Stock or any other class of equity
security (as defined in Section 3(a)(11) of the Exchange Act) of
Seller, it will give written notice to all Holders of the Registrable
Securities at least four weeks before the initial filing with the
Commission of such registration statement, which notice shall set
forth the intended method of disposition of the securities proposed to
be registered by Seller. The notice shall offer to include in such
filing the aggregate number of shares of Registrable Securities, as
such Holders may request.
Each Holder of any Registrable Securities desiring to have
Common Stock registered under this Section 7.02 shall advise Seller in
writing within 10 days after the date of receipt of such offer from
Seller, setting forth the amount of such Common Stock for which
registration is requested. Seller shall thereupon include in such
filing the number of shares of Common Stock for which registration is
so requested, subject to the following sentence, and shall use its
best efforts to effect registration under the Securities Act of such
shares. If a public offering is proposed for the securities being
registered by Seller or such demanding security holder and the
managing underwriter of such public offering advises Seller in writing
that, in its opinion, the distribution of the Common Stock requested
to be included in the registration concurrently with the securities
being registered by Seller or such demanding security holder would
materially and adversely affect the distribution of such securities by
Seller or such demanding security holder, then Seller, if applicable,
and all selling security holders (including, if applicable, the
Holders and the demanding security holder who initially requested such
registration) shall reduce (to the extent Seller has a contractual
right to impose such a reduction) the amount of securities each
intended to distribute through such offering on a pro rata basis;
provided, however, that Seller shall not be required to reduce the
amount of securities to be distributed on its behalf to less than 50%
of the aggregate number of securities to be registered in such
offering.
SECTION 7.03. Registration Procedures. If Seller is required
by the provisions of this Article VII to effect
<PAGE>
the registration of any of Purchaser's securities under the Securities
Act, Seller will, as expeditiously as possible:
(a) promptly prepare and file with the Commission a
registration statement with respect to such securities and
cause such registration statement to become and remain
effective for a period of time required for the disposition
of such securities by the Holders thereof, but not to exceed
three months from the effective date thereof;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all securities
covered by such registration statement until the earlier of
such time as all such securities have been disposed of in a
public offering or the expiration of three months, and to
comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such
registration statement during such period in accordance with
the intended methods of disposition by the Holders of such
securities set forth in such registration statement;
(c) furnish to such Holders such number of copies of
such registration statement, each amendment and supplement
thereto, and the prospectus included in such registration
statement (including each preliminary prospectus), all in
conformity with the requirements of the Securities Act, and
such other documents, as such Holders may reasonably request;
(d) notify such Holders promptly after Seller shall
receive notice thereof, of the time when such registration
statement became effective or when any amendment or
supplement to any prospectus forming a part thereof has been
filed;
(e) notify such Holders promptly of any request by
the Commission for the amending or supplementing of such
registration statement or prospectus forming a part thereof
or for additional information;
(f) advise such Holders after Seller shall receive
notice or otherwise obtain knowledge of the issuance of any
order by the Commission suspending the effectiveness of such
registration statement or
<PAGE>
amendment thereto or of the initiation or threatening of any
proceeding for that purpose, and promptly use its best
efforts to prevent the issuance of any stop order or to
obtain its withdrawal promptly if such stop order should be
issued;
(g) use its best efforts to register or qualify such
securities under such other securities or blue sky laws of
such jurisdictions within the United States and Puerto Rico
as each Holder (or any underwriter on behalf of such Holder)
of such securities shall request (provided that Seller shall
not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is
not then qualified or to file any general consent to service
of process), and do such other reasonable acts and things as
may be required of it to enable such Holder to consummate the
disposition in such jurisdiction of such securities;
(h) furnish on the date that such securities are
delivered to underwriters for sale pursuant to such
registration or, if such securities are not being sold
through underwriters, on the date that such registration
statement becomes effective, (i) an opinion dated such date,
of the independent counsel representing Seller for the
purposes of such registration, addressed to such
underwriters, if any, and, if such securities are not being
sold through underwriters, then to the Holder making such
request, in customary form and covering matters of the type
customarily covered in such legal opinions and (ii) a comfort
letter dated such date, from the independent certified public
accountants of Seller, addressed to such underwriters, if
any, and, if such securities are not being sold through
underwriters, then to the Holder making such request in a
customary form and covering matters of the type customarily
covered by such comfort letters as such underwriters or such
Holder, as the case may be, shall reasonably request;
(i) enter into customary agreements (including one
or more underwriting agreements in customary form) and take
such other actions as are reasonably required or reasonably
requested by such Holders or any underwriter on behalf
thereof in order to expedite or facilitate the disposition of
such securities;
(j) use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, but not later than 18 months
<PAGE>
after the effective date of such registration statement, an
earnings statement covering the period of at least 12 months
beginning with the first full month after the effective date
of such registration statement, which earnings statements
shall satisfy the provisions of Section 11(a) of the
Securities Act (including, at the option of Seller, Rule
158);
(k) notify such Holders at any time when a
prospectus relating to such registration statement is
required to be delivered under the Securities Act, of the
happening of any event as a result of which such registration
statement contains an untrue statement of material fact or
omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading, and, at the request of any such Holder, prepare a
supplement or amendment to such registration statement so
that such registration statement will not contain an untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading;
(l) cause all shares of Common Stock being so
registered to be listed on each securities exchange on which
similar securities issued by Seller are then listed or, if
similar securities are not then listed, take all reasonable
action either to list such shares on a securities exchange or
to facilitate the trading of the securities on the Nasdaq
National Market; and
(m) provide a transfer agent and registrar for all
shares of Common Stock being so registered not later than the
effective date of such registration statement.
It shall be a condition precedent to the obligation of
Seller to take any action pursuant to this Article VII in respect of
the securities which are to be registered at the request of any Holder
of the Registrable Securities that such Holder shall furnish to Seller
such information regarding the securities held by such Holder and the
intended method of disposition thereof as Seller shall reasonably
request and as shall be required in connection with the action taken
by Seller. Seller may reasonably rely upon any such information so
furnished by a Holder.
SECTION 7.04. Expenses. All expenses incurred in complying
with this Article VII, including, without limitation, all registration
and filing fees (including all expenses incident to filing with the
NASD), printing
<PAGE>
expenses, fees and disbursements of counsel and accountants for Seller
and expenses of complying with the securities or blue sky laws of any
jurisdictions pursuant to Section 7.03(g), shall be paid by Seller,
except any discount or commissions payable to any underwriter by such
Holders and fees and expenses of counsel for such Holders.
SECTION 7.05. Indemnification and Contribution. (a) In the
event of any registration under the Securities Act pursuant to this
Article VII of any Registrable Securities, Seller will indemnify and
hold harmless the Holder thereof against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Holder may
become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which such
securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, or arise out of or are based upon 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, and will reimburse such Holder for any legal or any other
expenses incurred by such Holder in connection with investigating or
defending any such action or claim as such expenses are incurred;
provided, however, that Seller shall not be liable in any such case to
the extent that such loss, claim, damage, liability or expense arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration
statement, preliminary prospectus, prospectus or amendment or
supplement in reliance upon and in conformity with written information
furnished to Seller by such Holder or an underwriter on behalf of such
Holder expressly for use therein; and provided further that the
foregoing indemnity agreement with respect to any prospectus shall not
inure to the benefit of the Holder if it is conclusively determined by
a court of competent jurisdiction not subject to appeal that a copy of
a prospectus was not sent or given by or on behalf of the Holder to
the purchaser of the Common Stock who has asserted a claim, if
required by law to have been so delivered, at or prior to the written
confirmation of the sale of Common Stock to such person, and if a
prospectus would have cured the defect giving rise to such loss,
claim, damage or liability;
(b) Each Holder of Registrable Securities, by acceptance of
the registration provisions provided herein,
<PAGE>
agrees to indemnify and hold harmless Seller against any losses,
claims, damages, liabilities or expenses, joint or several, to which
Seller may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any registration statement under which securities were registered
under the Securities Act at the request of such Holder, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon 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, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in any such registration statement,
preliminary prospectus, prospectus or amendment or supplement in
reliance upon and in conformity with written information furnished to
Seller by such Holder expressly for use therein; and will reimburse
Seller for any legal or other expenses reasonably incurred by Seller
in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against an indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise
than under such subsection except to the extent it has been materially
prejudiced by such failure. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party (which shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party,
<PAGE>
in connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 7.05
is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a), (b) or (c) above in respect of any losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) referred to therein or if the indemnified party failed to
give the notice required under subsection (c) above, then each
indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of Seller
on the one hand and the relevant Holder on the other in connection
with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by Seller on the one hand or the
relevant Holder on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. Seller and each Holder registering
securities under this Article VII agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (d), no Holder registering
securities under this Article VII shall be required to contribute any
amount in excess of the amount by which the total price at which the
securities registered and sold by such Holder exceeds the amount of
any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
<PAGE>
(e) The obligations of Seller under this Section 7.05 shall
be in addition to any liability which Seller may otherwise have and
shall extend, upon the same terms and conditions, to each person
(including each underwriter) who participated in the offering of the
registered securities and to each person, if any, who controls any
Holder registering securities under this Article VII or any such
person (including each such underwriter) within the meaning of Section
15 of the Securities Act; and the obligations under this Section 7.05
of any Holder registering securities under this Article VII shall be
in addition to any liability which such Holder may otherwise have and
shall extend, upon the same terms and conditions, to each officer and
director of Seller and to each person, if any, who controls Seller
within the meaning of Section 15 of the Securities Act.
SECTION 7.06. Inspection of Records and Documents. Each
Holder and underwriter participating in any disposition pursuant to
the registrations described in this Article VII, and any attorney,
accountant or other agent retained by any such Holder or underwriter
(collectively, the "Inspectors"), shall have conducted, at dates,
times and locations reasonably specified by such Inspectors, such
investigations, inquiries and conferences with such directors,
officers, employees and agents (including, without limitation, outside
accountants and counsel) of Seller and its subsidiaries, been
furnished and reviewed such documentation of Seller and its
subsidiaries and conducted such other procedures, as the Inspectors
deem necessary, in their sole judgment, to have a satisfactory "due
diligence" defense under Section 11 of the Securities Act in
connection with such registrations.
SECTION 7.07. Assignment of Registration Rights. Each Holder
of Registrable Securities may assign all or any part of its rights
under this Article VII to any Affiliate of such Holder to whom such
Holder sells, transfers or assigns such Registrable Securities. In the
event that the Holder shall assign its rights pursuant to this Article
VII in connection with the transfer of less than all its Registrable
Securities, the Holder shall also retain its rights with respect to
its remaining Registrable Securities.
SECTION 7.08. Legend on Certificate(s). Inasmuch as less
than all the Shares shall carry with them registration rights under
this Article VII, at the Closing the Company shall give instructions
that the Shares be issued in the form of two certificates, with one
certificate representing 90,000 shares of Common Stock and bearing a
legend prominently referring to the registration rights
<PAGE>
provided under this Article VII, and with the other certificate
representing 210,000 shares and bearing a legend while held by a
Holder prominently referring to the absence of such rights. Any
replacement certificates issued therefor shall reflect, similarly, the
existence or absence of such rights in accordance with the terms of
this Article VII.
ARTICLE IX
Miscellaneous
SECTION 8.01. Survival. The warranties and representations
of Seller and Purchaser contained in or made pursuant to this
Agreement shall survive for a period of 4 years after the execution
and delivery of this Agreement and the Closing and shall in no way be
affected by any investigation of the subject matter thereof made by or
on behalf of Purchaser or Seller. All agreements and covenants
contained herein shall survive indefinitely until, by their respective
terms, they are no longer operative.
SECTION 8.02. Transfer; Successors and Assigns. The terms
and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.
SECTION 8.03. Governing Law. This Agreement shall be
governed by and construed under the laws of the State of Georgia.
SECTION 8.04. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
SECTION 8.05. Title and Subtitles. The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
SECTION 8.06. Notices. (a) All notices, requests, demands
and other communications under this Agreement or in connection
herewith shall be given to or made upon Purchaser at Thybo New
Ventures Limited, Par La Ville Place, 14 Par La Ville Road, Hamilton
HM JK Bermuda,
<PAGE>
with a copy to J.A.M. Vijverberg, TBG Management S.A.M., 29 Bvd
Princesse Charlotte, B.P. 89 MC 98007, Monaco Cedex or, if to Seller
to International CompuTex, Inc., 5500 Interstate North Parkway, Suite
507, Atlanta, Georgia 30328; attention: Chief Executive Officer.
(b) All notices, requests, demands and other communications
given or made in accordance with the provisions of this Agreement
shall be in writing, and shall be sent by certified or registered
mail, postage prepaid, return receipt requested, and shall be deemed
to be given or made when receipt is so confirmed.
(c) Any party may, by written notice to the other, alter its
address or respondent, and such notice shall be considered to have
been given 10 days after confirmation of receipt thereof.
SECTION 8.07. Finder's Fee. Each party represents and
warrants that it neither is nor will be obligated for any finder's fee
or commission in connection with this transaction. The Purchaser
agrees to indemnify and to hold harmless Seller from any liability for
any commission or compensation in the nature of a finder's fee (and
the costs and expenses of defending against such liability or asserted
liability) for which Purchaser or any of its officers, employees, or
representatives is responsible in connection with this transaction.
Seller agrees to indemnify and hold harmless Purchaser from any
liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which Seller or any of its
officers, employees or representatives is responsible in connection
with this transaction.
SECTION 8.08. Expenses. Seller covenants and agrees with the
Purchaser that Seller will pay or cause to be paid upon demand the
following: (i) the fees, disbursements and expenses of Seller's
counsel and accountants in connection with the purchase and sale of
the Shares; (ii) all expenses in connection with the qualification of
the Shares, for offering and sale under state securities laws,
including the fees and disbursements of counsel for Purchaser in
connection with such qualification; (iii) the cost of preparing stock
certificates; (iv) the cost and charges of any transfer agent or
registrar; (v) all fees and expenses provided for in Article VII; (vi)
all out-of-pocket costs and expenses associated with the filing of any
Schedule 13-D, Schedule 13-G or any successor form or the filing of
any amendment thereto required to be filed under the Exchange Act as a
<PAGE>
result of the Shares being included in a filing by a group because of
the voting rights granted under Article VI of this Agreement; and
(vii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided
for in this Section 8.08.
SECTION 8.09. Indemnification. Seller agrees to indemnify
and hold harmless each Holder, the Purchaser and the directors,
officers, employees and agents of the Purchaser and each person who
controls the Purchaser within the meaning of either the Securities Act
or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any lawsuit, action or claim
that they or any of them are part of a "control group", a "controlling
shareholder" or an "affiliate" of Seller, or any lawsuit or other
action arising out of or based upon a claim made pursuant to Section
13(d) under the Exchange Act and the rules promulgated thereunder or
any successor provision thereto as a result of the Shares being
included in a filing by a group because of the voting rights granted
under Article VI of this Agreement, and agrees to reimburse each such
indemnified party, within 30 business days after such expenses are
incurred, for all reasonable fees and expenses of counsel or other
expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action.
SECTION 8.10. Amendments and Waivers. Any term of this
Agreement may be amended 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 with the written
consent of Seller and the holders of a majority of the Shares
purchased hereunder. Any amendment or waiver effected in accordance
with this Section shall be binding upon each transferee of any Shares,
each future holder of all such Shares, and Seller.
SECTION 8.11. Severability. If one or more provisions of
this Agreement are held to be unenforceable under applicable law, such
provision shall be excluded from this Agreement and the balance of
this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
<PAGE>
SECTION 8.12. Entire Agreement. This Agreement dated January
29, 1998, constitutes the entire Agreement between the parties hereto
pertaining to the subject matter hereof and thereof, and any and all
other prior written or oral agreements existing between the parties
hereto are expressly canceled.
IN WITNESS WHEREOF, the parties have executed this Purchase
Agreement as of the date first above written.
THYBO NEW VENTURES LIMITED,
by /s/ J.A.M. Vijverberg
------------------------
Name: J.A.M. Vijverberg
Title: President
INTERNATIONAL COMPUTEX, INC.,
by /s/ Haim Dahan
------------------------
Name: Haim Dahan
Title: Chief Executive
Officer
<PAGE>
EXHIBIT 2
===============================================================================
FORMATION AGREEMENT
Among
INFORMATION HANDLING SERVICES INC.
And
CERTAIN SHAREHOLDERS OF INTERNATIONAL COMPUTEX, INC.
IDENTIFIED HEREIN
Dated as of January 10, 1999
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Interpretations
SECTION 1.01. Definitions...................................... 2
SECTION 1.02. Interpretations.................................. 11
ARTICLE II
Repurchase of Warrants and Reimbursement of
Repurchase Price
and
Contributions of Assets and ICI Common Stock
in Exchange for Holdings Common Stock
SECTION 2.01. Repurchase, Reimbursement,
Contributions and Exchanges.................... 11
SECTION 2.02. Acquired Assets and Excluded
Assets......................................... 13
SECTION 2.03. Assumption of Certain
Liabilities.................................... 16
ARTICLE III
The Closing
SECTION 3.01. Closing Date..................................... 18
SECTION 3.02. Transactions To Be Effected at the
Closing........................................ 18
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties
of IHS......................................... 19
SECTION 4.02. Representations and Warranties
in respect of Holdings and
Merger Sub..................................... 31
SECTION 4.03. Representations and Warranties of
the Founders................................... 33
<PAGE>
ARTICLE V
Page
Covenants
SECTION 5.01. Conduct of Business.............................. 51
SECTION 5.02. No Solicitation.................................. 56
ARTICLE VI
Additional Agreements
SECTION 6.01. Access to Information............................ 57
SECTION 6.02. Reasonable Efforts;
Notification................................... 58
SECTION 6.03. Costs and Expenses; Transfer
Taxes.......................................... 59
SECTION 6.04. Publicity........................................ 59
SECTION 6.05. Bulk Transfer Laws............................... 60
SECTION 6.06. Waiver of Certain Defenses ...................... 60
SECTION 6.07. Preparation of Proxy Statement;
Shareholders' Meeting.......................... 60
SECTION 6.08. Agreement of Founders To Vote in
Favor of Merger................................ 60
SECTION 6.09. Agreements Not To Compete........................ 61
SECTION 6.10. Agreement to Provide Directors'
and Officers Insurance......................... 63
SECTION 6.11. Tax Matters...................................... 63
SECTION 6.12. Stock Options.................................... 64
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to the Obligations of
IHS and the Founders........................... 65
SECTION 7.02. Conditions to the Obligations of
IHS............................................ 66
SECTION 7.03. Conditions to the Obligations of
the Founders................................... 68
<PAGE>
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination...................................... 71
SECTION 8.02. Effect of Termination............................ 73
SECTION 8.03. Amendment........................................ 73
SECTION 8.04. Extension; Waiver................................ 73
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations
and Warranties................................. 74
SECTION 9.02. Notices.......................................... 74
SECTION 9.03. Headings......................................... 75
SECTION 9.04. Severability..................................... 75
SECTION 9.05. Counterparts..................................... 75
SECTION 9.06. Entire Agreement; No Third-Party
Beneficiaries.................................. 75
SECTION 9.07. Governing Law.................................... 76
SECTION 9.08. Assignment....................................... 76
SECTION 9.09. Consent to Jurisdiction.......................... 76
<PAGE>
Appendices
A Founders, Optionholders, Shares of ICI Common
Stock, Options To Purchase Shares of ICI Common
Stock and Shares of Holdings Common Stock
B Products
C Transferred Employees
Exhibits
A Form of Dahan Employment Agreement
B Form of Galvin Employment Agreement
C Form of Merger Agreement
D Form of Option Amendment Agreement
E Form of Salem Employment Agreement
F Form of Services Agreement
G Form of Stockholders' Agreement
<PAGE>
FORMATION AGREEMENT dated as of January 10,
1999 (this "Agreement"), among INFORMATION
HANDLING SERVICES INC., a Delaware corporation
("IHS"), and Certain Shareholders of International
CompuTex, Inc., a Georgia corporation ("ICI"),
identified in Appendix A-1 (the "Founders").
WHEREAS IHS has caused IHS Itemquest Holdings Inc., a
Delaware corporation ("Holdings"), to be incorporated;
WHEREAS IHS intends to contribute to Holdings certain assets
and liabilities related to the CAPSXpert product lines of IHS, 330,000
shares of ICI Common Stock (as defined below) and cash in exchange for
7,989,877 shares of Holdings Common Stock (as defined below),
resulting in IHS owning an aggregate of 7,989,977 shares of Holdings
Common Stock;
WHEREAS the Founders intend to contribute to Holdings
1,566,153 shares of ICI Common Stock in exchange for 1,566,153 shares
of Holdings Common Stock;
WHEREAS, following the foregoing contributions and exchanges
(the "Formation Transaction"), each outstanding share of ICI Common
Stock will be converted into the right to receive $9.50 in cash in a
merger (the "Merger") of a wholly owned subsidiary of Holdings
("Merger Sub") with and into ICI such that ICI will be the surviving
corporation in the Merger;
WHEREAS, upon the effectiveness of the Merger, the employees
(and certain former employees) of ICI who hold options to purchase
shares of ICI Common Stock and certain directors of ICI who hold
options to purchase shares of ICI Common Stock, which employees (and
former employees) and directors are identified in Appendix A-2 (the
"Optionholders"), will, by amendment of the agreements evidencing
their options, receive, for each option identified in Appendix A-2, an
amount in cash equal to (i) the excess, if any, of (x) the
consideration paid in the Merger in respect of each outstanding share
of ICI Common Stock over (y) the exercise price per share of ICI
Common Stock subject to such option multiplied by (ii) the number of
shares of ICI Common Stock subject to such option; and
WHEREAS, as a result of the Formation Transaction and the
Merger, (i) IHS will own 83.611% of the outstanding
<PAGE>
shares of Holdings Common Stock and the Founders will collectively own
16.389% of the outstanding shares of Holdings Common Stock and (ii)
ICI, as the surviving corporation in the Merger, will be a wholly
owned subsidiary of Holdings.
NOW, THEREFORE, in consideration of the premises, mutual
promises, representations, warranties and covenants contained in this
Agreement, the parties hereto hereby agree:
ARTICLE I
Definitions and Interpretations
SECTION 1.01. Definitions. The following terms, as used in
this Agreement, shall have the following meanings:
"1995 ICI Stock Option Plan" has the meaning set forth in
Section 4.03(d).
"1996 ICI Stock Option Plan" has the meaning set forth in
Section 4.03(d).
"Acquired Assets" means the assets of IHS that are used,
held for use or intended to be used exclusively in, or that arise
exclusively out of, the conduct of the Business, as more particularly
described in Section 2.02(a).
"Administrative Assets" means books, records and other
administrative assets of every kind and nature, including, price
lists, correspondence, mailing lists, lists of customers and potential
customers, vendor lists, production data, sales materials and records,
market studies, penetration data, other market information, sales and
marketing plans, programs and strategies, sales, costs and other
financial data, purchasing materials and records, personnel records,
billing records, accounting records, other financial records, sale
order files, blueprints, plant layouts, and trade secrets, know-how,
show-how, designs and proprietary commercial information, methods,
practices, procedures, processes and formulae with respect to any of
the foregoing, in each case, other than such as constitute
Intellectual Property, that are used, held for use or intended to be
used exclusively in, or that arise exclusively out of, the conduct of
the Business.
<PAGE>
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under
common control with, such Person.
"Agreement" means this Formation Agreement, including all
Appendices, Exhibits and Schedules attached hereto.
"Ancillary Agreements" means the Employment Agreements, the
Option Amendment Agreements, the Merger Agreement, the Services
Agreement and the Stockholders' Agreement.
"Assumed Liabilities" means the liabilities, obligations and
commitments that relate exclusively to, or arise exclusively out of,
the Business, as more particularly described in Section 2.03(a).
"Business" means the CAPSXpert product lines of IHS and any
services offered by IHS that are related exclusively to those product
lines.
"Business Accounts Receivable" means all accounts receivable
of IHS arising exclusively out of the conduct of the Business.
"Business Intellectual Property" means all Intellectual
Property of IHS that is used, held for use or intended to be used
exclusively in, or that arises exclusively out of, the conduct of the
Business.
"Business Inventory" means all Inventory (including
Inventory in transit, on consignment or in the possession of a third
party) of IHS that is used, held for use or intended to be used
exclusively in, or that arises exclusively out of, the conduct of the
Business.
"Business Material Adverse Effect" means a material adverse
effect (i) on the business, assets, condition (financial or
otherwise), prospects or results of operations of the Business or (ii)
on the ability of IHS to perform its obligations under this Agreement
or the ability of IHS, Holdings or Merger Sub to perform its
obligations under the Ancillary Agreements to which it is a party.
"Business Permitted Lien" means (i) any Lien disclosed on
Schedule 4.01(e), (ii) any mechanics', carriers', workmen's,
repairmen's or other like Lien arising or incurred in the ordinary
course of business, any Lien arising under any original purchase price
conditional sales contract or equipment lease with a third party
entered into
<PAGE>
in the ordinary course of business and any Lien for Taxes that are not
due and payable or that may thereafter be paid without penalty and
(iii) any other imperfection of title or encumbrance, if any, that
does not, individually or in the aggregate, materially impair the
continued use of the assets to which it relates in the conduct of the
Business as presently conducted.
"Business Personal Property" means all Personal Property of
IHS that is used, held for use or intended to be used exclusively in,
or that arises exclusively out of, the conduct of the Business.
"Closing" has the meaning set forth in Section 3.01.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Contracts" means purchase orders, sales agreements,
customer subscriptions, service contracts, distribution agreements,
quotations and bids, product warranty, technical assistance or service
agreements, and all other written or oral contracts, leases,
subleases, licenses, sublicenses, indentures and other commitments,
agreements, arrangements and undertakings, and all amendments thereto.
"Dahan Employment Agreement" means the Employment Agreement
to be entered into by ICI and Haim E. Dahan, substantially in the form
of Exhibit A.
"Debenture Warrants" has the meaning set forth in
Section 2.01(a).
"Employment Agreements" means the Dahan Employment
Agreement, the Galvin Employment Agreement and the Salem Employment
Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934.
<PAGE>
"Excluded Assets" has the meaning set forth in
Section 2.02(b).
"Excluded Liabilities" has the meaning set forth in Section
2.03(b).
"Existing ICI Equity Rights" has the meaning set forth in
Section 4.03(d).
"Filed SEC Documents" has the meaning set forth in
Section 4.03(l)(ii).
"Financial Statements" has the meaning set forth in
Section 4.01(d).
"Formation Transaction" has the meaning set forth in the
preamble to this Agreement.
"Founders" means Haim E. Dahan, Michael J. Galvin, Patricia
Tuxbury Salem, Peter W. Jeng and James L. McAlarney, III which
individuals are identified as shareholders of ICI in the first column
of Appendix A-1.
"Founders Contributed Shares" has the meaning set forth in
Section 2.01(c).
"Galvin Employment Agreement" means the Employment Agreement
to be entered into by ICI and Michael J. Galvin, substantially in the
form of Exhibit B.
"Governmental Entity" means any Federal, state, local or
foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality.
"Holdings" means IHS Itemquest Holdings Inc., a Delaware
corporation.
"Holdings Common Stock" means the common stock, par value
$0.001 per share, of Holdings.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"ICI" means International CompuTex, Inc., a Georgia
corporation.
"ICI Benefit Plans" has the meaning set forth in
Section 4.03(m)(i).
<PAGE>
"ICI Common Stock" means the common stock, par value $0.001
per share, of ICI.
"ICI Material Adverse Effect" means a material adverse
effect (i) on the business, assets, condition (financial or
otherwise), prospects or results of operations of ICI or (ii) on the
ability of ICI to perform its obligations under the Ancillary
Agreements to which it is a party.
"ICI Pension Plans" has the meaning set forth in
Section 4.03(m)(i).
"ICI Permitted Lien" means (i) any Lien disclosed on
Schedule 4.03(f), (ii) any mechanics', carriers', workmen's,
repairmen's or other like Lien arising or incurred in the ordinary
course of business, any Lien arising under any original purchase price
conditional sales contract or equipment lease with a third party
entered into in the ordinary course of business and any Lien for Taxes
that are not due and payable or that may thereafter be paid without
penalty and (iii) any other imperfection of title or encumbrance, if
any, that does not, individually or in the aggregate, materially
impair the continued use of the assets to which it relates in the
conduct of the business of ICI as presently conducted.
"ICI Takeover Proposal" means any proposal or offer for a
merger, consolidation, dissolution, recapitalization or other business
combination involving ICI, any proposal for the issuance by ICI of a
material amount of its equity securities as consideration for the
assets or securities of another Person or any proposal or offer to
acquire in any manner, directly or indirectly, a material equity
interest in, any voting securities of, or a substantial portion of the
assets of, ICI, other than as contemplated by this Agreement and the
Ancillary Agreements.
"IHS" means Information Handling Services Inc., a Delaware
corporation.
"IHS Benefit Plans" means all "employee welfare benefit
plans" (as defined in Section 3(1) of ERISA), bonus, stock option,
stock purchase, deferred compensation plans or arrangements and other
employee fringe benefit plans maintained, or contributed to, by IHS or
any of its Affiliates for the benefit of any officers or employees of
the Business (including the IHS Pension Plans).
<PAGE>
"IHS Contributed Shares" means 330,000 shares of ICI Common
Stock, which shares are to be contributed by IHS to Holdings at the
Closing.
"IHS Pension Plans" means any "employee pension benefit
plan" (as defined in Section 3(2) of ERISA) maintained, or contributed
to, by IHS or any of its Affiliates for the benefit of any officers or
employees of the Business.
"Improvements" means buildings, fixtures and other
improvements.
"Intellectual Property" means intellectual and similar
intangible personal property and rights of every kind and nature,
including U.S. and foreign (i) patents and patent applications,
inventions, invention disclosures, which may or may not form the basis
of patent applications, and shop rights, (ii) trademarks, service
marks, trade names, business names and brand names, and all
registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and
applications in the United States Patent & Trademark Office, any state
of the United States or any other Governmental Entity, all goodwill
symbolized thereby or associated therewith and all extensions and
renewals thereof, (iii) copyrights (including all copyrights, whether
registered or unregistered, copyright registrations and applications
to register copyrights), (iv) Software, (v) Technical Documentation
and (vi) licenses and rights with respect to any of the foregoing or
property of like nature, including, but not limited to,
confidentiality agreements, invention assignments or agreements,
noncompetition agreements and other intellectual property agreements.
"Inventory" means raw materials, work-in-process,
semi-finished goods, finished goods, supplies, containers and
packaging, and other inventories.
"Lien" means any lien, charge, claim, pledge, security
interest, security agreement, right to purchase, conditional sale
agreement or other title retention agreement, lease, tenancy, right of
occupancy, easement, mortgage, restriction, reservation, reversion,
license, option, covenant or other encumbrance (including the filing
of, or agreement to give, any financing statement under the Uniform
Commercial Code of any jurisdiction).
"Merger" means the merger of Merger Sub with and into ICI
pursuant to the terms of the Merger Agreement.
<PAGE>
"Merger Agreement" means the Merger Agreement to be entered
into by IHS, Holdings, Merger Sub and ICI, substantially in the form
of Exhibit C.
"Merger Sub" means a wholly owned subsidiary of Holdings
incorporated under the laws of the State of Georgia.
"Merger Sub Common Stock" means the common stock of Merger
Sub.
"Multiemployer Pension Plan" has the meaning set forth in
Section 4.03(m)(iv).
"Option Amendment Agreements" means, collectively, each of
the agreements to be entered into by ICI and the individual
Optionholders, each substantially in the form of Exhibit D.
"Optionholders" means the employees (and former employees)
of ICI who hold options to purchase shares of ICI Common Stock and
certain of directors of ICI who hold options to purchase shares of ICI
Common Stock, which employees (and former employees) and directors are
identified in the first column of Appendix A-2.
"Outside Date" has the meaning set forth in Section 8.01.
"Permits" means permits, concessions, grants, franchises,
licenses, consents, certificates, orders and other authorizations and
approvals of any Governmental Entity necessary for the conduct of the
Business as presently conducted or the ownership of the Acquired
Assets.
"Person" means any individual, corporation, organization,
partnership, joint venture, trust, firm, association (whether or not
incorporated), Governmental Entity or other entity.
"Personal Property" means tangible personal property (other
than Inventory), including machinery, equipment, tools, business
machines, office furniture and fixtures, vehicles, and other tangible
personal property.
"Products" means the products offered by IHS under the
CAPSXpert name, as more particularly described in Appendix B.
"Proxy Statement" has the meaning set forth in
Section 4.03(c).
<PAGE>
"Real Estate" means real property and interests in real
property including Improvements.
"Salem Employment Agreement" means the Employment Agreement
to be entered into by ICI and Patricia Tuxbury Salem, substantially in
the form of Exhibit E.
"SEC Documents" has the meaning set forth in
Section 4.03(e).
"Shareholders' Approval" has the meaning set forth in
Section 4.03(b)(ii).
"Shareholders' Meeting" has the meaning set forth in
Section 4.03(c).
"Securities Act" means the Securities Act of 1933.
"Services Agreement" means the Services Agreement to be
entered into by IHS and Holdings, substantially in the form of Exhibit
F.
"Software" means programs, routines, subroutines,
translators, object, source and microcode, operating and related
systems, compilers, assemblers, in each case, that cause a computer to
perform in an expected manner and all documentation related thereto,
including flow charts, instructions, end-user manuals, models and test
aids, and any and all updates and modifications thereto.
"Stockholders' Agreement" means the Stockholders' Agreement
to be entered into by Holdings, IHS and the Founders, substantially in
the form of Exhibit G.
"Tax" means (i) any tax, governmental fee or other like
assessment or charge of any kind whatsoever (including any tax imposed
under Subtitle A of the Code and any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem,
value-added, transfer, franchise, profits, license, withholding tax on
amounts paid, payroll, employment, excise, severance, stamp, capital
stock, occupation, property, environmental or windfall profit tax,
premium, custom, duty or other tax), together with any interest,
penalty, addition to tax or additional amount due or imposed by any
Governmental Entity responsible for the imposition of any such tax,
(ii) any liability for the payment of any amount of the type described
in clause (i) above as a result of a party to this Agreement being a
member of an affiliated, consolidated or combined group with any other
corporation at any time on or prior to the Closing Date and (iii) any
liability of any
<PAGE>
Person with respect to the payment of any amounts of the type
described in clause (i) or (ii) above as a result of any express or
implied obligation of such Person to indemnify any other Person.
"Tax Return" means all Federal, state, local, provincial and
foreign Tax returns, declarations, statements, reports, schedules,
forms and information returns, and any amended Tax Return, relating to
Taxes.
"Technical Documentation" means (i) all proprietary
technical information of every kind and nature, including manuals and
documentation, advertising and promotional material, catalogues, and
photographs, (ii) all trade secrets, confidential and non-confidential
know-how, confidential and non-confidential show-how, designs and
proprietary technical information, methods, practices, procedures,
processes and formulae, and (iii) all information concerning sources
of supply, components and services.
"Thybo" means Thybo New Ventures Limited, a Bermuda
corporation and an affiliate of IHS.
"Transfer Tax" means any transfer, documentary, sales, use,
registration, value-added and any other similar Tax (including any
applicable real estate transfer tax and real property transfer gains
tax) and related amounts (including any interest, penalty, addition to
tax or additional amount due, or imposed by any Governmental Entity
responsible for the imposition of any such tax).
"Transferred Employees" means, collectively, each of the
employees of IHS identified in Appendix C who will serve as an
employee of Holdings or ICI following the consummation of the
transactions contemplated by this Agreement.
"Year 2000 Compliant" means, with respect to a computer
system or software program, that such computer system or program: (i)
is capable of recognizing, processing, managing, representing,
interpreting and manipulating correctly date-related data for dates
earlier and later than January 1, 2000; (ii) provide date recognition
for any data element without limitation; (iii) has the ability to
function automatically into and beyond the year 2000 without human
intervention and without any change in operations associated with the
advent of the year 2000; (iv) and time correctly into and beyond the
year 2000; (v) has the ability not to produce noncompliance in
existing data, nor otherwise corrupt such data, into and
<PAGE>
beyond the year 2000; (vi) has the ability to process correctly after
January 1, 2000, data containing dates before that date; and (vii) has
the ability to recognize all "leap years", including February 29,
2000.
SECTION 1.02. Interpretations. (a) When used in this
Agreement, the words "include", "includes" and "including" shall be
deemed to be followed by the words "without limitation".
(b) Any terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa.
(c) When used in this Agreement, the word "or" is not
exclusive.
(d) All references to Articles, Sections, Appendices,
Exhibits and Schedules shall be deemed references to Articles,
Sections, Appendices, Exhibits and Schedules to this Agreement.
(e) This Agreement shall be deemed drafted jointly by all
the parties hereto and shall not be specifically construed against any
party hereto based on any claim that such party or its counsel drafted
this Agreement.
ARTICLE II
Repurchase of Warrants and Reimbursement of Repurchase Price
and
Contributions of Assets and ICI Common Stock
in Exchange for Holdings Common Stock
SECTION 2.01. Repurchase, Reimbursement, Contributions and
Exchanges. (a) Repurchase by Founders and Reimbursement by IHS. Upon
the terms and subject to the conditions set forth in this Agreement,
the Founders shall offer to repurchase all warrants granted by the
Founders to purchase, in the aggregate, 117,368 shares of ICI Common
Stock from the Founders (the "Debenture Warrants"), and IHS shall pay
to the Founders, on a pro rata basis, an amount equal to $1.90 with
respect to each share of ICI Common Stock represented by each
Debenture Warrant repurchased by the Founders (or exercised by the
holder of such Debenture Warrant) prior to the Closing Date, which
amount represents, in the aggregate, $223,000, as partial
reimbursement of the amount paid by the Founders to the holders of the
Debenture Warrants. Such payment shall be made at the Closing with
respect to all Debenture Warrants repurchased (or exercised)
<PAGE>
prior to the Closing Date and monthly, after the Closing Date, with
respect to Debenture Warrants repurchased (or exercised) during each
month. In the event that at the time of the Closing all the Debenture
Warrants shall not have been repurchased (or exercised), the Founders,
on a pro rata basis, and IHS shall each place in escrow an amount
equal to the product of (x) the number of shares represented by
Debenture Warrants not repurchased (or exercised) prior to the Closing
Date and (y) $1.90, unless the Founders and Holdings agree upon an
alternate arrangement.
(b) Contributions by IHS. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, IHS shall
contribute to Holdings (or Holdings' designee(s)) (i) all the right,
title and interest of IHS in, to and under the Acquired Assets, (ii)
the IHS Contributed Shares and (iii) cash in an amount that, together
with all available cash of ICI, is sufficient to enable ICI, as the
surviving corporation in the Merger, to pay the consideration to be
paid for the shares of ICI Common Stock in the Merger.
(c) Contributions by the Founders. Upon the terms and
subject to the conditions set forth in this Agreement, at the Closing,
each Founder shall contribute to Holdings (or Holdings' designee(s))
all right, title and interest of such Founder in, to and under the
number of shares of ICI Common Stock set forth opposite the name of
such Founder in the third column of Appendix A-1 (collectively, the
"Founders Contributed Shares").
(d) Exchanges from Holdings. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing, in
consideration of the contributions made by IHS and the Founders,
Holdings shall issue, sell and deliver (i) to IHS, 7,989,977 shares of
Holdings Common Stock and (ii) to each Founder, the number of shares
of Holdings Common Stock set forth opposite the name of such Founder
in the fourth column of Appendix A-1. The shares of Holdings Common
Stock to be issued to IHS and each Founder will be duly authorized,
validly issued, fully paid and non-assessable.
Each certificate representing shares of Holdings Common
Stock will, until the time at which such shares of Holdings Common
Stock have been sold pursuant to an effective registration statement
under the Securities Act or, upon delivery to Holdings of an opinion
of counsel reasonably satisfactory to Holdings, in a transaction that
is exempt from, or not subject to, the registration requirements of
the Securities Act and applicable securities
<PAGE>
laws of any state or other jurisdiction, bear the following legends:
(i) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION, AND, UNLESS SO
REGISTERED, THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE ACT AND APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION."; and
(ii) any legend required by the "blue sky" laws of
any state to the extent such laws are applicable to the
shares represented by such certificate.
SECTION 2.02. Acquired Assets and Excluded Assets. (a) The
term "Acquired Assets" means the properties, assets, goodwill and
rights of whatever kind and nature, real or personal, tangible or
intangible, of IHS existing on the Closing Date, other than the
Excluded Assets, that are used, held for use, or intended to be used
exclusively in, or that arise exclusively out of, the conduct of the
Business, including:
(i) all Business Inventory, including the Business
Inventory listed on Schedule 2.02(a)(i);
(ii) all Business Personal Property, including the
Business Personal Property listed on Schedule 2.02(a)(ii);
(iii) all Business Accounts Receivable;
(iv) all Business Intellectual Property;
(v) all Permits;
(vi) all Contracts to which IHS is a party or by which
IHS is bound that are used, held for use or intended to be
used exclusively in, or that arise exclusively out of, the
conduct of the Business;
(vii) all rights in and to Products sold or leased
(including Products returned after the Closing and rights of
rescission, replevin and reclamation) in the conduct of the
Business;
(viii) all credits, prepaid expenses, deferred charges,
advance payments, security deposits and
<PAGE>
prepaid items that are used, held for use or intended for
use exclusively in, or that arise exclusively out of, the
conduct of the Business;arise exclusively out of, the
conduct of the Business;ess;arise exclusively out of, the
conduct of the Business;
(ix) all rights, claims and credits relating to any
other Acquired Asset or any Assumed Liability, including any
such items arising under insurance policies, and all
guarantees, warranties, indemnities and similar rights in
favor of IHS in respect of any other Acquired Asset or
Assumed Liability;
(x) all Administrative Assets; and
(xi) all goodwill generated by, or associated with, the
Business.
(b) The term "Excluded Assets" means:
(i) all Real Estate of IHS;
(ii) all cash and cash equivalents of IHS;
(iii) all assets under any IHS Pension Plan;
(iv) all business records, financial records, tax
records and employee records (or copies thereof) reasonably
retained by IHS (including business records, financial
records, tax records and employee records relating to the
Business);
(v) all rights of IHS under this Agreement, the
Ancillary Agreements and the agreements, certificates and
documents delivered in connection herewith and therewith;
(vi) all rights, claims and credits related to any
other Excluded Asset or any Excluded Liability, including
any such items arising under insurance policies, and all
guarantees, warranties, indemnities and similar rights in
favor of IHS in respect of any other Excluded Asset or
Excluded Liability; and
(vii) all properties, assets, goodwill and rights of
whatever kind and nature, real or personal, tangible or
intangible, of IHS that either (i) relate exclusively to, or
arise exclusively out of, the conduct of any business (or
product lines) of IHS other than the Business (or the
CAPSXpert product lines) or (ii) relate to, or arise out of,
the conduct of both the Business and any other business of
IHS or both the
<PAGE>
CAPSXpert product lines and any other product lines of IHS.
(c) Holdings shall acquire the Acquired Assets free and
clear of all liabilities, obligations and commitments of IHS, other
than the Assumed Liabilities, and free and clear of all Liens, other
than Business Permitted Liens.
(d) Notwithstanding anything in this Agreement to the
contrary, this Agreement shall not constitute an agreement to assign
any asset, or any benefit, right or claim arising under, or resulting
from, such asset, if an attempted assignment thereof, without the
consent of a third party, would constitute a breach or other
contravention of the rights of such third party, would be ineffective
with respect to any party to any agreement concerning such asset or
would in any way adversely affect the rights of IHS or, upon
contribution, Holdings, in, to or under such asset. If any assignment
by IHS to Holdings, or any assumption by Holdings, of any right, title
or interest in, to or under, or any liability, obligation or
commitment in respect of, any asset requires the consent of a third
party, then such assignment or assumption shall be made subject to
such consent being obtained.
IHS shall (at its own cost and expense) use all reasonable
efforts to obtain any necessary consent to assignment of any right,
title or interest in, to or under, or assumption of any liability,
obligation or commitment in respect of, any Acquired Asset that has
not been obtained prior to the Closing; provided, however, that IHS
shall not be required to make any payments or to forego any benefits
to obtain any consent, unless such consent is necessary to transfer to
Holdings ownership of any of the Products. In the event that any
necessary consent to assignment is not obtained within 45 days after
the Closing Date, then IHS shall (at the cost and expense of Holdings,
excluding, however, any payments required to obtain any consent that
is necessary to transfer to Holdings ownership of any of the Products,
which payments shall be at the cost and expense of IHS), for a period
of 36 months following the Closing Date, cooperate in any lawful and
reasonable arrangement reasonably proposed by Holdings under which
Holdings shall obtain the economic benefits of any right, title, or
interest in, to or under any Acquired Asset with respect to which such
consent is not obtained in accordance with the terms of this
Agreement. To the extent Holdings obtains such benefits, Holdings
shall, on behalf of IHS, discharge all liabilities, obligations and
commitments in respect of
<PAGE>
such Acquired Asset, so long as such action of Holdings would not
result in any default thereunder.
(e) In the event that IHS and the Founders reasonably
determine that any of the Acquired Assets remain in the possession of
IHS after the Closing, then IHS shall (at its own cost and expense)
promptly deliver such Acquired Assets to Holdings. In the event that
IHS and the Founders reasonably determine that any assets of IHS other
than the Acquired Assets (and the IHS Contributed Shares) are in the
possession of Holdings, then Holdings shall (at its own cost and
expense) promptly deliver such assets to IHS.
SECTION 2.03. Assumption of Certain Liabilities. (a) Upon
the terms and subject to the conditions set forth in this Agreement,
Holdings shall assume, effective as of the Closing, and from and after
the Closing, Holdings shall pay, perform and discharge when due, all
liabilities, obligations and commitments, whether arising before or
after the Closing, and whether known or unknown, fixed or contingent,
express or implied, other than the Excluded Liabilities, that relate
exclusively to, or arise exclusively out of, the conduct of the
Business (such liabilities, obligations and commitments, the "Assumed
Liabilities"), including:
(i) all liabilities, obligations and commitments of IHS
in respect of the Business Intellectual Property, including
the liabilities, obligations and commitments described on
Schedule 2.03(a)(i);
(ii) all liabilities, obligations and commitments of
IHS in respect of the Permits;
(iii) all liabilities, obligations and commitments of
IHS in respect of the Contracts included in the Acquired
Assets;
(iv) all liabilities, obligations and commitments of
IHS in respect of any Transferred Employee, including the
liabilities, obligations and commitments described on
Schedule 2.03(a)(iv);
(v) all liabilities, obligations and commitments in
respect of any Transferred Employee arising under any IHS
Benefit Plan that is not a Pension Plan, including the
liabilities, obligations and commitments described on
Schedule 2.03(a)(v);
<PAGE>
(vi) all accounts payable of IHS that relate
exclusively to, or arise exclusively out of, the conduct of
the Business;
(vii) all liabilities, obligations and commitments of
IHS in respect of any Product (including liabilities,
obligations or commitments arising out of claims of
negligence, strict liability, personal injury, product
damage or breach of warranty, liabilities, obligations and
commitments arising out of any other claims (including
workers' compensation and employer's liability), and
liabilities, obligations and commitments related to
promotional obligations and product recalls);
(viii) all liabilities, obligations and commitments of
IHS for Taxes attributable to the Business or the Acquired
Assets, other than income Taxes for any period (or portion
thereof) ending on or prior to the Closing Date; and
(ix) all other liabilities, obligations and commitments
of IHS that relate exclusively to, or arise exclusively out
of, the conduct of the Business.
(b) The term "Excluded Liabilities" means:
(i) all liabilities, obligations and commitments in
respect of any Transferred Employee arising under any IHS
Pension Plan;
(ii) all liabilities, obligations and commitments for
Transfer Taxes incurred in connection with this Agreement,
the Ancillary Agreements or the transactions as contemplated
hereby or thereby;
(iii) all liabilities, obligations and commitments of
IHS that relate exclusively to, or that arise exclusively
out of, any Excluded Asset;
(iv) all liabilities, obligations and commitments of
IHS, whether known or unknown, fixed or contingent, express
or implied, that relate exclusively to, or arise exclusively
out of, the conduct of any business of IHS other than the
Business; and
(v) all liabilities, obligations and commitments of IHS
for income Taxes attributable to the Business or the
Acquired Assets for any period (or portion thereof) ending
on or prior to the Closing Date.
<PAGE>
ARTICLE III
The Closing
SECTION 3.01. Closing Date. The closing (the "Closing") of
the transactions contemplated by this Agreement shall take place at
the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York,
New York 10019, at 10:00 a.m., New York City time, on the second
business day following the satisfaction (or, to the extent permitted,
the waiver) of the conditions set forth in Section 7.01, or if on such
day any condition set forth in Section 7.02 or 7.03 has not been
satisfied (or, to the extent permitted, waived by the party entitled
to the benefit thereof), as soon as practicable after all the
conditions set forth in Article VII have been satisfied (or, to the
extent permitted, waived by the parties entitled to the benefits
thereof), or at such other place and time as shall be agreed by IHS
and the Founders.
SECTION 3.02. Transactions To Be Effected at the Closing. At
the Closing: (a) The Founders shall deliver to IHS evidence reasonably
satisfactory to IHS and its counsel of the repurchase (or exercise) of
all Debenture Warrants that have been repurchased (or exercised) prior
to the Closing Date, and IHS shall deliver to the Founders, by wire
transfer in immediately available funds to the bank account or
accounts previously specified by the Founders, the aggregate amount
due in accordance with Section 2.01(a), as partial reimbursement of
the amount paid by the Founders to the holders of the Debenture
Warrants in connection with such repurchases (or exercises).
(b) IHS shall deliver (i) to Holdings, appropriately
executed bills of sale, assignments and other instruments of transfer
relating to the Acquired Assets and assignments and other instruments
of transfer relating to the IHS Contributed Shares, in each case in
form and substance reasonably satisfactory to the Founders and their
counsel, (ii) to Holdings, Merger Sub and the Founders, appropriately
executed counterparts of each of the Ancillary Agreements to which it
is a party, (iii) to Holdings, Merger Sub and the Founders, all other
agreements, documents and certificates identified in Section 7.02 and
(iv) to Holdings, Merger Sub and the Founders, any additional
agreement, document or certificate reasonably requested by Holdings,
Merger Sub or the Founders, or its or their respective counsel, to
demonstrate compliance with the covenants, and satisfaction of the
conditions precedent, set forth in this Agreement.
<PAGE>
(c) Each of the Founders shall deliver (i) to Holdings,
appropriately executed assignments and other instruments of transfer
relating to the Founders Contributed Shares held by such Founder, in
each case in form and substance reasonably satisfactory to IHS and its
counsel, (ii) to IHS, Holdings and Merger Sub, appropriately executed
counterparts of each of the Ancillary Agreements to which such Founder
is a party, (iii) to IHS, Holdings and Merger Sub, all other
agreements, documents and certificates identified in Section 7.02 and
(iv) to IHS, Holdings and Merger Sub, any additional agreement,
document or certificate reasonably requested by IHS, Holdings or
Merger Sub, or counsel to IHS, to demonstrate compliance with the
covenants, and satisfaction of the conditions precedent, set forth in
this Agreement.
(d) Holdings shall deliver (i) to IHS, 7,989,877 shares of
Holdings Common Stock, (ii) to each of the Founders, the number of
shares of Holdings Common Stock set forth opposite the name of such
Founder in the fourth column of Appendix A-1, (iii) to IHS, Merger Sub
and each of the Founders, appropriately executed counterparts of each
Ancillary Agreement to which it is a party, (iv) to IHS, Merger Sub
and each of the Founders, all other agreements, documents and
certificates identified in Section 7.02 and (v) to IHS, Merger Sub and
each of the Founders, any additional agreement, document or
certificate reasonably requested by IHS, Merger Sub or the Founders,
or its or their respective counsel, to demonstrate compliance with the
covenants, and satisfaction of the conditions precedent, set forth in
this Agreement.
(e) IHS and each of the Founders shall place in escrow the
amounts, if any, required pursuant to Section 2.01(a), which escrow
shall be at the joint cost and expense of IHS and the Founders.
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of IHS. IHS
hereby represents and warrants to the Founders that, except for any
breach of the following representations and warranties that in the
aggregate with all other breaches of such representations and
warranties has not had, and could not reasonably be expected to have,
a Business Material Adverse Effect:
<PAGE>
(a) Organization, Standing and Power. IHS is duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or otherwise hold the
Acquired Assets and to conduct the Business as presently conducted.
IHS is duly qualified to do business as a foreign corporation in each
jurisdiction in which it is required to qualify.
(b) Authority; Execution and Delivery; Enforceability. IHS
has full power and authority to execute this Agreement and each of the
Ancillary Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery by IHS of this Agreement and each of the Ancillary Agreements
to which it is a party and the consummation by IHS of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of IHS and no other corporate
proceedings on the part of IHS are necessary to authorize this
Agreement or any of the Ancillary Agreements to which IHS is a party
or the consummation of the transactions contemplated hereby or
thereby. IHS has duly executed and delivered this Agreement and, prior
to the Closing, IHS will have duly executed and delivered each
Ancillary Agreement to which it is a party. This Agreement
constitutes, and each Ancillary Agreement to which IHS is a party
will, upon the Closing, constitute, a legal, valid and binding
obligation of IHS, enforceable against IHS in accordance with its
terms.
(c) No Conflicts; Consents. The execution and delivery by
IHS of this Agreement and each of the Ancillary Agreements to which it
is a party do not, and the consummation of the transactions
contemplated hereby and thereby and the compliance by IHS with the
terms hereof and thereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancelation or
acceleration of any obligation or the loss of a benefit under, or
result in the creation of any Lien upon any of its properties or
assets under, any provision of (i) the Certificate of Incorporation or
By-Laws of IHS, (ii) any Contract to which IHS is a party or by which
any of its properties or assets is bound or (iii) any judgment, order
or decree, or statute, law, ordinance, rule or regulation, applicable
to IHS or any of its properties or assets. No consent, approval,
license, permit, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required to be
obtained or
<PAGE>
made by or with respect to IHS in connection with the execution,
delivery and performance of this Agreement and each of the Ancillary
Agreements to which it is a party or the consummation of the
transactions contemplated hereby and thereby, other than (i)
compliance with, and filings under, the HSR Act, if required, (ii)
filings with the Commission, including the filing of a statement on
Schedule 13D under the Exchange Act, and (iii) filings with the
Secretary of State of the State of Georgia, including, in connection
with the Merger, the filing of articles or a certificate of merger,
and filings with the relevant authorities of other states of
appropriate documents relating to the qualification to do business.
(d) Financial Statements. Schedule 4.01(d) sets forth (i)
the unaudited pro forma balance sheet of the Business as of November
30, 1998 and (ii) the unaudited pro forma statements of operations of
the Business for the fiscal years ended November 30, 1997 and 1998
(collectively, the "Financial Statements"). The Financial Statements
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved
(except as may be otherwise indicated on Schedule 4.01(d)) and fairly
present in all respects the financial position of the Business as of
the dates thereof and the results of its operations for the periods
then ended.
(e) Acquired Assets. Except as disclosed on Schedule
4.01(e), IHS has good and valid title to all the Acquired Assets it
owns, in each case free and clear of all Liens, except Business
Permitted Liens. None of the Acquired Assets are leased by IHS. This
Section 4.01(e) does not relate to the Business Intellectual Property,
which is exclusively the subject of Section 4.01(f).
(f) Intellectual Property.
(i) Schedule 4.01(f)(i) sets forth a true and complete
list of all data bases, software and trademarks included in
the Business Intellectual Property. With respect to all
Business Intellectual Property that is registered or subject
to an application for registration, Schedule 4.01(f)(i) sets
forth a list of all jurisdictions in which such Business
Intellectual Property is registered or an application for
registration has been filed. Except as disclosed on Schedule
4.01(f)(i), (i) all Business Intellectual Property has been
duly registered with, filed with, or issued by, the
appropriate Governmental Entity where such registration,
filing or issuance is
<PAGE>
necessary or appropriate for the conduct of the Business as
presently conducted, (ii) IHS is the sole and exclusive
owner of, and IHS has the right to use, execute, reproduce,
display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, without payment to any
other Person, all Business Intellectual Property, and the
consummation of the transactions contemplated hereby does
not and will not conflict with, alter or impair any such
rights, (iii) since January 1, 1994, IHS has not received
any communication from any Person asserting any ownership
interest in any Business Intellectual Property owned by IHS
and (iv) to the knowledge of IHS, no Person is in violation
of, in conflict with, or infringing any rights of IHS
relating to the Business Intellectual Property.
(ii) Except as disclosed on Schedule 4.01(f)(ii), IHS
has not granted any license or other right of any kind
relating to any Business Intellectual Property or the
licensing, marketing or distribution thereof, other than
nonexclusive licenses to end-users in the ordinary course of
business. IHS is not bound by, or a party to, any license,
option or agreement of any kind relating to the Intellectual
Property of any other Person for the use of such
Intellectual Property in the conduct of the Business, except
as disclosed on Schedule 4.01(f)(ii) and except for
so-called "shrink-wrap" license agreements relating to
computer software licensed in the ordinary course of
business.
(iii) To the knowledge of IHS, the conduct of the
Business as presently conducted does not violate, conflict
with or infringe the Intellectual Property of any other
Person, and since January 1, 1994, IHS has not received any
communication alleging that IHS has, in the conduct of the
Business, violated, conflicted with, or infringed any rights
relating to the Intellectual Property of any Person.
(iv) To the knowledge of IHS, no former or current
employee of the Business, and no consultant or contractor
hired by IHS, who has participated in, or contributed to,
the development of any Business Intellectual Property has
any valid claim against IHS in connection with the
involvement of such Person in the development of any
Business Intellectual Property, and since January 1, 1994,
IHS has not received any communication asserting any such
claim.
<PAGE>
(v) To the knowledge of IHS, none of the Transferred
Employees is obligated under any Contract, or subject to any
judgment, order or decree, or statute, law, ordinance, rule
or regulation, that would interfere in any respect with the
use of his or her best efforts to promote the interests of
the Business or that would conflict with the Business as
presently conducted. To the knowledge of IHS, neither the
consummation of the transactions contemplated hereby nor the
conduct of the Business as proposed to be conducted will
conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or
give rise to a right of termination under, any Contract
under which any Transferred Employee is obligated or any
judgment, order or decree, or statute, law, ordinance, rule
or regulation, to which any Transferred Employee is subject.
(vi) Except as disclosed on Schedule 4.01(f)(vi), no
Person has been granted any rights to, and no Person has a
copy of, any source code used, held for use or intended to
be used exclusively in, or that arises exclusively out of,
the conduct of the Business.
(g) Contracts.
(i) Except as disclosed on Schedule 4.01(g)(i), and
except for Contracts relating solely to Excluded Assets, IHS
is not a party to, or bound by, any Contract that is used,
held for use or intended to be used exclusively in, or that
arises exclusively out of, the conduct of the Business and
that is:
(A) a written employment agreement or employment
contract with any Transferred Employee;
(B) a collective bargaining agreement or other
Contract with any labor organization, union or
association;
(C) a covenant not to compete;
(D) a Contract with (1) any stockholder of IHS,
(2) any Affiliate of IHS or (3) any officer or employee
of IHS or any of its Affiliates (other than employment
agreements and employment contracts described in clause
(A) above);
(E) a lease, sublease or similar Contract with any
Person under which IHS is a lessor or
<PAGE>
sublessor of, or makes available for use to any Person,
(1) any Real Estate occupied by the Business or (2) any
portion of any premises occupied by the Business;
(F) a lease, sublease or similar Contract with any
Person under which IHS is a lessor or sublessor of, or
makes available for use to any Person, any Business
Personal Property;
(G) (1) a continuing contract for the purchase of
materials, supplies or equipment (other than purchase
orders for Inventory in the ordinary course of business
consistent with past practice), (2) a Contract for
management, service, consulting or similar services or
(3) a Contract for advertising services;
(H) a license, option, agreement or other Contract
relating in whole or in part to the Business
Intellectual Property (including any license, option,
agreement or other Contract under which IHS is licensee
or licensor of any Business Intellectual Property);
(I) (1) a Contract under which the Business has
borrowed any money from, or issued any note, bond,
debenture or other evidence of indebtedness to, any
Person or (2) any other note, bond, debenture or other
evidence of indebtedness issued by the Business to any
Person;
(J) a Contract (including any so-called
take-or-pay or keepwell agreement) under which (1) any
Person has, directly or indirectly, guaranteed
indebtedness, liabilities or obligations of the
Business or (2) the Business has, directly or
indirectly, guaranteed indebtedness, liabilities or
obligations of any other Person (in each case other
than endorsements for the purpose of collection in the
ordinary course of business);
(K) a Contract under which the Business has,
directly or indirectly, made any advance, loan,
extension of credit or capital contribution to, or
other investment in, any Person (other than extensions
of trade credit in the ordinary course of business);
<PAGE>
(L) a Contract providing for indemnification of
any Person with respect to liabilities relating to the
Business;
(M) a power of attorney (other than a power of
attorney given in the ordinary course of business with
respect to routine tax matters);
(N) a Contract not made in the ordinary course of
business;
(O) a confidentiality agreement, other than in the
ordinary course of business;
(P) a Contract (including a purchase order)
involving payment by the Business of more than $25,000
or extending for a term more than 180 days from the
date of this Agreement, other than purchase orders
entered into in the ordinary course of business prior
to the date of this Agreement and purchase orders
entered into in the ordinary course of business after
the date of this Agreement and not in violation of this
Agreement;
(Q) a Contract (including a sales order) involving
the obligation of the Business to deliver Products or
services for payment of more than $25,000 or extending
for a term more than 180 days from the date of this
Agreement, other than subscriptions for Products sold
in the ordinary course of business prior to the date of
this Agreement and other than subscription for Products
entered into in the ordinary course of business after
the date of this Agreement and not in violation of this
Agreement;
(R) a Contract with, or license or Permit granted
by or from, any Governmental Entity;
(S) a Contract providing for the services of any
dealer, distributor, sales representative, franchisee
or similar representative involving the payment by the
Business of more than $25,000;
(T) a Contract granting a Lien upon any of the
Acquired Assets, other than a Business Permitted Lien;
(U) a Contract for the sale of any of the Acquired
Assets (other than sales of Inventory in the ordinary
course of business) or the grant of
<PAGE>
any preferential rights to purchase any of the Acquired
Assets or requiring the consent of any party to the
transfer of any of the Acquired Assets;
(V) any other Contract that has an aggregate
future liability to any Person (other than IHS) in
excess of $25,000 (other than liabilities arising in
connection with the delivery of Products pursuant to
subscriptions for such Products); or
(W) a Contract other than as described above to
which the Business is a party or by which it or any of
its properties or assets is bound, in each case that is
material to the Business or the use of any of the
Acquired Assets.
(ii) Except as disclosed on Schedule 4.01(g)(ii), each
Contract identified on Schedule 4.01(g)(ii) is valid,
binding and in full force and effect and is enforceable by
IHS or the Business, as applicable, in accordance with its
terms. Except as disclosed on Schedule 4.01(g)(ii), IHS or
the Business, as applicable, has performed all obligations
required to be performed by it under the Contracts included
in the Acquired Assets, and neither IHS nor the Business has
taken any actions that are in conflict with, or that would
result in any violation of, or default (with or without
notice or lapse of time, or both) under, any such Contract,
and, to the knowledge of IHS, no other party to any such
Contract has taken any action that is in conflict with, or
that would result in any violation of, or default (with or
without notice or lapse of time, or both) under, such
Contract. Neither IHS nor the Business has, except as
disclosed on Schedule 4.01(g)(ii), received any written or
oral notice of the intention of any party to terminate any
Contract included in the Acquired Assets. Except as
disclosed on Schedule 4.01(g)(ii), to the knowledge of IHS,
the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the
compliance with the terms hereof will not require the
consent of any party to any Contract identified on Schedule
4.01(g)(i) or any material Contract with a customer for the
sale of Products to avoid the invalidity of the transfer of
such Contract, the termination thereof or a breach,
violation or default thereunder. Complete and correct copies
of all Contracts listed on Schedule 4.01(g)(i), together
with all amendments thereto, have been made available to the
Founders.
<PAGE>
(h) Permits.
(i) Schedule 4.01(h) sets forth all Permits issued or
granted to IHS by Governmental Entities that are necessary
or desirable for the conduct of the Business. Except as
disclosed on Schedule 4.01(h), (i) to the knowledge of IHS,
all such Permits are validly held by IHS, and IHS has
complied in all respects with all terms and conditions
thereof, (ii) since January 1, 1994, IHS has not received
any notice of any suit, action or proceeding relating to the
revocation or modification of any such Permits, and (iii) to
the knowledge of IHS, none of such Permits will be subject
to suspension, modification, revocation or nonrenewal as a
result of the execution and delivery of this Agreement or
any of the Ancillary Agreements to which it is a party or
the consummation of the transactions contemplated hereby and
thereby.
(ii) IHS possesses all Permits to own, or hold under
lease, and operate the Acquired Assets and to conduct the
Business as currently conducted.
(i) Sufficiency of Acquired Assets. The Acquired Assets, the
Excluded Assets set forth on Schedule 4.01(i) and the assets used to
provide the services to be provided to the Business under the Services
Agreement comprise all the properties and assets employed by IHS in
connection with the Business. The Acquired Assets, together with the
rights and services to be provided to the Business under the
Employment Agreements and the Services Agreement, are sufficient for
the conduct of Business immediately following the Closing in
substantially the same manner as currently conducted.
(j) Insurance. IHS maintains policies of fire and casualty,
liability and other forms of insurance that cover the Business in such
amounts, with such deductibles and against such risks and losses as
are, in the judgment of IHS, reasonable for the Business.
(k) Taxes.
(i) IHS has timely filed, or has caused to be timely
filed on its behalf, all Tax Returns required to be filed by
it to the extent directly relating to the Business, and all
such Tax Returns are true, complete and accurate to the
extent directly relating to the Business. All Taxes directly
relating to the Business shown to be due on such Tax
Returns, or otherwise owed, have been timely paid.
<PAGE>
(ii) The most recent Financial Statements reflect an
adequate reserve for all Taxes payable by IHS directly
relating to the Business for all Taxable periods and
portions thereof through the date of such Financial
Statements. No deficiency with respect to any Taxes has been
proposed, asserted or assessed against IHS directly relating
to the Business, and no requests for waivers of the time to
assess any such Taxes are pending.
(iii) There are no Liens for Taxes (other than for
current Taxes not yet due and payable) on the Acquired
Assets.
(iv) Except as disclosed on Schedule 4.01(k)(iv), (A)
none of the Acquired Assets is "tax exempt use property"
within the meaning of Section 168(h) of the Code and (B)
none of the Acquired Assets is a lease made pursuant to
Section 168(f)(8) of the Internal Revenue Code of 1954.
(v) At the time of Closing, IHS will have no plan to
sell or otherwise dispose of shares of Holdings Common Stock
issued to IHS pursuant to Section 2.01(d).
(l) Absence of Certain Changes or Events. Except as
disclosed on Schedule 4.01(l), from the date of the most recent
Financial Statements to the date of this Agreement, IHS has conducted
the Business only in the ordinary course, and during such period there
has not been:
(i) any event, change, effect or development has had or
could reasonably be expected to have an adverse effect
related to the Business;
(ii) (A) any granting by IHS to any Transferred
Employee of any increase in compensation, except in the
ordinary course of business consistent with past practice or
as was required under employment agreements in effect as of
the date of the most recent Financial Statements, (B) any
granting by IHS to any Transferred Employee of any increase
in severance or termination pay, except as was required
under any employment, severance or termination agreements in
effect as of the date of the most recent Financial
Statements or (C) any entry by IHS into any employment,
severance or termination agreement with any Transferred
Employee;
(iii) any adoption of, or amendment to, any IHS Benefit
Plan by IHS during the period from the date of
<PAGE>
the most recent Financial Statements to the date of this
Agreement;
(iv) any change in accounting methods, principles or
practices by IHS materially affecting the properties or
assets of the Business, except insofar as may have been
required by a change in generally accepted accounting
principles; or
(v) any elections by IHS with respect to Taxes directly
relating to the Business or settlement or compromise by IHS
of any Tax liability or refund directly relating to the
Business.
(m) Proceedings. Except as disclosed on Schedule 4.01(m),
there is no suit, action or proceeding pending or, to the knowledge of
IHS, threatened, against or affecting the Business or the Acquired
Assets, nor is there any judgment, order or decree outstanding against
or affecting the Business or the Acquired Assets. Except as disclosed
on Schedule 4.01(m), there are no suits, actions or proceedings
initiated by IHS, or that IHS intends to initiate, against any other
Person arising out of the conduct of the Business. Except as disclosed
on Schedule 4.01(m), to the knowledge of IHS, there is no pending or
threatened investigation of the conduct of the Business or any of the
Acquired Assets.
(n) Compliance with Laws. Except as disclosed on Schedule
4.01(n), the Business is in compliance with all laws, ordinances,
rules and regulations, applicable to the Business or the Acquired
Assets, including those laws, ordinances, rules and regulations
relating to occupational health and safety and the environment. Except
as disclosed on Schedule 4.01(n), IHS has not received any written
communication since January 1, 1997 from a Governmental Entity that
alleges that the Business or any of the Acquired Assets is not in
compliance in any respect with any law, ordinance, rule or regulation
applicable to the Business or the Acquired Assets. IHS has not
received any written notice that any investigation or review by any
Governmental Entity with respect to the Business or any of the
Acquired Asset is pending or that any such investigation or review is
contemplated. This Section 4.01(n) does not relate to matters with
respect to Taxes, which are the subject of Section 4.01(k).
(o) Labor Agreements and Actions. The Business is not bound
by, or subject to (and none of the Acquired Assets is bound by or
subject to), any written or oral, express or implied, contract,
commitment or arrangement with
<PAGE>
any labor union, and no labor union has requested or, to the knowledge
of IHS, sought to represent any of the employees, representatives or
agents of the Business. There is no strike or other labor dispute
involving the Business pending, or, to the knowledge of IHS,
threatened, nor is IHS aware of any labor organization activity
involving the employees of the Business. IHS is not aware that any
Transferred Employee intends to terminate his or her employment with
IHS, and IHS does not have a present intention to terminate the
employment of any Transferred Employee. The Business has complied with
all applicable Federal and state equal employment opportunity laws and
with other laws related to employment.
(p) Year 2000 Compliance. Except as disclosed on Schedule
4.01(p), IHS expects the computer systems of the Business to be Year
2000 Compliant by June 30, 1999. To the knowledge of IHS, all Business
Inventory that is or uses computer software is Year 2000 Compliant. To
the knowledge of IHS, any failure on the part of the customers of, and
suppliers to, the Business to be Year 2000 Compliant by December 31,
1999, is not expected to have an adverse effect on the Business.
(q) Brokers. No broker, investment banker, financial advisor
or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
consummation of the transactions contemplated by this Agreement and
the Ancillary Agreements based upon arrangements made by or on behalf
of IHS.
(r) IHS Contributed Shares. At the time of the Closing, IHS
will have good and valid title to the IHS Contributed Shares, free and
clear of all Liens. Upon delivery to Holdings at the Closing of the
certificates representing the IHS Contributed Shares, duly endorsed by
IHS for transfer to Holdings, good and valid title to the IHS
Contributed Shares will pass to Holdings, free and clear of all Liens.
Other than this Agreement and the Common Stock Purchase Agreement
dated as of January 29, 1998, between ICI and Thybo, the IHS
Contributed Shares are not subject to any voting trust agreement or
other contract, agreement, arrangement, commitment or understanding,
including any such agreement, arrangement, commitment or understanding
restricting or otherwise relating to the voting, dividend rights or
disposition of the IHS Contributed Shares.
(s) Information Supplied. None of the information supplied
or to be supplied by IHS for inclusion
<PAGE>
or incorporation by reference in the Proxy Statement will, at the date
it is first mailed to ICI's shareholders or at the time of the
Shareholders' Meeting, contain any untrue statement of a fact or omit
to state any fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply
as to form in all respects with the requirements of the Exchange Act
and the rules and regulations thereunder, except that no
representation is made by IHS with respect to statements made or
incorporated by reference therein based on information supplied by any
Person other than IHS for inclusion or incorporation by reference in
the Proxy Statement.
SECTION 4.02. Representations and Warranties in respect of
Holdings and Merger Sub. IHS hereby represents and warrants to the
Founders that, except for any breach of the following representations
and warranties that in the aggregate with all other breaches of such
representations and warranties could not reasonably be expected to
have a Business Material Adverse Effect:
(a) Organization, Standing and Power. Holdings is duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power and authority to
conduct business as presently conducted. At the time of the Closing,
Merger Sub will be duly organized, validly existing and in good
standing under the laws of the State of Georgia.
(b) Authority; Execution and Delivery; Enforceability. At
the time of the Closing, each of Holdings and Merger Sub will have
full power and authority to execute each of the Ancillary Agreements
to which it is a party and to consummate the transactions contemplated
thereby. At the time of the Closing, the execution and delivery by
each of Holdings and Merger Sub of each of the Ancillary Agreements to
which it is a party and the consummation by each of Holdings and
Merger Sub of the transactions contemplated thereby will have been
duly authorized by all necessary corporate action on the part of each
of Holdings and Merger Sub and no other corporate proceedings on the
part of Holdings or Merger Sub will be necessary to authorize any of
the Ancillary Agreements to which it is a party or the consummation of
the transactions contemplated thereby. Prior to the Closing, each of
Holdings and Merger Sub will have duly executed and delivered each
Ancillary Agreement to which it is a party. Each Ancillary Agreement
to which Holdings or Merger Sub is a party will, upon the Closing,
constitute a legal, valid
<PAGE>
and binding obligation of Holdings or Merger Sub, as the case may be,
enforceable against Holdings or Merger Sub, as the case may be, in
accordance with its terms.
(c) No Conflicts; Consents. The execution and delivery by
each of Holdings and Merger Sub of each of the Ancillary Agreements to
which it is a party and the consummation of the transactions
contemplated thereby and the compliance by each of Holdings and Merger
Sub with the terms thereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancelation or
acceleration of any obligation or the loss of a benefit under, or
result in the creation of any Lien upon any of its properties or
assets under, any provision of (i) the Certificate of Incorporation or
By-Laws of Holdings or the Articles of Incorporation or By-laws of
Merger Sub, (ii) any Contract to which Holdings or Merger Sub is a
party or by which any of its properties or assets is bound or (iii)
any judgment, order or decree, or statute, law, ordinance, rule or
regulation, applicable to Holdings or Merger Sub or any of its
properties or assets. No consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with
respect to Holdings or Merger Sub in connection with the execution,
delivery and performance of each of the Ancillary Agreements to which
it is a party or the consummation of the transactions contemplated
thereby, other than (i) compliance with, and filings under, the HSR
Act, if required, (ii) filings with the Commission, including the
filing of a statement on Schedule 13D under the Exchange Act, and
(iii) filings with the Secretary of State of the State of Georgia,
including, in connection with the Merger, the filing of articles or a
certificate of merger, and filings with the relevant authorities of
other states of appropriate documents relating to the qualification to
do business.
(d) Capitalization.
(i) Immediately prior to the Closing, the authorized
capital of Holdings will consist of 20,000,000 shares of
Holdings Common Stock, of which 100 shares will be issued
and outstanding. Immediately prior to the Closing, all of
the outstanding shares of Holdings Common Stock will have
been duly and validly authorized and issued and will be
fully paid and nonassessable and will have been issued in
compliance with applicable Federal and state securities
laws. Immediately prior to the Closing, there will be no
<PAGE>
outstanding options, warrants, rights (including conversion
or preemptive rights) or agreements, in writing or oral, for
the purchase or acquisition from Holdings of any shares of
its capital stock, other than in respect of this Agreement
and any stock option or similar plan approved by the Board
of Directors of Holdings for the benefit of the directors,
officers or employees of Holdings or Merger Sub. Immediately
prior to the Closing, there will be no rights of first
refusal or similar rights in respect of shares of Holdings'
capital stock issued or sold by Holdings.
(ii) Immediately prior to the Closing, the authorized
capital of Merger Sub will consist of 110,000,000 shares of
Merger Sub Common Stock, of which 100,000,000 shares will be
issued and outstanding. Immediately prior to the Closing,
all of the outstanding shares of Merger Sub Common Stock
will have been duly and validly authorized and issued and
will be fully paid and nonassessable and will have been
issued in compliance with Federal and state securities laws.
Immediately prior to the Closing, there will be no
outstanding options, warrants, rights (including conversion
or preemptive rights) or agreements, in writing or oral, for
the purchase or acquisition from Merger Sub of any shares of
its capital stock. Immediately prior to the Closing there
will be no rights of first refusal or similar rights in
respect of shares of Merger Sub's capital stock issued or
sold by Merger Sub.
(e) Issuance of Shares of Holdings Common Stock. The shares
of Holdings Common Stock to be issued to IHS and the Founders pursuant
to this Agreement, when issued, sold and delivered in accordance with
the terms of hereof for the consideration expressed herein, will be
(i) duly and validly issued, fully paid and nonassessable, (ii) free
of restrictions on transfer, other than restrictions on transfer under
this Agreement, the Stockholders' Agreement and applicable Federal and
state securities laws and (iii) not subject to any preemptive rights
of others.
(f) Operations of Holdings. Holdings was formed solely for
the purpose of engaging in the transactions contemplated by this
Agreement and the Ancillary Agreements. Holdings has conducted its
business as contemplated by this Agreement and the Ancillary
Agreements.
SECTION 4.03. Representations and Warranties of the
Founders. Each of the Founders hereby represents and warrants to IHS
that except for any breach of the following
<PAGE>
representations and warranties that in the aggregate with all other
breaches of such representations and warranties has not had, and could
not reasonably be expected to have, an ICI Material Adverse Effect:
(a) Organization, Standing and Power. ICI is duly organized,
validly existing and in good standing under the laws of the State of
Georgia and has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or otherwise hold its
properties and assets and to conduct its business as presently
conducted. ICI is duly qualified to do business as a foreign
corporation in each jurisdiction in which it is required to qualify.
ICI has not, since the date of its formation, engaged in any business
other than the provision of software services and applications, and
ICI has not, since the date of its formation, engaged in any
activities other than those activities reasonably related to the
business of ICI as presently conducted. There is no predecessor Person
to ICI. ICI has not had, and does not now have, any subsidiaries. The
Founders have delivered to IHS and Holdings true and complete copies
of the Restated Articles of Incorporation of ICI and the By-laws of
ICI, in each case as amended through the date of this Agreement.
(b) Authority; Execution and Delivery; Enforceability.
(i) Each of the Founders has full power and authority
to execute this Agreement and each of the Ancillary
Agreements to which such Founder is a party and to
consummate the transactions contemplated hereby and thereby.
Each of the Founders has duly executed and delivered this
Agreement and, prior to the Closing, will have duly executed
and delivered each Ancillary Agreement to which such Founder
is a party. This Agreement constitutes, and each Ancillary
Agreement to which each Founder is a party will, upon the
Closing, constitute, a legal, valid and binding obligation
of such Founder, enforceable against such Founder in
accordance with its terms.
(ii) ICI has full power and authority to execute each
of the Ancillary Agreements to which it is a party and to
consummate the transactions contemplated thereby. The
execution and delivery by ICI of each of the Ancillary
Agreements to which it a party and the consummation by ICI
of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of
ICI and no other
<PAGE>
corporate proceedings on the part of ICI are necessary to
authorize any of the Ancillary Agreements to which it a
party or the consummation by ICI of the transactions
contemplated thereby, subject, in the case of the Merger
Agreement and the Merger, to receipt of the affirmative vote
of holders of shares of ICI Common Stock representing a
majority of the votes entitled to be cast by holders of the
outstanding shares of ICI Common Stock, voting as a single
class (the "Shareholders' Approval"). Prior to the Closing,
ICI will have duly executed and delivered each Ancillary
Agreement to which ICI is a party. Each Ancillary Agreement
to which ICI is a party will, upon the Closing, constitute a
legal, valid and binding obligation of ICI, enforceable
against ICI in accordance with its terms.
The Board of Directors of ICI, at a meeting duly called
and held, duly and unanimously adopted resolutions (i)
approving the Merger Agreement and the Merger and each of
the other Ancillary Agreements to which ICI is a party and
the transactions contemplated thereby, (ii) determining that
the terms of the Merger are fair to, and in the best
interests of, ICI, (iii) recommending that the holders of
ICI Common Stock approve the Merger Agreement and the
Merger, (iv) declaring that Merger Agreement and the Merger
are advisable and (v) adopting the Merger Agreement. Neither
Part 2 nor Part 3 of Article 11 of the Georgia Business
Corporation Code applies or purports to apply to ICI, IHS,
Holdings or Merger Sub with respect to this Agreement, the
Ancillary Agreements (including the Merger Agreement) or the
transactions contemplated hereby or thereby (including the
Merger). To the knowledge of the Founders, no other state
takeover statute or similar statute or regulation applies or
purports to apply to ICI, IHS, Holdings or Merger Sub with
respect to this Agreement, the Ancillary Agreements
(including the Merger Agreement) or the transactions
contemplated hereby or thereby (including the Merger).
The only vote of holders of any class or series of
capital stock of ICI necessary to approve the Merger
Agreement and the Merger is the Shareholders' Approval. The
affirmative vote of the holders of ICI Common Stock, or any
of them, is not necessary to approve this Agreement or any
Ancillary Agreement, other than the Merger Agreement, or to
consummate any transactions contemplated hereby or thereby,
other than the Merger.
<PAGE>
(c) No Conflicts; Consents.
(i) No consent, approval, license, permit, order or
authorization of, or registration, declaration or filing
with, any Governmental Entity is required to be obtained or
made by or with respect to any of the Founders in connection
with the execution, delivery and performance of this
Agreement or any of the Ancillary Agreements to which such
Founder is a party or the consummation of the transactions
contemplated hereby or thereby.
(ii) The execution and delivery by ICI of each of the
Ancillary Agreements to which it is a party will not, and
the consummation of the transactions contemplated thereby
and compliance by ICI with the terms thereof will not,
conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancelation or
acceleration of any obligation or the loss of a benefit
under, or result in the creation of any Lien upon any of the
properties or assets of ICI under, any provision of (i) the
Restated Articles of Incorporation of ICI or the By-laws of
ICI, (ii) any of its properties or assets is bound or (iii)
any judgment, order or decree, or statute, law, ordinance,
rule or regulation, applicable to ICI or any of its
properties or assets. No consent, approval, license, permit,
order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required to be
obtained or made by or with respect to ICI in connection
with the execution, delivery and performance of any of the
Ancillary Agreements to which it is a party or the
consummation of the transactions contemplated thereby, other
than (i) compliance with, and filings under, the HSR Act, if
required, (ii) filings with the Commission, including the
filing of a proxy statement prepared in connection with a
meeting of the shareholders of ICI (the "Shareholders'
Meeting") for the purpose of obtaining the Shareholders'
Approval (the "Proxy Statement") and filings under Section
13(a) of the Exchange Act, and (iii) filings with the
Secretary of State of the State of Georgia, including, in
connection with the Merger, the filing of articles or a
certificate of merger, and filings with the relevant
authorities of other states of appropriate documents
relating to the qualification to do business.
(d) Capitalization. The authorized capital of ICI consists
of 20,000,000 shares of ICI Common Stock, of
<PAGE>
which 3,578,760 shares are issued and outstanding. All of the
outstanding shares of ICI Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable and have
been issued in compliance with applicable Federal and state securities
laws and are approved for quotation on the Nasdaq National Market
under the symbol "ICIQ".
Except for (i) options issued or issuable for an aggregate
of 452,133 shares of ICI Common Stock under the 1995 Restricted
Non-qualified Incentive Stock Option Plan, dated August 1, 1995 (the
"1995 ICI Stock Option Plan"), and the 1996 Stock Option Plan, dated
December 20, 1996 (the "1996 ICI Stock Option Plan"), as amended, and
(ii) the Warrant dated May 5, 1997 to purchase 112,500 shares of ICI
Common Stock issued pursuant to the Underwriting Agreement dated April
29, 1997, there are no outstanding options, warrants, rights
(including conversion or preemptive rights) or agreements, in writing
or oral, for the purchase or acquisition from ICI of any shares of its
capital stock (the rights and options in clauses (i) and (ii) above
being collectively called the "Existing ICI Equity Rights"). All
shares of ICI Common Stock that may be issued pursuant to the Existing
ICI Equity Rights will be, when issued in accordance with the terms
thereof, duly and validly authorized and issued and are fully paid and
non-assessable. There exist no rights of first refusal or similar
rights in respect of shares of ICI's capital stock issued or sold by
ICI. Schedule 4.02(d) accurately sets forth the outstanding shares of
ICI Common Stock, the options to acquire shares of ICI Common Stock
issued or issuable under the 1995 ICI Stock Option Plan and the 1996
ICI Stock Option Plan and the exercise prices in respect of such
options, in each case, as of January 8, 1998.
(e) Financial Statements. Since becoming registered under
the Exchange Act on April 29, 1997, ICI has filed all reports,
schedules, forms, statements, exhibits and other documents required to
be filed by it with the Commission pursuant to the reporting
requirements of the Exchange Act (all of the foregoing, together with
Registration Statement No. 333-21647, as amended, being referred to
herein as the "SEC Documents"). As of their respective dates, the SEC
Documents complied in all respects with the applicable requirements of
the Securities Act and the Exchange Act and the rules and regulations
of the Commission promulgated thereunder applicable to such SEC
Documents, and, as of their respective dates, none of the SEC
Documents taken as a whole (when read together with all exhibits
included therein and financial statement schedules thereto and
documents (other than exhibits) incorporated by
<PAGE>
reference therein) contained any untrue statement of a fact or omitted
to state a fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. As of their respective dates, the
financial statements of ICI included in the SEC Documents complied as
to form in all respects with applicable accounting requirements and
the published rules and regulations of the Commission with respect
thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements) and
fairly present in all respects the financial position of ICI as of the
dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustment).
(f) Assets other than Real Property. Except as disclosed on
Schedule 4.03(f), ICI has good and valid title to all its Personal
Property, in each case free and clear of all Liens, except ICI
Permitted Liens. With respect to properties and assets that are leased
by ICI, ICI is in compliance with such leases in all material respects
and holds a valid leasehold interest in such properties and assets, in
each case free and clear of all Liens, except ICI Permitted Liens.
This Section 4.03(f) does not relate to the Intellectual Property of
ICI, which is exclusively the subject of Section 4.03(g).
(g) Intellectual Property.
(i) Schedule 4.03(g)(i) sets forth a true and complete
list of all data bases, software, trademarks and patents and
patent applications included in the Intellectual Property
owned by ICI. With respect to all Intellectual Property
owned by ICI that is registered or subject to an application
for registration, Schedule 4.03(g)(i) sets forth a list of
all jurisdictions in which such Intellectual Property is
registered or an application for registration has been
filed. Except as disclosed on Schedule 4.03(g)(i), (i) all
Intellectual Property owned by ICI has been duly registered
with, filed with, or issued by, the appropriate Governmental
Entity where such registration, filing or issuance is
necessary or appropriate for the conduct of ICI's business
as presently conducted, (ii) ICI is the sole and exclusive
<PAGE>
owner of, and ICI has the right to use, execute, reproduce,
display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, without payment to any
other Person, all the Intellectual Property it owns, and the
consummation of the transactions contemplated hereby does
not and will not conflict with, alter or impair any such
rights, (iii) since January 1, 1993, ICI has not received
any communication from any Person asserting any ownership
interest in any of the Intellectual Property it owns and
(iv) to the knowledge of the Founders, no Person is in
violation of, in conflict with, or infringing any rights of
ICI relating to the Intellectual Property it owns.
(ii) Except as disclosed on Schedule 4.03(g)(ii), ICI
has not granted any license or other right of any kind
relating to any Intellectual Property that it owns or the
licensing, marketing or distribution thereof, other than
nonexclusive licenses to end-users in the ordinary course of
business. ICI is not bound by, or a party to, any license,
option or agreement of any kind relating to the Intellectual
Property of any other Person for the use of such
Intellectual Property in the conduct of its business, except
as disclosed on Schedule 4.03(g)(ii) and except for
so-called "shrink-wrap" license agreements relating to
computer software licensed in the ordinary course of
business.
(iii) To the knowledge of the Founders, the conduct of
its business as presently conducted does not violate,
conflict with or infringe the Intellectual Property of any
other Person, and since January 1, 1993, ICI has not
received any communication alleging that ICI has, in the
conduct of its business, violated, conflicted with, or
infringed any rights relating to the Intellectual Property
of any Person.
(iv) To the knowledge of the Founders, no former or
current employee of ICI, and no consultant or contractor
hired by ICI, who has participated in, or contributed to,
the development of any Intellectual Property owned by ICI
has any valid claim against ICI in connection with the
involvement of such Person in the development of any such
Intellectual Property, and since January 1, 1993, ICI has
not received and communication asserting any such claim.
(v) To the knowledge of the Founders, none of its
employees is obligated under any Contract, or subject to any
judgment, order or decree, or statute, law,
<PAGE>
ordinance, rule or regulation, that would interfere in any
respect with the use of his or her best efforts to promote
the interests of its business or that would conflict with
its business as presently conducted. To the knowledge of the
Founders, neither the consummation of the transactions
contemplated hereby nor the conduct of its business as
proposed to be conducted will conflict with, or result in
any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of
termination under, any Contract under which any of its
employees is obligated or any judgment, order or decree, or
statute, law, ordinance, rule or regulation, to which any of
its employees is subject.
(vi) Except as disclosed on Schedule 4.03(g)(vi), no
Person has been granted any rights to, and no Person has a
copy of, any source code used, held for use or intended to
be used in, or arising out of, the conduct of the business
of ICI.
(h) Real Property. Schedule 4.03(h) sets forth a true and
complete list of all Real Estate leased by ICI. ICI has good and valid
title to the leasehold estates in all the Real Estate it leases, in
each case free and clear of all Liens, except (i) Liens disclosed on
Schedule 4.03(h), (ii) mechanics', carriers', workmen's, repairmen's
or other like Liens arising or incurred in the ordinary course of
business, Liens arising under original purchase price conditional
sales contracts or equipment leases with third parties entered into in
the ordinary course of business and Liens for Taxes that are not due
and payable or that may thereafter be paid without penalty, (iii)
other imperfections of title or encumbrances, if any, that do not,
impair the continued use of the assets to which they relate in the
conduct of the business of ICI as presently conducted, (iv) leases,
sublease or similar agreements set forth on Schedule 4.03(i), (v)
easements, covenants, rights-of-way and other similar restrictions of
record and (vi) (A) zoning, building and other similar restrictions,
(B) Liens that have been placed by any developer, landlord or other
third party on property over which ICI has easement rights or on any
property leased by ICI and subordination or similar agreements
relating thereto and (C) unrecorded easements, covenants,
rights-of-way and other similar restrictions. None of the items set
forth in clause (vi) above could reasonably be expected to impair the
continued use and operation of the property to which they relate in
the conduct of the business of ICI as presently conducted.
ICI does not own any Real Estate in fee.
<PAGE>
(i) Contracts.
(i) Except as disclosed on Schedule 4.03(i)(i), ICI
is not a party to, or bound by, any Contract that is:
(A) a written employment agreement or employment
contract;
(B) a collective bargaining agreement or other
Contract with any labor organization, union or
association;
(C) a covenant not to compete;
(D) a Contract with (1) any shareholder of ICI,
(2) any Affiliate of ICI or (3) any director, officer
or employee of ICI or any of its Affiliates (other than
employment agreements and employment contracts
described in clause (A) above);
(E) a lease, sublease or similar Contract with any
Person under which ICI is a lessor or sublessor of, or
makes available for use to any Person, (1) any Real
Estate or (2) any portion of any premises otherwise
occupied by ICI;
(F) a lease, sublease or similar Contract with any
Person under which ICI is a lessor or sublessor of, or
makes available for use to any Person, any Personal
Property of ICI;
(G) (1) a continuing Contract for the future
purchase of materials, supplies or equipment (other
than purchase orders for Inventory in the ordinary
course of business consistent with past practice), (2)
a Contract for management, service, consulting or
similar services or (3) a Contract for advertising
services;
(H) a license, option, agreement or other Contract
relating in whole or in part to any Intellectual
Property (including any license, option, agreement or
other Contract under which ICI is licensee or licensor
of any Intellectual Property) of ICI;
(I) (1) a Contract under which ICI has borrowed
any money from, or issued any note, bond, debenture or
other evidence of indebtedness to,
<PAGE>
any Person or (2) any other note, bond, debenture or
other evidence of indebtedness issued to any Person;
(J) a Contract (including any so-called
take-or-pay or keepwell agreement) under which (1) any
Person has, directly or indirectly, guaranteed
indebtedness, liabilities or obligations of ICI or (2)
ICI has, directly or indirectly, guaranteed
indebtedness, liabilities or obligations of any other
Person (in each case other than endorsements for the
purpose of collection in the ordinary course of
business);
(K) a Contract under which ICI has, directly or
indirectly, made any advance, loan, extension of credit
or capital contribution to, or other investment in, any
Person (other than extensions of trade credit in the
ordinary course of business);
(L) a Contract providing for indemnification of
any Person with respect to liabilities relating to the
business of ICI;
(M) a power of attorney (other than a power of
attorney given in the ordinary course of business with
respect to routine tax matters);
(N) a Contract not made in the ordinary course of
business;
(O) a confidentiality agreement, other than in the
ordinary course of business;
(P) a Contract (including a purchase order)
involving payment by ICI of more than $25,000 or
extending for a term more than 180 days from the date
of this Agreement, other than purchase orders entered
into in the ordinary course of business prior to the
date of this Agreement and purchase orders entered into
in the ordinary course of business after the date of
this Agreement and not in violation of this Agreement;
(Q) a Contract (including a sales order) involving
the obligation of ICI to deliver products or services
for payment of more than $25,000 or extending for a
term more than 180 days from the date of this
Agreement, other than sales orders entered into in the
ordinary course of
<PAGE>
business after the date of this Agreement and not in
violation of this Agreement;
(R) a Contract with, or license or Permit
granted by or from, any Governmental Entity;
(S) a Contract providing for the services of any
dealer, distributor, sales representative, franchisee
or similar representative involving the payment by ICI
of more than $25,000;
(T) a Contract granting a Lien upon any of the
properties or assets of ICI;
(U) a Contract for the sale of any of the
properties or assets of ICI (other than sales of
Inventory in the ordinary course of business) or the
grant of any preferential rights to purchase any
properties or assets of ICI or requiring the consent of
any party to the transfer of any of the properties or
assets of ICI;
(V) any other Contract that has an aggregate
future liability to any Person (other than ICI) in
excess of $25,000; or
(W) a Contract other than as described above to
which ICI is a party or by which it or any of its
properties or assets is bound, in each case that is
material to its business or the use of any of the
properties or assets of ICI.
(ii) Except as disclosed on Schedule 4.03(i)(ii), each
Contract identified on Schedule 4.03(i)(i) is valid, binding
and in full force and effect and is enforceable by ICI in
accordance with its terms. Except as disclosed on Schedule
4.03(i)(ii), ICI has performed all obligations required to
be performed by it under the Contracts to which it is a
party or by which it is bound, and it has not taken any
actions that are in conflict with, or that would result in
any violation of, or default (with or without notice or
lapse of time, or both) under, any such Contract, and, to
the knowledge of the Founders, no other party to any such
Contract has taken any action that is in conflict with, or
that would result in any violation of, or default (with or
without notice or lapse of time, or both) under, such
Contract. ICI has not, except as disclosed on Schedule
4.03(i)(ii), received any written or oral notice of the
intention of any party to terminate any Contract to which
ICI is a party or by
<PAGE>
which ICI is bound. Except as disclosed on Schedule
4.03(i)(ii), to the knowledge of the Founders, the execution
and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the compliance with the
terms hereof will not require the consent of any party to
any Contract identified on Schedule 4.01(i)(ii) or any
material Contract with a customer for the sale of any ICI
product or service to avoid the invalidity of the transfer
of such Contract, the termination thereof or a breach,
violation or default thereunder. Complete and correct copies
of all Contracts listed on Schedule 4.03(i)(i), together
with all amendments thereto, have been made available to
IHS.
(j) Permits.
(i) Schedule 4.03(j) sets forth all Permits issued or
granted to ICI by Governmental Entities that are necessary
or desirable for the conduct of its business. Except as
disclosed on Schedule 4.03(j), (i) to the knowledge of the
Founders, all such Permits are validly held by ICI, and ICI
has complied in all material respects with all terms and
conditions thereof, (ii) since January 1, 1993, ICI has not
received any notice of any suit, action or proceeding
relating to the revocation or modification of any such
Permits and (iii) to the knowledge of the Founders, none of
such Permits will be subject to suspension, modification,
revocation or nonrenewal as a result of the execution and
delivery of this Agreement or any of the Ancillary
Agreements to which it is a party or the consummation of the
transactions contemplated hereby and thereby.
(ii) ICI possesses all Permits to own, or hold under
lease, and operate its properties and assets and to conduct
its business as currently conducted.
(k) Insurance. ICI maintains policies of fire and casualty,
liability and other forms of insurance that cover its business in such
amounts, with such deductibles and against such risks and losses as
are, in the judgment of ICI, reasonable for its business.
(l) Taxes.
(i) ICI has timely filed, or has caused to be timely
filed on its behalf, all Tax Returns or extensions thereof
required to be filed by it, and all such Tax Returns are
true, complete and accurate. All
<PAGE>
Taxes shown to be due on such Tax Returns, or otherwise
owed, have been timely paid.
(ii) The most recent financial statements included in
the SEC Documents filed and publicly available prior to the
date of this Agreement (the "Filed SEC Documents") reflect
an adequate reserve for all Taxes payable by ICI for all
Taxable periods and portions thereof through the date of
such financial statements. No deficiency with respect to any
Taxes has been proposed, asserted or assessed against ICI,
and no requests for waivers of the time to assess any such
Taxes are pending.
(iii) The Federal income Tax Returns of ICI have not
been examined by the United States Internal Revenue Service.
(iv) There are no Liens for Taxes (other than for
current Taxes not yet due and payable) on the properties or
assets of ICI.
(v) Neither ICI nor any of its Affiliates is bound by
any agreement with respect to Taxes.
(vi) (A) Neither ICI nor any of its Affiliates has
made, with respect to ICI, any consent under Section 341 of
the Code, (B) none of the assets of ICI is "tax exempt use
property" within the meaning of Section 168(h) of the Code
and (C) ICI is not lessor or lessee under a lease made
pursuant to Section 168(f)(8) of the Internal Revenue Code
of 1954.
(vii) At the time of Closing, the Founders will have no
plan to sell or otherwise dispose of shares of Holdings
Common Stock issued to the Founders pursuant to Section
2.01(d).
(m) Employee Benefits.
(i) Schedule 4.03(m)(i) sets forth a list of all
"employee pension benefit plans" (as defined in Section by
ICI or any of its Affiliates for the benefit of any officers
or employees of ICI ("ICI Pension Plans") and all "employee
welfare benefit plans" (as defined in Section 3(1) of
ERISA), bonus, stock option, stock purchase, deferred
compensation plans or arrangements and other employee fringe
benefit plans maintained, or contributed to, by ICI or any
of its Affiliates for the benefit of any officers or
employees of ICI (all the foregoing, including the ICI
Pension
<PAGE>
Plans, being herein called "ICI Benefit Plans"). ICI has
made available to IHS true, complete and correct copies of
(i) each ICI Benefit Plan (or, in the case of any unwritten
ICI Benefit Plans, descriptions thereof), (ii) the two most
recent annual reports on Form 5500 (including all schedules
and attachments thereto) filed with the Internal Revenue
Service with respect to each ICI Benefit Plan (if any such
report was required), (iii) the most recent summary plan
description for each ICI Benefit Plan for which such a
summary plan description is required and (iv) each trust
agreement, group annuity contract or other funding and
financing arrangement relating to any ICI Benefit Plan.
(ii) Except as disclosed on Schedule 4.03(m)(ii), each
ICI Pension Plan has been the subject of a determination
letter from the Internal Revenue Service to the effect that
such ICI Pension Plan is qualified and exempt from Federal
income taxes under Sections 401(a) and 501(a), respectively,
of the Code, and no such determination letter has been
revoked nor, to the knowledge of the Founders, has
revocation been threatened, nor has any such ICI Pension
Plan been amended since the date of its most recent
determination letter or application therefor in any respect
that would adversely affect its qualification or increase
its costs.
(iii) To the knowledge of the Founders, each ICI
Benefit Plan has been administered in all respects in
accordance with its terms. To the knowledge of the Founders,
ICI and all ICI Benefit Plans are in compliance in all
respects with the applicable provisions of ERISA, the Code,
all other applicable laws and all applicable collective
bargaining agreements. To the knowledge of the Founders,
except as disclosed on Schedule 4.03(m)(iii), all reports,
returns and similar documents with respect to the ICI
Benefit Plans required to be filed with any Governmental
Entity or distributed to any participant in any ICI Benefit
Plan have been duly and timely filed or distributed. Except
as disclosed on Schedule 4.03(m)(iii), there are no suits,
actions or proceedings pending, or, to the knowledge of the
Founders, threatened, against or involving any ICI Benefit
Plan and, to the knowledge of the Founders, there are no
investigations by any Governmental Entity or other claims
(except routine claims for benefits payable in the normal
operation of the ICI Benefit Plans) pending or threatened
against or involving any
<PAGE>
ICI Benefit Plan or asserting any rights to benefits under
any ICI Benefit Plan.
(iv) Except as disclosed on Schedule 4.03(m)(iv), no
ICI Pension Plan, other than any ICI Pension Plan that is a
"multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA (a "Multiemployer Pension Plan"), had,
as of the respective last annual valuation date for each
such ICI Pension Plan, an "unfunded benefit liability" (as
defined in Section 4001(a)(18) of ERISA), based on actuarial
assumptions that have been furnished to IHS. To the
knowledge of the Founders, none of the ICI Pension Plans has
an "accumulated funding deficiency" (as defined in Section
302 of ERISA or Section 412 of the Code), whether or not
waived. None of ICI, any officer of ICI or any of the ICI
Benefit Plans that are subject to ERISA, including the ICI
Pension Plans, any trusts created thereunder or any trustee
or administrator thereof, has engaged in a "prohibited
transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) or any other breach of fiduciary
responsibility that could subject ICI or any officer of ICI
to the tax or penalty on prohibited transactions imposed by,
or to any liability under, Section 502(i) or 502(1) of ERISA
or Section 4975 of the Code. To the knowledge of the
Founders, none of such ICI Benefit Plans and trusts has been
terminated, nor has there been any "reportable event" (as
defined in Section 4043 of ERISA) with respect to such ICI
Benefit Plans or trusts during the last five years. ICI has
not incurred a "complete withdrawal" or a "partial
withdrawal" (as defined in Sections 4203 and 4205,
respectively, of ERISA) since the effective date of such
Sections 4203 and 4205 with respect to any Multiemployer
Pension Plan.
(v) With respect to any ICI Benefit Plan that is an
employee welfare benefit plan, except as disclosed on
Schedule 4.03(m)(v), (i) no such ICI Benefit Plan is
unfunded or funded through a "welfare benefits fund" (as
defined in Section 419(e) of the Code), (ii) each such ICI
Benefit Plan that is a "group health plan" (as defined in
Section 5000(b)(1) of the Code) complies with the applicable
requirements of Section 4980B(f) of the Code and (iii) each
such ICI Benefit Plan (including any such ICI Benefit Plan
covering retirees or other former employees) may be amended
or terminated without material liability to ICI on or at any
time after the Closing.
<PAGE>
(vi) Except as disclosed on Schedule 4.03(m)(vi), no
employee or former employee, or officer or former officer,
or director or former director, of ICI will become entitled
to any bonus, retirement, severance, job security or similar
benefit or any enhanced benefit solely as a result of the
transactions contemplated by this Agreement and the
Ancillary Agreements. Any amount that may be received
(whether in cash or property or the vesting of property) as
a result of the transactions contemplated by this Agreement
and the Ancillary Agreements by any employee, officer or
director of ICI who is a "disqualified individual" (as
defined in proposed Treasury Regulation Section 1.280G-1)
under any employment, severance or termination agreement,
other compensation arrangement or ICI Benefit Plan currently
in effect would not be characterized as an "excess parachute
payment" (as defined in Section 280G(b)(1) of the Code).
(n) Absence of Certain Changes or Events. Except as
disclosed on Schedule 4.03(n), from the date of the most recent
financial statements included in the Filed SEC Documents to the date
of this Agreement, ICI has conducted its business only in the ordinary
course, and during such period there has not been:
(i) any event, change, effect or development that has
had or could reasonably be expected to have an adverse
effect on the business of ICI;
(ii) (A) any granting by ICI to any director, officer
or employee of ICI of any increase in compensation, except
in the ordinary course of business consistent with past
practice or as was required under employment agreements in
effect as of the date of the most recent financial
statements included in the Filed SEC Documents, (B) any
granting by ICI to any such director, officer or employee of
any increase in severance or termination pay, except as was
required under any employment, severance or termination
agreements in effect as of the date of the most recent
financial statements included in the Filed SEC Documents or
(C) any entry by ICI into any employment, severance or
termination agreement with any such director, officer or
employee;
(iii) any adoption of, or amendment to, any ICI Benefit
Plan by ICI during the period from the date of the most
recent financial statements included in the Filed SEC
Documents to the date of this Agreement;
<PAGE>
(iv) any change in accounting methods, principles or
practices by ICI affecting the properties or assets of ICI,
except insofar as may have been required by a change in
generally accepted accounting principles;
(v) any elections by ICI with respect to Taxes or
settlement or compromise by ICI of any Tax liability or
refund; or
(vi) (A) any declaration, setting aside or payment of
any dividends, distributions or other amounts (whether in
cash, stock or property) with respect to any of shares of
ICI Common Stock or any other shares of capital stock of
ICI, (B) any split, combination or reclassification of any
shares of ICI Common Stock or any issuance, or authorization
to issue, any other securities in respect of, in lieu of, or
in substitution for, shares of ICI Common Stock or (C) any
purchase, redemption or other acquisition for value of any
shares of ICI Common Stock or any other securities of ICI or
any rights, warrants or options to acquire any such shares
or other securities.
(o) Proceedings. Except as disclosed on Schedule 4.03(o),
there is no suit, action or proceeding pending or, to the knowledge of
the Founders, threatened, against or affecting ICI, its business or
its properties or assets, nor is there any judgment, order or decree
outstanding against or affecting ICI, its business or its properties
or assets. Except as disclosed on Schedule 4.03(o), there are no
suits, actions or proceedings initiated by ICI, or that ICI intends to
initiate, against any other Person arising out of the conduct of its
business. Except as disclosed on Schedule 4.03(o), to the knowledge of
the Founders, there is no pending or threatened investigation of ICI,
the conduct of its business or its properties or assets.
(p) Compliance with Laws. Except as disclosed on Schedule
4.03(p), ICI is in compliance in all respects with all laws,
ordinances, rules and regulations, applicable to ICI, its business or
its properties or assets, including those laws, ordinances, rules and
regulations relating to occupational health and safety and the
environment. Except as disclosed on Schedule 4.03(p), ICI has not
received any written communication since January 1, 1997 from a
Governmental Entity that alleges that ICI, its business or any of its
properties or assets is not in compliance in any respect with any law,
ordinance, rule or regulation applicable to ICI, its business or its
properties or assets. ICI has not received any written notice that any
<PAGE>
investigation or review by any Governmental Entity with respect to
ICI, its business or its properties or assets is pending or that any
such investigation or review is contemplated. This Section 4.03(p)
does not relate to matters with respect to Taxes, which are the
subject of Section 4.03(l).
(q) Labor Agreements and Actions. ICI is not bound by, or
subject to (and none of its properties or assets is bound by or
subject to), any written or oral, express or implied, contract,
commitment or arrangement with any labor union, and no labor union has
requested or, to the knowledge of the Founders, sought to represent
any of the employees, representatives or agents of ICI. There is no
strike or other labor dispute involving ICI pending, or, to the
knowledge of the Founders, threatened, nor is ICI aware of any labor
organization activity involving its employees. ICI is not aware that
any officer or key employee of ICI intends to terminate his or her
employment with ICI, and ICI does not have a present intention to
terminate the employment of any officer or key employee of ICI. ICI
has complied in all respects with all applicable Federal and state
equal employment opportunity laws and with other laws related to
employment.
(r) Year 2000 Compliance. Except as disclosed on Schedule
4.03(r), ICI expects its computer systems to be Year 2000 Compliant by
June 30, 1999. To the knowledge of the Founders, all Inventory of ICI
that is or uses computer software is Year 2000 Compliant. To the
knowledge ICI, any failure on the part of the customers of, and
suppliers to, ICI to be Year 2000 Compliant by December 31, 1999, is
not expected to have an adverse effect on the business of ICI.
(s) Brokers. No broker, investment banker, financial advisor
or other Person, other than Interstate/Johnson Lane Corporation and
Green Morris & Associates, Inc., the fees and expenses of which will
subject to the limitation set forth in Section 6.03(a), be paid by
ICI, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the consummation of
the transactions contemplated by this Agreement and the Ancillary
Agreements based upon arrangements made by or on behalf of the
Founders or ICI.
(t) Founders Contributed Shares. Each of the Founders has
good and valid title to the Founders Contributed Shares owned by such
Founder, free and clear of all Liens. Upon delivery to Holdings at the
Closing of the certificates representing the Founders Contributed
Shares
<PAGE>
owned by such Founder, duly endorsed by such Founder for transfer to
Holdings, good and valid title to the Founders Contributed Shares
owned by such Founder will pass to Holdings, free and clear of all
Liens. Other than this Agreement, the Founders Contributed Shares are
not subject to any voting trust agreement or other contract,
agreement, arrangement, commitment or understanding, including any
such agreement, arrangement, commitment or understanding restricting
or otherwise relating to the voting, dividend rights or disposition of
the Founders Contributed Shares.
(u) Information Supplied. None of the information supplied
or to be supplied by the Founders or ICI for inclusion or
incorporation by reference in the Proxy Statement will, at the date it
is first mailed to ICI's shareholders or at the time of the
Shareholders' Meeting, contain any untrue statement of a fact or omit
to state any fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply
as to form in all respects with the requirements of the Exchange Act
and the rules and regulations thereunder, except that no
representation is made by the Founders with respect to statements made
or incorporated by reference therein based on information supplied by
any Person other than the Founders or ICI for inclusion or
incorporation by reference in the Proxy Statement.
ARTICLE V
Covenants
SECTION 5.01. Conduct of Business. (a) Conduct of Business
by IHS. Except for matters set forth on Schedule 5.01(a) or otherwise
expressly permitted by the terms of this Agreement, from the date of
this Agreement to the Closing, IHS shall conduct the Business in the
usual, regular or ordinary course in substantially the same manner as
previously conducted and, to the extent consistent therewith, use all
reasonable efforts to preserve the Business, keep available the
services of the Transferred Employees and maintain the relationships
of the Business with suppliers, customers, licensors, licensees,
distributors and others with whom the Business deals to the end that
the Business shall be unimpaired at the Closing. Prior to the Closing,
IHS shall not take any action that would, or that could reasonably be
expected to, result in any of the conditions to the Closing set forth
in Article VII not being satisfied. In addition (and without
<PAGE>
limiting the generality of the foregoing), except as set forth on
Schedule 5.01(a) or otherwise expressly permitted or required by the
terms of this Agreement, prior to the Closing IHS shall not do any of
the following in connection with the Business without the prior
written consent of the Founders:
(i) grant to any Transferred Employee any increase in
compensation or benefits, except in the ordinary course of
business consistent with past practice or as may be required
under employment agreements in effect as of the date of the
most recent Financial Statements;
(ii) renew or amend any collective bargaining agreement
or other Contract with any labor organization, union or
association, except in each case as required by applicable
laws;
(iii) incur or assume any liabilities, obligations or
indebtedness for borrowed money or guarantee any such
liabilities, obligations or indebtedness, other than in the
ordinary course of business consistent with past practice;
(iv) cancel any material indebtedness of the Business
for borrowed money (individually or in the aggregate) or
waive any claims or rights of substantial value belonging to
the Business;
(v) except for intercompany transactions in the
ordinary course of business consistent with past practice,
pay, loan or advance any amount to, or sell, transfer or
lease any of the Acquired Assets to, or enter into any
agreement or arrangement with, IHS or any of its Affiliates;
(vi) permit, allow or suffer any Acquired Asset to
become subjected to any Lien of any nature whatsoever that
would have been required to be set forth on Schedule 4.01(e)
if existing on the date of this Agreement;
(vii) make or incur any capital expenditure that,
individually, is in excess of $25,000 or make or incur any
such expenditures which, in the aggregate, are in excess of
$25,000;
(viii) sell, lease, license or otherwise dispose of any
of the Acquired Assets that are material, individually or in
the aggregate, to the Business,
<PAGE>
except Inventory sold in the ordinary course of business
consistent with past practice;
(ix) enter into any lease of real property, except any
renewals of existing leases in the ordinary course of
business consistent with past practice;
(x) acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any
other manner, any Person or any business or division of any
Person or otherwise acquire any assets (other than
Inventory) that are material, individually or in the
aggregate, to the Business;
(xi) make any change in any method of accounting or
accounting practice or policy other than those required by
generally accepted accounting principles;
(xii) enter into any Contract, or any other commitment,
agreement, arrangement or undertaking, written or oral, or
engage in any transaction, involving any future benefit to
the Business or any future liability owned by the Business
in excess of $25,000 or that is otherwise material to the
Business as presently conducted;
(xiii) authorize any of, or commit or agree to do or
take, whether in writing or oral, any of, the foregoing
actions.
(b) Conduct of the Business of ICI by the Founders. Except
for matters set forth on Schedule 5.01(b) or otherwise expressly
permitted by the terms of this Agreement, from the date of this
Agreement to the Closing, the Founders shall cause ICI to conduct its
business in the usual, regular or ordinary course in substantially the
same manner as previously conducted and, to the extent consistent
therewith, use all reasonable efforts to preserve its business, keep
available the services of its current employees and maintain its
relationships with suppliers, customers, licensors, licensees,
distributors and others with whom it deals to the end that its
business shall be unimpaired at the Closing. Prior to the Closing, the
Founders shall not, and shall not permit ICI to, take any action that
would, or that could reasonably be expected to, result in any of the
conditions to the Closing set forth in Article VII not being
satisfied. In addition (and without limiting the generality of the
foregoing), except as set forth on Schedule 5.01(b) or otherwise
expressly permitted or required by the terms of this Agreement, prior
to the Merger the Founders shall not, and shall not permit ICI to,
<PAGE>
do any of the following without the prior written consent of IHS:
(i) grant to any officer or employee any increase in
compensation or benefits, except in the ordinary course of
business consistent with past practice or as may be required
under employment agreements in effect as of the date of the
most recent financial statements included in the Filed SEC
Documents;
(ii) adopt or amend any ICI Benefit Plan (or any plan
that would be an ICI Benefit Plan if adopted) or enter into,
adopt, extend (beyond the Closing Date), renew or amend any
collective bargaining agreement or other Contract with any
labor organization, union or association, except in each
case as contemplated by this Agreement or required by
applicable laws;
(iii) incur or assume any liabilities, obligations or
indebtedness for borrowed money or guarantee any such
liabilities, obligations or indebtedness, other than in the
ordinary course of business consistent with past practice;
(iv) cancel any material indebtedness for borrowed
money (individually or in the aggregate) or waive any claims
or rights of substantial value;
(v) except for intercompany transactions in the
ordinary course of business consistent with past practice,
pay, loan or advance any amount to, or sell, transfer or
lease any of its properties or assets to, or enter into any
agreement or arrangement with, ICI or any of its Affiliates;
(vi) permit, allow or suffer any of its properties or
assets to become subjected to any Lien of any nature
whatsoever that would have been required to be set forth on
Schedule 4.03(f) if existing on the date of this Agreement;
(vii) make or incur any capital expenditure that,
individually, is in excess of $25,000 or make or incur any
such expenditures which, in the aggregate, are in excess of
$25,000;
(viii) sell, lease, license or otherwise dispose of
any of its properties or assets that, individually or in the
aggregate, are material to ICI, except Inventory sold in the
ordinary course of business consistent with past practice;
<PAGE>
(ix) enter into any lease of real property, except any
renewals of existing leases in the ordinary course of
business consistent with past practice;
(x) acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any
other manner, any Person or any business or division of any
Person or otherwise acquire any assets (other than
Inventory) that are material, individually or in the
aggregate, to ICI;
(xi) make any change in any method of accounting or
accounting practice or policy other than those required by
generally accepted accounting principles;
(xii) enter into any Contract, or any other commitment,
agreement, arrangement or undertaking, written or oral, or
engage in any transaction, involving any future benefit to
ICI or any future liability owed by ICI in excess of $25,000
or that is otherwise material to the business of ICI as
presently conducted;
(xiii) (A) declare, set aside or pay any dividends,
distributions or other amounts (whether in cash, stock or
property) with respect to any of shares of ICI Common Stock
or any other shares of capital stock of ICI, (B) split,
combine or reclassify any shares of ICI Common Stock or
issue, or authorize the issuance of, any other securities in
respect of, in lieu of, or in substitution for, shares of
ICI Common Stock or (C) purchase, redeem or otherwise
acquire for value any shares of ICI Common Stock or any
other securities of ICI or any rights, warrants or options
to acquire any such shares or other securities;
(xiv) issue, deliver, sell or grant (A) any shares of
ICI Common Stock, (B) any securities convertible into or
exchangeable for, or any options, warrants or rights to
acquire, any shares of ICI Common Stock, voting securities
or convertible or exchangeable securities, other than grants
of options to acquire not more than 2,000 shares of ICI
Common Stock made to any individual who has not been
previously employed by ICI in connection with the employment
of such individual by ICI; provided that such individual
executes and delivers an agreement substantially identical
to the form of Option Amendment Agreement attached hereto as
Exhibit E or (C) any "phantom" stock, "phantom" stock
rights, stock appreciation rights or stock-based performance
units, other than the issuance of ICI
<PAGE>
Common Stock in respect of options to acquire shares of ICI
Common Stock existing on the date of this Agreement as
contemplated by the Ancillary Agreements;
(xv) amend the Restated Articles of ICI or the By-laws
of ICI; or
(xvi) authorize any of, or commit or agree to do or
take, whether in writing or oral, any of, the foregoing
actions.
(c) Other Actions. IHS shall not, and shall not permit
Holdings or Merger Sub to, and the Founders shall not, and shall not
permit ICI to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and warranties
of IHS or the Founders, as applicable, set forth in this Agreement
becoming untrue in any material respect or (ii) except as otherwise
permitted by Section 5.02, any condition to the Closing set forth in
Article VII not being satisfied.
(d) Advice of Changes. IHS and the Founders shall promptly
advise one another orally and in writing of any change or event
having, or which, insofar as can reasonably be foreseen, would have, a
Business Material Adverse Effect or an ICI Material Adverse Effect, as
applicable.
SECTION 5.02. No Solicitation. (a) The Founders shall not
(i) directly or indirectly, solicit, initiate or encourage the
submission of, any ICI Takeover Proposal, (ii) enter into any
agreement with respect to any ICI Takeover Proposal or (iii) directly
or indirectly, participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to,
or take any other action to facilitate any inquiries or the making of
any proposal that constitutes, or may reasonably be expected to lead
to, any ICI Takeover Proposal.
(b) The Founders shall not (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to IHS, the
approval or recommendation by ICI of the Ancillary Agreements to which
ICI is a party, (ii) approve any letter of intent, agreement in
principle, acquisition agreement or similar agreement relating to any
ICI Takeover Proposal or (iii) approve or recommend, or propose to
approve or recommend, any ICI Takeover Proposal.
(c) The Founders shall, within five business days after
receipt thereof, advise IHS orally and in writing of any ICI Takeover
Proposal or any inquiry with respect to, or
<PAGE>
that could reasonably be expected to lead to, any ICI Takeover
Proposal, and the identity of the Person making any such ICI Takeover
Proposal or inquiry (including any change to the material terms of any
such ICI Takeover Proposal or inquiry). The Founders shall (i) keep
IHS fully informed of the status (including any change to the details)
of any such ICI Takeover Proposal or inquiry and (ii) provide to IHS
as soon as practicable after receipt or delivery thereof with copies
of all correspondence and other written material sent or provided to
the Founders or ICI from any third party in connection with any ICI
Takeover Proposal or sent or provided by the Founders or ICI to any
third party in connection with any ICI Takeover Proposal.
(d) Notwithstanding any other provision of this Agreement,
it is understood and agreed that any remedies at law would be
inadequate in the case of any breach of the covenants contained in
Section 5.02. IHS shall be entitled to equitable relief, including the
remedy of specific performance, with respect to any breach or
attempted breach of the covenants contained in Section 5.02.
ARTICLE VI
Additional Agreements
SECTION 6.01. Access to Information. IHS shall afford to the
Founders and ICI, and to the officers, employees, accountants,
counsel, financial advisors and other representatives of ICI,
reasonable access during normal business hours during the period prior
to the Closing, to all the properties, assets, books and records of
the Business (other than the Excluded Assets), and, during such
period, IHS shall furnish promptly to the Founders and ICI (a) a copy
of each document filed by it during such period pursuant to the
requirements of Federal or state securities laws and (b) all other
information concerning the Business as the Founders or ICI may
reasonably request. The Founders shall, and shall cause ICI to, afford
to IHS, and to the officers, employees, accountants, counsel,
financial advisors and other representatives of IHS, reasonable access
during normal business hours during the period prior to the Closing,
to all the properties, assets, books and records of ICI, and, during
such period, the Founders shall, and shall cause ICI to, furnish
promptly to IHS (a) a copy of each document filed by the Founders or
ICI during such period pursuant to the requirements of Federal or
state securities laws and (b) all other information concerning the
business, properties or assets of ICI as IHS may reasonably request.
<PAGE>
SECTION 6.02. Reasonable Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each
of IHS and the Founders shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with one another in doing, all things necessary,
proper or advisable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this Agreement and the
Ancillary Agreements, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations
and filings (including filings with Governmental Entities, if any) and
the taking of all reasonable steps as may be necessary to avoid an
action or nonaction by, or to obtain a waiver, consent or approval
from, any Governmental Entity, (ii) the obtaining of all necessary
waivers, consents and approvals from third parties, (iii) the
defending of any suits, actions or proceedings, whether judicial or
administrative, challenging this Agreement or any of the Ancillary
Agreements or the consummation of the transactions contemplated hereby
or thereby, including seeking to have any stay or temporary
restraining order entered by any Governmental Entity vacated or
reversed, and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by
this Agreement or the Ancillary Agreement or to fully carry out the
purposes of this Agreement and the Ancillary Agreements. In connection
with, and without limiting, the foregoing, the Founders shall cause
ICI and the Board of Directors of ICI to (i) take all action necessary
to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the transactions contemplated
by this Agreement or the Ancillary Agreements and (ii) if any state
takeover statute or similar statute or regulation becomes applicable
to any transaction contemplated by this Agreement or the Ancillary
Agreements, take all action necessary to ensure that such transactions
may be consummated as promptly as practicable upon the terms
contemplated by this Agreement and the Ancillary Agreements.
(b) IHS shall give prompt notice to the Founders, and the
Founders shall, or shall cause ICI to, give prompt notice to IHS, of
(i) any representation or warranty made by IHS or such Founder, as
applicable, contained in this Agreement or any Ancillary Agreement
becoming untrue or inaccurate in any material respect or (ii) the
failure by IHS or such Founder, as applicable, to comply with, or
satisfy in any material respect, any covenant, condition or agreement
to be complied with or satisfied by IHS or such Founder, as
applicable, under this Agreement or any of the
<PAGE>
Ancillary Agreements; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements
of IHS or such Founder, as applicable, or the conditions to the
obligations of IHS or such Founder, as applicable, under this
Agreement or any of the Ancillary Agreements.
SECTION 6.03. Costs and Expenses; Transfer Taxes. (a) If the
Closing does not take place, all costs and expenses incurred in
connection with this Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby shall be paid by the
party incurring such cost or expense. If the Closing takes place, (i)
all costs and expenses incurred by IHS in connection with this
Agreement and the Ancillary Agreements and the transactions
contemplated hereby and thereby shall be paid by IHS and (ii) all
costs and expenses incurred by the Founders and ICI in connection with
this Agreement and the Ancillary Agreements and the transactions
contemplated hereby and thereby shall be paid by Holdings; provided,
however, that in no event shall the amount paid by Holdings pursuant
to this Section 6.03(a) for any costs or expenses incurred by the
Founders or ICI exceed $350,000 (exclusive of the costs and expenses
related to the maintenance of policies of directors' and officers'
liability insurance pursuant to Section 6.10).
(b) All Transfer Taxes applicable to the conveyance and
transfer from IHS to Holdings of the Acquired Assets and any other
Transfer Taxes incurred in connection with the consummation of the
transactions contemplated by this Agreement and the Ancillary
Agreements shall be paid by Holdings, and IHS shall, and the Founders
shall cause ICI to, cooperate in the preparation, execution, and
filing of any and all Tax Returns with respect to such Transfer Taxes
in a timely manner.
SECTION 6.04. Publicity. IHS shall not make a public release
or announcement concerning the transactions contemplated by this
Agreement and the Ancillary Agreements without the prior consent of
the Founders, which consent shall not be unreasonably withheld, except
as such release or announcement may be required by law or the rules or
regulations of any United States or foreign securities exchange, in
which case IHS shall allow the Founders reasonable time to comment on
such release or announcement in advance of such issuance. The Founders
shall not, and shall not permit ICI to, make a public release or
announcement concerning the transactions contemplated by this
Agreement and the Ancillary Agreements without the prior consent of
IHS, which consent shall not be
<PAGE>
unreasonably withheld, except as such release or announcement may be
required by law or the rules or regulations of any United States or
foreign securities exchange, in which case ICI shall allow IHS
reasonable time to comment on such release or announcement in advance
of such issuance.
SECTION 6.05. Bulk Transfer Laws. The Founders hereby waive
compliance by IHS with the provisions of any so-called "bulk transfer
law" of any jurisdiction in connection with the contribution of the
Acquired Assets to Holdings.
SECTION 6.06. Waiver of Certain Defenses. Each of IHS and
the Founders hereby expressly agrees (i) that Sections 4(b) and 4(e)
of the Year 2000 Information and Readiness Disclosure Act are
inapplicable to this Agreement, and (ii) to waive any defenses arising
under such act in any suit, action or proceeding relating to the
matters addressed by this Agreement.
SECTION 6.07. Preparation of Proxy Statement; Shareholders'
Meeting. As soon as practicable following the date of this Agreement,
the Founders shall cause ICI to prepare the Proxy Statement. The
Founders shall cause ICI to use all reasonable efforts to cause the
Proxy Statement to be mailed to the shareholders of ICI as promptly as
practicable. The Founders shall cause ICI to, as soon as practicable
following the date of this Agreement, duly call, give notice of,
convene and hold the Shareholders' Meeting for the purpose of
obtaining the Shareholders' Approval. The Founders will prohibit ICI
from mailing the Proxy Statement, or any amendment thereof or
supplement thereto, to the shareholders of ICI unless ICI has first
given IHS an opportunity to review and comment on such document and
has obtained the consent of IHS to such mailing, which consent will
not be unreasonably withheld or delayed.
SECTION 6.08. Agreement of Founders To Vote in Favor of
Merger. (a) Unless this Agreement shall have been earlier terminated
in accordance with the provisions of Section 8.01, at the
Shareholders' Meeting, or in any other circumstances upon which a
vote, consent or other approval (including by written consent) with
respect to the Merger Agreement or the Merger is sought, each Founder
shall, including by executing a written consent, vote (or cause to be
voted) all shares of ICI Common Stock such Founder is entitled to vote
in favor of granting the Shareholders' Approval.
<PAGE>
(b) At any meeting of the shareholders of ICI, at any
adjournment thereof, and in any other circumstances upon which the
vote, consent or other approval of the Founders is sought, each
Founder shall vote (or cause to be voted) all shares of ICI Common
Stock such Founder is entitled to vote against (i) any merger
agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding
up of or by ICI, (ii) any ICI Takeover Proposal and (iii) any
amendment of Restated Articles of Incorporation of ICI, By-laws of ICI
or other proposal or transaction involving ICI, which amendment or
other proposal or transaction would in any manner impede, frustrate,
prevent or nullify any provision of the Merger Agreement or the Merger
or change in any manner the voting rights of any class of ICI Common
Stock. Each of the Founders shall refrain from committing or agreeing
to take any action inconsistent with the foregoing.
SECTION 6.09. Agreements Not To Compete. (a) Agreement of
Founders Not To Compete. Each of the Founders understands that IHS
shall be entitled to protect and preserve the going concern value of
the Business and the going concern value of ICI to the extent
permitted by law and that IHS would not have entered into this
Agreement absent the provisions of this Section 6.09(a) and,
therefore, for a period of three years from the Closing, each of the
Founders shall not, directly or indirectly:
(i) engage in activities or businesses, or establish
any new businesses, that are directly in competition with
the Business or the CSM software business of ICI, including
(A) selling products or services competitive with the
Products or the CSM software of ICI, (B) soliciting any
customer or prospective customer of the Business or ICI to
purchase any products or services competitive with the
Products or the CSM software of ICI from anyone other than
Holdings and its Affiliates, (C) developing any products or
services competitive with the Products or the CSM software
of ICI and (D) assisting any Person in any way to do, or
attempt to do, anything prohibited by clause (A), (B) or (C)
above; and
(ii) perform any action, activity or course of conduct
that is directly detrimental to the Business or the business
of ICI or the business reputation of the Business or ICI,
including disclosing or furnishing to anyone other than
Holdings and its Affiliates any confidential information
relating to the Business or
<PAGE>
the business of ICI or otherwise using such confidential
information for the benefit of such Founder or any other
Person.
(b) Agreement of IHS Not To Compete. IHS understands that
each of the Founders shall be entitled to protect and preserve the
going concern value of Holdings to the extent permitted by law and
that the Founders would not have entered into this Agreement absent
the provisions of this Section 6.09(b) and, therefore, for a period of
three years from the Closing, IHS shall not, directly or indirectly:
(i) engage in activities or businesses, or establish
any new businesses, that are directly in competition with
the Business or the CSM software business of ICI, including
(A) selling products or services competitive with the
Products or the CSM software of ICI, (B) soliciting any
customer or prospective customer of Holdings to purchase any
products or services competitive with the Products or the
CSM software of ICI from anyone other than Holdings and its
Affiliates, (C) developing any products or services
competitive with the Products or the CSM software of ICI and
(D) assisting any Person in any way to do, or attempt to do,
anything prohibited by clause (A), (B) or (C) above; and
(ii) perform any action, activity or course of conduct
that is directly detrimental to Holdings or the business
reputation of Holdings, including disclosing or furnishing
to anyone other than Holdings and its Affiliates any
confidential information relating to Holdings or otherwise
using such confidential information for the benefit of IHS
or any other Person (other than pursuant to a separate
agreement between IHS and Holdings).
(c) Notwithstanding any other provision of this Agreement,
it is understood and agreed that any remedies at law would be
inadequate in the case of any breach of the covenants contained in
Section 6.09. IHS shall be entitled to equitable relief, including the
remedy of specific performance, with respect to any breach or
attempted breach of the covenants contained in Section 6.09(a) and the
Founders shall be entitled to equitable relief including the remedy of
specific performance, with respect to any breach or attempted breach
of the covenants contained in Section 6.09(b).
<PAGE>
SECTION 6.10. Agreement to Provide Directors' and Officers'
Insurance. IHS hereby agrees that, for a period of five years
following the Closing Date, IHS shall cause Holdings to maintain the
policies of directors' and officers' liability insurance maintained by
ICI on the date hereof, which policies shall cover acts or omissions
occurring prior to the Closing Date in respect of each Person covered
by the directors' and officers' liability insurance policies
maintained by ICI as of the date hereof; provided, however, that IHS
may cause Holdings to substitute therefor policies providing at least
the same coverage and containing terms and conditions that, when
considered as a whole, are in all material respects no less favorable
than the terms and conditions of such policies. IHS hereby agrees
that, immediately following consummation of the Merger, IHS shall
cause Holdings and ICI, as the surviving corporation in the Merger, to
indemnify all directors and officers of ICI (including former
directors and officers) to the same extent that ICI is obligated to
indemnify such directors and officers as of the date hereof pursuant
to the Restated Articles of Incorporation and By-laws of ICI and any
written agreements in effect as of the date hereof between ICI and
such directors and officers. All indemnification obligations of
Holdings and ICI, as the surviving corporation in the Merger, shall
continue in full force and effect in accordance with their terms from
and after the consummation of the Merger for the maximum period
permitted by law.
SECTION 6.11. Tax Matters. (a) The parties hereto intend
that the contributions to Holdings and issuances of stock by Holdings
pursuant to Sections 2.01(b), (c) and (d) are intended to be described
in Section 351 of the Code, and the parties hereto agree to take
positions consistent with this intent in all tax filings.
(b) The parties hereto shall cooperate with each other and
provide tax information to each other necessary or appropriate for the
parties to file tax returns and reports consistent with this position
and to defend any challenges to this position by any tax authorities.
In particular, the Founders shall provide Holdings with information
necessary for Holdings to determine its tax basis in the Founders
Contributed Shares.
(c) Promptly following the Merger, IHS shall enter into a
tax sharing agreement with Holdings generally consistent with the tax
sharing agreements entered into between members of the Federal
consolidated group of which IHS is a member. Such agreement shall be
based generally on the principle that Holdings and its subsidiaries
will be
<PAGE>
liable for their share of the consolidated group's Federal income tax
liabilities determined generally on the same basis as if Holdings and
its subsidiaries were the only members of their own consolidated
Federal income tax group. Similar principles shall apply to other tax
returns filed on a consolidated or combined basis by a group that
includes Holdings or its subsidiaries as well as IHS or its other
affiliates.
SECTION 6.12. Stock Options. The Founders shall use their
best efforts to obtain from each Optionholder the consent of such
Optionholder to the transactions contemplated by the form of Option
Amendment Agreement, which consent shall be evidenced by the execution
and delivery by such Optionholder of a counterpart to an Option
Amendment Agreement between ICI and such Optionholder.
As soon as practicable following the date of this Agreement,
the Founders shall use their best efforts to cause the Board of
Directors of ICI (or, if appropriate, any committee administering the
1995 ICI Stock Option Plan or the 1996 ICI Stock Option Plan) to adopt
such resolutions or take such other actions (i) as are required (A) to
adjust the terms of all outstanding options to purchase shares of ICI
Common Stock (and any stock appreciation rights linked to the price of
shares of ICI Common Stock) heretofore granted to any employee (but
not former employee) or director of ICI under the 1995 ICI Stock
Option Plan or the 1996 ICI Stock Option Plan, whether vested or
unvested, and (B) to adjust the terms of all outstanding options to
purchase shares of ICI Common Stock (and any stock appreciation rights
linked to the price of shares of ICI Common Stock) heretofore granted
to any former employee of ICI under the 1995 ICI Stock Option Plan or
the 1996 ICI Stock Option Plan that are vested as of the date on which
the employment of such employee was terminated, in the case of clauses
(A) and (B), as necessary to provide that each such option to purchase
shares of ICI Common Stock (and any stock appreciation right related
thereto) outstanding immediately prior to the effectiveness of the
Merger shall not give the holder thereof the right to receive any
capital stock of ICI or Holdings after the effective time of the
Merger or to receive any consideration other than, for each option
(and any stock appreciation right related thereto), an amount in cash
equal to (i) the excess, if any, of (x) the consideration paid in the
Merger for each outstanding share of ICI Common Stock over (y) the
exercise price per share of ICI Common Stock subject to such option
multiplied by (ii) the number of shares of ICI Common Stock subject to
such option and (ii) as are required to make such other changes to the
1995 ICI Stock Option Plan and the 1996
<PAGE>
ICI Stock Option Plan as IHS and the Founders may agree are
appropriate to give effect to the transactions contemplated by this
Agreement and the Ancillary Agreements.
The Founders shall use their best efforts to cause ICI to
(i) cause the 1995 ICI Stock Option Plan and the 1996 ICI Stock Option
Plan to terminate upon consummation of the Merger, (ii) cause all
provisions in any other ICI Benefit Plan providing for the issuance,
transfer or grant of any capital stock of ICI, or any interest in
respect of any capital stock of ICI, to be deleted upon consummation
of the Merger and (iii) ensure that, upon consummation of the Merger,
no holder of options to purchase shares of ICI Common Stock or
participant in the 1995 ICI Stock Option Plan, the 1996 ICI Stock
Option Plan or any other ICI Benefit Plan shall have any right to
acquire any capital stock of ICI or Holdings.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to the Obligations of IHS and the
Founders. The obligation of IHS to, and the obligation of IHS to cause
Holdings and Merger Sub to, consummate the transactions contemplated
by this Agreement and the Ancillary Agreements, and the obligation of
the Founders to, and to cause ICI to, consummate the transactions
contemplated by this Agreement and the Ancillary Agreements, is
subject to the satisfaction or waiver on or prior to the Closing of
the following conditions:
(a) Governmental Approvals. The waiting period under the HSR
Act, if applicable to the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements, shall
have expired or been terminated. All other authorizations, consents,
orders or approvals of, or declarations or filings with, or
expirations of waiting periods imposed by, any Governmental Entity
necessary for the consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements shall have been obtained
or filed or shall have occurred.
(b) No Injunctions or Restraints. No applicable statute,
law, ordinance, rule or regulation enacted, entered, promulgated,
enforced or issued by, any Governmental Entity, no temporary
restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction, and no other legal
<PAGE>
restraint or prohibition preventing the consummation of the
transactions contemplated by this Agreement and the Ancillary
Agreements shall be in effect.
(c) Shareholders' Approval. The Merger Agreement and the
Merger shall have been approved by the affirmative vote of holders of
shares of ICI Common Stock and shares of Merger Sub Common Stock
representing, in each case, a majority of the votes entitled to be
cast by holders of the outstanding shares of ICI Common Stock or
Merger Sub Common Stock, as the case may be, voting as a single class.
SECTION 7.02. Conditions to the Obligations of IHS. The
obligation of IHS to, and to cause Holdings and Merger Sub to,
consummate the transactions contemplated by this Agreement and the
Ancillary Agreements is subject to the satisfaction or waiver on or
prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Founders and ICI in this Agreement and in the
Ancillary Agreements, as applicable, shall be true and correct, as of
the date hereof and as of the Closing Date as though made on such
Closing Date, except where failure of such representations and
warranties to be true and correct as of the date hereof and as of the
Closing Date as made on the Closing Date, when considered as a whole,
has not had and could not reasonably be expected to have an ICI
Material Adverse Effect. IHS shall have received a certificate signed
by each of the Founders (and ICI, if applicable) to such effect.
(b) Performance of Obligations. The Founders shall have, and
shall have caused ICI to have, performed or complied in all material
respects with all covenants and obligations required by this Agreement
and the Ancillary Agreements to be satisfied by the Founders or ICI,
as the case may be, prior to the Closing. IHS shall have received a
certificate signed by each of the Founders to such effect.
(c) Opinion of Counsel. IHS shall have received an opinion
dated the Closing Date of Gambrell & Stolz, L.L.P., counsel to the
Founders, which opinion shall include the opinion of such counsel with
respect to (i) the due organization, valid existence and good standing
of ICI, (ii) the power and authority of ICI to execute and deliver
each of the Ancillary Agreements to which it is a party and to
consummate the transactions contemplated thereby, (iii) the
enforceability of this Agreement against each of the Founders and the
enforceability of each of the Ancillary Agreements to which any of the
Founders of ICI is a party
<PAGE>
against such Founder or ICI, as applicable, (iv) the absence of any
conflict created by the execution and delivery of any of the Ancillary
Agreements to which ICI is a party, the consummation of any of the
transactions contemplated thereby or the compliance by ICI of the
terms thereof with the Restated Articles of Incorporation or By-laws
of ICI, any Contract to which ICI is a party or by which any of its
properties or assets are bound or any judgment, order or decree, or
statute, law, ordinance, rule or regulation applicable to ICI, its
properties or assets, (v) the compliance of ICI with all laws,
ordinances, rules and regulations, applicable to ICI, including those
laws, ordinances, rules and regulations relating to occupational
health and safety and the environment and (vi) the absence of any
material suit, action or proceeding against ICI, other than any such
suit, action or proceeding disclosed on Schedule 4.03(o), and which
opinion shall be reasonably satisfactory in form and substance to IHS
and its counsel.
(d) Ancillary Agreements. Each of the Employment Agreements,
the Merger Agreement, the Services Agreement and the Stockholders'
Agreement, and Option Amendment Agreements in respect of not less than
95% of all shares of ICI Common Stock to be issued to the
Optionholders upon exercise of all their options to purchase shares of
ICI Common Stock, shall have been duly executed and delivered by each
of the parties thereto (other than IHS, Holdings and Merger Sub), and
each such Ancillary Agreement shall constitute a legal, valid and
binding obligation of each of the parties thereto (other than IHS,
Holdings and Merger Sub), enforceable against each such party in
accordance with its terms, and be in full force and effect.
(e) Absence of Proceedings. There shall not be pending or
threatened any suit, action or proceeding by any Governmental Entity
or any action, suit or proceeding by any other Person that has a
reasonable likelihood of success and that, if successful, could be
reasonably expected to have an ICI Material Adverse Effect or a
material adverse effect on the business, assets, condition (financial
or otherwise), prospects or results of operations of the Business as
combined with the business of ICI upon consummation of the Merger:
(i) challenging or seeking to restrain or prohibit the
consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements or seeking to obtain
from IHS, Holdings, Merger Sub, the Founders or ICI in
connection with the consummation of the transactions
contemplated by this Agreement and the
<PAGE>
Ancillary Agreements any damages that are material in
relation to ICI;
(ii) seeking to prohibit or limit the ownership or
operation by IHS or any of its subsidiaries of any material
portion of its business, properties or assets (including the
Business), or the ownership or operation by IHS of any of
its subsidiaries (or ICI), or to compel IHS or any of its
subsidiaries to dispose of or hold separate any material
portion of its business, properties or assets (including the
Business) or any of its subsidiaries (or ICI), in each case
as a result of the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements;
(iii) seeking to impose material limitations on the
ability of IHS or any of its subsidiaries to acquire or
hold, or exercise full rights of ownership of, its business,
properties and assets (including the Business) (or any
material portion of its business, properties and assets
(including the Business)) or the business, properties and
assets of ICI (or any material portion of the business,
properties and assets of ICI), or seeking to impose material
limitations on the ability of IHS or any of its subsidiaries
to acquire or hold, or exercise full rights of ownership of,
any shares of ICI Common Stock;
(iv) seeking to prohibit IHS or any of its subsidiaries
from effectively controlling in any material respect its
business, properties or assets (including the Business) or
the business, properties and assets of ICI; or
(v) which otherwise is reasonably likely to have an ICI
Material Adverse Effect.
(f) Other Documents. The Founders shall have furnished to
IHS such other documents relating to the Founders or ICI as IHS (or
its counsel) may reasonably request.
(g) Dissenters' Rights. The shares of ICI Common Stock held
by any Person who complies with all the provisions of the laws of the
Georgia Business Corporation Code concerning the right of any holder
of shares of ICI Common Stock to dissent from the Merger and require
appraisal of such holder's shares of ICI Common Stock shall constitute
less than 5% of the issued and outstanding shares of ICI Common Stock
immediately prior to the Closing.
<PAGE>
SECTION 7.03. Conditions to the Obligations of the Founders.
The obligation of each of the Founders to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements is subject
to the satisfaction or waiver on or prior to the Closing of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of IHS in this Agreement and the Ancillary Agreements, as
applicable, shall be true and correct, as of the date hereof and as of
the Closing Date as though made on the Closing Date, except where the
failure of such representations and warranties to be true and correct,
as of the date hereof and as of the Closing Date as though made on the
Closing Date when considered as a whole, has not had and could not
reasonably be expected to have a Business Material Adverse Effect. The
Founders shall have received a certificate signed by IHS (and Holdings
and Merger Sub, if applicable) to such effect.
(b) Performance of Obligations. IHS shall have, and shall
have caused Holdings and Merger Sub to have, performed or complied in
all material respects with all covenants and obligations required by
this Agreement and the Ancillary Agreements to be satisfied by IHS,
Holdings or Merger Sub, as the case may be, prior to the Closing. The
Founders shall have received a certificate signed by IHS to such
effect.
(c) Opinion of Counsel. The Founders shall have received an
opinion dated the Closing Date of Cravath, Swaine & Moore, counsel to
IHS, which opinion shall include the opinion of such counsel with
respect to (i) the due organization, valid existence and good standing
of each of IHS, Holdings and Merger Sub, (ii) the power and authority
of IHS to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and the power and authority of each
of IHS, Holdings and Merger Sub to execute and deliver each of the
Ancillary Agreements to which it is a party and to consummate the
transactions contemplated thereby, (iii) the enforceability of this
Agreement against each of IHS and the enforceability of each of the
Ancillary Agreements to which IHS, Holdings or Merger Sub is a party
against IHS, Holdings or Merger Sub, as applicable, and (iv) the
absence of any conflict created by the execution and delivery of this
Agreement, the consummation of any of the transactions contemplated
hereby or the compliance by IHS with the terms hereof with Certificate
of Incorporation or By-laws of IHS and the absence of any conflict
created by the execution and delivery of any of the Ancillary
Agreements to which IHS,
<PAGE>
Holdings or Merger Sub is a party, the consummation of any of the
transactions contemplated thereby or the compliance by IHS, Holdings
or Merger Sub with the terms thereof with the Certificate or Articles
of Incorporation or By-laws of IHS, Holdings or Merger Sub, as
applicable, and which opinion shall be reasonably satisfactory in form
and substance to the Founders and their counsel.
(d) Ancillary Agreements. Each of the Employment Agreements,
the Merger Agreement, the Services Agreement and the Stockholders'
Agreement, and Option Amendment Agreements in respect of not less than
95% of all shares of ICI Common Stock to be issued to the
Optionholders upon exercise of all their options to purchase shares of
ICI Common Stock, shall have been duly executed and delivered by each
of the parties thereto (other than the Founders and ICI), and each
such Ancillary Agreement shall constitute a legal, valid and binding
obligation of each of the parties thereto (other than the Founders and
ICI), enforceable against each such party in accordance with its
terms, and be in full force and effect.
(e) Absence of Proceedings. There shall not be pending or
threatened any suit, action or proceeding by any Governmental Entity
or any action, suit or proceeding by any other Person that has a
reasonable likelihood of success and that, if successful, could be
reasonably expected to have an ICI Material Adverse Effect or a
material adverse effect on the business, assets, condition (financial
or otherwise), prospects or results of operations of the Business as
combined with the business of ICI upon consummation of the Merger:
(i) challenging or seeking to restrain or prohibit the
consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements or seeking to obtain
from IHS, Holdings, Merger Sub, the Founders or ICI in
connection with the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements
any damages that are material in relation to ICI;
(ii) seeking to prohibit or limit the ownership or
operation by IHS or any of its subsidiaries of any material
portion of its business, properties or assets (including the
Business), or the ownership or operation by IHS of any of
its subsidiaries (or ICI), or to compel IHS or any of its
subsidiaries to dispose of or hold separate any material
portion of its business, properties or assets (including the
Business) or any of its subsidiaries (or ICI), in each case
as a result of
<PAGE>
the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements;
(iii) seeking to impose material limitations on the
ability of IHS or any of its subsidiaries to acquire or
hold, or exercise full rights of ownership of, its business,
properties and assets (including the Business) (or any
material portion of its business, properties or assets
(including the Business)) or the business, properties and
assets of ICI (or any material portion of the business,
properties or assets of ICI), or seeking to material impose
limitations on the ability of IHS or any of its subsidiaries
to acquire or hold, or exercise full rights of ownership of,
any shares of ICI Common Stock;
(iv) seeking to prohibit IHS or any of its subsidiaries
from effectively controlling in any material respect its
business, properties or assets (including the Business) or
the business, properties and assets of ICI; or
(v) which otherwise is reasonably likely to have a
Business Material Adverse Effect.
(f) Option Plan. IHS shall have caused Holdings to create an
option plan permitting the Board of Directors of Holdings to grant
options to Holdings employees for up to 5% of the outstanding equity
of Holdings.
(g) Other Documents. IHS and Holdings shall have furnished
the Founders such other documents relating to IHS, Holdings or Merger
Sub as the Founders (or their counsel) may reasonably request.
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be terminated
at any time prior to the Closing:
(i) by mutual written consent of IHS, Holdings and the
Founders;
(ii) by either IHS or the Founders:
(A) if the transactions contemplated by this
Agreement and the Ancillary Agreements are not
consummated on or before March 29, 1999 (the
<PAGE>
"Outside Date"), unless the failure to consummate such
transactions is the result of a wilful and material
breach of this Agreement or any Ancillary Agreement by
the party seeking to terminate this Agreement;
(B) if any Governmental Entity issues an order,
decree or ruling, or takes any other action,
permanently enjoining, restraining or otherwise
prohibiting the transactions contemplated by this
Agreement and the Ancillary Agreements and such order,
decree, ruling or other action shall have become final
and nonappealable;
(C) if any condition to the obligation of IHS to
consummate the transactions contemplated in this
Agreement and the Ancillary Agreements set forth in
Section 7.02 or any condition to the obligation of the
Founders to consummate the transactions contemplated by
this Agreement and the Ancillary Agreements set forth
in Section 7.03 becomes incapable of satisfaction prior
to the Outside Date; unless the failure to satisfy such
condition is the result of a wilful and material breach
of this Agreement or any Ancillary Agreement by the
party seeking to terminate this Agreement; or
(D) if, upon a vote at a duly held at a
Shareholders' Meeting to obtain the Shareholders'
Approval, the Shareholders' Approval is not obtained;
(iii) by IHS, if the Founders breach or fail to perform
in any material respect any of their representations,
warranties or covenants contained in this Agreement or any
Ancillary Agreement, or fail to cause ICI to perform in any
material respect any of its representations, warranties or
covenants contained in any Ancillary Agreement, which breach
or failure to perform (i) would give rise to the failure of
a condition set forth in Section 7.02(a) or 7.02(b) and (ii)
cannot be, or has not been, cured within 30 days after the
giving of written notice to the Founders of such breach (so
long as IHS is not then in wilful and material breach of any
representation, warranty or covenant contained in this
Agreement or any Ancillary Agreement);
(iv) by the Founders, if IHS breaches or fails to
perform in any material respect any of its
<PAGE>
representations, warranties or covenants contained in this
Agreement or any Ancillary Agreement, or IHS fails to cause
Holdings or Merger Sub to perform any of its
representations, warranties or covenants contained in any
Ancillary Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in
Section 7.03(a) or 7.03(b) and (ii) cannot be, or has not
been, cured within 30 days after the giving of written
notice to IHS of such breach (so long as none of the
Founders is then in wilful and material breach of any
representation, warranty or covenant contained in this
Agreement or any Ancillary Agreement); or
(v) by IHS, if the Founders shall participate in
discussions in breach of Section 5.02.
SECTION 8.02. Effect of Termination. In the event of
termination of this Agreement by IHS, on the one hand, or the
Founders, on the other hand, as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of IHS or the Founders, other than
pursuant to Section 4.01(q), Section 4.03(s), Section 6.03, this
Section 8.02 and Article IX, which provisions shall survive such
termination, except to the extent that such termination results from a
wilful and material breach of this Agreement or any Ancillary
Agreement by the party seeking to terminate this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by
IHS and the Founders at any time before or after receipt of the
Shareholders' Approval; provided, however, that, after receipt of the
Shareholders' Approval, there shall be made no amendment that by law
requires further approval by the shareholders of ICI without the
further approval of such shareholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of
IHS and the Founders.
SECTION 8.04. Extension; Waiver. At any time prior to the
Closing, the parties hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any Ancillary Agreement
or (c) subject to the limitations set forth in Section 8.03, waive
compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension
or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The
<PAGE>
failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of
such rights.
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or any of
the Ancillary Agreements, or in any instrument delivered in connection
herewith or therewith, shall survive the Closing. This Section 9.01
shall not limit any covenant or agreement of any of the parties hereto
or thereto which, by its terms, contemplates performance after the
Closing.
SECTION 9.02. Notices. All notices, requests, claims,
demands and other communications under this Agreement shall be in
writing and shall be deemed given upon receipt by the parties hereto
at the following addresses (or at such other address for such party as
shall be specified by like notice):
(a) if to IHS,
Information Handling Services Inc.
Iverness Business Park
15 Iverness Way East
Englewood, CO 80112
Attention: Mr. Darold Stagner
Telecopy: (303) 397-2742
with a copy to:
TBG Services Inc.
565 Fifth Avenue
New York, NY 10017
Attention: Mr. Steven Green
Telecopy: (212) 850-8530
and
Cravath, Swaine & Moore
Worldwide Plaza
828 Eighth Avenue
New York, NY 10019
Attention: Robert Rosenman, Esq.
Telecopy: (212) 474-3700
<PAGE>
(b) if to the Founders,
International CompuTex, Inc.
5500 Interstate North Parkway
Suite 507
Atlanta, GA 30328
Attention: Mr. Haim E. Dahan
Telecopy: (770) 953-1574
with a copy to
Gambrell & Stolz, L.L.P.
SunTrust Plaza
Suite 4300
303 Peachtree Street, N.E.
Atlanta, GA 30308
Attention: Henry Levi, Esq.
Telecopy: (404) 221-6501
SECTION 9.03. Headings. The table of contents and headings
contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
SECTION 9.04. Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced
by any rule or law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon determination that any
term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 9.05. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more
counterparts have been signed by each of the parties hereto and
delivered to the other parties hereto.
SECTION 9.06. Entire Agreement; No Third-Party
Beneficiaries. This Agreement, the Ancillary Agreements and any
written confidentiality agreement between or among any of the Founders
or ICI, on the one hand, and IHS, on the other hand, (a) constitute
the entire agreement, and
<PAGE>
supersede all prior agreements and understandings, both written and
oral, among the parties hereto and thereto with respect to the
transactions contemplated by this Agreement and the Ancillary
Agreements and (b) are not intended to confer upon any Person other
than the parties hereto or thereto any rights or remedies.
SECTION 9.07. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State
of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
SECTION 9.08. Assignment. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise, by
any of the parties hereto without the prior written consent of the
other parties. Any purported assignment without such consent shall be
void. Subject to the preceding sentences, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the
parties hereto and their respective successors and assigns.
SECTION 9.09. Consent to Jurisdiction. Each of the parties
hereto (a) consents to submit to the personal jurisdiction of any
Federal court located in the State of Delaware or any Delaware state
court in the event any dispute arises regarding this Agreement or the
transactions contemplated hereby, (b) agrees not to attempt to deny or
defeat such personal jurisdiction by motion or other request for leave
from any such court, (c) agrees not to bring any action relating to
this Agreement or the transactions contemplated hereby in any court
other than any Federal court sitting in the State of Delaware or any
Delaware state court and (d) waives any right to trial by jury with
respect to any action related to, or arising out of, this Agreement or
the transactions contemplated hereby.
<PAGE>
IN WITNESS WHEREOF, IHS has caused this Agreement to be
signed by its officer thereunto duly authorized, and each of the
Founders has signed this Agreement, all as of the date first written
above.
INFORMATION HANDLING SERVICES
INC.,
by /s/ Stephen Green
-------------------------
Name: Stephen Green
Title: Vice President
/s/ Haim E. Dahan
-------------------------
Haim E. Dahan
/s/ Michael J. Galvin
--------------------------
Michael J. Galvin
/s/ Patricia Tuxbury Salem
---------------------------
Patricia Tuxbury Salem
/s/ Peter W. Jeng
--------------------------
Peter W. Jeng
/s/ James L. McAlarney, III
---------------------------
James L. McAlarney, III
<PAGE>
EXHIBIT A
ICI Letterhead
CONFIDENTIAL
Mr. Emil Dahan
International CompuTex, Inc.
5500 Interstate North Parkway
Suite 507
Atlanta, Ga 30328-4662
Dear Mr. Dahan:
This letter will confirm and record our agreement as to the terms
relating to your employment by International CompuTex, Inc. ("ICI")
following the acquisition of ICI by [NEWCO] as follows:
1. Commencing on the effective date of the acquisition of ICI by
[NEWCO], your position with ICI will be President and Chief
Technology Officer, reporting to the Chief Executive Officer of
ICI.
2. Your salary will be at the rate of $180,000 per year payable in
equal biweekly installments. It is contemplated that at least
annually during the term of your employment, the Board of
Directors of ICI will consider and appraise your contribution to
the operating efficiency, growth, production and profit of ICI
and on the basis of such consideration and appraisal may increase
(but shall not decrease) your rate of salary. In addition to your
salary, you shall participate in an Annual Incentive Compensation
Plan ("Annual Plan") pursuant to which you shall be eligible to
receive an annual bonus commencing with respect to the fiscal
year ended November 30, 1999 and each fiscal year that you are
employed by ICI thereafter, in an amount equal to $30,000 in the
event ICI equals or exceeds "target" performance, payable in
accordance with the terms and conditions of the Annual Plan.
"Target" performance for the fiscal year ended November 30, 1999
shall be profit before interest and income tax for ICI equal to
or greater than $1 million for the period commencing on the date
hereof and ending on November 30, 1999. The "target" performance
requirements for subsequent fiscal years shall be established for
each such year by the Board of Directors of ICI or such person
designated by the terms of the Annual Plan. No bonus shall be
paid for any fiscal year for performance below "target"
performance, and no bonus shall be paid for any fiscal year
unless you are employed on November 30 of such fiscal year.
3. You will have continued use of the ICI owned car you have been
using during the twelve month period preceding the date of this
Agreement. You shall also be
<PAGE>
included, to the extent eligible, under any plans providing
benefits subsequent to the date hereof to the employees of ICI
generally.
4. In the event your employment with ICI is terminated before the
completion of three years from the date hereof for any reason
other than termination by ICI for "cause" as defined below, then
ICI shall pay you on the effective date of termination of your
employment a lump-sum severance payment equal to the base salary
paid to you by ICI during the preceding twelve month period. For
purposes of this Agreement, "cause" shall mean malfeasance or
misconduct materially detrimental to the interests of ICI or any
of its affiliates or a material breach by you of this agreement.
5. In the event your employment with ICI is terminated after the
completion of three years from the date hereof, any severance
payment shall be subject to and in accordance with the ICI
severance policy in effect on the effective date of termination
(which severance policy shall be, so long as ICI is an affiliate
of Information Handling Services Group Inc. ("IHS Group"), the
severance policy of IHS Group in effect on the effective date of
termination).
6. Your death or "permanent and total disability" as defined in
Section 22(e) of the US Internal Revenue Code, as amended from
time to time, shall terminate all obligations hereunder.
7. Simultaneously with the execution and delivery of this agreement,
ICI and you shall execute and deliver the ICI Agreement with
Employee - Nondisclosure and other Covenants in the form attached
hereto as Exhibit A ("Nondisclosure Agreement").
8. It is understood that this agreement does not entitle you to
employment for any specific period of time and that in the event
of termination of your employment the only obligation of ICI and
its affiliates shall be solely as specified herein.
9. (A) For a period of three years from the effective date of
termination of your employment, you agree that you will not,
directly or indirectly:
(i) engage in activities or businesses, or establish any new
businesses, that are directly in competition with the
business of ICI at the time your employment with ICI is
terminated, including without limitation (a) selling
products or services competitive with the CAPSXpert products
or the CSM software of ICI, (b) soliciting any customer or
prospective customer of ICI to purchase any products or
services competitive with the CAPSXpert products or the CSM
software of ICI from anyone other than ICI and its
affiliates, (c) developing any products or services
competitive with the CAPSXpert products or the CSM software
of ICI, and (d) assisting any person or entity in any way to
do, or attempt to do, anything prohibited by clause (a), (b)
or (c) above; and
(ii) perform any action, activity or course of conduct that is
substantially detrimental to the business of ICI or the business
reputation of ICI.
(B) Notwithstanding any other provision of this Agreement, it is
understood and agreed that any remedies at law would be
inadequate in the case of any
<PAGE>
breach of the covenants contained in paragraph 9. ICI shall
be entitled to equitable relief, including the remedy of
specific performance, with respect to any breach or
attempted breach of the covenants contained in this
paragraph.
(C) The parties hereto agree that the duration and area for
which the covenant not to compete set forth in this
paragraph 9 is to be effective are reasonable. In the event
that any court determines that the time period or the area,
or both of them, are unreasonable and that such covenant is
to that extent unenforceable, the parties hereto agree that
the covenant shall remain in full force and effect for the
greatest time period and in the greatest area that would not
render it unenforceable. The parties intend that this
covenant shall be deemed to be a series of separate
covenants, one for each and every political subdivision of
each and every state of the United States of America and
each and every political subdivision of each and every
country throughout the world where this covenant is intended
to be effective.
10. Any notice, request, instruction or other document to be given
hereunder by any party hereto shall be in writing and shall be
delivered personally or sent by registered or certified mail or
sent by overnight courier addressed as set forth below:
If to ICI:
International CompuTex, Inc.
c/o Information Handling Services Inc.
15 Inverness Way East
Englewood, CO 80115
Attention: President
with a copy to:
TBG Services Inc.
565 Fifth Avenue
New York, New York 10017
Attention: Vice President & General Counsel
If to Emil Dahan:
c/o International CompuTex, Inc.
5500 Interstate North Parkway
Suite 507
Atlanta, GA 30328-4662
or such other address as you or ICI shall designate to the other
in conformity with the foregoing
11. This agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign or
transfer this agreement or any rights or obligations hereunder,
except that ICI may assign or transfer this agreement to any
affiliate or to a successor corporation; provided that in the
case of any such assignment or transfer, this agreement shall,
subject to the provisions hereof, be binding upon and inure to
the benefit of any such affiliate or successor corporation and
such affiliate or successor corporation shall discharge and
perform all of the obligations of ICI.
<PAGE>
12. This agreement and the Nondisclosure Agreement constitute the
entire agreement and understanding of the parties with respect to
the subject matter hereof, and all prior negotiations and
understandings relating to the subject matter of this Agreement
are merged herein and are superseded and canceled by this
agreement. All modifications and amendments hereto must be in
writing signed by both parties.
13. This Agreement shall be governed by and construed in accordance
with, the laws of the State of Georgia applicable to agreements
made and to be performed within Georgia.
IN WITNESS WHEREOF, the parties have executed this Agreement
__________, 1999.
INTERNATIONAL COMPUTEX, INC.
By:
-------------------------
Title:
----------------------
----------------------------
Emil Dahan
<PAGE>
EXHIBIT B
ICI Letterhead
CONFIDENTIAL
Mr. Michael J. Galvin
International CompuTex, Inc.
5500 Interstate North Parkway
Suite 507
Atlanta, Ga 30328-4662
Dear Mr. Galvin:
This letter will confirm and record our agreement as to the terms
relating to your employment by International CompuTex, Inc. ("ICI")
following the acquisition of ICI by [NEWCO] as follows:
9. Commencing on the effective date of the acquisition of ICI by
[NEWCO], you will be a Vice President of ICI.
10. Your salary will be at the rate of $100,000 per year payable in
equal biweekly installments. Its is contemplated that at least
annually during the term of your employment, the Board of
Directors of ICI will consider and appraise your contribution to
the operating efficiency, growth, production and profit of ICI
and on the basis of such consideration and appraisal may increase
(but shall not decrease) your rate of salary. In addition to your
salary, you shall participate in an Annual Incentive Compensation
Plan ("Annual Plan") pursuant to which you shall be eligible to
receive an annual bonus commencing with respect to the fiscal
year ended November 30, 1999 and each fiscal year that you are
employed by ICI thereafter, in an amount equal to 25% of your
December 1 base salary in effect at the beginning of such fiscal
year at "target performance" and in an amount equal to 37 1/2% at
"maximum performance", payable in accordance with the terms and
conditions of the Annual Plan. The "target" and "maximum"
performance requirements shall be established for each year by
the Board of Directors of ICI or such person designated by the
terms of the Annual Plan. You shall also be included, to the
extent eligible, under any plans providing benefits subsequent to
the date hereof to the employees of ICI generally.
11. In the event your employment with ICI is terminated before the
completion of three years from the date hereof for any reason
other than termination (x) by ICI for "cause" as defined below,
or (y) by you other than for "good reason" as defined below, then
ICI shall pay you on the effective date of termination of your
employment a lump-sum severance payment equal to the base salary
paid to you by ICI during the preceding twelve month period. For
purposes of this agreement, "cause" shall mean malfeasance or
misconduct materially detrimental to the interests
<PAGE>
of ICI or any of its affiliates or a material breach by you of
this agreement and "good reason" shall mean a material breach by
ICI of this agreement.
12. In the event your employment with ICI is terminated after the
completion of three years from the date hereof, any severance
payment shall be subject to and in accordance with the ICI
severance policy in effect on the effective date of termination
(which severance policy shall be, so long as ICI is an affiliate
of Information Handling Services Group Inc. ("IHS Group"), the
severance policy of IHS Group in effect on the effective date of
termination).
13. Your death or "permanent and total disability" as defined in
Section 22(e) of the US Internal Revenue Code, as amended from
time to time, shall terminate all obligations hereunder.
14. Simultaneously with the execution and delivery of this Agreement,
ICI and you shall execute and deliver the ICI Agreement with
Employee - Nondisclosure and other Covenants in the form attached
hereto as Exhibit A ("Nondisclosure Agreement").
15. It is understood that this Agreement does not entitle you to
employment for any specific period of time and that in the event
of termination of your employment the only obligation of ICI and
its affiliates shall be solely as specified herein.
16. (A) For a period of one year from the effective date of
termination of your employment, you agree that you will not,
directly or indirectly:
(i) engage in activities or businesses, or establish any new
businesses, that are directly in competition with the
business of ICI at the time your employment with ICI is
terminated, including without limitation (a) selling
products or services competitive with the CAPSXpert products
or the CSM software of ICI, (b) soliciting any customer or
prospective customer of ICI to purchase any products or
services competitive with the CAPSXpert products or the CSM
software of ICI from anyone other than ICI and its
affiliates, (c) developing any products or services
competitive with the CAPSXpert products or the CSM software
of ICI, and (d) assisting any person or entity in any way to
do, or attempt to do, anything prohibited by clause (a), (b)
or (c) above; and
(ii) perform any action, activity or course of conduct that is
substantially detrimental to the business of ICI or the
business reputation of ICI.
(B) Notwithstanding any other provision of this Agreement, it is
understood and agreed that any remedies at law would be
inadequate in the case of any breach of the covenants
contained in paragraph 8. ICI shall be entitled to equitable
relief, including the remedy of specific performance, with
respect to any breach or attempted breach of the covenants
contained in this paragraph.
(C) The parties hereto agree that the duration and area for
which the covenant not to compete set forth in this
paragraph 8 is to be effective are reasonable. In the event
that any court determines that the time period or the area,
or both of them, are unreasonable and that such covenant is
to that extent
<PAGE>
unenforceable, the parties hereto agree that the covenant
shall remain in full force and effect for the greatest time
period and in the greatest area that would not render it
unenforceable. The parties intend that this covenant shall
be deemed to be a series of separate covenants, one for each
and every political subdivision of each and every state of
the United States of America and each and every political
subdivision of each and every country throughout the world
where this covenant is intended to be effective.
9. Any notice, request, instruction or other document to be given
hereunder by any party hereto shall be in writing and shall be
delivered personally or sent by registered or certified mail or
sent by overnight courier addressed as set forth below:
If to ICI:
International CompuTex, Inc.
c/o Information Handling Services Inc.
15 Inverness Way East
Englewood, CO 80115
Attention: President
with a copy to:
TBG Services Inc.
565 Fifth Avenue
New York, New York 10017
Attention: Vice President & General Counsel
If to Michael J. Galvin:
==========================
--------------------------
or such other address as you or ICI shall designate to the other
in conformity with the foregoing
10. This agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign or
transfer this agreement or any rights or obligations hereunder,
except that ICI may assign or transfer this agreement to any
affiliate or to a successor corporation; provided that in the
case of any such assignment or transfer, this agreement shall,
subject to the provisions hereof, be binding upon and inure to
the benefit of any such affiliate or successor corporation and
such affiliate or successor corporation shall discharge and
perform all of the obligations of ICI.
11. This agreement and the Nondisclosure Agreement constitute the
entire agreement and understanding of the parties with respect to
the subject matter hereof, and all prior negotiations and
understandings relating to the subject matter of this Agreement
are merged herein and are superseded and canceled by this
agreement. All modifications and amendments hereto must be in
writing signed by both parties.
<PAGE>
12. This Agreement shall be governed by and construed in accordance
with, the laws of the State of Georgia applicable to agreements
made and to be performed within Georgia.
IN WITNESS WHEREOF, the parties have executed this Agreement
_____________, 1999.
INTERNATIONAL COMPUTEX, INC.
By:
-------------------------
Title:
----------------------
----------------------------
Michael J. Galvin
<PAGE>
EXHIBIT C
==============================================================================
AGREEMENT AND PLAN OF MERGER
Dated as of January [ ], 1999,
Among
INFORMATION HANDLING SERVICES INC.
IHS ITEMQUEST HOLDINGS INC.
[MERGER SUB]
And
INTERNATIONAL COMPUTEX, INC.
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
The Merger
SECTION 1.01. The Merger ...................................... 1
SECTION 1.02. Closing ......................................... 1
SECTION 1.03. Effective Time .................................. 1
SECTION 1.04. Effects ......................................... 2
SECTION 1.05. Articles of Incorporation and
By-laws ....................................... 2
SECTION 1.06. Directors ....................................... 2
SECTION 1.07. Officers ........................................ 2
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock ......................... 3
SECTION 2.02. Exchange of Certificates ........................ 4
ARTICLE III
Conditions Precedent ........................................... 6
ARTICLE IV
Termination, Amendment and Waiver
SECTION 4.01. Termination .................................... 7
SECTION 4.02. Effect of Termination ........................... 7
SECTION 4.03. Amendment ....................................... 7
<PAGE>
ARTICLE V
General Provisions
SECTION 5.01. Notices ......................................... 7
SECTION 5.02 Headings ........................................ 8
SECTION 5.03. Interpretation .................................. 8
SECTION 5.04. Assignment ...................................... 9
SECTION 5.05. Severability .................................... 9
SECTION 5.06. Entire Agreement; No Third-Party
Beneficiaries ................................. 9
SECTION 5.07. Governing Law ................................... 9
SECTION 5.08. Enforcement; Exclusive
Jurisdiction .................................. 9
SECTION 5.09. Counterparts .................................... 10
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of
January [ ], 1999 (this "Agreement"), among
INFORMATION HANDLING SERVICES INC., a Delaware
corporation ("IHS"), IHS ITEMQUEST HOLDINGS INC.,
a Delaware corporation ("Holdings"), [MERGER SUB],
a Georgia corporation ("Merger Sub"), and
International CompuTex, Inc., a Georgia
corporation ("ICI").
WHEREAS IHS and certain shareholders of ICI are parties to a
Formation Agreement dated as of January 10, 1999 (the "Formation
Agreement"), pursuant to which the Formation Transaction (capitalized
terms used herein but not defined herein shall have the meanings
assigned thereto in the Formation Agreement) will be consummated; and
WHEREAS the respective Boards of Directors of Holdings,
Merger Sub and ICI have approved the merger of Merger Sub with and
into ICI on the terms and subject to the conditions set forth in this
Agreement, whereby each issued share of common stock, par value $0.001
per share, of ICI (the "ICI Common Stock") not owned directly or
indirectly by Holdings or ICI shall be converted into cash.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. On the terms and subject to the
conditions set forth in this Agreement, and in accordance with the
Georgia Business Corporation Code (the "GBCC"), Merger Sub shall be
merged with and into ICI at the Effective Time (as defined below). At
the Effective Time, the separate corporate existence of Merger Sub
shall cease, and ICI shall continue as the surviving corporation (the
"Surviving Corporation").
SECTION 1.02. Closing. The closing of the Merger (the
"Closing") shall take place immediately following the consummation of
the Formation Transaction.
SECTION 1.03. Effective Time. Prior to the Closing, Holdings
shall prepare, and on the date on which the Closing occurs (or as soon
as practicable thereafter),
<PAGE>
Holdings shall file with the Secretary of State of the State of
Georgia, a certificate or articles of merger or other appropriate
documents (in any such case, the "Certificate of Merger") executed in
accordance with the relevant provisions of the GBCC and shall make all
other filings or recordings required under the GBCC. The Merger shall
become effective at such time as the Certificate of Merger is duly
filed with the Secretary of State of the State of Georgia or at such
subsequent time as shall be stated in the Certificate of Merger (the
"Effective Time").
SECTION 1.04. Effects. The Merger shall have the effects set
forth in Section 14-2-1106 of the GBCC.
SECTION 1.05. Articles of Incorporation and By- laws. (a)
The Restated Articles of Incorporation of ICI as in effect immediately
prior to the Effective Time shall be amended at the Effective Time so
that (i) Article I of such Restated Articles of Incorporation reads in
its entirety as follows: "The name of the Corporation is: "IHS
Itemquest II Inc." and (ii) Article IV of such Restated Articles of
Incorporation reads in its entirety as follows: "The Corporation shall
have authority to issue not more than 110,000,000 shares of a single
class of Common Stock with par value $0.001 per share.", and, as so
amended, such Restated Articles of Incorporation shall be the articles
of incorporation of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable law.
(b) The By-laws of Merger Sub as in effect immediately prior
to the Effective Time shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or
by applicable law.
SECTION 1.06. Directors. Haim E. Dahan, who is currently the
President, Chief Executive Officer and Chairman of ICI, will become a
director of the Surviving Corporation at the Effective Time. Other
than Mr. Dahan, the directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation,
until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may
be.
SECTION 1.07. Officers. Mr. Dahan will become the President
and Chief Technology Officer of the Surviving Corporation. In
addition, Michael J. Galvin and Patricia Tuxbury Salem, who are
currently officers and directors of ICI, will become officers, but not
directors, of the Surviving Corporation. Other than Mr. Dahan,
Mr. Galvin and
<PAGE>
Ms. Salem, the officers of Merger Sub immediately prior to the
Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may
be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of
the holder of any shares of ICI Common Stock or any shares of Merger
Sub Common Stock:
(a) Capital Stock of Merger Sub. Each issued and outstanding
share of Merger Sub Common Stock shall be converted into and become
one fully paid and nonassessable share of common stock, par value
$0.001 per share, of the Surviving Corporation.
(b) Cancelation of Treasury Stock and Stock Owned by
Holdings or Merger Sub. Each share of ICI Common Stock that is owned
by ICI and each share of ICI Common Stock that is owned by Holdings or
Merger Sub shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and no Merger
Consideration (as defined below) or other consideration shall be
delivered in exchange therefor.
(c) Conversion of ICI Common Stock. Subject to Sections
2.01(b) and 2.01(d), each issued and outstanding share of ICI Common
Stock shall be converted into the right to receive $9.50 in cash (the
"Merger Consideration"). As of the Effective Time, all such shares of
ICI Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each holder of a certificate previously representing any such shares
shall cease to have any rights with respect thereto, except the right
to receive the Merger Consideration upon surrender of such certificate
in accordance with Section 2.02, without interest.
(d) Dissenters' Rights. Notwithstanding anything in this
Agreement to the contrary, shares ("Dissent Shares") of ICI Common
Stock that are outstanding immediately prior to the Effective Time and
that are held by any Person who is entitled to demand, and who
properly demands, payment of the fair value of such Dissent Shares
<PAGE>
pursuant to, and who complies in all respects with, Article 13 of the
GBCC ("Article 13") shall not be converted into Merger Consideration
as provided in Section 2.01(c), but rather the holders of Dissent
Shares shall be entitled to payment of the fair value of such Dissent
Shares in accordance with Article 13; provided, however, that if any
such holder shall fail to perfect or otherwise shall waive, withdraw
or lose the right to receive payment of fair value under Article 13,
then the right of such holder to be paid the fair value of such
holder's Dissent Shares shall cease and such Dissent Shares shall be
deemed to have been converted as of the Effective Time into, and to
have become exchangeable solely for the right to receive, the Merger
Consideration as provided in Section 2.01(c). Prior to the Effective
Time, ICI shall not, without the prior written consent of IHS, make
any payment with respect to, or settle or offer to settle, any such
demands, or agree to do any of the foregoing.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent.
Prior to the Effective Time, ICI shall designate American Stock
Transfer & Trust Company, or other bank or trust company, to act as
paying agent (the "Paying Agent") for the payment of the Merger
Consideration upon surrender of certificates representing ICI Common
Stock.
(b) ICI To Provide Funds. ICI shall take all steps necessary
to enable the Surviving Corporation to provide to the Paying Agent, on
a timely basis, as and when needed on and after the Effective Time,
cash necessary to pay for the shares of ICI Common Stock converted
into the right to receive cash pursuant to Section 2.01 (such cash
being hereinafter referred to as the "Exchange Fund").
(c) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall cause the
Paying Agent to mail to each holder of record of a certificate or
certificates (each, a "Certificate") which immediately prior to the
Effective Time represented outstanding shares of ICI Common Stock
whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 2.01 (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have
such other provisions as the Surviving Corporation may reasonably
specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancelation to the Paying Agent or to
such other agent or
<PAGE>
agents as may be appointed by ICI, together with such letter of
transmittal, duly executed, and such other documents as may be
reasonably required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the
amount of cash into which the shares of ICI Common Stock theretofore
represented by such Certificate shall have been converted pursuant to
Section 2.01, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of ICI Common Stock
which is not registered in the transfer records of ICI, payment may be
made to a Person other than the Person in whose name the Certificate
so surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the Person
requesting such payment shall pay any transfer or other taxes required
by reason of the payment to a Person other than the registered holder
of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.02, each Certificate
shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the amount of cash, without
interest, into which the shares of ICI Common Stock theretofore
represented by such Certificate shall have been converted pursuant to
Section 2.01. No interest will be paid or will accrue on the cash
payable upon the surrender of any Certificate, except to the extent
provided under Article 13.
(d) No Further Ownership Rights in ICI Common Stock. The
Merger Consideration paid upon the surrender of Certificates in
accordance with the terms hereof shall be deemed to have been paid in
full satisfaction of all rights pertaining to the shares of ICI Common
Stock theretofore represented by such Certificates, subject, however,
to the Surviving Corporation's obligation to pay any dividends or make
any other distributions with a record date prior to the Effective Time
which may have been declared or made by ICI on such shares of ICI
Common Stock in accordance with the terms of this Agreement and the
Formation Agreement on or prior to the Effective Time and which remain
unpaid at the Effective Time, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of ICI Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this
Article II.
(e) Termination of Exchange Fund. Any portion of the
Exchange Fund that remains undistributed to the holders
<PAGE>
of ICI Common Stock for six months after the Effective Time shall be
delivered to the Surviving Corporation, upon demand, and any holder of
ICI Common Stock who has not theretofore complied with this Article II
shall thereafter look only to the Surviving Corporation for payment of
its claim for Merger Consideration.
(f) No Liability. None of IHS, Holdings, Merger Sub, ICI or
the Paying Agent shall be liable to any Person in respect of any cash
from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any
Certificate has not been surrendered prior to five years after the
Effective Time (or immediately prior to such earlier date on which
Merger Consideration in respect of such Certificate would otherwise
escheat to or become the property of any Governmental Entity), any
such shares, cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable law, become
the property of the Surviving Corporation, free and clear of all
claims or interest of any Person previously entitled thereto.
(g) Investment of Exchange Fund. The Paying Agent shall
invest any cash included in the Exchange Fund, as directed by the
Surviving Corporation, on a daily basis. Any interest and other income
resulting from such investments shall be paid to the Surviving
Corporation.
(h) Withholding Rights. The Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise
payable to any holder of ICI Common Stock pursuant to this Agreement
such amounts as may be required to be deducted and withheld with
respect to the making of such payment under the Code, or under any
provision of state, local or foreign tax law.
ARTICLE III
Conditions Precedent
The only conditions precedent to the respective obligation
of each party to effect the Merger shall be satisfaction (or waiver by
the applicable beneficiary of the applicable condition) of the
conditions set forth in Article VII of the Formation Agreement and the
consummation of the Formation Transaction.
<PAGE>
ARTICLE IV
Termination, Amendment and Waiver
SECTION 4.01. Termination. This Agreement may be terminated,
whether before or after receipt of the Shareholders' Approval, but
only upon termination of the Formation Agreement in accordance with
the terms thereof.
SECTION 4.02. Effect of Termination. In the event of
termination of this Agreement as provided in Section 4.01, this
Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of IHS, Holdings, Merger Sub or
ICI, other than this Section 4.02 and Article V.
SECTION 4.03. Amendment. This Agreement may be amended by
IHS, Holdings, Merger Sub and ICI at any time before or after receipt
of the Shareholders' Approval; provided, however, that, after receipt
of the Shareholders' Approval, there shall be made no amendment that
by law requires further approval by the shareholders of ICI without
the further approval of such shareholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of
IHS, Holdings, Merger Sub and ICI.
ARTICLE V
General Provisions
SECTION 5.01. Notices. All notices, requests, claims,
demands and other communications under this Agreement shall be in
writing and shall be deemed given upon receipt by the parties hereto
at the following addresses (or at such other address for such party as
shall be specified by like notice):
(a) if to IHS, Holdings or Merger Sub,
Information Handling Services Inc.
Iverness Business Park
15 Iverness Way East
Englewood, CO 80112
Attention: Mr. Darold Stagner
Telecopy: (303) 397-2742
<PAGE>
with a copy to:
TBG Services Inc.
565 Fifth Avenue
New York, NY 10017
Attention: Mr. Steven Green
Telecopy: (212) 850-8530
and
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Robert Rosenman, Esq.
Telecopy: (212) 474-3700
(b) if to ICI,
International CompuTex, Inc.
5500 Interstate North Parkway
Suite 507
Atlanta, GA 30328
Attention: Mr. Haim E. Dahan
Telecopy: (770) 953-1574
with a copy to
Gambrell & Stolz, L.L.P.
SunTrust Plaza
Suite 4300
303 Peachtree Street, N.E.
Atlanta, GA 30308
Attention: Henry Levi, Esq.
Telecopy: (404) 221-6501
SECTION 5.02. Headings. The table of contents and headings
contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
SECTION 5.03. Interpretation. When a reference is made in
this Agreement to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the
words "without limitation".
<PAGE>
SECTION 5.04. Assignment. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise by any
of the parties without the prior written consent of the other parties.
Any purported assignment without such consent shall be void. Subject
to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
SECTION 5.05. Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced
by any rule or law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 5.06. Entire Agreement; No Third-Party
Beneficiaries. This Agreement, the Formation Agreement, the other
Ancillary Agreements and the Confidentiality Agreement (a) constitute
the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties hereto and
thereto with respect to the transactions contemplated by this
Agreement, the Formation Agreement and the other Ancillary Agreements
and (b) are not intended to confer upon any Person other than the
parties hereto or thereto any rights or remedies.
SECTION 5.07. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof, except to the
extent the laws of the State of Georgia are mandatorily applicable to
the Merger.
SECTION 5.08. Enforcement; Exclusive Jurisdiction. Each of
the parties hereto (a) consents to submit to the personal jurisdiction
of any Federal court located in the State of Delaware or any Delaware
state court in the event any dispute arises regarding this Agreement
or the transactions contemplated hereby, (b) agrees not to attempt to
deny or defeat such personal jurisdiction by
<PAGE>
motion or other request for leave from any such court, (c) agrees not
to bring any action relating to this Agreement or the transactions
contemplated hereby in any court other than any Federal court sitting
in the State of Delaware or any Delaware state court and (d) waives
any right to trial by jury with respect to any action related to, or
arising out of, this Agreement or the transactions contemplated
hereby.
SECTION 5.09. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to
the other parties.
<PAGE>
IN WITNESS WHEREOF, each of IHS, Holdings, Merger Sub and
ICI have caused this Agreement to be signed by their respective
officers thereunto duly authorized, and each of the Founders has
signed this Agreement, all as of the date first written above.
INFORMATION HANDLING SERVICES
INC.,
by
------------------------
Name:
Title:
IHS ITEMQUEST HOLDINGS INC.,
by
------------------------
Name:
Title:
MERGER SUB,
by
-----------------------
Name:
Title
INTERNATIONAL COMPUTEX, INC.,
by
------------------------
Name:
Title:
<PAGE>
EXHIBIT D
AGREEMENT dated as of January [ ], 1999,
between INTERNATIONAL COMPUTEX, INC., a Georgia
corporation (the "Company"), and [ ] (the
"Optionholder").
WHEREAS, pursuant to a Formation Agreement dated as of
January 10, 1999 (the "Formation Agreement"), among Information
Handling Services Inc., a Delaware corporation ("IHS"), and certain
management shareholders of the Company (collectively, the "Founders"),
IHS has caused IHS Itemquest Holdings Inc., a Delaware corporation
("Holdings"), to be incorporated:
(i) IHS intends to contribute to Holdings certain assets and
liabilities related to the CAPSXpert product lines of IHS, 330,000
shares of common stock, par value $0.001 per share, of the Company
(the "Company Common Stock") and cash in exchange for 7,989,877 shares
of common stock of Holdings, par value $0.001 per share (the "Holdings
Common Stock"), resulting in IHS owning an aggregate of 7,989,977
shares of Holdings Common Stock;
(ii) The Founders intend to contribute to Holdings 1,566,153
shares of Company Common Stock in exchange for 1,566,153 shares of
Holdings Common Stock;
(iii) Following the foregoing contributions and exchanges
(the "Formation Transaction"), all outstanding shares of Company
Common Stock will be converted into the right to receive $9.50 in cash
in a merger (the "Merger") of a wholly owned subsidiary of Holdings
with and into the Company such that the Company will be the Surviving
Corporation in the Merger;
(iv) As a result of the Formation Transaction and the
Merger, (i) (A) IHS will own 83.611% of the outstanding shares of
Holdings Common Stock and (B) the Founders will collectively own
16.389% of the outstanding shares of Holdings Common Stock and (ii)
the Company, as the surviving corporation in the Merger, will be a
wholly owned subsidiary of Holdings;
(v) The Optionholder currently holds one or more options to
purchase shares of Company Common Stock, as described in Appendix A
(the "Company Options");
(vi) The agreement of the Optionholder to amend the
agreements evidencing the Company Options to provide that the
Optionholder shall receive, upon the effectiveness of the Merger, for
each Company Option, an amount in cash equal
<PAGE>
to (i) the excess, if any, of (x) the consideration paid in the Merger
in respect of each outstanding share of ICI Common Stock over (y) the
exercise price per share of ICI Common Stock subject to such Company
Option multiplied by (ii) the number of shares of ICI Common Stock
subject to such Company Option (together with a similar agreement on
the part of other employees of the Company and certain directors of
the Company who have been granted options to purchase shares of
Company Common Stock) is a condition precedent to the consummation of
the transactions contemplated by the Formation Agreement; and
WHEREAS the Company and the Optionholder desire to enter
into certain agreements relating to the amendment of the agreements
evidencing the Company Options.
NOW, THEREFORE, in consideration of the premises, mutual
promises and covenants contained in this Agreement, the Company and
the Optionholder hereby agree:
1. Representations and Warranties of the Optionholder. The
Optionholder hereby represents and warrants to the Company as follows:
(a) The Optionholder has full power and authority to execute
this Agreement and to consummate the transactions contemplated hereby.
The Optionholder has duly executed and delivered this Agreement, and
this Agreement constitutes a legal, valid and binding obligation of
the Optionholder, enforceable against the Optionholder in accordance
with its terms.
(b) Appendix A attached hereto accurately sets forth for
each Company Option (i) the date of grant of such Company Option, (ii)
the number of shares of Company Common Stock that may be purchased
upon exercise of such Company Option, (iii) the exercise price in
respect of such Company Option and (iv) the ISN/NSO status and vesting
(exercisability) status of such Company Option as of January [ ],
1999.
2. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Optionholder as follows:
the Company has full power and authority to execute this Agreement and
to consummate the transactions contemplated hereby. The execution and
delivery by the Company of this Agreement and consummation by the
Company of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the
Company (and no other corporate proceedings
<PAGE>
are necessary to authorize this Agreement or the transactions
contemplated hereby). The Company has duly executed and delivered this
Agreement, and this Agreement constitutes a valid, legal and binding
obligation of the Company, enforceable against the Company in
accordance with its terms. The execution and delivery by the Company
of this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance by the Company with the terms
hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancelation or acceleration of
any obligation or to loss of a material benefit under, or result in
the creation of any Lien upon any of its properties or assets under,
any provision of (i) the Restated Articles of Incorporation or By-laws
of the Company, (ii) any purchase order, sales agreement, customer
subscription, service contract, distribution agreement, quotation and
bid, product warranty, technical assistance or service agreement, or
any other written or oral contract, lease, sublease, license,
sublicense, indenture or other commitment, agreement, arrangement or
undertaking, or any amendment thereto, to which the Company is a party
or by which any of its properties or assets is bound or (iii) any
judgment, order or decree, or statute, law, ordinance, rule or
regulation, applicable to the Company or any of its properties or
assets, other than any such items that, in the aggregate with all
other breaches of such representations and warranties, has not had and
could not reasonably be expected to have a material adverse effect on
the business, assets, condition (financial or otherwise), prospects or
results of operations of the Company.
3. Amendment of Options. (a) By executing this Agreement,
the Company and the Optionholder hereby amend the agreements
evidencing the Company Options as set forth in paragraph 3(b), which
amendments shall become effective only if, and upon, the consummation
of the transactions contemplated by the Formation Agreement. The
Optionholder hereby acknowledges that he or she has received, and has
had an opportunity to review with his or her financial or other
advisors, the Option Amendment Memorandum dated January [ ], 1999,
furnished to him or her by the Company.
(b) The terms of the agreements evidencing the Company
Options, as amended, shall provide that, upon the effectiveness of the
Merger, each Company Option shall, without any action on the part of
the Optionholder, the Company or any other person or entity, be
automatically exercised, on a cashless basis, and the Optionholder
shall receive for such Company Option an amount in cash equal to
<PAGE>
(i) the excess, if any, of (x) the consideration paid in the Merger in
respect of each outstanding share of Company Common Stock over (y) the
exercise price per share of Company Common Stock subject to such
Company Option multiplied by (ii) the number of shares of Company
Common Stock subject to such Company Option.
(c) The Optionholder hereby agrees that all amounts payable
in respect of the Company Options, as amended pursuant to the terms of
paragraph 3(b), shall be subject to any required withholding of taxes
and shall not bear interest.
(d) The Optionholder hereby further agrees that, upon the
effectiveness of the amendments to the agreements evidencing the
Company Options pursuant to the terms of paragraph 3(b), the
Optionholder shall not have any right to receive any capital stock of
the Company or any other entity under such agreements (or the Company
Options) or to receive any consideration other than, for each Company
Option, the amount in cash as provided in paragraph 3(b).
4. General Provisions. (a) Amendments. This Agreement may
not be amended except by an instrument in writing signed by the
Company and the Optionholder, with the written consent of IHS, which
consent shall not be unreasonably withheld.
(b) Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed
given upon receipt by the Company and the Optionholder at the
following addresses(or at such other address for such party as shall
be specified by like notice):
(i) if to the Company:
International CompuTex, Inc.
5500 Interstate North Parkway
Suite 507
Atlanta, Georgia 30328
Attention: Mr. Haim E. Dahan
Telecopy: (770) 953-1574
<PAGE>
and
(ii) if to the Optionholder:
[ ]
[ ]
[ ]
[ ]
Attention:
(c) Interpretation. When a reference is made in this
Agreement to paragraphs, such reference shall be to a paragraph to
this Agreement unless otherwise indicated. The headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Wherever the
words "include", "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation".
(d) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule or law, or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse
to the Company or the Optionholder. Upon such determination that any
term or other provision is invalid, illegal or incapable of being
enforced, the Company and the Optionholder shall negotiate in good
faith to modify this Agreement so as to effect the original intent of
the Company and the Optionholder as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts
have been signed by Company and the Optionholder and delivered to the
other party hereto.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof, except to the extent the laws
of the State of Georgia are mandatorily applicable to the transactions
contemplated hereby.
<PAGE>
(g) Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise, by
Company and the Optionholder without the prior written consent of the
other party and the written consent of IHS, which consent shall not be
unreasonably withheld. Any purported assignment without such consent
shall be void. Subject to the preceding sentences, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the
Company and the Optionholder and their respective successors and
assigns.
(h) Consent to Jurisdiction. The Company and the
Optionholder (a) consent to submit to the personal jurisdiction of any
Federal court located in the State of Delaware or any Delaware state
court in the event any dispute arises regarding this Agreement or the
transactions contemplated hereby, (b) agree not to attempt to deny or
defeat such personal jurisdiction by motion or other request for leave
from any such court, (c) agree not to bring any action relating to
this Agreement or the transactions contemplated hereby in any court
other than any Federal court sitting in the State of Delaware or any
Delaware state court and (d) waive any right to trial by jury with
respect to any action related to, or arising out of, this Agreement or
the transactions contemplated hereby.
(i) Enforcement. The Company and the Optionholder agree that
irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the
Company and the Optionholder shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any
Delaware state court or, any Federal court located in the State of
Delaware, this being in addition to any other remedy to which they are
entitled at law or in equity.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to
be signed by its officers thereunto duly authorized, and the
Optionholder has signed this Agreement, all as of the date first
written above.
INTERNATIONAL COMPUTEX, INC.,
by
--------------------------
Name:
Title:
-------------------------------
[Optionholder]
<PAGE>
Appendix A
<PAGE>
EXHIBIT E
ICI Letterhead
CONFIDENTIAL
Ms. Patricia Tuxbury Salem
International CompuTex, Inc.
5500 Interstate North Parkway
Suite 507
Atlanta, Ga 30328-4662
Dear Ms. Salem:
This letter will confirm and record our agreement as to the terms
relating to your employment by International CompuTex, Inc. ("ICI")
following the acquisition of ICI by [NEWCO] as follows:
13. Commencing on the effective date of the acquisition of ICI by
[NEWCO], you will be a Vice President of ICI.
14. Your salary will be at the rate of $100,000 per year payable in
equal biweekly installments. Its is contemplated that at least
annually during the term of your employment, the Board of
Directors of ICI will consider and appraise your contribution to
the operating efficiency, growth, production and profit of ICI
and on the basis of such consideration and appraisal may increase
(but shall not decrease) your rate of salary. In addition to your
salary, you shall participate in an Annual Incentive Compensation
Plan ("Annual Plan") pursuant to which you shall be eligible to
receive an annual bonus commencing with respect to the fiscal
year ended November 30, 1999 and each fiscal year that you are
employed by ICI thereafter, in an amount equal to 25% of your
December 1 base salary in effect at the beginning of such fiscal
year at "target performance" and in an amount equal to 37 1/2% at
"maximum performance", payable in accordance with the terms and
conditions of the Annual Plan. The "target" and "maximum"
performance requirements shall be established for each year by
the Board of Directors of ICI or such person designated by the
terms of the Annual Plan. You shall also be included, to the
extent eligible, under any plans providing benefits subsequent to
the date hereof to the employees of ICI generally.
15. In the event your employment with ICI is terminated before the
completion of three years from the date hereof for any reason
other than termination (x) by ICI for "cause" as defined below or
(y) by you other than for "good reason" as defined below, then
ICI shall pay you on the effective date of termination of your
employment a lump-sum severance payment equal to the base salary
paid to you by ICI during the preceding twelve month period. For
purposes of this
<PAGE>
agreement, "cause" shall mean malfeasance or misconduct
materially detrimental to the interests of ICI or any of its
affiliates or a material breach by you of this agreement and
"good reason" shall mean a material breach by ICI of this
agreement.
16. In the event your employment with ICI is terminated after the
completion of three years from the date hereof, any severance
payment shall be subject to and in accordance with the ICI
severance policy in effect on the effective date of termination
(which severance policy shall be, so long as ICI is an affiliate
of Information Handling Services Group Inc. ("IHS Group"), the
severance policy of IHS Group in effect on the effective date of
termination).
17. Your death or "permanent and total disability" as defined in
Section 22(e) of the US Internal Revenue Code, as amended from
time to time, shall terminate all obligations hereunder.
18. Simultaneously with the execution and delivery of this Agreement,
ICI and you shall execute and deliver the ICI Agreement with
Employee - Nondisclosure and other Covenants in the form attached
hereto as Exhibit A ("Nondisclosure Agreement").
19. It is understood that this Agreement does not entitle you to
employment for any specific period of time and that in the event
of termination of your employment the only obligation of ICI and
its affiliates shall be solely as specified herein.
20. (A) For a period of one year from the effective date of
termination of your employment, you agree that you will not,
directly or indirectly:
1. engage in activities or businesses, or establish any new
businesses, that are directly in competition with the
business of ICI at the time your employment with ICI is
terminated, including without limitation (a) selling
products or services competitive with the CAPSXpert products
or the CSM software of ICI (b) soliciting any customer or
prospective customer of ICI to purchase any products or
services competitive with the CAPSXpert products or the CSM
software of ICI from anyone other than ICI and its
affiliates, (c) developing any products or services
competitive with the CAPSXpert products or the CSM software
of ICI, and (d) assisting any person or entity in any way to
do, or attempt to do, anything prohibited by clause (a), (b)
or (c) above; and
(ii) perform any action, activity or course of conduct that is
substantially detrimental to the business of ICI or the
business reputation of ICI.
(B) Notwithstanding any other provision of this Agreement, it is
understood and agreed that any remedies at law would be
inadequate in the case of any breach of the covenants
contained in paragraph 8. ICI shall be entitled to equitable
relief, including the remedy of specific performance, with
respect to any breach or attempted breach of the covenants
contained in this paragraph.
<PAGE>
(C) The parties hereto agree that the duration and area for
which the covenant not to compete set forth in this
paragraph 8 is to be effective are reasonable. In the event
that any court determines that the time period or the area,
or both of them, are unreasonable and that such covenant is
to that extent unenforceable, the parties hereto agree that
the covenant shall remain in full force and effect for the
greatest time period and in the greatest area that would not
render it unenforceable. The parties intend that this
covenant shall be deemed to be a series of separate
covenants, one for each and every political subdivision of
each and every state of the United States of America and
each and every political subdivision of each and every
country throughout the world where this covenant is intended
to be effective.
9. Any notice, request, instruction or other document to be given
hereunder by any party hereto shall be in writing and shall be
delivered personally or sent by registered or certified mail or
sent by overnight courier addressed as set forth below:
If to ICI:
International CompuTex, Inc.
c/o Information Handling Services Inc.
15 Inverness Way East
Englewood, CO 80115
Attention: President
with a copy to:
TBG Services Inc.
565 Fifth Avenue
New York, New York 10017
Attention: Vice President & General Counsel
If to Patricia Tuxbury Salem:
==========================
--------------------------
or such other address as you or ICI shall designate to the other
in conformity with the foregoing.
10. This agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign or
transfer this agreement or any rights or obligations hereunder,
except that ICI may assign or transfer this agreement to any
affiliate or to a successor corporation; provided that in the
case of any such assignment or transfer, this agreement shall,
subject to the provisions hereof, be binding upon and inure to
the benefit of any such affiliate or successor
<PAGE>
corporation and such affiliate or successor corporation shall
discharge and perform all of the obligations of ICI.
11. This agreement and the Nondisclosure Agreement constitute the
entire agreement and understanding of the parties with respect to
the subject matter hereof, and all prior negotiations and
understandings relating to the subject matter of this Agreement
are merged herein and are superseded and canceled by this
agreement. All modifications and amendments hereto must be in
writing signed by both parties.
12. This Agreement shall be governed by and construed in accordance
with, the laws of the State of Georgia applicable to agreements
made and to be performed within Georgia.
IN WITNESS WHEREOF, the parties have executed this Agreement
_____________, 1999.
INTERNATIONAL COMPUTEX, INC.
By:
-------------------------
Title:
----------------------
----------------------------
Patricia Tuxbury Salem
<PAGE>
EXHIBIT F
SERVICES AGREEMENT dated as of
_______________, 1999
between
INFORMATION HANDLING SERVICES INC.,
a Delaware corporation ("IHS"), and
[NEWCO], a Delaware corporation ("Company").
WHEREAS IHS has, effective on the date hereof, contributed to the
Company certain assets and liabilities related to the CAPSXpert
product lines of IHS;
WHEREAS prior to the date hereof certain personnel and assets of
IHS have been used to provide services in connection with both the
CAPSXpert product lines and other product lines of IHS; and
WHEREAS the Company desires IHS to provide certain services to
the Company in connection with the CAPSXpert product lines after the
date hereof, and IHS is willing to provide such services.
NOW, THEREFORE, IHS and the Company hereby agree:
1. Services to be Provided by IHS
Commencing on the date hereof, IHS agrees to provide to the
Company in connection with the CAPSXpert product lines, and the
Company agrees to accept, the services set forth in Exhibit A.
2. Payment.
The Company agrees to pay IHS monthly on or before the fifth day
of each month the monthly fixed fee of $331,165 for the fixed fee
services set forth in Exhibit A, subject to adjustment as provided in
paragraph 3 below. In addition
<PAGE>
to the fixed fee, the Company agrees to pay on receipt of invoice the
IHS affiliated companies in India/Malaysia for data conversion
services provided by such companies in connection with the CAPSXpert
databases.
3. Fee Adjustment.
(a) On each anniversary of the date of this Agreement, IHS may
increase the monthly fixed fee provided in paragraph 2 by a
percentage equal to the increase, if any, in the Consumer
Price Index for the preceding twelve month period. The
monthly fixed fee, as so increased, shall be the amount paid
by the Company to IHS for the fixed fee services set forth
in Exhibit A for the succeeding twelve month period.
(b) In addition to the adjustment for changes in the consumer
price index provided in paragraph 3(a) above, in the event
there is a change in the nature or level of services
provided by IHS that either increases or decreases the costs
incurred by IHS in providing such services by more than 5%
from costs used to determine the initial fees in Exhibit A,
then the parties will in good faith agree upon an equitable
adjustment in the fees for providing the services to take in
to consideration such change in costs. (For example, in the
event there is a material shift in CAPSXpert customers from
CD-ROM to internet delivery, the costs to IHS for providing
hosting may increase while the costs for providing shipping
and handling of CD-ROM products may decrease, and if the net
change is more than 5%, the parties will in good faith agree
upon an equitable adjustment in the monthly fee.)
<PAGE>
(c) At least ninety days prior to each anniversary of the date
of this Agreement, the Company may notify IHS that the
Company desires to terminate one or more of the services set
forth in Exhibit A, effective on the anniversary of the date
of this Agreement. In the event the parties fail to
negotiate a new arrangement with respect to the services
specified in the notice prior to the anniversary date, then
IHS shall cease providing the services specified in the
notice on the anniversary date, and the fees payable by the
Company to IHS will be reduced by the amount of fees in
Exhibit A attributed to the terminated services.
4. Proration.
The fixed monthly fee will be prorated for partial months if this
Agreement commences or ends on a day other than the first or last day
of a month.
5. Force Majeure.
IHS shall be excused for failure to perform any parts of this
Agreement due to events beyond its control, including but not limited
to, fire, storm, flood, earthquake, explosion, accident, acts of the
public enemy, riots and other civil disturbances, sabotage, strikes or
other labor disturbances, injunctions, transportation embargoes or
delays, acts of God, failure of performance of third parties necessary
to IHS' performance under this Agreement, or the laws or regulations
of the Federal, state or local government or branch or agency thereof.
The fees payable by the Company during any force majeure period will
be reduced to reflect any services not provided by IHS during such
period.
<PAGE>
6. Standard of Performance.
IHS agrees that it will use the same standard of care in
performing services under this Agreement as it uses in performing such
services for its own account. In the event of any errors or defects in
the services, IHS' sole obligation shall be correction of such errors
or defects at IHS' expense. In no event shall IHS be liable for
punitive, incidental, indirect or consequential damages arising out of
or in connection with this Agreement.
7. Financing.
During the three year period from the date of this Agreement, IHS
agrees to make available to the Company a working capital line of
credit in the aggregate principal amount of Five Million Dollars
($5,000,000). The outstanding borrowings under the line of credit
shall bear interest, payable monthly on the first day of each month,
at the prime rate in effect from time to time as announced by First
Union National Bank. The borrowings under the line of credit shall be
evidenced by a promissory note in the form of Exhibit B. In the event
the Company maintains cash credit balances with IHS, IHS shall pay
interest on such credit balances at the prime rate in effect from time
to time as announced by First Union National Bank.
8. Cash Flow.
In the event the CAPSXpert business contributed to the Company by
IHS fails to operate on a break-even cash flow basis during the
initial twelve month period from the date of this Agreement, then at
the end of the twelve month period IHS will make a cash contribution
to the Company in an amount equal to the net negative cash flow of the
CAPSXpert business for the twelve month period from the date of this
Agreement.
<PAGE>
9. Employees.
After the date of this Agreement, employees of the Company and/or
ICI will perform work strictly for the Company and ICI, and IHS will
not cause such employees to engage in projects for IHS, unless
otherwise agreed to in a separate agreement between the parties.
10. D.A.T.A.
IHS will discontinue publication of D.A.T.A. hardcopy books and
the DATA/PAL CD-ROM product during the 1999 calendar year. Following
such discontinuance, IHS will transfer to the Company those
telemarketing employees of IHS who were working primarily on sales of
the discontinued products. The Company shall have the right, at the
date of expiration of the customers' subscriptions for the
discontinued products, to attempt to convert the customers to the CAPS
EZ product of ICI.
11. Term.
a) The initial term of this Agreement shall be a period of
three years from the date hereof. This Agreement shall
continue for additional terms of one year each thereafter
unless terminated by either party on not less than 180 days
written notice prior to the end of the initial term or any
succeeding one year renewal term.
b) Either party may terminate this Agreement for cause if the
other party materially breaches its obligations under this
Agreement and fails to cure said breach within 90 days after
receipt of notice from the nonbreaching party.
<PAGE>
12. Assignment.
In the event the Company assigns the CAPSXpert business to its
wholly-owned subsidiary International CompuTex, Inc. ("ICI"), this
Agreement shall be binding upon and inure to the benefit of ICI.
13. Miscellaneous.
a) This Agreement constitutes the entire agreement, and
supersedes all prior agreements and understandings, both
written and oral, between the parties hereto and thereto
with respect to the subject matter hereof.
b) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Colorado,
regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
IN WITNESS WHEREOF, each of IHS and the Company have caused
this Agreement to be signed by their respective officers thereunder
duly authorized, all as of the date first written above.
INFORMATION HANDLING SERVICES INC.
By:
---------------------------
Name:
Title:
[ NEWCO ]
By:__________________________
Name:
Title: ___________________
<PAGE>
Exhibit A
<PAGE>
EXHIBIT G
==============================================================================
STOCKHOLDERS' AGREEMENT
Among
INFORMATION HANDLING SERVICES INC.
And
HAIM E. DAHAN, MICHAEL J. GALVIN, PATRICIA TUXBURY SALEM,
PETER JENG and JAMES MCALARNEY
Dated as of February [ ], 1999
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Interpretations
SECTION 1.01. Definitions...................................... 1
SECTION 1.02. Interpretations.................................. 4
ARTICLE II
Certain Transfers of Shares of
Restricted Holdings Common Stock
SECTION 2.01. Restrictions on Transfers of
Shares of Restricted Holdings
Common Stock................................... 5
SECTION 2.02. Purchase of Shares of Restricted
Holdings Common Stock by IHS................... 5
ARTICLE III
Certain Rights regarding Initial Public Offering
of Shares of Holdings Common Stock.................. 8
ARTICLE IV
Registration Rights
SECTION 4.01. Incidental Registration Rights................... 9
SECTION 4.02. Holdback Agreement............................... 11
SECTION 4.03. Registration Procedures.......................... 12
SECTION 4.04. Registration Expenses............................ 17
SECTION 4.05. Indemnification.................................. 18
<PAGE>
ARTICLE V
Page
Rights of IHS To Compel Sales
of Holdings Common Stock,
Obligations To Sell Holdings Common Stock
and
Rights to Participate in Sales of Holdings Common Stock
SECTION 5.01. Rights To Compel Sales by
Management Stockholders upon
Sales of Holdings Common Stock................. 22
SECTION 5.02. Obligations To Sell upon Sale of
Holdings....................................... 23
SECTION 5.03. Rights of Management Stockholders
To Sell upon Sales of Holdings
Common Stock................................... 25
ARTICLE VI
Legends.......................... 28
ARTICLE VII
Certain Covenants Relating to the Conduct of the
Business prior to an Initial Public Offering
SECTION 7.01. Board of Directors of Holdings................... 28
SECTION 7.02. Transactions between Holdings
and IHS........................................ 29
SECTION 7.03. Financing of Holdings by IHS..................... 30
SECTION 7.04. Audited Financial Statements of
Holdings....................................... 30
SECTION 7.05. Option Plan...................................... 30
<PAGE>
ARTICLE VIII
Page
General Provisions
SECTION 8.01. Notices.......................................... 30
SECTION 8.02. Headings......................................... 31
SECTION 8.03. Severability..................................... 31
SECTION 8.04. Counterparts..................................... 31
SECTION 8.05. Entire Agreement; No Third-Party
Beneficiaries.................................. 31
SECTION 8.06. Governing Law.................................... 32
SECTION 8.07. Assignment....................................... 32
SECTION 8.08. Consent to Jurisdiction.......................... 32
SECTION 8.09. Agreement To Be Bound............................ 32
Appendix A Management Stockholders and Shares of
Restricted Holdings Common Stock
Schedule I Management Stockholders Addresses
<PAGE>
STOCKHOLDERS' AGREEMENT dated as of February
[ ], 1999 (this "Agreement"), among INFORMATION
HANDLING SERVICES INC., a Delaware corporation
("IHS"), and Haim E. Dahan, Michael J. Galvin,
Patricia Tuxbury Salem, Peter Jeng and James
McAlarney (collectively, the "Management
Stockholders").
WHEREAS IHS, IHS Itemquest Holdings Inc., a Delaware
corporation ("Holdings"), and the Management Stockholders have entered
into a Formation Agreement dated as of January 10, 1999 (the
"Formation Agreement");
WHEREAS the execution and delivery of this Agreement is a
condition precedent to the consummation of the transactions
contemplated by the Formation Agreement;
WHEREAS, upon consummation of the transactions contemplated
by the Formation Agreement and certain of the ancillary agreements
entered into in connection therewith, IHS will own 7,989,977 shares of
Restricted Holdings Common Stock (as defined below) and each of the
Management Stockholders will own the number of shares of Restricted
Holdings Common Stock set forth opposite the name of such Management
Stockholder in the second column of Appendix A;
WHEREAS IHS and the Management Stockholders desire to enter
into certain agreements relating to the transfer and sale of shares of
Holdings Common Stock (as defined below), the members of the Board of
Directors of Holdings and certain other matters;
NOW, THEREFORE, in consideration of the premises,
mutual promises and covenants contained in this Agreement, the parties
hereto hereby agree:
ARTICLE I
Definitions and Interpretations
SECTION 1.01. Definitions. The following terms, as used in
this Agreement, shall have the following meanings:
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under
common control with, such Person.
<PAGE>
"Agreement" means this Stockholders' Agreement, including
all Appendices, Exhibits and Schedules attached hereto.
"Appraisal Firm" means (i) Deloitte & Touche LLP, Ernst &
Young L.L.P. and Veronois Suhler Associates Inc., or any successor
thereto, which firm is retained by IHS on behalf of, and at the
expense of, Holdings for the purpose of determining the Fair Market
Value of shares of Holdings Common Stock or (ii) in the event that any
such firm is unavailable or unwilling to perform such services for any
reason, any other nationally recognized investment banking firm
retained by IHS with the consent of the Management Stockholders (and
the Permitted Transferees of the Management Stockholders) who hold a
majority of the shares of Holdings Common Stock then held by all
Management Stockholders (and the Permitted Transferees of the
Management Stockholders) on behalf of, and at the expense of, Holdings
for the purpose of determining the Fair Market Value of shares of
Holdings Common Stock, which firm does not have (i) any direct
financial interest in, or any indirect material financial interest in,
IHS or any of Affiliate of IHS or (ii) any relationship with, or
connection to, IHS, any Affiliate of IHS or any of the Management
Stockholders.
"Appraised Value" means the arithmetic average of the Fair
Market Value of shares of Holdings Common Stock determined by each of
three Appraisal Firms.
"Commission" means the Securities and Exchange Commission.
"Contract" means any purchase order, sales agreement,
customer subscription, service contract, distribution agreement,
quotation and bid, product warranty, technical assistance or service
agreement, or any other written or oral contract, lease, sublease,
license, sublicense, indenture or other commitment, agreement,
arrangement or undertaking, and all amendments thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
from time to time amended.
"Fair Market Value" means, with respect to shares of
Holdings Common Stock, the fair market value thereof (without regard
to any transfer restrictions thereon, whether imposed by law or
contract, or to lack of liquidity thereof and without regard to the
minority shareholder status of the holder thereof) on a fully diluted
and fully distributed basis as determined by an Appraisal Firm
<PAGE>
retained for the purpose of determining the fair market value of such
shares of Holdings Common Stock.
"Formation Agreement" means the Formation Agreement dated as
of January 10, 1999, among IHS and the Management Stockholders.
"Governmental Entity" means any Federal, state, local or
foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality.
"Holdings" means IHS Itemquest Holdings Inc., a Delaware
corporation.
"Holdings Common Stock" means the common stock, par value
$0.001 per share, of Holdings.
"IHS" means Information Handling Services Inc., a Delaware
corporation.
"Incidental Registration" has the meaning set forth in
Section 4.01(a).
"indemnified party" has the meaning set forth in
Section 4.05(c).
"indemnifying party" has the meaning set forth in
Section 4.05(c).
"Initial Public Offering" means the first underwritten
primary public offering of shares of Holdings Common Stock pursuant to
an effective registration statement (other than a registration
statement on Form S-4 or Form S-8 or any similar or successor form)
under the Securities Act.
"Lien" means any lien, charge, claim, pledge, security
interest, security agreement, right to purchase, conditional sale
agreement or other title retention agreement, mortgage, restriction,
reservation, reversion, option, covenant or other encumbrance.
"Loss" means any loss, liability, claim, damage, charge,
penalty, cost or expense, including court costs, reasonable legal fees
and expenses and reasonable expenses incurred in investigating,
prosecuting, defending or settling any claim, demand or suit.
"Management Stockholders" means, collectively, Haim E.
Dahan, Michael J. Galvin, Patricia Tuxbury Salem, Peter Jeng and James
McAlarney.
<PAGE>
"Permitted Transferee" means, with respect to any Management
Stockholder, or any Permitted Transferee of such Management
Stockholder, (i) upon the death of such Management Stockholder, the
heirs, executors, administrators, testamentary trustees, legatees or
beneficiaries of such Management Stockholder and (ii) a trust, the
beneficiaries of which include only such Management Stockholder, the
spouse of such Management Stockholder and/or the lineal descendants of
such Management Stockholder; provided, however, that each Permitted
Transferee must agree in writing, in accordance with the provisions of
Section 8.09, to be bound by the terms, and subject to the conditions,
of this Agreement to the same extent, and in the same manner, as such
Management Stockholder prior to the transfer of any shares of Holdings
Common Stock to such Permitted Transferee; and provided, further, that
the transfer of shares of Holdings Common Stock from such Management
Stockholder to such Permitted Transferee is in compliance with all
applicable securities laws.
"Person" means any individual, corporation, organization,
partnership, joint venture, trust, firm, association (whether or not
incorporated), Governmental Entity or other entity.
"Restricted Holdings Common Stock" means shares of Holdings
Common Stock held by IHS (or any Affiliate of IHS) or any Management
Stockholder (or any Permitted Transferee of such Management
Stockholder) unless (i) such shares have been effectively registered
under Section 5 of the Securities Act and disposed of pursuant to an
effective registration statement or (ii) such shares can be freely
sold and transferred without restriction under the Securities Act not
less than 90 days following the date on which an Initial Public
Offering is consummated.
"Sale of Holdings" has the meaning set forth in
Section 5.02.
"Sale of Holdings Common Stock" has the meaning set forth in
Section 5.01.
"Securities Act" means the Securities Act of 1933, as from
time to time amended.
SECTION 1.02. Interpretations. (a) When used in this
Agreement, the words "include", "includes" and "including" shall be
deemed to be followed by the words "without limitation".
<PAGE>
(b) Any terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa.
(c) When used in this Agreement, the word "or" is not
exclusive.
(d) All references to Articles, Sections, Appendices,
Exhibits and Schedules shall be deemed references to Articles,
Sections, Appendices, Exhibits and Schedules to this Agreement.
(e) This Agreement shall be deemed drafted jointly by all
the parties hereto and shall not be specifically construed against any
party hereto based on any claim that such party or its counsel drafted
this Agreement.
ARTICLE II
Certain Transfers of Shares of
Restricted Holdings Common Stock
SECTION 2.01. Restrictions on Transfers of Shares of
Restricted Holdings Common Stock. Each Management Stockholder agrees
that such Management Stockholder shall not, directly or indirectly,
transfer, sell, assign, tender, hypothecate or otherwise dispose of,
or grant any security interest in, pledge or place in trust, or create
or suffer to exist any Lien on, any shares of Restricted Holdings
Common Stock held by such Management Stockholder as of the date of
this Agreement or any shares of Restricted Holdings Common Stock
acquired by such Management Stockholder after the date of this
Agreement, other than (i) to a Permitted Transferee, (ii) to IHS
pursuant to the provisions of Section 2.02(a) or (iii) to any other
Person, upon the direction of IHS, pursuant to the provisions of
Article V. Any attempt on the part of any Management Stockholder to
transfer any shares of Restricted Holdings Common Stock other than in
accordance with the provisions of this Section 2.01 shall be void and
of no force and effect, and Holdings shall refrain from recognizing
any such transfer and shall refuse to reflect in the corporate records
of Holdings any change in the record ownership of shares of Restricted
Holdings Common Stock in connection with any such transfer.
SECTION 2.02. Purchase of Shares of Restricted Holdings
Common Stock by IHS. (a) Purchase of Shares from Management
Stockholders. Subject to the provisions of Section 2.02(b), in the
event that, at any time prior to the
<PAGE>
date on which an Initial Public Offering is commenced, IHS shall have
declined a request made on behalf of the Management Stockholders
pursuant to Article III that IHS cause Holdings to undertake an
Initial Public Offering, each Management Stockholder (and the
Permitted Transferees of such Management Stockholder) shall have the
right to sell to IHS, and IHS shall be obligated to purchase, in a
single transaction, such number of shares of Restricted Holdings
Common Stock held by such Management Stockholder (and the Permitted
Transferees of such Management Stockholder) as such Management
Stockholder (and the Permitted Transferees of such Management
Stockholder) shall request at a price equal to the Appraised Value of
such shares of Restricted Holdings Common Stock.
To exercise the rights granted under this Section 2.02(a), a
Management Stockholder must deliver written notice to IHS of the
desire of such Management Stockholder (and the Permitted Transferees
of such Management Stockholder) to require IHS to purchase shares of
Restricted Holdings Common Stock held by such Management Stockholder
(and the Permitted Transferees of such Management Stockholder)
pursuant to this Section 2.02(a) within ten business days of the date
on which IHS shall have declined a request made on behalf of the
Management Stockholders pursuant to Article III that IHS cause
Holdings to undertake any Initial Public Offering, which notice shall
specify the number of shares of Restricted Holdings Common Stock to be
sold to IHS. The sale and purchase of such shares shall close on the
tenth business day following the date on which IHS shall have received
from each of three Appraisal Firms a determination of the Fair Market
Value of shares of Holdings Common Stock. At the closing of such sale
and purchase, which closing shall take place at the principal offices
of IHS (or any other place in the United States designated by IHS),
(i) each Management Stockholder (and the Permitted Transferees of such
Management Stockholder) shall deliver to IHS certificates representing
the shares of Restricted Holdings Common Stock to be sold by such
Management Stockholder (and the Permitted transferees of such
Management Stockholder) and purchased by IHS, duly endorsed in blank
for transfer, free and clear of all Liens, and otherwise without
representation or warranty, with all requisite stock transfer stamps
affixed thereon, and (ii) IHS shall pay to such Management Stockholder
(and the Permitted Transferees of such Management Stockholder), in
next day funds, an amount equal to the Appraised Value of such shares
of Restricted Holdings Common Stock.
(b) Limitations on Obligations of IHS to Purchase Shares.
IHS shall not be obligated to purchase any shares
<PAGE>
of Restricted Holdings Common Stock at any time pursuant to Section
2.02(a) to the extent, but only to the extent, that such purchase
would conflict with, or result in a violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancelation or acceleration of any obligation or
to loss of a material benefit under, or result in the creation of any
Lien upon any of its properties or assets under, any provision of any
Contract to which IHS is a party or by which any of its properties or
assets is bound or any judgment, order or decree, or statute, law,
ordinance, rule or regulation, applicable to IHS or any of its
properties or assets that would, individually or in the aggregate,
have a material adverse effect on the business, assets, condition
(financial or otherwise), prospects or results of operations of IHS
and its subsidiaries, taken as a whole. Prior to being relieved of the
obligation to purchase shares of Restricted Holdings Common Stock
pursuant to Section 2.02(a) by operation of the provisions of this
Section 2.02(b), IHS shall use all reasonable efforts to obtain a
waiver of all relevant provisions of any Contract, and all relevant
restrictions imposed by any applicable judgment, order, decree,
statute, law, ordinance, rule or regulation, from the parties to such
Contract or the Governmental Entity responsible for such judgment,
order, decree, statute, law, ordinance, rule or regulation, in each
case to permit IHS to perform its obligations to purchase shares of
Restricted Holdings Common Stock pursuant to Section 2.02(a).
IHS shall notify the Management Stockholders at such time as
IHS is no longer subject to the condition that relieved IHS of its
obligation to purchase shares of Restricted Holdings Common Stock by
operation of the provisions of this Section 2.02(b). If IHS has been
relieved of its obligation to purchase shares of Restricted Holdings
Common Stock pursuant to Section 2.02(a) and there had been a
determination of Fair Market Value of the shares of Holdings Common
Stock by the Appraisal Firms pursuant to Section 2.02(a) more than six
months prior to the date of the notice delivered by IHS pursuant to
the first sentence of this paragraph, then, at the option of the
Management Shareholders, there shall be a new determination of the
Fair Market Value of the shares of Holdings Common Stock by the
Appraisal Firms, and the prior determination of Fair Market Value
shall be of no effect.
<PAGE>
ARTICLE III
Certain Rights regarding Initial Public Offering
of Shares of Holdings Common Stock
So long as an Initial Public Offering shall not have been
commenced, on the third anniversary of the date of this Agreement, the
Management Stockholders (and the Permitted Transferees of the
Management Stockholders) shall have the right to request that IHS
cause Holdings to undertake an Initial Public Offering and, if the
Management Stockholders (and the Permitted Transferees of the
Management Stockholders) shall not have previously exercised such
right, on each subsequent anniversary of the date of this Agreement,
the Management Stockholders (and the Permitted Transferees of the
Management Stockholders) shall have the right to request that IHS
cause Holdings to undertake an Initial Public Offering.
To exercise the rights granted under this Article III, the
Management Stockholders (and the Permitted Transferees of the
Management Stockholders) who hold a majority of the shares of Holdings
Common Stock then held by all Management Stockholders (and Permitted
Transferees of the Management Stockholders) shall (i) determine
whether to request that IHS cause Holdings to undertake an Initial
Public Offering and (ii) in the event that such Management
Stockholders (and Permitted Transferees) determine to request that IHS
cause Holdings to undertake an Initial Public Offering, select a
representative to deliver written notice, on behalf of all Management
Stockholders (and Permitted Transferees of the Management
Stockholders), to IHS of the desire of the Management Stockholders
(and the Permitted Transferees of the Management Stockholders) to
request that IHS cause Holdings to undertake an Initial Public
Offering pursuant to this Article III; provided, however, that in no
event shall the Management Stockholders (and the Permitted Transferees
of the Management Stockholders) deliver more than one such notice to
IHS. Such notice must be delivered to IHS within ten business days of
the third anniversary of the date of this Agreement, or within ten
business days of any anniversary of the date of this Agreement
thereafter, as applicable, and specify the identity of the
representative of the Management Stockholders (and the Permitted
Transferees of the Management Stockholders) for purposes of this
Article III.
<PAGE>
ARTICLE IV
Registration Rights
SECTION 4.01. Incidental Registration Rights. (a) Rights to
include Shares of Restricted Holdings Common Stock. If Holdings, at
any time, proposes to register any of its equity securities (other
than a registration on Form S-4 or Form S-8 or any similar or
successor form), whether or not for sale for its own account, in a
manner which would permit the registration of Restricted Holdings
Common Stock for sale to the public under the Securities Act, then IHS
shall cause Holdings to give written notice to each Management
Stockholder (and each Permitted Transferee of such Management
Stockholder) of such proposed registration at least 30 days prior to
the date on which the registration statement with respect to such
registration is anticipated to be filed with the Commission. Such
notice shall offer each Management Stockholder (and each Permitted
Transferee of such Management Stockholder) opportunity to include in
such registration such number of shares of Restricted Holdings Common
Stock as such Management Stockholder (and such Permitted Transferee)
may request (an "Incidental Registration"). Subject to Section
4.01(b), upon the written request of any Management Stockholder (and
any Permitted Transferee of such Management Stockholder) (which notice
shall specify the number of shares of Restricted Holdings Common Stock
such Management Stockholder (or such Permitted Transferee) intends to
dispose) made within 20 days after the receipt by such Management
Stockholder (or such Permitted Transferee) of the notice given by
Holdings, IHS shall cause Holdings to use all reasonable efforts to
include in such Incidental Registration such number of shares of
Restricted Holdings Common Stock as such Management Stockholder (and
such Permitted Transferee) shall request, together with any and all
other shares of Restricted Holdings Common Stock as any other
Management Stockholder (and any Permitted Transferee of such
Management Stockholder) shall request; provided, however, that, if
such Incidental Registration involves an underwritten offering, all
Management Stockholders (and Permitted Transferees) requesting
inclusion of shares of Restricted Holdings Common Stock in such
Incidental Registration must sell such shares of Restricted Holdings
Common Stock to the underwriter (or underwriters) selected by Holdings
on the same terms, and subject to the same conditions, as are
applicable to Holdings. Each Management Stockholder (and each
Permitted Transferee of such Management Stockholder) shall be
permitted to withdraw all or any portion of the shares of Restricted
Holdings Common Stock such Management Stockholder (or such Permitted
Transferee) shall have requested to be
<PAGE>
included in any Incidental Registration at any time prior to the
effective date of the registration statement with respect to such
Incidental Registration; provided, however, that, if such withdrawal
occurs after the filing with the Commission of the registration
statement with respect to such Incidental Registration, such
Management Stockholder (or such Permitted Transferee) shall be
required to reimburse Holdings for the portion of registration
expenses payable with respect to the shares of Restricted Holdings
Common Stock so withdrawn.
(b) Priority in Incidental Registrations. IHS shall cause
Holdings to permit each Management Stockholder (and each Permitted
Transferee of such Management Stockholder) to include in any
Incidental Registration all shares of Restricted Holdings Common Stock
such Management Stockholder (and such Permitted Transferee) shall
request to include in such Incidental Registration on the same terms
and subject to the same conditions as any similar securities, if any,
of Holdings included therein. Notwithstanding the foregoing, if IHS,
Holdings or the managing underwriter (or underwriters) participating
in any offering pursuant to such Incidental Registration shall advise
the Management Stockholders (and Permitted Transferees of the
Management Stockholders) in writing that the total amount of
securities requested to be included in such Incidental Registration
exceeds the amount of securities that can be sold in (or during the
time of) such offering without delaying or jeopardizing the success of
such offering (including the price per share of the securities to be
sold), then the amount of securities to be offered for the account of
all Management Stockholders (and Permitted Transferees) shall be
reduced pro rata on the basis of the number of shares requested to be
registered by each Management Stockholder (and each Permitted
Transferee of such Management Stockholder) and other Person
participating in such offering; provided, however, that in no event
shall the amount of securities to be offered for the account of all
Management Stockholders (and Permitted Transferees) be more than 50%
of the total amount of securities included in such Incidental
Registration.
(c) Right To Abandon. Nothing contained in this Section 4.01
shall create any liability on the part of IHS or Holdings to any
Management Stockholder (or any Permitted Transferee of such Management
Stockholder) in the event that IHS, in its sole discretion, should
decide to cause Holdings to refrain from filing any registration
statement contemplated by Section 4.01(a) or to cause Holdings to
withdraw any such registration statement subsequent to the filing of
such registration statement with the Commission,
<PAGE>
regardless of any action whatsoever that such Management Stockholder
(or such Permitted Transferee) may have taken, whether as a result of
the issuance by Holdings of any notice contemplated by Section 4.01(a)
or otherwise.
SECTION 4.02. Holdback Agreement. If, prior to the
commencement of an Initial Public Offering, Holdings shall file a
registration statement with respect to Holdings Common Stock, or
similar securities or securities convertible into, or exchangeable or
exercisable for, Holdings Common Stock or such securities, then, each
Management Stockholder (and each Permitted Transferee of such
Management Stockholder), to the extent requested by Holdings or, in
the case of an underwritten public offering pursuant to such
registration statement, the managing underwriter (or underwriters) in
respect of such offering, shall refrain from, directly or indirectly,
transferring, selling, assigning, hypothecating or otherwise disposing
of, or granting an option to purchase, offering to sell or otherwise
seeking to dispose of, any shares of Holdings Common Stock held by
such Management Stockholder (or the Permitted Transferees of such
Management Stockholder) for a period of 180 days following the
effectiveness of such registration statement, and, if requested by
Holdings or such managing underwriter (or underwriters), such
Management Stockholder (and the Permitted Transferees of such
Management Stockholder) shall enter into a binding agreement with
Holdings or such managing underwriter (or underwriters), as
applicable, to such effect.
If, after the consummation of an Initial Public Offering,
Holdings shall file a registration statement with respect to Holdings
Common Stock, or similar securities or securities convertible into, or
exchangeable or exercisable for, Holdings Common Stock or such
securities, then, each Management Stockholder (and each Permitted
Transferee of such Management Stockholder), to the extent requested by
Holdings or, in the case of an underwritten public offering pursuant
to such registration statement, the managing underwriter (or
underwriters) in respect of such offering, shall refrain from,
directly or indirectly, transferring, selling, assigning,
hypothecating or otherwise disposing of, or granting an option to
purchase, offering to sell or otherwise seeking to dispose of, any
shares of Holdings Common Stock held by such Management Stockholder
(or the Permitted Transferees of such Management Stockholder) for a
period of 90 days following the effectiveness of such registration
statement, and, if requested by Holdings or such managing underwriter
(or underwriters), such Management Stockholder (and the Permitted
Transferees of such Management Stockholder) shall enter into a binding
agreement
<PAGE>
with Holdings or such managing underwriter (or underwriters), as
applicable, to such effect.
SECTION 4.03. Registration Procedures. In connection with
the performance of it obligations pursuant to this Article IV, IHS
shall cause Holdings (subject to the provisions of this Article IV)
to:
(i) prepare and file with the Commission a registration
statement for the sale of shares of Restricted Holdings
Common Stock on any form for which Holdings qualifies, or
which counsel for Holdings shall deem appropriate in
accordance with the intended methods of disposition
specified by any Management Stockholder (or any Permitted
Transferee of such Management Stockholder) with respect to
the shares of Restricted Holdings Common Stock of such
Management Stockholder (and such Permitted Transferee)
covered by such registration statement, and, subject to
Holdings's right to abandon any registration statement
pursuant to Section 4.01(c), use all reasonable efforts to
cause such registration statement to become effective and
remain effective as provided herein;
(ii) prepare and file with the Commission such
amendments (including post-effective amendments) to such
registration statement, and such supplements to the related
prospectus, as may be required by the applicable rules,
regulations or instructions under the Securities Act during
the applicable period in accordance with the intended
methods of disposition specified by any Management
Stockholder (or any Permitted Transferee of such Management
Stockholder) with respect to the shares of Restricted
Holdings Common Stock such Management Stockholder (and such
Permitted Transferee) covered by such registration
statement, make generally available earnings statements
satisfying the provisions of Section 11(a) of the Securities
Act (or comply with the requirements of Rule 158 under the
Securities Act) and cause the related prospectus, as so
supplemented, to be filed with the Commission pursuant to
Rule 424 under the Securities Act; provided, however, that
prior to the filing of any registration statement or
prospectus, or any amendments or supplements thereto (other
than reports required to be filed by Holdings under the
Exchange Act), Holdings shall furnish to all Management
Stockholders (and Permitted Transferees) who own shares of
Restricted Holdings Common Stock covered by such
registration statement and their counsel for review and
<PAGE>
comment, copies of all documents required to be filed with
the Commission;
(iii) notify all Management Stockholders (and Permitted
Transferees) who own any shares of Restricted Holdings
Common Stock covered by such registration statement promptly
and (if requested) confirm such notice in writing, (A) when
a prospectus, or any prospectus supplement or post-effective
amendment, has been filed with the Commission, and, with
respect to such registration statement or any post-effective
amendment, when the same has become effective, (B) of any
request by the Commission for any amendment or supplement to
such registration statement or the related prospectus, or
for additional information regarding such Management
Stockholders, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that
purpose, (D) of the receipt by the Holdings of any
notification with respect to the suspension of the
qualification, or the exemption from qualification, of any
of the shares of Restricted Holdings Common Stock for sale
in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose, and (E) of the happening of any
event that requires the making of any changes in such
registration statement, prospectus or documents incorporated
or deemed to be incorporated therein by reference so that
they will not contain any untrue statement of a material
fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made,
not misleading;
(iv) use all reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of such
registration statement or the lifting of any suspension of
the qualification, or the exemption from qualification, of
any shares of Restricted Holdings Common Stock for sale in
any jurisdiction in the United States;
(v) furnish to each Management Stockholder (and each
Permitted Transferee of such Management Stockholder) who
owns any shares of Restricted Holdings Common Stock covered
by such registration statement and any counsel for such
Management Stockholder (and such Permitted Transferee),
without charge, one conformed copy of such registration
statement, as declared effective by the Commission, and of
each post-effective
<PAGE>
amendment thereto, in each case including financial
statements and schedules and all exhibits and reports
incorporated, or deemed to be incorporated, therein by
reference, and deliver, without charge, such number of
copies of the preliminary prospectus, any amended
preliminary prospectus, each final prospectus and any
post-effective amendment or supplement thereto, as such
Management Stockholder (or such Permitted Transferee) may
reasonably request in order to facilitate the disposition of
the shares of Restricted Holdings Common Stock of such
Management Stockholder (or such Permitted Transferee)
covered by such registration statement in conformity with
the requirements of the Securities Act;
(vi) prior to any public offering of shares of Restricted
Holdings Common Stock covered by such registration
statement, use all reasonable efforts to register or qualify
such shares of Restricted Holdings Common Stock for offer
and sale under the securities or blue sky laws of such
jurisdictions as each Management Stockholder (and each
Permitted Transferee of such Management Stockholder) who
owns any shares of Restricted Holdings Common Stock covered
by such registration statement shall reasonably request in
writing; provided, however, that Holdings shall in no event
be required to qualify generally to do business as a foreign
corporation or as a dealer in any jurisdiction where it is
not at the time so qualified or to execute or file a general
consent to service of process in any such jurisdiction where
it has not theretofore done so or to take any action that
would subject it to taxation or general service of process
in any such jurisdiction where it is not then subject;
(vii) upon the happening of any event that requires the
making of any changes in such registration statement,
prospectus or documents incorporated or deemed to be
incorporated therein by reference so that they will not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
prepare a post-effective amendment to such registration
statement or supplement to the related prospectus or any
amendment of any document incorporated or deemed to be
incorporated therein by reference and file any other
required document so that, as thereafter delivered to the
purchasers of the shares of Restricted Holdings Common Stock
being sold thereunder, such prospectus will not contain an
untrue statement of a material fact
<PAGE>
or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading;
(viii) use all reasonable efforts to cause all shares
of Restricted Holdings Common Stock covered by such
registration statement to be listed on each securities
exchange or quoted on any automated interdealer quotation
system, if any, on which similar securities issued by
Holdings are then listed or quoted;
(ix) on or before the effective date of such
registration statement, provide the transfer agent for the
shares of Restricted Holdings Common Stock covered by such
registration statement with printed certificates for such
shares of Restricted Holdings Common Stock, which
certificates shall be in a form eligible for deposit with
The Depository Trust Company;
(x) make available for inspection by each Management
Stockholder (and each Permitted Transferee of such Management
Stockholder) who owns any shares of Restricted Holdings
Common Stock covered by such registration statement and any
attorney, accountant or other agent retained by such
Management Stockholder (or such Permitted Transferee), all
financial and other records, and all other information, as
shall be reasonably necessary to enable such Management
Stockholder to satisfy all due diligence responsibilities;
provided, however, that all financial and other records, and
all other information, determined by Holdings to be
confidential shall not be disclosed to any such Person unless
such Person shall have entered into a confidentiality
agreement, reasonably satisfactory to Holdings, with
Holdings; and
(xi) if such offering is an underwritten offering,
enter into such agreements (including an underwriting
agreement in form, scope and substance customary in
underwritten offerings) and take all other appropriate
action to expedite or facilitate the disposition of the
shares of Restricted Holdings Common Stock covered by such
registration statement, and in connection therewith (A) use
all reasonable efforts to obtain opinions of counsel to
Holdings (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to each
Management Stockholder (and each Permitted Transferee of
such Management Stockholder) who owns any shares of
Restricted Holdings Common Stock covered by such
registration statement and
<PAGE>
the managing underwriter (or underwriters)), (B) use all
reasonable efforts to obtain "comfort" letters (and updates
thereof) from the independent certified public accountants
of Holdings (and, if necessary, any independent certified
public accountants of any Person acquired by Holdings in
respect of which financial statements and financial data
are, or are required to be, included in the registration
statement), (C) if requested, and if an underwriting
agreement is entered into, provide for indemnification
provisions and procedures substantially to the effect set
forth in Section 4.05 with respect to all parties to be
indemnified pursuant thereto.
Holdings may require each Management Stockholder (and each
Permitted Transferee of such Management Stockholder) who owns any
shares of Restricted Holdings Common Stock covered by such
registration statement to furnish such information regarding such
Management Stockholder (and such Permitted Transferee) and the
intentions of such Management Stockholder (and such Permitted
Transferee) regarding the method of disposition of such shares of
Restricted Holdings Common Stock as Holdings may from time to time
reasonably request in writing. If any such information is not
furnished within a reasonable period of time after receipt of such
request, Holdings shall be entitled to exclude the shares of
Restricted Holdings Common Stock held by such Management Stockholder
(and such Permitted Transferee) from such registration statement.
Each Management Stockholder (and each Permitted Transferee
of such Management Stockholder) agrees that, upon receipt of any
notice from Holdings of the happening of any event of the kind
described in clause (iii)(B), (iii)(C), (iii)(D) or (iii)(E) above,
such Management Stockholder (and such Permitted Transferee) shall
forthwith discontinue disposition of any shares of Restricted Holdings
Common Stock covered by such registration statement or the related
prospectus until (1) receipt of the copies of the amended registration
statement and supplemented prospectus contemplated by clause (vii)
above or (2) such Management Stockholder (and such Permitted
Transferee) is advised in writing by Holdings that the use of the
applicable prospectus may be resumed and such Management Stockholder
(and such Permitted Transferee) has received copies of any amended
registration statement or supplemented prospectus or any additional or
supplemental filings which are incorporated, or deemed to be
incorporated, by reference in such prospectus.
<PAGE>
Each Management Stockholder (and each Permitted Transferee
of such Management Stockholder) also agrees that, if requested by
Holdings, such Management Stockholder (and such Permitted Transferee)
shall deliver to Holdings (at the expense of Holdings) all copies of
any registration statement covering any shares of Restricted Holdings
Common Stock owned by such Management Stockholder (or such Permitted
Transferee) and the related prospectus, other than permanent file
copies thereof, in the possession of such Management Stockholder (or
such Permitted Transferee) at the time of such request. Each
Management Stockholder (and each Permitted Transferee of such
Management Stockholder) further agrees to refrain from utilizing any
material, other than the applicable current preliminary prospectus or
prospectus, in connection with the offering of any shares of
Restricted Holdings Common Stock owned by such Management Stockholder
(or such Permitted Transferee) under any registration statement.
SECTION 4.04. Registration Expenses. Subject to Section
4.01(a), whether or not any registration statement is filed or becomes
effective, IHS shall cause Holdings to pay all costs, fees and
expenses incident to the performance by IHS or Holdings of its
obligations under this Article IV, including (i) all registration and
filing fees, including NASD filing fees, (ii) all fees and expenses of
compliance with securities or blue sky laws, including reasonable fees
and disbursements of counsel in connection therewith, (iii) printing
expenses (including expenses of printing certificates for shares of
Restricted Holdings Common Stock and of printing prospectuses if the
printing of prospectuses is requested by the Stockholders or the
managing underwriter (or underwriters), if any), (iv) messenger,
telephone and delivery expenses, (v) fees and disbursements of counsel
for Holdings, (vi) fees and disbursements of all independent certified
public accountants of Holdings (including expenses of any "comfort"
letters required in connection with this Agreement), (vii) fees and
disbursements of all other Persons retained by Holdings in connection
with any registration statement, (viii) fees and disbursements of one
counsel, other than counsel for Holdings, selected by the Management
Stockholders (and the Permitted Transferees of the Management
Stockholders) who own a majority of the shares of Restricted Holdings
Common Stock being registered, to represent all such Management
Stockholders (and Permitted Transferees of the Management
Stockholders), (ix) fees and disbursements of underwriters customarily
paid by the issuers or sellers of securities and (x) all other costs,
fees and expenses incident to the performance by IHS or Holdings of
its obligations under this Article IV. Notwithstanding the foregoing,
the costs, fees and expenses
<PAGE>
of any Person retained by any Management Stockholder (or any Permitted
Transferee of such Management Stockholder) (other than one counsel for
all Management Stockholders (and Permitted Transferees)), any
discounts, commissions or brokers' fees or fees of similar securities
industry professionals and any transfer taxes relating to the
disposition of shares of Restricted Holdings Common Stock by any
Management Stockholder (or any Permitted Transferee of such Management
Stockholder), will be payable by such Management Stockholder (or such
Permitted Transferee), and Holdings will have no obligation to pay any
such amounts.
SECTION 4.05. Indemnification. (a) Indemnification by
Holdings. IHS shall cause Holdings, without limitation as to time, to
indemnify and hold harmless, to the fullest extent lawful, each
Management Stockholder (and each Permitted Transferee of such
Management Stockholder) who owns shares of Restricted Holdings Common
Stock that are covered by a registration statement or a prospectus,
and the agents of such Management Stockholder (or such Permitted
Transferee, and each director, officer or employee, if any, of such
Permitted Transferee, and each Person, if any, who controls such
Permitted Transferee (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act) and the directors,
officers, employees or agents of any such controlling Persons), and
from and against any and all Losses, as incurred, arising out of or
based upon any untrue or alleged untrue statement of a material fact
contained in such registration statement or prospectus, or in any
amendment or supplement thereto, or in any preliminary prospectus, or
arising out of or based upon any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are
based upon information furnished in writing to Holdings by or on
behalf of such Management Stockholder (or such Permitted Transferee)
expressly for use therein; provided, however, that Holdings shall not
be liable to such Management Stockholder (or such Permitted
Transferee) to the extent that any such Losses arise out of or are
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any preliminary prospectus if (i) having
previously been furnished by or on behalf of Holdings with copies of
the final prospectus, such Management Stockholder (or such Permitted
Transferee) failed to send or deliver a copy of the final prospectus
with or prior to the delivery of written confirmation of the sale of
shares of Restricted Common Stock by such Management Stockholder (or
such Permitted Transferee) to the Person asserting the claim from
which such Losses arise and
<PAGE>
(ii) the final prospectus would have corrected in all material
respects such untrue statement or alleged untrue statement or such
omission or alleged omission; and provided further, however, that
Holdings shall not be liable in any such case to the extent that any
such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the final
prospectus, if (i) such untrue statement or alleged untrue statement
or such omission or alleged omission is corrected in all material
respects in a supplement to the final prospectus and (ii) having
previously been furnished by or on behalf of Holdings with copies of
the final prospectus as so supplemented, such Management Stockholder
(or such Permitted Transferee) thereafter failed to deliver such final
prospectus as so supplemented prior to or concurrently with the sale
of shares of Restricted Holdings Common Stock.
(b) Indemnification by Management Stockholders. In
connection with any Incidental Registration in which any Management
Stockholder (or any Permitted Transferee of such Management
Stockholder) is participating, such Management Stockholder (or such
Permitted Transferee) shall furnish to Holdings in writing such
information as Holdings reasonably requests for use in connection with
the registration statement with respect to such Incidental
Registration or the related prospectus, and each Management
Stockholder (and each Permitted Transferee of such Management
Stockholder) agrees to indemnify and hold harmless, to the fullest
extent lawful, Holdings, its directors, officers, employees or agents,
each Person who controls Holdings (within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act) and the
directors, officers, employees or agents of such controlling Persons,
from and against all Losses arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in such
registration statement or the related prospectus or any amendment or
supplement thereto, or any preliminary prospectus, or arising out of
or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, to the extent, but only to the extent, that
such untrue or alleged untrue statement or omission or alleged
omission is based upon any information so furnished in writing by or
on behalf of such Management Stockholder (or such Permitted
Transferee) to Holdings expressly for use in such registration
statement or prospectus.
(c) Conduct of Indemnification Proceedings. If any Person
shall be entitled to indemnity under this Section 4.05 (an
"indemnified party"), such indemnified
<PAGE>
party shall give prompt notice to the party from whom such indemnity
is sought (the "indemnifying party") of any claim or of the
commencement of any proceeding with respect to which such indemnified
party seeks indemnification or contribution pursuant hereto; provided,
however, that the delay or failure to so notify the indemnifying party
shall not relieve the indemnifying party from any obligation or
liability except to the extent that the indemnifying party has been
prejudiced by such delay or failure.
The indemnifying party shall have the right, exercisable by
giving written notice to an indemnified party promptly after receipt
of written notice from such indemnified party of such claim or
proceeding, to assume, at the expense of the indemnifying party, the
defense of any such claim or proceeding, with counsel reasonably
satisfactory to such indemnified party; provided, however, that (i) an
indemnified party shall have the right to employ separate counsel in
any such claim or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (A) the indemnifying party
agrees to pay such fees and expenses, (B) the indemnifying party fails
to assume promptly the defense of such claim or proceeding or fails to
employ counsel reasonably satisfactory to such indemnified party or
(C) the named parties to any proceeding (including impleaded parties)
include both such indemnified party and the indemnifying party, and
such indemnified party shall have been advised by counsel that there
may be one or more legal defenses available to it that are
inconsistent with those available to the indemnifying party or that a
conflict of interest is likely to exist among such indemnified party
and any other indemnified parties (in which case the indemnifying
party shall not have the right to assume the defense of such action on
behalf of such indemnified party) and (ii) subject to clause (C)
above, the indemnifying party shall not, in connection with any such
claim or proceeding or separate but substantially similar or related
claims or proceedings in the same jurisdiction, arising out of the
same general allegations or circumstances, be liable for the fees and
expenses of more than one firm of attorneys (together with appropriate
local counsel) at any time for all the indemnified parties, or for
fees and expenses that are not reasonable. Whether or not such defense
is assumed by the indemnifying party, such indemnified party shall not
be subject to any liability for any settlement made without the
consent of such indemnified party. The indemnifying party shall not
consent to entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such
<PAGE>
indemnified party of a release, in form and substance reasonably
satisfactory to the indemnified party, from all liability in respect
of such claim or proceeding for which such indemnified party would be
entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in
this Section 4.05 is unavailable to an indemnified party in respect of
any Losses (other than in accordance with its terms), then each
applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and such indemnified party, on the other hand,
in connection with the actions, statements or omissions that resulted
in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party, on the one hand, and
indemnified party, on the other hand, shall be determined by reference
to, among other things, whether any action in question, including any
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been taken by, or relates to information
supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a result of any
Losses shall be deemed to include any legal or other fees or expenses
incurred by such party in connection with any claim or proceeding. The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.05(d) were determined by pro
rata allocation or by any other method of allocation that does not
take account of the equitable considerations described in the
immediately preceding sentence. Notwithstanding any provision of this
Section 4.05(d), an indemnifying party that is a Management
Stockholder (or a Permitted Transferee of such Management Stockholder)
shall not be required to contribute any amount which is in excess of
the amount by which the total proceeds received by such Management
Stockholder (or such Permitted Transferee) from the sale of the shares
of Restricted Holdings Common Stock sold by such Management
Stockholder (or such Permitted Transferee) (net of all underwriting
discounts and commissions) exceeds the amount of any damages that such
indemnifying party has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
<PAGE>
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
ARTICLE V
Rights of IHS To Compel Sales of Holdings Common Stock,
Obligations To Sell Holdings Common Stock and
Rights To Participate in Sales of Holdings Common Stock
SECTION 5.01. Rights To Compel Sales by Management
Stockholders upon Sales of Holdings Common Stock. In the event that
IHS (or any Affiliate of IHS) enters into an agreement with any Person
(other than an Affiliate of IHS) regarding the sale (other than a
public offering of shares of Holdings Common Stock pursuant to an
effective registration statement under the Securities Act) of all or
any portion of the shares of Holdings Common Stock held by IHS (or any
Affiliate of IHS) (a "Sale of Holdings Common Stock"), then IHS shall
have the right to require each Management Stockholder (and the
Permitted Transferees of such Management Stockholder) to include in
such Sale of Holdings Common Stock the proportion of shares of
Holdings Common Stock held by such Management Stockholder (and the
Permitted Transferees of such Management Stockholder) that is
identical to the proportion of shares of Holdings Common Stock held by
IHS (and its Affiliates) that is to be sold by IHS (and its
Affiliates) in connection with such Sale of Holdings Common Stock.
To exercise the rights granted under this Section 5.01, IHS
must deliver to each Management Stockholder written notice of the
intent of IHS to require such Management Stockholder (and the
Permitted Transferees of such Management Stockholder) to participate
in a Sale of Holdings Common Stock pursuant to this Section 5.01 not
less than ten business days prior to the date on which such Sale of
Holdings Common Stock is to be consummated. Such notice shall set
forth in reasonable detail the material terms of such Sale of Holdings
Common Stock, including the price per share at which such Management
Stockholder (and the Permitted Transferees of such Management
Stockholder) shall be required to sell the applicable proportion of
shares of Holdings Common Stock held by such Management Stockholder
(and the Permitted Transferees of such Management Stockholder) (which
price shall be equal to the price to be paid for the shares of
Holdings Common Stock that are to be sold by IHS (and its Affiliates)
in such Sale of Holdings Common Stock).
<PAGE>
Upon receipt of such notice, each Management Stockholder
(and the Permitted Transferees of such Management Stockholder) shall
be obligated to sell the applicable proportion of shares of Holdings
Common Stock held by such Management Stockholder (and the Permitted
Transferees of such Management Stockholder) in such Sale of Holdings
Common Stock. Each Management Stockholder (and the Permitted
Transferees of such Management Stockholder) shall, if requested by
IHS, enter into a binding agreement with the Person to whom shares of
Holdings Common Stock are to be sold pursuant to such Sale of Holdings
Common Stock to sell the applicable proportion of shares of Holdings
Common Stock held by such Management Stockholder (and the Permitted
Transferees of such Management Stockholder) on the terms, and subject
to the conditions, if any, set forth in the notice delivered to such
Management Stockholder by IHS.
At the closing of such Sale of Holdings Common Stock, which
closing shall take place at the location specified by IHS in the
notice delivered to each Management Stockholder, each Management
Stockholder (and the Permitted Transferees of such Management
Stockholder) shall deliver to the Person to whom shares of Holdings
Common Stock are to be sold pursuant to such Sale of Holdings Common
Stock certificates representing the applicable proportion of shares of
Holdings Common Stock required to be sold by such Management
Stockholder (and the Permitted Transferees of such Management
Stockholder), duly endorsed in blank for transfer, free and clear of
all Liens, and otherwise without representation or warranty, with all
requisite stock transfer stamps affixed thereon, against delivery of
the price to be paid therefor in connection with such Sale of Holdings
Common Stock.
SECTION 5.02. Obligations To Sell upon Sale of Holdings. In
the event that the Board of Directors of Holdings approves the sale of
Holdings to any other Person (other than an Affiliate of IHS) (whether
by merger, consolidation or sale of all or substantially all the
capital stock or assets of Holdings) (a "Sale of Holdings"), then each
Management Stockholder (and the Permitted Transferees of such
Management Stockholder) shall be obligated to consent to, vote in
favor of, and raise no objections to, such Sale of Holdings.
In the event that any Sale of Holdings involves the sale of
shares of Holdings Common Stock, then each Management Stockholder (and
the Permitted Transferees of such Management Stockholder) shall also
be obligated to sell all the shares of Holdings Common Stock held by
such Management Stockholder (and the Permitted Transferees of
<PAGE>
such Management Stockholder) to such Person on the terms, and subject
to the conditions, approved by the Board of Directors of Holdings in
connection with such Sale of Holdings.
In the event that the Board of Directors of Holdings desires
to consummate a Sale of Holdings pursuant to this Section 5.02, the
Board of Directors of Holdings shall deliver to each Management
Stockholder written notice of the proposed Sale of Holdings not less
than ten business days prior to the date on which such Sale of
Holdings is to be consummated. Such notice shall set forth in
reasonable detail the material terms of such Sale of Holdings, and, if
such Sale of Holdings involves the sale of shares of Holdings Common
Stock, such notice shall also set forth the fair market value of the
consideration (whether cash, securities or other property) to be paid
for each share of Holdings Common Stock in connection with such Sale
of Holdings. Upon receipt of such notice, each Management Stockholder
(and the Permitted Transferees of such Management Stockholder) shall
be obligated to take any action the Board of Directors of Holdings
shall deem necessary or appropriate in connection with the
consummation of such Sale of Holdings. In addition, if such Sale of
Holdings involves the sale of shares of Holdings Common Stock, each
Management Stockholder (and the Permitted Transferees of such
Management Stockholder) shall, if requested by the Board of Directors
of Holdings, enter into a binding agreement with such Person to sell
all shares of Holdings Common Stock held by such Management
Stockholder (and the Permitted Transferees of such Management
Stockholder) on the terms, and subject to the conditions, if any, set
forth in the notice delivered to such Management Stockholder by the
Board of Directors of Holdings.
Upon the closing of any Sale of Holdings that involves the
sale of shares of Holdings Common Stock, which closing shall take
place at the location specified by IHS in the notice delivered to each
Stockholder, each Management Stockholder (and the Permitted
Transferees of such Management Stockholder) shall deliver to the
Person to whom shares of Holdings Common Stock are to be sold pursuant
to such Sale of Holdings certificates representing all shares of
Holdings Common Stock held by such Management Stockholder (and the
Permitted Transferees of such Management Stockholder), duly endorsed
in blank for transfer, free and clear of all Liens, and otherwise
without representation or warranty, with all requisite stock transfer
stamps affixed thereon, against delivery of the consideration to be
paid therefor in connection with such Sale of Holdings.
<PAGE>
SECTION 5.03 Rights of Management Stockholders To Sell upon
Sales of Holdings Common Stock. (a) In the event that IHS (or any
Affiliate of IHS) proposes to enter into an agreement with any Person
(other than an Affiliate of IHS) regarding a Sale of Holdings Common
Stock, then, so long as such Person raises no objection, IHS shall
deliver to each Management Stockholder written notice of such proposed
Sale of Holdings Common Stock, which notice shall set forth in
reasonable detail the material terms of such proposed Sale of Holdings
Common Stock, including both the number of shares of Holdings Common
Stock to be sold and the price per share at which shares of Holdings
Common Stock are to be sold in connection with such proposed Sale of
Holdings Common Stock. Each Management Stockholder (and the Permitted
Transferees of such Management Stockholder) shall have the option to
sell all shares of Holdings Common Stock held by such Management
Stockholder (and the Permitted Transferees of such Management
Stockholder) to such Person in connection with such proposed Sale of
Holdings Common Stock, on the terms and subject to the conditions, if
any, set forth such notice prior to the sale of any shares of Holdings
Common Stock held by IHS (or any Affiliate of IHS) to such Person. In
the event that the number of shares of Holdings Common Stock to be
sold in connection with such proposed Sale of Holdings Common Stock is
less than the total number of shares of Holdings Common Stock held by
the Management Stockholders, then the Management Stockholders shall
sell their shares of Holdings Common Stock in such proposed Sale of
Holdings Common Stock on a pro rata basis. Within ten business days
following the date on which such notice is received by any Management
Stockholder, such Management Stockholder (and the Permitted
Transferees of such Management Stockholder) shall notify IHS (and any
Affiliate of IHS) of the decision of such Management Stockholder (and
such Permitted Transferee) regarding such proposed Sale of Holdings
Common Stock.
If a Management Stockholder (or a Permitted Transferee of
such Management Stockholder) gives notice of such Management
Stockholder's (or such Permitted Transferee's) election to participate
in a proposed Sale of Holdings Common Stock, such Management
Stockholder (and such Permitted Transferee) shall be obligated to
sell, on a pro rata basis, the shares of Holdings Common Stock held by
such Management Stockholder (and such Permitted Transferee) to such
Person pursuant to such proposed Sale of Holdings Common Stock, on the
terms and subject to the conditions, if any, set forth in the notice
delivered to such Management Stockholder by IHS. Each Management
Stockholder (and each Permitted Transferee of such Management
Stockholder) that exercises the option granted under this Section
5.03(a) (and
<PAGE>
each Permitted Transferee of such Management Stockholder) shall, if
requested by IHS, enter into a binding agreement with the Person to
whom shares of Holdings Common Stock are to be sold pursuant to such
Sale of Holdings Common Stock to sell such Management Stockholder's
(or such Permitted Transferee's) pro rata share of shares of Holdings
Common Stock on the terms, and subject to the conditions, if any, set
forth in the notice delivered to such Management Stockholder by IHS.
At the closing of such Sale of Holdings Common Stock, which
closing shall take place at the location specified by IHS in the
notice delivered to each Management Stockholder, each Management
Stockholder (and the Permitted Transferees of such Management
Stockholder) shall deliver to the Person to whom shares of Holdings
Common Stock are to be sold pursuant to such Sale of Holdings Common
Stock certificates representing the applicable proportion of shares of
Holdings Common Stock to be sold by such Management Stockholder (and
the Permitted Transferees of such Management Stockholder), duly
endorsed in blank for transfer, free and clear of all Liens, and
otherwise without representation or warranty, with all requisite stock
transfer stamps affixed thereon, against delivery of the price to be
paid therefor in connection with such Sale of Holdings Common Stock.
(b) In the event that any Management Stockholder elects not
to exercise the option granted pursuant to Section 5.03(a) to
participate in a proposed Sale of Holdings Common Stock and IHS (or
any Affiliate of IHS) enters into an agreement with such Person
regarding a Sale of Holdings Common Stock, then such Management
Stockholder (and the Permitted Transferees of such Management
Stockholder) shall have the option to require IHS to include in such
Sale of Holdings Common Stock the proportion of shares of Holdings
Common Stock held by such Management Stockholder (and the Permitted
Transferees of such Management Stockholder) that is identical to the
proportion of shares of Holdings Common Stock held by IHS (and its
Affiliates) that is to be sold by IHS (and its Affiliates) in
connection with such Sale of Holdings Common Stock.
IHS shall deliver to each Management Stockholder written
notice of the intent of IHS to participate in a Sale of Holdings
Common Stock pursuant to this Section 5.03(b) not less than ten
business days prior to the date on which such Sale of Holdings Common
Stock is to be consummated. Such notice shall set forth in reasonable
detail the material terms of such Sale of Holdings Common Stock,
including the price per share at which such Management
<PAGE>
Stockholder (and the Permitted Transferees of such Management
Stockholder) shall have the option to sell the applicable proportion
of shares of Holdings Common Stock held by such Management Stockholder
(and the Permitted Transferees of such Management Stockholder) (which
price shall be equal to the price to be paid for the shares of
Holdings Common Stock that are to be sold by IHS (and its Affiliates)
in such Sale of Holdings Common Stock).
The option granted pursuant to this Section 5.03(b) shall be
exercisable by written notice to IHS by each Management Stockholder
(or any Permitted Transferee of such Management Stockholder) given
within ten business days after receipt by such Management Stockholder
of the notice delivered by IHS. If any Management Stockholder (or any
Permitted Transferee of such Management Stockholder) gives notice of
the election of such Management Stockholder (or such Permitted
Transferee) to sell, the Management Stockholder (and the Permitted
Transferee) shall be obligated to sell, conditioned only upon the
closing of the Sale of Holdings Common Stock. Each Management
Stockholder (and each Permitted Transferee of such Management
Stockholder) that exercises such option shall, if requested by IHS,
enter into a binding agreement with the Person to whom shares of
Holdings Common Stock are to be sold pursuant to such Sale of Holdings
Common Stock to sell the applicable proportion of shares of Holdings
Common Stock held by such Management Stockholder (or such Permitted
Transferee) on the terms, and subject to the conditions, if any, set
forth in the notice delivered to such Management Stockholder by IHS.
At the closing of such Sale of Holdings Common Stock, which
closing shall take place at the location specified by IHS in the
notice delivered to each Management Stockholder, each Management
Stockholder (and the Permitted Transferees of such Management
Stockholder) shall deliver to the Person to whom shares of Holdings
Common Stock are to be sold pursuant to such Sale of Holdings Common
Stock certificates representing the applicable proportion of shares of
Holdings Common Stock required to be sold by such Management
Stockholder (and the Permitted Transferees of such Management
Stockholder), duly endorsed in blank for transfer, free and clear of
all Liens, and otherwise without representation or warranty, with all
requisite stock transfer stamps affixed thereon, against delivery of
the price to be paid therefor in connection with such Sale of Holdings
Common Stock.
<PAGE>
ARTICLE VI
Legends
Each certificate representing shares of Restricted Holdings
Common Stock will, until the time at which (i) such shares have been
effectively registered under Section 5 of the Securities Act and
disposed of pursuant to an effective registration statement or (ii)
such shares can be freely sold and transferred without restriction
under the Securities Act, bear the following legends:
(i) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION, AND, UNLESS SO
REGISTERED, THEY MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT AND
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION.";
(ii) "THESE SECURITIES ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF FEBRUARY
[ ], 1999 AMONG INFORMATION HANDLING SERVICES INC., CERTAIN
MEMBERS OF MANAGEMENT OF Holdings AND CERTAIN EMPLOYEES OF
HOLDINGS. A COPY OF THE STOCKHOLDERS' AGREEMENT IS ON FILE
WITH THE SECRETARY OF Holdings." and
(iii) any legend required by the "blue sky" laws of any
state to the extent such laws are applicable to the shares
represented by such certificate.
ARTICLE VII
Certain Covenants Relating to the Conduct of the Business
prior to an Initial Public Offering
SECTION 7.01. Board of Directors of Holdings. IHS agrees,
and each Management Stockholder (and each Permitted Transferee of such
Management Stockholder) agrees, that, at all times prior to the
consummation of an Initial Public Offering, IHS or such Management
Stockholder (and such Permitted Transferee), as applicable, shall take
all action necessary, including the voting of all shares of Holdings
Common Stock held by IHS or such Management Stockholder (or such
Permitted Transferee), as applicable, to cause the Board of Directors
of Holdings to consist at
<PAGE>
all times prior to the consummation of an Initial Public Offering of
not more than five members.
The Management Stockholders (together with their Permitted
Transferees) shall be entitled, at all times prior to the consummation
of an Initial Public Offering, to designate one member of the Board of
Directors so long as either (i) the shares of Holdings Common Stock
held by the Management Stockholders (and their Permitted Transferees)
constitute not less than 5% of the outstanding shares of Holdings
Common Stock or (ii) Haim E. Dahan is an employee of Holdings or its
subsidiary. In the event that both the shares of Holdings Common Stock
held by the Management Stockholders (and their Permitted Transferees)
constitute less than 5% of the outstanding shares of Holdings Common
Stock and Haim E. Dahan has ceased to be an employee of Holdings or
its subsidiary, the Management Stockholders (together with their
Permitted Transferees) shall no longer be entitled to designate any
member of the Board of Directors of Holdings. The Management
Stockholders hereby designate Haim E. Dahan as their designee to the
Board of Directors of Holdings pursuant to this Article VII, which
designation shall continue until such time as the Management
Stockholders (and any Permitted Transferees of the Management
Stockholders) who hold a majority of the shares of Holdings Common
Stock then held by all Management Stockholders (and any Permitted
Transferees of the Management Stockholders) designate another Person
to serve as the Management Stockholders' designee to the Board of
Directors of Holdings and such Management Stockholders (and Permitted
Transferees) shall have advised IHS in writing of such designation. So
long as the Management Stockholders are entitled to designate a member
of the Board of Directors of Holdings, Holdings shall hold at least
one in-person meeting of its Board of Directors in each fiscal year.
SECTION 7.02. Transactions between Holdings and IHS. Except
for the Merger and as otherwise contemplated by this Agreement and the
Formation Agreement, at all times prior to the earlier to occur of the
consummation of an Initial Public Offering and the third anniversary
of the date of this Agreement, as long as the Management Stockholders
hold shares constituting more than 5% of the outstanding Holdings
Common Stock, IHS will not, and will not permit Holdings, to sell,
lease, license or otherwise transfer any material assets between IHS
or any Affiliate of IHS and Holdings, except (i) pursuant to contracts
or commitments existing on the Closing Date in accordance with the
Formation Agreement, (ii) in the ordinary course of business or (iii)
with the consent of Management
<PAGE>
Stockholders holding a majority of the shares of Holdings Common Stock
then held by the Management Stockholders.
SECTION 7.03. Financing of Holdings by IHS. Except (i) for
financing in the form of debt or (ii) with the consent of a majority
of shares then held by the Management Stockholders, IHS will not
invest in or advance any amount to Holdings until the earlier to occur
of the consummation of an Initial Public Offering and the third
anniversary of the date of this Agreement.
SECTION 7.04. Audited Financial Statements of Holdings. So
long as the Management Stockholders are entitled to designate a member
of the Board of Directors of Holdings pursuant to Section 7.01, and
prior to the consummation of an Initial Public Offering, IHS agrees to
cause Holdings to have separate annual audited consolidated financial
statements.
SECTION 7.05. Option Plan. Within 90 days from the date
hereof, IHS will cause Holdings to issue initial grants of options
under an employee stock option plan for employees of Holdings.
ARTICLE VIII
General Provisions
SECTION 8.01. Notices. All notices, requests, claims,
demands and other communications under this Agreement shall be in
writing and shall be deemed given upon receipt by the parties hereto
at the following addresses (or at such other address for such party as
shall be specified by like notice):
(i) if to IHS,
Information Handling Services Inc.
Iverness Business Park
15 Iverness Way East
Englewood, CO 80112
Attention: Mr. Darold Stagner
Telecopy: (303) 397-2742
<PAGE>
with a copy to:
TBG Services Inc.
565 Fifth Avenue
New York, NY 10017
Attention: Mr. Steven Green
Telecopy: (212) 850-8530
(ii) if to any Management Stockholder,
to the address of such Management Stockholder set forth
in Schedule I, and, in the case of any Permitted
Transferee of such Management Stockholder, to the
address set forth in the written agreement entered into
accordance with the provisions of Section 8.09
SECTION 8.02. Headings. The table of contents and headings
contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
SECTION 8.03. Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced
by any rule or law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon determination that any
term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 8.04. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more
counterparts have been signed by each of the parties hereto and
delivered to the other parties hereto.
SECTION 8.05. Entire Agreement; No Third-Party
Beneficiaries. This Agreement (a) constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written
and oral, among the parties hereto with respect to the transactions
contemplated hereby
<PAGE>
and (b) is not intended to confer upon any Person other than the
parties hereto any rights or remedies.
SECTION 8.06. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State
of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
SECTION 8.07. Assignment. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise, by
any Management Stockholder without the prior written consent of the
holders of a majority of the shares of Holdings Common Stock then held
by IHS and its Affiliates; provided, however, that each Management
Stockholder may assign the rights, interests and obligations of such
Stockholder under this Agreement to a Permittee Transferee in
accordance with the provisions of this Agreement. Any purported
assignment without such consent shall be void. Subject to the
preceding sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their
respective successors and assigns.
SECTION 8.08. Consent to Jurisdiction. Each of the parties
hereto (a) consents to submit to the personal jurisdiction of any
Federal court located in the State of Delaware or any Delaware state
court in the event any dispute arises regarding this Agreement or the
transactions contemplated hereby, (b) agrees not to attempt to deny or
defeat such personal jurisdiction by motion or other request for leave
from any such court, (c) agrees not to bring any action relating to
this Agreement or the transactions contemplated hereby in any court
other than any Federal court sitting in the State of Delaware or any
Delaware state court and (d) waives any right to trial by jury with
respect to any action related to, or arising out of, this Agreement or
the transactions contemplated hereby.
SECTION 8.09. Agreement To Be Bound. Notwithstanding
anything to the contrary contained in this Agreement, no shares of
Holdings Common Stock may be transferred, sold, assigned, tendered,
hypothecated or otherwise disposed of to any Permitted Transferee
unless such Permitted Transferee, prior to such transfer, sale,
assignment, tender, hypothecation or other disposition, agrees in
writing, in form and substance satisfactory to IHS, to be bound by the
terms of this Agreement to the same extent, and in the same manner, as
the transferor of such shares of Holdings Common Stock, which writing
shall include
<PAGE>
the address of such Permitted Transferee to which notices given
pursuant to this Agreement may be sent.
IN WITNESS WHEREOF, each IHS has caused this Agreement to be
signed by its officer thereunto duly authorized, and each of the
Management Stockholders has signed this Agreement, all as of the date
first written above.
INFORMATION HANDLING SERVICES
INC.,
by
-------------------------
Name:
Title:
------------------------------
Haim E. Dahan
------------------------------
Michael J. Galvin
------------------------------
Patricia Tuxbury Salem
------------------------------
Peter Jeng
------------------------------
Jim McAlarney
<PAGE>
Appendix A
<PAGE>
Schedule I
