<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report February 28, 1998
ARIS CORPORATION
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C> <C>
Washington 0-22649 91-1497147
- ------------------------------- ------------------------ ---------------------------------
(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation)
</TABLE>
6720 Fort Dent Way, Suite 250, Seattle, Washington 98188-2555
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(Address of Principal Executive Offices) (Zip Code)
(206) 433-2081
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Registrant's telephone number, including area code
NONE
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(Former Name or Former Address, if Changed Since Last Report)
Page 1 of 4
Exhibit Index is at Page 5
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS; and
ITEM 9. SALES OF EQUITY SECURITIES PURUSANT TO REGULATION S.
Agreement for Purchase and Sale of the Entire Share Capital of Barefoot
Computer Training Limited. On February 28, 1998, ARIS Corporation ("ARIS")
acquired all of the outstanding share capital of Barefoot Computer Training
Limited ("Barefoot") pursuant to an Agreement dated February 28, 1998 (the
"Agreement") for the purchase and sale of the entire share capital (the
"Acquisition") of Barefoot by and among ARIS, Robin Nessim Smouha Adda and the
shareholders of Barefoot. In connection with the Acquisition, ARIS issued
278,611 shares of restricted ARIS common stock, no par value per share
("Restricted ARIS Stock") in exchange for all of the issued and outstanding
shares of Barefoot. Although the Restricted ARIS Stock issued in connection
with the Acquisition will not be registered, the selling shareholders of
Barefoot have been granted registration rights under the terms of a registration
rights agreement.
The issuance of the Restricted ARIS Stock in connection with the
Acquisition was exempt from registration requirements of Section 5 of the
Securities Act of 1933, as amended (the "Act"). All 278,611 shares were issued
pursuant Regulation S of the Act ("Regulation S"). In connection with the
issuance of the Restricted ARIS Stock, all Barefoot shareholders (collectively,
the "Sellers") were required to execute an Investment and Pooling Letter with
regard to Regulation S. Each Seller that was issued Restricted ARIS Stock was
required to represent and warrant, among other things, that he, she or it was
not a "U.S. Person" as defined by Regulation S, was not acquiring the Restricted
ARIS Stock for the account or benefit of any U.S. Person and that at all times
relevant to the transaction, such Seller has been outside of the United States.
In addition, "Offering Restrictions" as defined by Regulation S were
implemented.
In connection with the Acquisition, 27,861 shares of Restricted ARIS Stock
issued to certain of the Sellers are being held in escrow until February 28,
1999 to cover any reimbursable claims under the Agreement and related
agreements.
The terms of the Agreement and registration rights agreement were
determined on the basis of arm's-length negotiations. Prior to execution of the
Agreement, neither ARIS nor any of its affiliates nor any director or officer of
ARIS or any associate of any such director or officer, had any material
relationship with Barefoot. The terms of the Acquisition are more fully
described in the Agreement, the Registration Rights Agreement and the Escrow
Agreement, copies of which are filed as Exhibits 2.1, 2.2 and 2.3, respectively
to this Report. Subject to a pending independent valuation, the total
consideration given by ARIS in exchange for the shares of Barefoot is
$5,900,000.
Page 2
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All assets of Barefoot acquired in the Acquisition are utilized in its
information technology consulting and training business and will be utilized in
the same business of ARIS. The Acquisition will be accounted for using the
pooling of interests method of accounting.
The foregoing descriptions are qualified in their entirety by reference to
the full text of the Agreement which is filed as an Exhibit hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired. Not Applicable.
(b) Pro Forma Financial Information. Not Applicable.
(c) Exhibits.
2.1 Agreement for the purchase and sale of the entire share capital
of Barefoot Computer Training Limited dated February 28, 1998 by
and among, ARIS Corporation, Robin Nessim Smouha Adda and the
shareholders of Barefoot Computer Training Limited.
2.2 Registration Rights Agreement dated as of February 28, 1998 by
and among ARIS Corporation and the Persons listed on the
signature pages to the Registration Rights Agreement.
2.3 Escrow Agreement dated March 2, 1998 by and among ARIS
Corporation, Coutts & Co, the Persons listed on the signature
pages to the Escrow Agreement and Robin Nessim Smouha Adda.
99.1 Press release issued by ARIS Corporation on March 2, 1998.
Page 3
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARIS CORPORATION
By: /s/ Thomas W. Averill
-----------------------------
Thomas W. Averill
Vice President of Finance and
Chief Financial Officer
Dated: March 12, 1998
Page 4
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<C> <S>
2.1 Agreement for the purchase and sale of the entire share capital
of Barefoot Computer Training Limited dated February 28, 1998 by
and among, ARIS Corporation, Robin Nessim Smouha Adda and the
shareholders of Barefoot Computer Training Limited.
2.2 Registration Rights Agreement dated as of February 28, 1998 by
and among ARIS Corporation and the Persons listed on the
signature pages to the Registration Rights Agreement.
2.3 Escrow Agreement dated March 2, 1998 by and among ARIS
Corporation, Coutts & Co, the Persons listed on the signature
pages to the Escrow Agreement and Robin Nessim Smouha Adda.
99.1 Press release issued by ARIS Corporation on March 2, 1998.
</TABLE>
Page 5
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EXHIBIT 2.1
DATED 28 FEBRUARY 1998
----------------------
ARIS CORPORATION
ROBIN NESSIM SMOUHA ADDA
and
THE SHAREHOLDERS OF
BAREFOOT COMPUTER TRAINING LIMITED
----------------------------------
AGREEMENT
FOR THE SALE AND PURCHASE OF
THE ENTIRE ISSUED SHARE CAPITAL OF
BAREFOOT COMPUTER TRAINING LIMITED
----------------------------------
CLYDE & CO
An International Law Firm
51 Eastcheap
London EC3M 1JP
Tel: 0171 623 1244
Fax: 0171 623 5427
Ref: SKJ/CBH/9800503
-1-
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THE SHARES OF COMMON STOCK OF ARIS CORPORATION ISSUED TO THE PERSONS AND
ENTITIES NAMED IN SCHEULE 1 OF THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED OR
SOLD IN THE UNTIED STATES OR TO U.S. PERSONS (AS DEFINED IN RULE 902(O) UNDER
THE SECURITIES ACT) UNLESS SUCH SHARES ARE REGISTEREDUNDER THE SECURITIES ACT OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE AND UNLESS THE OTHER RESTRICTIONS ON THE TRANFER CONTAINED IN THE
AGREEMENTS REFERRED TO HEREIN ARE COMPLIED WITH.
THIS AGREEMENT is made as a deed on 28 February 1998
BETWEEN:
(1) THE PERSONS AND ENTITIES whose names and addresses are set out in Schedule
1 ("the Sellers");
(2) ROBIN NESSIM SMOUHA ADDA of 31 Felden Street, London SW6 5AE ("Mr Adda");
and
(3) ARIS CORPORATION of Fort Dent Two, suite 250, 6720 Fort Dent Way, Seattle,
Washington 98188, United States of America ("the Buyer").
WHEREAS:
(A) The Buyer wishes to acquire all of the issued shares of Barefoot Computer
Training Limited, a company incorporated in England and Wales as at the
date of this Agreement, on the terms and conditions of this Agreement.
(B) After such acquisition, the Buyer plans to integrate Barefoot Computer
Training Limited into Oxford Computer Group Limited, the Buyer's wholly-
owned subsidiary in the United Kingdom, by transferring all of the shares
or all of the assets of Barefoot Computer Training Limited to Oxford
Computer Group Limited, although the Buyer is not legally obliged to make
any such transfer and Oxford Computer Group Limited has no legal right to
any or all of the shares of assets of Barefoot Computer Training Limited.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION
1.1 In this Agreement and the Schedules the following words and expressions
shall have the following meanings unless the context otherwise requires:
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"ACCOUNTS DATE" in respect of the Audited Accounts means the Last
Accounts Date, 30 November 1996 or 30 November 1995
(as the case may be);
"THE ACT" means the Companies Act 1985;
"ADDA SETTLEMENT" means a discretionary trust established under a deed
of settlement under the laws of the British Virgin
Islands;
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange
Act;
"ASSOCIATE" means GTS and/or any person, firm or company which is
a connected person of any Warrantor or which is an
associated company of any Warrantor;
"AUDITED ACCOUNTS" means the Last Accounts, the audited balance sheet of
the Company as at 30 November 1996 and/or 30 November
1995, the audited profit and loss account of the
Company for the fiscal year ended on 30 November 1996
and/or 30 November 1995 and, in each case, the
auditor's and directors' reports and notes thereon;
"BUSINESS DAY" means a day other than a Saturday, Sunday or public
holiday in the United Kingdom or the U.S.;
"BUYER'S GROUP" means the Buyer and/or any subsidiary of the Buyer
(including but not limited to Oxford), any holding
company of the Buyer and any subsidiary of any such
holding company;
"BUYER'S SHARES" means two hundred and seventy eight thousand six
hundred and eleven (278,611) fully paid, nonassessable
shares in the common stock of the Buyer to be issued
to the Sellers under this Agreement;
"BUYER'S SOLICITORS" means Clyde & Co of 51 Eastcheap, London, EC3M 1JP;
"CHILDRENS' TRUSTS" means collectively the Olivia Adda Settlement, the
Jacques Adda Settlement, the Jessica Adda Settlement
and the Georgina Adda Settlement;
"THE COMPANY" means Barefoot Computer Training Limited, brief
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<PAGE>
details of which are set out in Schedule 2;
"COMPLETION" means completion of the sale and purchase of the
Shares in accordance with the terms of this Agreement;
"CONSIDERATION" means the consideration described in clause 3;
"DIRECTORS" means the directors of the Company immediately before
Completion of this Agreement;
"DISCLOSURE LETTER" means the letter in a form satisfactory to the Buyer
from the Sellers' Solicitors to the Buyer's Solicitors
relating to the Warranties;
"EMPLOYEES" means the employees of the Company as at the date of
this Agreement, as listed in the Disclosure Letter;
"ENCUMBRANCE" means a mortgage, charge, pledge, lien, assignment,
right to acquire, option, restriction, right of first
refusal, right of pre-emption, third party right or
interest, title retention or any other encumbrance or
security interest of any kind whatsoever or another
type of preferential arrangement (including without
limitation a title transfer and/or retention
arrangement) having similar effect;
"ENVIRONMENTAL LAWS" means all regulations, directions and other
environmental protection, occupational, health and
safety or similar laws, regulations, restrictions,
licences, rules, and European Community directives as
in force in the United Kingdom, including but not
limited to the Environmental Protection Act 1990, the
Water Act 1989, the Control of Substances Hazardous to
Health Regulations, the Control of Pollution Act 1974
and the Radioactive Substances Act 1960;
"ESCROW AGENT" means the escrow agent named and defined as such in
the Escrow Agreement;
"ESCROW AGREEMENT" means an agreement in the agreed form to be executed
and delivered by the Buyer, the Warrantors and the
Escrow Agent in accordance with this Agreement;
"ESCROW FUND" means the escrow fund as defined in the Escrow
Agreement;
"ESCROWED SHARES" means the Buyer's Shares to be placed in escrow
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pursuant to the terms of clause 3.2 and in accordance
with the provisions of the Escrow Agreement, or such
fewer number of Buyer's Shares to be held in escrow
from time to time, reduced in accordance with the
terms of the Escrow Agreement;
"EVENT" includes (without limitation) the death of any person,
any change in the residence of any person for the
purposes of Taxation, any payment, transaction,
action, omission or occurrence of whatever nature and
a failure to make sufficient dividend payments to
avoid a shortfall apportionment or deemed distribution
of income, and references to an event occurring on or
before Completion shall include the combined result of
two or more events the first of which shall have taken
place before Completion in circumstances where that
event or those events taking place before Completion
shall have taken place outside the Company's ordinary
course of business (or shall be deemed to have taken
place outside the Company's ordinary course of
business) and that event or those events occurring
after Completion shall have taken place inside the
Company's ordinary course of business and shall also
include Completion;
"FSA" means the Financial Services Act 1986;
"GAAP" means U.S. generally accepted accounting principles;
"GTS" means Global Training Solutions (London) Limited whose
registered office is at Telephone House, 77 Paul
Street, London EC2A 4PT ("GTS London"), Global
Training Solutions Limited ("GTS Limited") whose
registered office is at PO Box 146, Wickhams Cay 1,
Road Town, Tortola, British Virgin Islands and/or any
associated, affiliated or related person thereof;
"GTS BUSINESS" means the provision by GTS of (i) vendor/partner
certification and training schemes (being A+,
Skillcheck and substantially similar training schemes)
developed by GTS, (ii) courseware relating thereto
developed by GTS, and (iii) "train the trainer" skills
transfer and support relating to (i) and/or (ii)
above, in each case solely and exclusively to vendors
and partners (but not, for the avoidance of doubt and
without limitation, to end users);
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"GTS SERVICES means the services agreement in the agreed form
AGREEMENT" to be entered into between the Company and GTS London;
"ICTA" means the Income and Corporation Taxes Act 1988;
"INTELLECTUAL means patents, trade marks, service marks, designs,
PROPERTY" applications and rights to apply for any of the
foregoing, design rights, copyright (including but not
limited to all copyright in any drawings, plans,
specifications, manuals, designs, and computer
software) inventions, trade secrets, know how and
other confidential information and business names and
any similar rights, whether registrable or registered
or not, in any part of the world, in each case owned
or used by the Company for the purpose of its
business;
"INVESTMENT AND means the investment and pooling letter from each
POOLING LETTER" Seller in the agreed form;
"LAST ACCOUNTS" means the audited balance sheet of the Company as at
the Last Accounts Date, the audited profit and loss
account of the Company for the fiscal year ended on
the Last Accounts Date, and the auditor's and
directors' reports and notes thereon;
"LAST ACCOUNTS DATE" means 30 November 1997;
"LEASES" means the leases of the Property dated 14 June 1996
between Area Managements (London) Limited (1) and the
Company (2);
"LETTER OF means the letter of transmittal from each Seller in
TRANSMITTAL" the agreed form;
"LIABILITIES" means as at any relevant date, all actual or
contingent liabilities, whether liquidated, quantified
or unliquidated, known or not, arising out of any
event occurring before, or from circumstances
subsisting, at that date;
"MANAGEMENT means the unaudited management accounts of the
ACCOUNTS" Company for the two monthly periods ended on 31
December 1997 and 31 January 1998;
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<PAGE>
"OXFORD" means Oxford Computer Group Limited of Wolsey Hall,
66 Banbury Road, Oxford OX2 6PR (a wholly-owned
subsidiary of the Buyer);
"PLANNING ACTS" means the Town and Country Planning Act 1990, the
Planning (Listed Buildings and Conservation Areas) Act
1990, the Planning (Hazardous Substances) Act 1990 and
the Planning (Consequential Provisions) Act 1990;
"PROMISSORY NOTE" means the promissory note to be issued by GTS to the
Company in the agreed form;
"PROPERTY" means the leasehold premises briefly described in
Schedule 3;
"PROPERTY LIABILITY" means any or all losses, damages, claims, demands,
costs and/or expenses of any kind whatsoever arising
(whether directly or indirectly) out of or in
connection with (i) any of the Planning Acts, (ii) the
permitted use designated under either or both of the
Leases, and/or (iii) any breach under either or both
of the Leases resulting from (i) and/or (ii) above;
"REGISTRATION RIGHTS means the agreement between each Seller and the Buyer
AGREEMENT" granting each Seller "piggyback" and "best efforts"
S-3 demand registration rights with respect to the
Buyer's Shares in the agreed form;
"REGULATION S" means Regulation S of the Securities Act;
"SEC" means the United States Securities Exchange
Commission;
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended;
"SECURITIES means the United States Securities Exchange Act of
EXCHANGE ACT" 1934, as amended;
"SELLERS" means the persons and entities whose names and
addresses are set out in Schedule 1;
"SELLERS' means Baker & McKenzie of 100 New Bridge Street,
SOLICITORS" London EC4V 6JA;
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"SHAREHOLDERS" means the Sellers;
"SHARES" means the whole of the issued share capital of the
Company;
"SSAP" means either a Statement of Standard Accounting
Practice published by the Institute of Chartered
Accountants in England and Wales or a Financial
Reporting Standard as issued by the Accounting
Standards Board;
"STC" means STC International Limited as trustee of the
Adda Settlement, P O Box 146, Roadtown, Tortola,
British Virgin Islands;
"STOCK EXCHANGE" means the London Stock Exchange Limited;
"SUPPLEMENTAL means the Tax Covenant, the Escrow Agreement, the
AGREEMENTS" Registration Rights Agreement, the Investment and
Pooling Letter, the Letter of Transmittal, the
Promissory Note and the GTS Services Agreement;
"TCGA" means the Taxation of Chargeable Gains Act 1992;
"TAXATION" means all forms of taxation, charges, duties, imposts,
withholdings, rates, levies and governmental charges
(including any related fine, penalty, surcharge or
interest and whether national, state, provincial or
local) in all cases in the nature of tax or
corresponding to tax, whatsoever and whenever created,
enacted or imposed, and whether of the United Kingdom
or elsewhere and "Tax" shall be construed accordingly;
"TAXATION STATUTES" means statutes (and all regulations and arrangements
whatsoever made thereunder) whether of the United
Kingdom or elsewhere, and whether enacted before or
after the date of this Agreement, providing for or
imposing any Taxation;
"TAX COVENANT" means a deed of covenant relating to the Company's
liability for Taxation (in respect of which the
Warrantors stand as Covenantors) in the agreed form to
be executed and delivered by the Buyer and the
Warrantors at Completion;
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"TRUSTEES" means, in respect of the Childrens' Trusts, Mr Adda
and Pernille Adda and, in respect of the Adda
Settlement, STC;
"TRUSTS" means the Childrens' Trusts and the Adda Settlement,
or any of them;
"U.S." means the United States of America;
"WARRANTIES" means the warranties, representations and undertakings
by Annie Sly and/or the Warrantors (or any of them)
contained in clause 6 and set out in Schedule 4:
"Warranty" shall be construed accordingly; and
"WARRANTORS" means Mr Adda and each of the Sellers (but excepting
only Annie Sly because she is not a member or
affiliate of the control group for purposes of the
pooling requirements of GAAP).
1.2 Unless otherwise stated, a reference in this Agreement to a clause, sub-
clause or Schedule is a reference to a clause or sub-clause of, or a
schedule to, this Agreement. For the avoidance of doubt, the Schedules
form part of this Agreement and take effect as if set out in this
Agreement.
1.3 References to statutory provisions shall be construed as references to
those provisions as respectively replaced, amended or re-enacted from time
to time (whether before or after the date of this Agreement) and shall
include any provisions of which they are re-enactments (whether with or
without modification) and any sub-ordinate legislation made under such
provisions.
1.4 Unless the context otherwise requires, references to the singular shall
include the plural and vice versa, references to any gender shall include
all genders, and references to "person" shall include an individual, body
corporate, firm, association, trust, government or local authority
department, partnership or other authority or body (whether corporate or
unincorporate).
1.5 Clause headings are for ease of reference only and shall not affect the
construction of this Agreement.
1.6 Words and expressions defined in the Act shall, unless the context
otherwise requires, have the same meanings when used in this Agreement.
1.7 References to "in the agreed form" mean in the form agreed in writing
between the Sellers or the Warrantors (as the case may be) and the Buyer
and for the purpose of identification initialled by the Sellers' Solicitors
and the Buyer's Solicitors.
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2. SALE AND PURCHASE
2.1 Subject to the terms of this Agreement, each of the Sellers shall sell with
full title guarantee and the Buyer shall buy with effect from Completion
the Shares together with all benefits and rights attaching to the Shares,
including without limitation all dividends declared, and distributions made
or paid, on or after the date of this Agreement.
2.2 The Shares shall be sold free from all Encumbrances.
2.3 Each of the Sellers and Mr Adda hereby waives any pre-emption rights and
other restrictions on the transfer of, or otherwise relating to, any of the
Shares, conferred on him or any other person under the Articles of
Association of the Company, an agreement between Mr Adda (1) and Annie Sly
and Carol Courtney (2) dated 30 April 1992, or otherwise.
3. CONSIDERATION
3.1 In consideration of the sale of the Shares by the Sellers to the Buyer, the
Buyer shall, on Completion, allot and issue to each Seller the number of
Buyer's Shares set out opposite such Seller's name in column (4) of
Schedule 1.
3.2 Twenty seven thousand eight hundred and sixty one (27,861) of the Buyer's
Shares (being ten percent (10%) of the total number of Buyer's Shares to be
allotted and issued by the Buyer to the Sellers hereunder) shall be placed
in escrow by the Warrantors in accordance with the terms of the Escrow
Agreement.
4. COMPLETION
4.1 Completion shall take place at the offices of the Buyer's Solicitors on 28
February 1998.
4.2 The Buyer shall not be obliged to complete the purchase of any of the
Shares unless all of the documents and matters set out in Parts I and III
of Schedule 5 have been delivered and/or fully satisfied (as appropriate)
or waived by the Buyer. The Sellers shall not be obliged to complete the
sale of any of the Shares unless all of the documents set out in Part II of
Schedule 5 have been delivered by the Buyer or waived by the Sellers.
4.3 At Completion, the Buyer shall cause:
(a) ChaseMellon Shareholder Services to deliver via international courier
to each Seller as soon as practicable after Completion a certificate
representing the number of Buyer's Shares set out opposite such
Seller's name in column 4 of Schedule 1 minus, in the case of each
Warrantor, the number of Buyer's Shares representing such Warrantor's
pro-rata portion of the Escrowed Shares; and
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(b) to be delivered to the Escrow Agent certificates in respect of the
Buyer's Shares representing each Warrantor's pro-rata portion of the
Escrowed Shares.
4.4 If the Sellers do not comply with one or more of their obligations under
Part I of Schedule 5 on or prior to the date agreed for Completion or if
the Buyer does not comply with one or more of its obligations under Part II
of Schedule 5 on or prior to the date agreed for Completion (in either case
"the defaulting party"), or any subsequent date to which the other party
("the non-defaulting party") agrees in writing to defer Completion, the
non-defaulting party may (without prejudice to any other rights or remedies
available to it or them under this Agreement or otherwise) subject to the
agreement of the defaulting party, agree in writing to defer Completion to
another date in accordance with this clause 4.4, in which case the
provisions of this Agreement shall apply as if that other date were the
date set for Completion in clause 4.1.
5. COVENANTS
5.1 Each party shall, before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated hereby,
consult with the other parties with respect thereto and no party shall,
without the prior written consent of the other parties, issue any press
release or make any such public statement, except as may be required by law
or applicable regulation.
5.2 The Buyer and each of the Sellers shall (and shall procure that the Company
shall) use all reasonable efforts and shall cooperate fully and shall take
all reasonable actions as are reasonably necessary to allow the acquisition
of the Shares by the Buyer as contemplated by this Agreement to be
accounted for on the Business Combination of the Accounting Principles
Board of the American Institute of Certified Public Accountants as amended
by Statements of the Financial Accounting Standards Board, and the restated
interpretations of the American Institute of Certified Public Accountants
(FASB), the Emerging Issues Task Force and the regulations of the U.S.
Securities Exchange Commission. In connection therewith and prior to
Completion, each Seller shall have executed and delivered an Investment and
Pooling Letter to the Buyer and the Buyer shall have received a pooling
letter from Price Waterhouse LLP, as auditors for the Buyer.
5.3 Upon the request of the Buyer, the Warrantors shall procure that the
Company's auditors Moores Rowland, shall, subject to their receipt of
reasonable professional fees and expenses for the same:
(a) continue to allow Price Waterhouse LLP to have access to and to review
the audit work of Moores Rowland for the fiscal years of the Company
ended on 30 November 1996 and 30 November 1997 under the same
conditions set out in the "hold-harmless" letter dated 18 February
1998; and/or
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(b) with the prior written consent of Moores Rowland, include the audited
financial statements and the auditors report published by Moores
Rowland in respect of such years within any opinion given by Price
Waterhouse LLP relating to any audit of the Buyer's Group and/or the
Company and/or within any SEC filings made at any time in relation to
the Buyer's Group and/or the Company.
6. WARRANTORS' WARRANTIES
6.1 Each of the Sellers severally warrants, represents and undertakes to the
Buyer that:
(a) he has the legal right and full power and authority to sell and
transfer to the Buyer the full legal and beneficial ownership of the
Shares set out opposite his name in column 3 of Schedule 1 with full
title guarantee, free from all Encumbrances and otherwise on the terms
of this Agreement without the consent of any third party; and
(b) he has the legal right and full power and authority to enter into and
perform this Agreement and any and all Supplemental Agreements in
accordance with their respective terms.
6.2 The Warrantors jointly and severally warrant, represent and undertake to
the Buyer that the Warranties contained in this clause 6 and in Schedule 4
are true, accurate and complete in all respects as at the date of
Completion.
6.3 Each of the Warranties is given subject to the matters fairly and
specifically and, so far as the Warrantors are aware, fully disclosed in
the Disclosure Letter.
6.4 Each of the Warranties shall be construed separately and independently of
each other and no Warranty shall be limited or restricted by reference to
or inference from any other Warranty.
6.5 The Warranties shall remain in full force and effect after Completion and
the Buyer's rights and remedies in respect of any breach of the Warranties
or under any other provision of this Agreement shall not be regarded as
modified or varied by Completion, by any investigation (including without
limitation any due diligence investigation) made by or on behalf of the
Buyer in connection with the purchase of the Shares or any information or
documents supplied to it (save as set out in the Disclosure Letter), by the
Buyer failing to exercise or delaying the exercise of any of its rights or
remedies or by any other event or matter whatsoever except a specific and
duly authorised written waiver or release by the Buyer.
6.6 Any amounts owed pursuant to the Warranties by the Warrantors shall be
deemed to be an adjustment in the amount of the Buyer's Shares received as
Consideration, calculated by reference to the closing price of the Buyer's
Shares as quoted on the Nasdaq National Market on 27 February 1998.
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6.7 The Sellers each undertake (for themselves and any nominees) that after
Completion and for so long as they remain the registered holder of any of
the Shares they will:-
(a) not represent themselves as the beneficial owners of any of the
Shares;
(b) exercise all powers, rights and privileges vested in the registered
holder of the Shares only in accordance with the lawful written
directions of the Buyer or such member of the Buyer's Group as the
Buyer may nominate by notice in writing to the Sellers; and
(c) hold the Shares and any dividends or other distributions of profits or
assets in respect thereof in trust for the Buyer or such member of the
Buyer's Group as the Buyer may nominate by notice in writing to the
Sellers.
6.8 STC undertakes that during the "Restricted Period" it will not:
(a) distribute any of the capital and/or income of the Adda Settlement if
to do so would, or would be reasonably likely to, result in the
aggregate value of the net assets of the Adda Settlement being less
than five hundred thousand pounds sterling (pound 500,000) or enter
into any transaction or arrangement having a similar effect unless an
irrevocable and legally binding undertaking in favour of the Buyer is
obtained from any beneficiary to whom STC proposes to distribute any
capital and/or income (such undertaking to be in a form satisfactory
to the Buyer) whereby such beneficiary assumes joint and several
liability with STC in respect of any claim under this Agreement and/or
any Supplemental Agreement to the extent of the value of the
distribution; and/or
(b) exercise any of its powers to invest or lend any money or other funds
from the Adda Settlement to any person, company, partnership or other
business enterprise or venture of the Warrantors or any Associate of
any of the Warrantors without the prior written consent of the Buyer,
such consent not to be unreasonably withheld.
6.9 STC undertakes that during the "Restricted Period" it will not, without the
prior written consent of the Buyer (which consent shall not be unreasonably
withheld), do or permit or cause to be done any of the following:
(a) retire from the Adda Settlement;
(b) appoint any new or additional trustee(s) to the Adda Settlement;
and/or
(c) vest or cause to vest any of the property of the Adda Settlement in
any new or additional trustee(s).
6.10 The Buyer agrees that any claim arising against the Warrantors out of or
in
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<PAGE>
connection with this Agreement and/or any Supplemental Agreement shall
first be brought against the Escrow Fund; provided however, that if any
claim is not satisfied (whether in whole or in part) out of the Escrow
Fund, the Buyer shall be entitled to bring such claim directly against any
of the Warrantors in accordance with their respective liabilities under
this Agreement and any such claim brought against any of the Warrantors may
be satisfied (in whole or in part), at the option of the Warrantors in cash
or by transfer to the Buyer of such number of Buyer's Shares (as valued in
accordance with clause 6.3 of the Escrow Agreement) as may be required to
satisfy such claim.
6.11 The "Restricted Period" shall be a period which is the earlier of one year
from Completion or the date upon which the Buyer has completed its first
audit of the Buyer's consolidated financial statements; provided however to
the extent that any claim is made by the Buyer in connection with this
Agreement and/or any Supplemental Agreement such one year period shall be
extended until the date when such claim is resolved or satisfied.
7. LIMITATIONS ON WARRANTORS' LIABILITY
7.1 The provisions of this clause 7 shall operate to limit the liability of the
Warrantors in respect of any claim under or in connection with the
Warranties. For the avoidance of doubt, unless expressly provided
otherwise, clause 8 is in no way limited by the provisions of this clause
7.
7.2 The Warrantors shall not be liable under the Warranties (or, where
relevant, under the indemnities contained in clause 8) in respect of any
claim:
(a) unless the aggregate amount of all claims under this Agreement and/or
the Supplemental Agreements exceeds forty thousand pounds sterling
(pound 40,000); provided however, that if the aggregate liability in
respect of all such claims exceeds forty thousand pounds sterling
(pound 40,000), then the Buyer shall be entitled to pursue recovery of
all claims, including without limitation all claims previously
notified;
(b) to the extent that the aggregate amount of the liability of the
Warrantors for all claims made under the Warranties or the indemnities
would exceed five hundred thousand pounds sterling (pound 500,000);
provided however, that this sub-clause 7.2(b) shall not apply to any
claim relating to any criminal fine or penalty for which the liability
of the Warrantors shall be unlimited;
(c) unless notice of such claim is given in writing (stating in reasonable
detail the specific matters in respect of which the claim is made) by
the Buyer to the Warrantors within the earlier of twelve (12) months
after the date of Completion, or the date upon which the Buyer has
completed its first audit of the Buyer's consolidated financial
statements; and/or
(d) (i) to the extent that the liability of the Trustees in respect of
any claim
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<PAGE>
would exceed the proportion of the claim which equals the
proportion of the total consideration received by them on behalf
of their respective trust or settlement as appropriate; and
(ii) without prejudice to clause 6.8, to the extent that any claim
against the Trustees of the Adda Settlement or the Childrens'
Trusts exceeds the assets of the relevant trust or settlement as
appropriate.
For the avoidance of doubt this clause 7.2(d) shall in no way limit
the liability of Mr Adda.
7.3 Any claim made by the Buyer for breach of Warranty shall be reduced by the
amount of any payment made by any of the Warrantors in respect of the same
facts or circumstances pursuant to the provisions of the Tax Covenant and
vice versa.
7.4 Where any of the Warranties is qualified by the phrase "so far as the
Warrantors are aware" or any similar phrase, the Warrantors shall be deemed
to have made reasonable enquiry with regard to the subject matter of such
Warranty.
7.5 Neither party shall be entitled to rescind this Agreement after Completion
in any circumstance.
7.6 No liability shall attach to the Warrantors in respect of any claim under
the Warranties:
(a) unless notice is given by the Buyer to the Warrantors of the relevant
facts of that claim as soon as reasonably practicable; provided
however, that if the Buyer and/or the Company in its sole discretion
seeks indemnification in respect of any such claim from any insurer,
the Buyer shall only be required to give notice to the Warrantors
under this clause 7.6 at the same time as the Buyer and/or the Company
(as the case may be) gives written notice of the claim to the insurer;
or
(b) in respect of any fact or matter of which the Buyer has actual
knowledge as at Completion that would, but for this sub-clause 7.6(b),
entitle the Buyer to make a claim against the Warrantors for breach of
any of the Warranties; provided however, that, for the avoidance of
doubt, actual knowledge on the part of the Buyer shall in no way be
imputed or deemed by virtue of the delivery at any time of any papers,
documents and/or other materials (on any media) by or on behalf of the
Sellers (or any of them) to the Buyer, its employees, officers, agents
and/or representatives.
7.7 In the event that the Buyer or the Company is entitled to recover any sum
(whether by payment, discount, credit or otherwise) from any third party in
respect of any matter for which a claim could be made against the
Warrantors, the Buyer shall use, or procure that the Company shall use, its
reasonable endeavours to recover such sum before making the claim, and any
sum recovered will reduce
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<PAGE>
the amount of the claim; and, in the event of the recovery being delayed
until after the claim has been satisfied by the Warrantors, the Buyer shall
account to the Warrantors in respect of any amount so recovered (after
deduction of all reasonable costs and expenses of the recovery) up to the
amount of the payment.
7.8 In the event that a claim under the Warranties against the Warrantors
arises as a result of or in connection with a liability to or a dispute
with any third party, no such liability or dispute shall be admitted,
settled or discharged without the written consent of the Warrantors and the
Buyer shall (provided that it is indemnified to its reasonable satisfaction
by the Warrantors against any costs, expenses, liabilities, penalties
and/or fines which may be incurred by the Buyer and/or the Company in
taking such action) take and shall procure that the Company shall take such
action to avoid, dispute, resist, appeal, compromise or contest such
liability or dispute as may be agreed between the parties.
7.9 No liability shall attach to the Warrantors in respect of any claim:
(a) under the Warranties or indemnities to the extent that such claim
relates to any loss for which the Buyer or the Company is indemnified
by insurance or for which it would have been so indemnified if at the
relevant time there had been maintained valid and adequate insurance
cover of a type in force in relation to the Company at the date of
Completion;
(b) to the extent that provision or reserve in respect of the matter or
thing giving rise to such claim has been specifically provided for or
detailed and noted in the Last Accounts;
(c) if such claim would not have arisen but for a change in the rate of
tax or a change in legislation made after the date hereof or a change
in the interpretation of the law after the date hereof or a change by
the relevant tax authority in the method of applying or calculating
the rate of tax after the date hereof or a change in any extra
statutory concession previously made by any revenue authority (whether
or not such change purports to be effective retrospectively in whole
or in part) or if such claim would not have arisen but for any
judgment delivered after the date hereof;
(d) to the extent that such claim would not have arisen but for a change
in the treatment of assets and liabilities or of the tax attributable
to timing differences (including capital allowances) in future
accounts of the Company or but for any other change in the accounting
bases upon which the Company prepares its future accounts;
(e) to the extent that such claim would not have arisen but for an
omission or a voluntary act or transaction (other than an omission,
act or transaction carried out pursuant to a legally binding
obligation created on or before Completion) occurring after Completion
otherwise than in the ordinary course of business; or
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<PAGE>
(f) if and to the extent that such claim would not have arisen or would
have been reduced or eliminated but for a failure on the part of the
Company to make any claim, election, surrender or disclaimer or give
any notice or consent or do any other thing after Completion the
making, giving or doing of which was taken into account in preparing
the Last Accounts and specifically notified to the Buyer on or before
Completion.
(g) for the avoidance of doubt, the provisions of clauses 3.1(a) to (k),
3.3, 3.4, 4, 5, 6, 9, 11 and 12 of the Tax Covenant shall apply
mutatis mutandis in relation to any claim or claims in respect of any
of the Warranties contained in Section 13 of Schedule 4 of this
Agreement other than as they relate to PAYE or National Insurance
contributions. In respect of any claim or claims in respect of the
Warranties as they relate to PAYE or National Insurance contributions,
the provisions of clauses 3.2(a) to (e), 3.3, 3.4, 4, 5, 6, 9, 11 and
12 of the Tax Covenant shall apply mutatis mutandis.
8. INDEMNITIES
8.1 Subject always to the limitations on liability contained in sub-clauses
7.2(a), (b) and (d)), and 7.9(a) and (b) for the period ending on the
earlier of one year after the date of Completion or the date upon which the
Buyer has completed its first audit of the Buyer's consolidated financial
statements, the Warrantors shall be jointly and severally liable to the
Buyer (for itself and as trustee for the Company) for any Property
Liability and shall indemnify (and shall at all times keep fully and
effectively indemnified) the Buyer and the Company in respect thereof.
8.2 The provisions of this clause 8 shall be in addition to, and not in
limitation of, any other rights or remedies which the Buyer may have under
this Agreement, any Supplemental Agreement or otherwise.
8.3 The Warrantors shall have no liability to the Buyer in respect of the
Property Liability in the event that the Buyer uses (for planning purposes)
the Property other than in accordance with the terms of the Leases.
9. BUYER'S WARRANTIES
The Buyer represents and warrants that:
(a) it is a corporation duly organised and existing under the laws of the
State of Washington, U.S. and that the Buyer has all necessary
corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as now conducted and as
proposed to be conducted; and
(b) it has the full corporate power and corporate authority to enter into
this Agreement and to carry out the terms of this Agreement. The
Buyer has taken all corporate action necessary to authorise the
execution, delivery and
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<PAGE>
performance of this Agreement. This Agreement has been duly and
validly executed and delivered by the Buyer, and is binding upon and
enforceable against the Buyer in accordance with its terms, except as
enforceability may be limited or affected by applicable bankruptcy,
insolvency, reorganisation or other laws of general application
relating to or affecting the rights of creditors, and except as
enforceability may be limited by rules of law governing specific
performance, injunctive relief or other equitable remedies.
10. RESTRICTIVE COVENANTS
10.1 In this clause 10:-
(a) "Business" means the provision of information technology
training services as carried on by the Company
as at Completion;
(b) "Prohibited Area" means England, Wales, Scotland, Northern
Ireland, Eire, Channel Isles and/or the Isle of
Man; and
(c) "Senior Staff" means collectively all employees and/or
contractors of the Company who as at Completion
are training and/or lecturing contractors,
sales directors and/or managers, team leaders,
sales and/or account managers, training
directors and/or managers, technical directors
and/or managers, financial controllers and/or
management accountants.
10.2 In further consideration of the sale and purchase effected by this
Agreement and in order to protect the goodwill of the Company, each
Warrantor hereby undertakes with the Buyer as follows:-
(a) he shall not at any time hereafter divulge or communicate to any
person for his own or any other person's benefit or to the detriment
or possible detriment of the Company, the Business, the Buyer or any
other member of the Buyer's Group, any of the trade secrets or other
confidential information of the Company, or of any client, customer
or supplier of the Company, which has or may come to his knowledge;
(b) if he has obtained trade secrets or other confidential information
belonging to any third party under an agreement which contained
restrictions on disclosure he will not at any time infringe such
restrictions;
(c) he will not either directly or indirectly as a director, employee,
partner or
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<PAGE>
greater than three percent (3%) shareholder within two (2) years
after Completion carry on, or be engaged, concerned or interested in
carrying on, any business which is the same or substantially similar
to the Business within the Prohibited Area in competition with the
Company;
(d) in connection with any business competing or likely to compete with
the Business, he will not use any business name, trade name, trade
mark or logo used by the Company or any confusingly similar business
name, trade name, trade mark or logo;
(e) he will not within two (2) years after Completion solicit or accept
the custom or business of, interfere with, or endeavour to entice
away from the Company any person who at any time during the two (2)
years immediately preceding Completion was a client, customer or
supplier of the Company;
(f) he will not within two (2) years after Completion employ, seek to
employ, interfere with, or endeavour to solicit or entice away from
the Company, any Senior Staff; and
(g) he will not do any of the above-mentioned things directly or
indirectly, with or for or on behalf of any other person.
10.3 Subject always to the provisions of clause 10.6, each of the Warrantors
shall procure that each of his Associates (including, without limitation,
GTS) shall be bound by and observe the provisions of clause 10.2 as if
each Associate were a party covenanting with the Buyer. For the avoidance
of doubt, nothing in this Agreement shall prevent Mr Adda or GTS from
carrying on the GTS Business through GTS London or otherwise.
10.4 The parties confirm that they consider the restrictions contained in this
clause 10 to be reasonable in all respects, but if any such restriction
is held to be invalid or ineffective, but would not be so held if some
part of it were deleted, or some modification were made to its terms, the
parties agree that such restriction shall apply with such deletion or
modification as may be necessary to make it valid and effective.
10.5 The provisions of sub-clauses 10.2(a) to (g) inclusive are separate and
severable undertakings and shall be enforceable accordingly.
10.6 Notwithstanding the provisions of this clause 10, GTS London shall be
entitled to provide Services (as defined in the GTS Services Agreement)
to the Company strictly and solely in accordance with the GTS Services
Agreement and shall be entitled to use the personal services of Mr Adda
for the purposes of discharging its obligations to perform such Services;
provided however, that nothing in the GTS Services Agreement shall
otherwise limit, restrict or otherwise affect the provisions of this
clause 10 in so far as they apply to GTS and/or Mr Adda.
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<PAGE>
10.7 In the event that, during the period of two years from Completion, any
person wishes to purchase GTS, Mr Adda, as director of GTS London, will
procure that any purchaser will be bound by the provisions of subclauses
10.1, 10.2(c), (d), (e) and (f).
11. GENERAL
11.1 This Agreement shall be binding on and enure for the benefit of the
successors in title and assigns of the parties to this Agreement.
11.2 The Buyer may assign this Agreement and/or any Supplemental Agreement, in
whole or in part, or any or all of its rights under the same to Oxford or
to any other member of the Buyer's Group. Save as aforesaid, no party
shall be entitled to assign this Agreement and/or any Supplemental
Agreement, in whole or in part, or any or all of its/their rights and/or
obligations under the same without the prior written consent of the other
parties.
11.3 Without prejudice to the generality of clause 11.2 and for the avoidance
of doubt, any assignment by the Buyer of any of its rights under this
Agreement to Oxford or to any other member of the Buyer's Group may be
partial so that the benefit of the Warranties or any indemnities and/or
guarantees in this Agreement and/or any Supplemental Agreement may enure
to the benefit of the holder(s) for the time being of the Shares in
proportion to their respective interests.
11.4 Each of the Warrantors undertakes that he and any necessary third party
shall execute such deeds and documents and do all such other acts and
things as may be required to vest the Shares in the Buyer and otherwise
to give full force and effect to the provisions and intent of this
Agreement.
11.5 All provisions of this Agreement shall continue in full force and effect
notwithstanding Completion except in respect of those provisions already
performed or expressly waived at Completion.
11.6 Unless expressly stated otherwise, all obligations of the Warrantors
under this Agreement and any Supplemental Agreement shall be joint and
several.
11.7 Any party may release or compromise the liability of, or grant any time,
forbearance or indulgence to, any other party under this Agreement and/or
any Supplemental Agreement without modifying, affecting or prejudicing
any of its rights or remedies against such party.
11.8 Each party's rights and remedies under this Agreement are additional to
any other rights and remedies which may be available to it. No neglect,
delay or indulgence on the part of any party in enforcing any term of
this Agreement and/or any Supplemental Agreement will be construed as a
waiver and no single or partial exercise of any right or remedy under
this Agreement and/or any Supplemental Agreement shall preclude or
restrict the further exercise or enforcement of any
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<PAGE>
such right or remedy or any other available right or remedy. No waiver by
any party shall be valid unless in writing and signed by such party or a
duly authorised representative thereof.
11.9 If any term or provision of this Agreement or any Supplemental Agreement
is held to be illegal or unenforceable, in whole or in part, under any
enactment or rule of law, that term or provision shall to that extent be
deemed not to form part of this Agreement or such Supplemental Agreement
but the enforceability of the remainder of this Agreement or such
Supplemental Agreement shall not be affected.
11.10 Without prejudice to the provisions of clause 5.1, none of the parties
shall make any announcement or otherwise publicise this Agreement, any
Supplemental Agreement and/or any of its/their terms without the prior
written approval of the other parties hereto, unless required by law or
applicable regulation and then only after prior consultation with the
other parties.
11.11 Unless otherwise agreed by the parties, each party shall bear all
professional and other fees, costs and expenses incurred by it in
connection with this Agreement and/or any and all Supplemental Agreements
and all acts and events contemplated by it/them.
11.12 Time shall be of the essence of this Agreement except as expressly
otherwise agreed in writing between the parties, both as regards the
dates and periods specifically mentioned, and as to any substituted dates
and periods agreed in writing by the parties.
11.13 This Agreement and all Supplemental Agreements together constitute the
entire agreement between the parties relating to their subject matter and
supersede all previous agreements and understandings between the parties
with respect thereto.
11.14 Except as expressly provided herein, no variation of this Agreement or
any Supplemental Agreement shall have effect unless it is in writing and
signed by each party or a duly authorised representative of each party to
this Agreement.
11.15 This Agreement may be executed in any number of counterparts each of
which when executed shall be an original but all the counterparts
together shall constitute one and the same instrument.
11.16 If any term or provision of this Agreement (or of any agreement or
arrangement of which this Agreement forms part) renders this Agreement,
or the said agreement or arrangement, liable to registration under the
Restrictive Trade Practices Act 1976, that term or provision will not
take effect until the day after particulars of this Agreement, or the
said agreement or arrangement, have been duly furnished to the Director
General of Fair Trading for registration in accordance with the
requirements of such Act.
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<PAGE>
12. NOTICES
12.1 Any notice or other communication to be given under or in connection with
this Agreement shall be in writing, addressed to the party to be served
and delivered personally or sent by international overnight courier or by
facsimile:
(a) in the case of an individual, to the address herein stated; and
(b) in the case of a company or corporation, to its principal place of
business for the time being,
or (in either case) to such other address as the addressee may from time
to time specify for the purpose of, and in accordance with the provisions
of, this clause 12.
12.2 In the absence of evidence of earlier receipt, a notice or other
communication is deemed given:
(a) if delivered personally, when left at the address referred to in
clause 12.1;
(b) if sent by international overnight courier, three (3) Business Days
after having been deposited with an international overnight courier;
and
(c) if sent by facsimile, three (3) hours after completion of its
transmission if transmitted before 2.00 pm on any Business Day and
otherwise by 11.00 am on the next Business Day.
12.3 In proving the giving of notice it shall be sufficient to prove that the
notice was left or that the envelope containing such notice was properly
addressed and deposited with an international overnight courier or that
the facsimile was transmitted.
13. GOVERNING LAW
This Agreement shall be governed by and construed exclusively in
accordance with English Law and the parties submit to the non-exclusive
jurisdiction of the English Courts.
THIS DOCUMENT is executed as a deed and delivered on the day and year first
above written.
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SCHEDULE 1
----------
THE SELLERS
<TABLE>
<CAPTION>
(1) (2) (3) (4)
FULL NAME ADDRESS NUMBER OF NUMBER
SHARES TO OF BUYER'S
BE SOLD SHARES
<S> <C> <C> <C>
(1) Annie Sly 2 Earle Villas 30 8,358
Heath Road
Bradfield
Near Manningtree
Essex CO11 2X1
(2) Robin Nessim Smouha Adda 31 Felden Street 17 4,736
and Pernille Adda as London SW6 5AE
trustees of the Olivia
Adda Settlement
(3) Robin Nessim Smouha Adda 31 Felden Street 17 4,736
and Pernille Adda as London SW6 5AE
trustees of the Jacques
Adda Settlement
(4) Robin Nessim Smouha Adda 31 Felden Street 17 4,736
and Pernille Adda as London SW6 5AE
trustees of the Jessica
Adda Settlement
(5) Robin Nessim Smouha Adda 31 Felden Street 10 2,786
and Pernille Adda as London SW6 5AE
trustees of the Georgina
Adda Settlement
(6) STC International Limited PO Box 146 909 253,259
as trustee of teh Adda Roadtown
Settlement Tortola
British Virgin
Islands
Total 278,611
=======
</TABLE>
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SCHEDULE 2
DETAILS OF THE COMPANY
COMPANY NUMBER: 02502655
DATE AND PLACE OF INCORPORATION: 16 May 1990 in England and Wales
as Avalock Limited
CHANGE OF NAME: 13 December 1991 to Barefoot PC Training Limited
23 July 1993 to Barefoot Computer Training Limited
SHARE CAPITAL: Authorised Allotted and Issued
---------- -------------------
100 pounds divided into 1,000 ordinary shares
1,000 shares of 10 pence each of 10 pence each
ISSUED SHARES HELD BY:
Shareholder Number of Shares
- ----------- ----------------
Annie Sly 30
Robin Nessim Smouha Adda and Pernille Adda
as trustees of the Olivia Adda Settlement 17
Robin Nessim Smouha Adda and Pernille Adda
as trustees of the Jacques Adda Settlement 17
Robin Nessim Smouha Adda and Pernille Adda
as trustees of the Jessica Adda Settlement 17
Robin Nessim Smouha Adda and Pernille Adda
as trustees of the Georgina Adda Settlement 10
STC International Limited
as trustee of the Adda Settlement 909
REGISTERED OFFICE: Telephone House, 77 Paul Street, London EC2A 4PT
DIRECTORS: Robin Nessim Smouha Adda
Pernille Adda
SECRETARY: Robin Nessim Smouha Adda
ACCOUNTING REFERENCE DATE: 30 November
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AUDITORS: Moores Rowland, Cliffords Inn, Fetter Lane, London EC4A 1AS
TAX DISTRICT AND REFERENCE NUMBER: King's Cross 2; 656 76220 00906A07
VAT REGISTRATION NUMBER AND LOCAL VAT OFFICE: 607821543 City VAT office
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<PAGE>
SCHEDULE 3
THE PROPERTY
Sixth Floor North Wing and South Wing, 69-77 Paul Street, London EC2, more
particularly described in the Leases
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<PAGE>
SCHEDULE 4
THE WARRANTIES
1. AUTHORITY OF THE SELLERS
1.1 The Company is duly incorporated and validly existing under the laws of
England and Wales.
1.2 When executed, this Agreement and all Supplemental Agreements will
constitute valid and binding obligations on each of the Warrantors in
accordance with their respective terms.
1.3 The execution and delivery of, and the performance by the Warrantors of
their obligations under, this Agreement and/or any the Supplemental
Agreement shall not result in:
(a) any regulation or provision of the Company's memorandum and/or
articles of association being breached in any way;
(b) any breach of any agreement, licence or other instrument to which
any of the Warrantors or the Company is a party or is bound;
(c) the creation of any Encumbrance over the undertaking or any of the
assets of the Company;
(d) any third party having the right to terminate or modify any
agreement, licence or other instrument to which any of the
Warrantors or the Company is a party or is bound; or
(e) any breach of any order, judgment or decree of any court,
government agency or regulatory body.
1.4 The Shares comprise the entire allotted and issued share capital of the
Company, have been properly and validly allotted and issued and are
fully paid. No person has any other right or entitlement whatsoever over
or in respect of the capital of the Company and, since the Last Account
Date, the Company has not redeemed or purchased or agreed to redeem or
purchase any of its share capital.
1.5 The Shares are free from all Encum brances and there are no arrangements
or obligations to create any such Encumbrances at any time in the
future.
2. INFORMATION GIVEN TO THE BUYER
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<PAGE>
2.1 All information contained or referred to in this Agreement, the
Disclosure Letter and/or any documents accompanying the Disclosure
Letter (excepting only third party documents) is true and accurate in
all material respects.
2.2 All information contained or referred to in any third party documents
accompanying the Disclosure Letter is so far as the Warrantors are aware
true and accurate in all material respects.
2.3 All information given by or on behalf of the Warrantors to the Buyer
and/or its agents, employees and/or professional advisors relating to
the business, activities, affairs, assets and liabilities of the Company
was when given and now is fair and accurate in all material respects.
There are no material facts or matters in relation to the assets,
business or financial condition of the Company which so far as the
Warrantors are aware have not been fairly and accurately disclosed in
writing to the Buyer (other than those material facts or matters which
may be actually known by the Buyer).
3. CORPORATE MATTERS
3.1 The Company has complied in all material respects with all provisions
and requirements of the Act and all returns, particulars, resolutions
and other documents, required to be delivered to the Companies Registry
or any other authority have been duly and properly made and delivered.
3.2 The register of members and other statutory books of the Company have
been properly kept and are complete and up to date.
4. ACCOUNTS
4.1 All accounts, books, ledgers, financial and other records of any kind
whatsoever of the Company are in its possession, up to date and have
been fully and accurately maintained in accordance with all applicable
law on a proper and consistent basis and give a true and fair view of
the matters required to be dealt with therein.
4.2 The Audited Accounts:
(a) comply with the provisions of the Act and all other applicable law
in force at the relevant date;
(b) comply with all current SSAPs applicable to a United Kingdom
company;
(c) give a true and fair view of the financial position and state of
affairs of the Company at the Accounts Date;
(d) have been prepared on a basis consistent with that adopted in
preparing the Company's audited accounts for the last two
financial periods;
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(e) make proper provision for all actual liabilities;
(f) make proper and reasonable provision for all contingent
liabilities which are required to be provided for in compliance
with the Act, all other applicable law and all SSAPs applicable to
a United Kingdom company on the relevant date; and
(g) include stock and work in progress figures which in the
circumstances existing at the Accounts Date do not exceed the
amounts which could reasonably be expected to be realised in the
normal course of the Company's business.
4.3 The Management Accounts have been prepared with reasonable skill and
care and fairly present the state of affairs and financial position of
the Company for the two monthly periods ended on 31 December 1997 and
31 January 1998.
5. TRADING
5.1 Since the Last Accounts Date:
(a) the business of the Company has been continued in the ordinary
course and as a going concern and the Company has not assumed or
incurred any material liabilities which have or will have a
material effect on the financial position of the Company;
(b) there has been no deterioration in the turnover or the financial
or trading position or prospects of the Company and, so far as the
Warrantors are aware, no event, fact or matter has occurred or is
likely to occur which will or is reasonably likely to result in
any such deterioration;
(c) no capital commitments have been entered into by or on behalf of
the Company;
(d) the Company has paid its creditors in accordance with their
respective terms; and
(e) no dividend or other distribution has been declared, paid or made
to any member of the Company.
5.2 The Disclosure Letter contains particulars of all material contracts and
engagements, whether written or oral, to which the Company is a party at
the date of this Agreement.
5.3 The Company has not manufactured, sold or supplied products or services
which are or were or will become in any material respect faulty or
defective, or which were negligent, or which do not comply in any
respect with all specifications,
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warranties and representations, express or implied, made in relation to
them, or with all applicable regulations, standards and requirements.
5.4 The Company is not liable (save as may be implied by law) to service,
repair, maintain, take back or otherwise do anything in respect of any
goods or services that have been delivered by it.
5.5 No major customer or supplier of the Company has ceased to do business
with the Company since the Last Accounts Date and so far as the
Warrantors are aware no such customer or supplier intends to cease to do
business with the Company or substantially reduce its existing level of
business with it.
5.6 The Company has not entered into any transaction in which the Sellers,
the directors and/or managers of the Company and/or any of their
Associates (including without limitation GTS), was interested, directly
or indirectly.
5.7 The Disclosure Letter contains full details of all grants made to the
Company by any governmental department or authority or similar body, the
Company has no liability to repay any such grant and no circumstances
have arisen under which any such body could require repayment.
6. ASSETS
6.1 The Company owned at the Last Accounts Date and still owns, and had and
still has a good title to, all assets included in the Last Accounts or
acquired since that date and no asset is the subject of any assignment
or Encumbrance, except current assets since sold or realised in the
ordinary course of business.
6.2 The assets (including without limitation the Intellectual Property)
owned by the Company, together with the assets held under licence, hire
purchase, leasing or rental agreements, comprise all the assets,
property and rights which are necessary for the continuation of the
business of the Company as now conducted.
6.3 At least ninety-five percent (95%) of the book debts owed to the Company
included in the Last Accounts were, and at least ninety-five (95%) of
the book debts owed to the Company as at Completion will be, collected
in full in the ordinary course of business (that is, not more than
twenty (20) weeks after the date the debt was incurred).
6.4 The Company has all licences, consents, authorisations, orders,
warrants, permissions and other approvals necessary or desirable for
carrying on the Company's business and operations as at the date of
Completion and the same shall continue in full force and effect after
Completion and shall not be affected in any way by the transaction
contemplated by this Agreement and/or any Supplemental Agreement.
7. FINANCE
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There are no overdrafts, loans and/or other financial facilities
outstanding or available to the Company.
8. THE COMPANY'S OFFICERS, EMPLOYEES AND CONTRACTORS
8.1 (a) The Disclosure Letter contains true, complete and accurate
particulars of all Employees of the Company and the dates of
commencement of employment and the terms of employment of all such
Employees; and
(b) to the best of the knowledge and belief of the Warrantors after
reasonable inquiry, the Disclosure Letter contains true, complete
and accurate particulars of all contractors of the Company and the
dates of commencement of appointment to office and the terms of
appointment of all such contractors.
8.2 The Company has complied with all statutory and other regulations and
obligations in relation to its Employees and contractors and all former
employees and contractors.
8.3 The Company is not a party to any bonus, profit-sharing, share option,
share incentive or other incentive scheme, arrangement or agreement for
or affecting any directors, shareholders, contractors or Employees or
any former directors, shareholders, contractors or employees.
8.4 There are no collective bargaining arrangements or agreements and no
other agreements or arrangements between the Company and a trade union
or other body representing Employees.
8.5 The Company has paid up to date and in full all remuneration, pension
contributions, benefits and other payments or liabilities due from it in
respect of all Employees, directors and former employees. The Company
does not offer enhanced redundancy payments and has no outstanding
employment claims.
8.6 No director, Employee or contractor of the Company is under notice to
leave his office, employment or contract, given by him or the Company
and there are no proposals to terminate any of the same. No Employee has
left employment with the Company in the last three months.
8.7 There are no terms of employment or other agreements with the Company or
terms of appointment for directors of the Company which provide that a
change of control of the Company however defined shall entitle any
Employee, contractor or director to treat such change of control as a
breach of contract or entitle him to any benefit or payment or to treat
himself as redundant or dismissed or released from any obligation owed
by him to the Company.
8.8 During the period to which the Last Accounts relate and since the Last
Accounts
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Date or (where any employment or office commenced after the beginning of
such period) since the commencement date of the employment or holding of
office:
(a) no change has been made in the rate of remuneration, or the
pension or other benefits, of any director, contractor or Employee
or of any former director, employee or contractor of the Company;
and
(b) no change has been made in any other terms of employment or
appointment of any director, contractor or Employee.
9. PENSIONS
9.1 The Company has no obligation (whether legally enforceable or not) to
provide any life assurance, retirement, redundancy, termination,
pension, death, health or disability benefit or payment to any director,
Employee or contractor or former director, employee or contractor of the
Company or any spouse or dependent of any such person.
9.2 For the purposes of this clause 9.2, "the Pension Scheme" means The Sun
Life Flexible Executive Pension Plan; Policy Number 7955148. As at
Completion and at all times thereafter, the Company shall have no
liability of any kind whatsoever and shall suffer no losses, claims,
demands, charges, costs and/or expenses of any kind whatsoever arising
out of or in connection with the Pension Scheme. All contributions,
fees, premiums, charges and/or expenses of whatever nature relating to
the Pension Scheme and/or members thereof which have fallen due at or
before Completion have been paid in full and, as at Completion, no
services have been rendered or requested which have not been paid for in
full.
9.3 The Company is not under any legal or moral liability or obligation, or
a party to any ex gratia arrangement or promise whether written or
verbal, to pay pensions, gratuities, superannuation allowances or the
like, or otherwise to provide "relevant benefits" within the meaning of
Section 612(1) ICTA to or for any of its past or present officers or
employees or their dependants; and there are not now nor have there at
any time been any retirement benefit, or pension or death benefit, or
similar schemes or arrangements in relation to or binding on the Company
or to which it contributes nor have there been any announcements as to
the introduction of any such scheme or arrangement.
10. INSURANCE
10.1 All assets, property, rights, Intellectual Property, officers and
Employees capable of being insured are and have at all material times
been adequately insured against:
(a) fire and all risks (including but not limited to professional
indemnity)
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prudently or usually covered by companies carrying on similar
businesses to that of the Company; and
(b) accident, physical loss or damage, confiscation or detention of
any such assets by a foreign government, third party (including
product) liability and environmental liability.
10.2 The Company's insurances are all valid and in force, nothing has been
done or omitted or not disclosed which might breach, invalidate or
render them illegal or otherwise unenforceable and all premiums have
been paid up to date.
10.3 Details of all current insurance policies of the Company, and of all
current or outstanding claims and of all claims paid in the preceding
claims three (3) years are included in or annexed to the Disclosure
Letter.
11. LEGAL PROCEEDINGS
11.1 In the carrying on of its business and operations, the Company has not
materially breached any applicable law or any of the Company's
constitutional documents.
11.2 The Company has not in the last three (3) years been and is not engaged
in, and/or has not threatened to commence or been threatened with, any
claim, litigation, prosecution, proceeding, suit, legal action,
investigation, enquiry, arbitration or other legal or disciplinary
proceedings, any tribunal, enquiry or commission proceedings, or any
industrial dispute and so far as the Warrantors are aware there are no
circumstances which might give rise to the same.
11.3 In respect only of Taxation, the Company has not at any time been and is
not engaged in, and/or has not threatened to commence or been threatened
with, any claim, litigation, prosecution, proceeding, suit, legal
action, investigation, enquiry, arbitration or other legal proceedings,
and so far as the Warrantors are aware there are no circumstances which
might give rise to the same.
12. INSOLVENCY
12.1 No order has been made or resolution passed or meeting convened for the
winding up of the Company and there is no outstanding petition to wind
up the Company, or appoint an administrator or receiver of all or any
part of its undertaking or assets, nor has any such order been made nor
(so far as the Warrantors are aware) has any step been taken for or with
a view to the appointment of such a person.
12.2 No distress, execution or other process has been levied and remains
undischarged in respect of the Company and there is no outstanding
judgment or court order against the Company.
12.3 The Company is neither insolvent nor unable to pay its debts as they
fall due.
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13. TAXATION
13.1 In this section 13 of this Schedule 4:-
"Taxation" means any and all forms of taxes levies imposts contributions
duties and charges (including any relevant fine, penalty, surcharge or
interest) in all cases in the nature of tax or corresponding to tax and
all withholdings or deductions in respect thereof, of whatever nature
and whenever imposed, imposed or levied by any Tax Authority acting as
such whether directly or primarily chargeable against recoverable from
or attributable to the Company or any other person; and
"Tax Authority" means any governmental, federal, state, provincial,
local governmental or other, fiscal, tax, revenue, customs, duties or
excise authority, body or official, whether of the United Kingdom or
elsewhere in the world charged by statute with the collection or
administration of Taxation.
13.2 (a) The Company has properly and within the requisite periods made all
returns and provided all information which at any time it has been
liable to make or provide for any purposes of Taxation.
(b) The Company has duly and within the requisite periods made or
given all elections, claims, notices and which are assumed to have
been made or given in computing the charge or provision (if any)
for Taxation in, or in preparing any of the Last Accounts or the
audited accounts of the Company for any period of account ended on
or before 30 November 1997.
(c) The Company has duly and within the requisite periods paid or
accounted for all Taxation which it is liable to pay or account
for and is not liable to pay and has not within the six years
prior to the date hereof paid or been liable to pay, any fine,
interest or penalty in connection with any Taxation.
13.3 (a) The Company has not at any time in the six years prior to the date
hereof paid and will not as a result of the entry into or
Completion of this Agreement become liable to pay;
(i) any Taxation primarily chargeable against or assessable on
another person (whether or not the Company has a right of
recovery from that other person); or
(ii) any Taxation pursuant to Section 178, 179, 190 TCGA 1992 or
Part XI ICTA 1988.
(b) All Taxation for which the company is or may be jointly and
severally liable with any other person has been duly,fully and
punctually paid by that other person within the requisite periods.
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13.4 (a) No appeal is currently outstanding against any assessment or other
demand in respect of any Taxation.
(b) No enquiry or investigation is being made by any Taxation
Authority or into the Taxation affairs of the Company or into or
in respect of any returns or computations relating to Taxation
made by the Company and the Company has not received any written
notification that any such enquiry or investigation is to be made.
14. PROPERTY
14.1 The Company does not own or occupy any land and buildings other than the
Property.
14.2 The Company has good title to the Property.
14.3 No person other than the Company is in occupation of or in receipt of
any rents or profits from the Property.
14.4 The Property is free from any mortgage, debenture, charge, rent-charge,
lien or other encumbrance.
14.5 The Property is not subject to any restrictive covenants, stipulations,
easements or other rights vested in third parties.
14.6 The Company has not received complaint of any breach of any applicable
statutory or bye law requirements of any competent authority or any
provisions of the Planning Acts in respect of the Property and no
development of the Property has been undertaken by the Company in breach
of any applicable law, there is no outstanding notice relating to the
Property or any business carried on thereat or the use thereof and there
is no outstanding monetary claim or liability, contingent or otherwise,
in respect of the Property.
14.7 The Company has occupied the Property since the date of the grant of the
Leases and it has used the whole of the Property continuously as a
computer and information technology training establishment during the
period save in respect of approximately one thousand five hundred
(1,500) square feet of the Property which has been used as ancillary
offices.
14.8 The Company has paid the rent and so far as the Warrantors are aware the
Company has not at any time received notice of any breach of the
covenants under the terms of any lease in all material respects under
which the Company holds or occupies the Property and no rent reviews are
currently in progress affecting the Property.
14.9 So far as the Warrantors are aware, the Company has not at any time
received notice of any breach of any covenant, condition or agreement
contained in the
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Leases on the part of the landlord or the Company and the landlord has
not refused to accept rent or made any complaint or objection.
14.10 So far as the Warrantors are aware, the Company has not at any time
received notice from any person alleging breach by the Company or any
such previous owner, lessee, licensee or occupier of any Environmental
Laws.
15. INTELLECTUAL PROPERTY
15.1 The Disclosure Letter contains particulars of all Intellectual Property
of the Company as at Completion including without limitation any
Intellectual Property licensed to the Company by any third party and
licensed by the Company to any third party.
15.2 The Intellectual Property constitutes all intellectual property and
other proprietary rights and interests necessary for the continuation of
the business of the Company as at Completion and all Intellectual
Property is:
(a) legally and beneficially owned by, licensed to or used under the
owner's authority by the Company;
(b) so far as the Warrantors are aware, valid and enforceable;
(c) not being infringed or attacked or oppressed by any person;
(d) not subject to any licence or authority in favour of another; and
(e) in the case of such Intellectual Property as is registered or the
subject of application(s) for registration, all renewal fees which
are due and steps which are required for its maintenance and
protection have been paid and taken,
and the Company has not received any claims or applications or notice of
legal proceedings which if progressed might be material to the above
Warranties.
15.3 The Company does not use any third party intellectual property and/or
proprietary rights or interests other than the Intellectual Property or
so far as the Warrantors are aware, infringe any third party
intellectual property rights or interests and the Company is not liable
to pay any royalty or similar sum which is material in the context of
the Company's business. The Company is not a party to any licence which
imposes any materially onerous terms on the Company (including but not
limited to any materially onerous payment terms).
15.4 So far as the Warrantors are aware, all parties' obligations under all
licences and agreements forming part of the Intellectual Property have
been complied with and no disputes have arisen therefrom.
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15.5 The Company has not received nor, so far as the Warrantors are aware, is
it likely to receive any claim under any contract or under section 40 of
the Patents Act 1977 for employee compensation, or any assertion of
moral rights in respect of the Intellectual Property.
15.6 There has been and is no misuse of any know-how by the Company.
16. CERTAIN WARRANTIES REGARDING POOLING OF INTERESTS
16.1 The parties initiated discussions regarding the transactions
contemplated by this Agreement on 20 November 1997. This Agreement and
the Supplemental Agreements represent the entirety of the transaction
between the Shareholders and the Buyer's Group.
16.2 The Company is an autonomous, independent and viable operating company,
and has not been a subsidiary or division of another company or
corporation at any time prior to Completion.
16.3 There have not been any inter-corporate investments between the Company
and the Buyer's Group at any time prior to Completion.
16.4 The Company has not changed or altered any equity interest of the
Shares, including but not limited to any distributions to shareholders
and any additional issuances, exchanges or retirements of Shares or any
other securities, options and warrants in contemplation of this
Agreement within two (2) years prior to the date the parties first
initiated discussions regarding the transactions contemplated by this
Agreement and through Completion.
16.5 The Company has not reacquired any Shares prior to Completion.
16.6 No Affiliate of the Company has reduced its risk relative to its common
shareholder position for the thirty (30) days prior to Completion. No
Affiliate of the Company will reduce its risk relative to such position
prior to the publication of financial results covering at least thirty
(30) days of combined operations of the Buyer and the Company post-
Completion.
16.7 All of the Shares of the Company will be transferred to the Buyer at
Completion. There are no warrants, options or other securities other
than the Shares.
16.8 GTS London and GTS Limited are entities of which the ultimate record,
and/or controlling beneficial stockholder is STC as trustee. The nature
of business operations of GTS London and GTS Limited is the GTS
Business. Their operations constitute a separate line of business from
that of the Company. There have been no material business relationships
between the Company and GTS, nor are any committed in the future other
than the Services Agreement between the Company and GTS London. Assets
transferred by the Company to GTS were assets developed for GTS Business
and were transferred at cost.
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16.9 During the past two (2) years, Mr Adda has pursued his interest in the
end user information training business solely through the Company. There
are no assets essential to the operations of the Company that are owned
or controlled by Mr Adda or his Associates.
16.10 The Company has not paid any dividends of any kind during the two years
prior to the date of this Agreement. There have been no other
distributions to Shareholders or financial arrangements other than
normal compensation and performance bonuses. The Company does not
guarantee any debt owed by the Shareholders.
16.11 There have not been any agreements among the Shareholders during the two
years prior to the date of this Agreement that provide for election of
directors other than by a Shareholder vote or that restrict the sale or
transfer of Shares.
16.12 The Company has not disposed of any material assets for the two (2)
years prior to the date of this Agreement.
16.13 The Warrantors have no specific knowledge of any future transactions
which have been planned and which are inconsistent with the combining of
the entire existing interests of the shareholders of the Buyer and the
Company such as (i) agreements to retire or reacquire, directly or
indirectly, all or part of the Buyer's Shares; (ii) financial
arrangements for the benefit of any shareholder; (iii) significant
existing or planned business relationships with any other business owned
by any shareholder; and/or (iv) the Warrantors have no specific
knowledge of disposals of a significant part of the assets of the
Buyer's Group or knowledge of such disposals by the Company other than
disposals in the ordinary course of business and actions taken to
eliminate duplicate facilities or excess capacity.
16.14 STC is a British Virgin Island limited company which serves as Trustee
for the Adda Settlement. No Seller is an officer or director of STC. No
Seller holds any equity interest in STC.
16.15 Based upon the information given to the Company and the Sellers by the
Buyer, in relation to the accounting of this transaction as a pooling of
interests under GAAP, the Company and the Sellers have no actual
knowledge of specific facts which would prevent the Buyer from
accounting for this transaction as a pooling of interests under GAAP.
17. GENERAL
Each Warrantor acknowledges that the Buyer and others will rely upon the
truth and accuracy of the foregoing representations, Warranties and
agreements.
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SCHEDULE 5
MATTERS TO BE SATISFIED AT COMPLETION
PART 1: THE SELLERS
1. The Sellers shall have delivered to the Buyer's Solicitors:
(a) duly executed transfers of the Shares in favour of the Buyer or as
the Buyer may direct;
(b) the certificates for the Shares;
(c) the Tax Covenant duly executed by the Warrantors;
(d) the resignation from office of each Director and secretary of the
Company (except those whom the Buyer has notified to the Sellers in
writing prior to the date of Completion that it wishes to continue in
office) with a written acknowledgement under seal from each of them,
in the agreed form, that he has no outstanding claim against the
Company;
(e) if requested by the Buyer, the resignation of the auditors to the
Company confirming that they have no outstanding claims of any kind
against the Company and containing a statement complying with Section
394(1) of the Act;
(f) GTS Service Agreement in the agreed form to be entered into between
the Company and GTS London duly executed by GTS London;
(g) the Escrow Agreement duly executed by the Sellers, the Company and
the Escrow Agent;
(h) the Investment and Pooling Letter in the agreed form duly executed by
each Seller;
(i) the Letter of Transmittal in the agreed form duly executed by each
Seller;
(j) a duly executed Registration Rights Agreement in the agreed form;
(k) the Promissory Note; and
(l) any and all other Supplemental Agreements required to be executed by
the Warrantors (or any of them) and/or the Company.
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2. The Sellers shall have procured delivery of the following to the Buyer or
as the Buyer may direct:
(a) the certificate of incorporation, certificate(s) of incorporation on
change of name, statutory books (duly made up to Completion) and
common seal (if any) of the Company;
(b) the title deeds relating to the Property;
(c) all books of account and documents of record and all other documents
in the possession or under the control of the Sellers which are the
property of or in the possession of the Company, all complete and up
to date;
(d) bank statements of all bank accounts of the Company to a date not
more than two (2) days before Completion, and reconciliation
statements in respect of each such account up to Completion; and
(e) releases or certificates of non-crystallisation in the form required
by the Buyer of all mortgages and/or charges affecting the Company,
except as may be agreed in writing by the Buyer before execution of
this Agreement.
3. Each of the Sellers shall (and shall procure that each of his Associates
other than GTS shall) have repaid in full any and all monies owing by him
to the Company.
4. The Sellers shall have procured that the Directors have held a Board
Meeting of the Company at which the Directors shall, inter alia but
without limitation:
(a) approve the registration of the transfers of the Shares to the Buyer
or as the Buyer may direct (subject to stamping);
(b) appoint such persons as the Buyer shall nominate as directors and/or
secretary;
(c) accept the resignations referred to in clause 1(d) of Part I of this
Schedule 5;
(d) accept if required by the Buyer the resignation of the auditors and
appoint Price Waterhouse as auditors of the Company;
(e) approve and authorise for execution the GTS Service Agreement
between the Company and GTS London;
(f) replace all current mandates to bankers with new mandates as
required by the Buyer; and
(g) approve and authorise the discontinuation of Mr Adda's pension
arrangements.
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5. The Sellers shall have provided (and shall have procured that the Company
has provided) the Buyer with such information and assistance as is
reasonably necessary to enable the Buyer (and/or its advisers) to complete
to the Buyer's satisfaction a due diligence exercise in respect of the
Company.
PART II: THE BUYER
The Buyer shall have procured delivery to the Sellers of:
(a) a counterpart of the Tax Covenant and the Escrow Agreement duly
executed by the Buyer; and
(b) any and all other Supplemental Agreements required to be executed by
the Buyer.
PART III: GENERAL
1. The Company's current assets minus current liabilities and long-term debt
shall not, as at 31 January 1998, be less than negative two hundred
thousand pounds sterling (-200,000 pounds) and there has been no material
change in that position as at Completion.
2. There shall have been no material change in the Company's financial
position since the Last Accounts Date.
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EXECUTED AS A DEED by )
ARIS CORPORATION
Acting by:
Director ) /s/ Paul Y. Song, President
Secretary ) /s/ Norbert W. Sugayan, Jr.
SIGNED AND DELIVERED AS A DEED by ) /s/ Robin Nessim Smouha Adda
ROBIN NESSIM SMOUHA ADDA
in the presence of: ) /s/ Peter John Knight
SIGNED AND DELIVERED AS A DEED by ) /s/ Annie Sly
ANNIE SLY
in the presence of: ) /s/ Christyne Mayberry
SIGNED AND DELIVERED AS A DEED ) /s/ Robin Nessim Smouha Adda
by ROBIN NESSIM SMOUHA ADDA AND ) /s/ Peter John Knight
PERNILLE ADDA AS TRUSTEES OF THE ) By Peter John Knight duly
OLIVIA ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
the Olivia Adda Settlement
in the presence of: ) /s/ Christyne Mayberry
SIGNED AND DELIVERED AS A DEED ) /s/ Robin Nessim Smouha Adda
by ROBIN NESSIM SMOUHA ADDA AND ) /s/ Peter John Knight
PERNILLE ADDA AS TRUSTEES OF THE ) By Peter John Knight duly
JACQUES ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
the Jacques Adda Settlement
in the presence of: ) /s/ Christyne Mayberry
SIGNED AND DELIVERED AS A DEED ) /s/ Robin Nessim Smouha Adda
by ROBIN NESSIM SMOUHA ADDA AND ) /s/ Peter John Knight
PERNILLE ADDA AS TRUSTEES OF THE ) By Peter John Knight duly
JESSICA ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
the Jessica Adda Settlement
in the presence of: ) /s/ Christyne Mayberry
SIGNED AND DELIVERED AS A DEED ) /s/ Robin Nessim Smouha Adda
by ROBIN NESSIM SMOUHA ADDA AND ) /s/ Peter John Knight
PERNILLE ADDA AS TRUSTEES OF THE ) By Peter John Knight duly
GEORGINA ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
the Georgina Adda Settlement
in the presence of: ) /s/ Christyne Mayberry
SIGNED AND AS A DEED by )
STC INTERNATIONAL LIMITED AS TRUSTEE OF )
THE ADDA SETTLEMENT )
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Acting by: )
Director ) /s/ Peter John Knight
By Peter John Knight duly
authorised attorney for
STC International Limited as
Trustee of the Adda Settlement
Director/Secretary )
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EXHIBIT 2.2
ARIS CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of February 28, 1998, by and among ARIS
Corporation, a Washington corporation (the "Company"), and the persons listed on
the signature page(s) hereof (the "Holders").
RECITAL
The Company desires to provide the Holders certain registration rights and
state in this Agreement the obligations with respect to registration rights.
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, the Company and the Holders agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
(a) "Commission" shall mean the Securities and Exchange Commission,
or any other federal agency at the time administering the Securities Act.
(b) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.
(c) "Holder" shall mean any holder of outstanding Registrable
Securities or anyone who holds outstanding Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in
compliance with this Agreement.
(d) "Initiating Holders" shall mean any Holder or Holders of at least
thirty-percent (30%) of the Registrable Securities then outstanding.
(e) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement, and compliance with applicable
state securities laws of such states in which Holders notify the Company of
their intention to offer Registrable Securities.
(f) "Registrable Securities" shall mean all of the following to the
extent the same have not been sold to the public (i) any and all shares of
Common Stock of the Company originally issued by the Company to the persons
listed as a "Holder" on the signature page(s) hereof; or (ii) stock issued in
respect of stock referred to in (i) above in any reorganization; or (iii) stock
issued in respect of the stock referred to in (i) or (ii) above as a result of a
stock split, stock dividend, recapitalization or combination. Notwithstanding
the foregoing, Registrable Securities shall not include otherwise Registrable
Securities (i) sold by a person in a transaction in which his rights under this
Agreement are not properly assigned; or (ii) (A) sold to or through a broker or
dealer or underwriter in a public distribution or a public securities
transaction, or (B) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions, and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale or (C) if the
registration rights associated with such securities have been terminated
pursuant to Section 13 of this Agreement.
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<PAGE>
(g) "Rule 144" shall mean Rule 144 under the Securities Act or any
successor or similar rule as may be enacted by the Commission from time to time,
but shall not include Rule 144A.
(h) "Rule 144A" shall mean Rule 144A under the Securities Act or any
successor or similar rule as may be enacted by the Commission from time to time,
but shall not include Rule 144.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.
2. RESTRICTIONS ON TRANSFERABILITY.
The Registrable Securities shall not be sold, assigned, transferred or
pledged except upon the conditions specified in this Agreement, which conditions
are intended to ensure compliance with the provisions of the Securities Act.
Each Holder will cause any proposed purchaser, assignee, transferee, or pledgee
of the Registrable Securities held by a Holder to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Agreement.
3. RESTRICTIVE LEGEND.
Each certificate representing Registrable Securities shall (unless
otherwise permitted by the provisions of Section 4 below) be stamped or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws or
otherwise):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENTS COVERING THE
PURCHASE OF THESE SHARES AND RIGHTS TO REGISTER THESE SHARES AND RESTRICTING
THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
Each Holder consents to the Company making a notation on its records
and giving instructions to any transfer agent of the Registrable Securities in
order to implement the restrictions on transfer established in this Agreement.
4. NOTICE OF PROPOSED TRANSFER.
In order to ensure compliance with United States' federal and state
securities laws, the Holder of each certificate representing Registrable
Securities, by acceptance thereof, agrees to comply in all respects with the
provisions of this Section 4. Each such Holder agrees not to make any
disposition of all or any portion of any Registrable Securities unless and
until:
(a) 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
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<PAGE>
(b) (i) Such Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and
(ii) If reasonably requested by the Company, such Holder shall
furnish the Company with an opinion of counsel, reasonably satisfactory to the
Company that such disposition shall not require registration of such shares
under the Securities Act.
(c) Notwithstanding the provisions of paragraphs (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by a Holder which is a limited liability company or partnership to a
member or partner of such limited liability company or partnership or a retired
member or partner of such limited liability company or partnership who retires
after the date hereof, or to the estate of any such member or partner or retired
member or partner or the transfer by gift, will, or intestate succession of any
member or partner to his spouse or siblings, lineal descendants or ancestors of
such member or partner or spouse, provided, that such transferee agrees in
writing to be subject to all of the terms hereof to the same extent as if he
were an original Holder hereunder.
5. PIGGYBACK REGISTRATION.
(a) If at any time or from time to time the Company shall determine
to register any of its securities, for its own account or the account of any of
its shareholders, other than a registration relating solely to employee benefit
plans, or a registration relating solely to an SEC Rule 145 transaction, a
transaction relating solely to the sale of debt or convertible debt instruments
or a registration on any form (other than Form S-1, S-2 or S-3, or their
successor forms) which does not include substantially the same information as
would be required to be included in a registration statement covering the sale
of Registrable Securities, the Company will:
(i) give to each Holder written notice thereof as soon as
practicable prior to filing the registration statement; and
(ii) include in such registration and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within ten (10) days after receipt of such written notice from
the Company, by any Holder or Holders, except as set forth in subsection (b)
below.
(b) If the registration is for a registered public offering involving
an underwriting, the Company shall so advise the Holders as a part of the
written notice given pursuant to subsection 5(a)(i). In such event, the right of
any Holder to registration pursuant to this Section 5 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
5, if the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the managing underwriter
may limit the number of Registrable Securities and securities held by other
holders with piggyback registration rights similar to this Section 5 to be
included in the registration and underwriting to not less than thirty percent
(30%) of the total number of securities to be included in the registration and
underwriting. The Company shall so advise all Holders and such other holders,
and the number of shares of Registrable Securities and other securities that may
be included in the registration and underwriting shall be allocated among all
Holders and other holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and other
securities held by other holders at the time of filing the registration
statement.
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If any Holder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter. If, by the withdrawal of such Registrable Securities, a greater
number of Registrable Securities held by other Holders may be included in such
registration (up to the limit imposed by the underwriters), the Company shall
offer to all Holders who have included Registrable Securities in the
registration the right to include additional Registrable Securities. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
6. FORM S-3.
The Company shall use its best efforts to qualify for registration on
Form S-3 or its successor form. Holder(s) designated on the signature page(s)
hereof as having registration rights under this Section 6 shall have the right
at any time to request registrations on Form S-3 (such requests shall be in
writing and shall state the number of shares of Registrable Securities to be
disposed of and the intended method of disposition of shares by such Holders),
subject only to the following:
(a) The Company shall not be required to file a registration
statement pursuant to this Section 6 within one hundred twenty (120) days of the
effective date of any registration referred to in Section 5 above.
(b) The Company shall not be required to file a registration
statement pursuant to this Section 6 unless the Holder or Holders requesting
registration propose to dispose of shares of Registrable Securities having an
aggregate disposition price (before deduction of underwriting discounts and
expenses of sale) of at least $1,000,000.
(c) The Company shall not be required to file more than (i) one
registration statement pursuant to this Section 6 within any twelve (12) month
period or (ii) three registration statements pursuant to this Section 6 in the
aggregate.
(d) The Company shall file a registration statement from and after
the date it first becomes qualified for registration on Form S-3 or its
successor form, provided the Holder(s) designated on the signature page(s)
hereof as having registration rights under this Section 6 have made a proper
request for such registration not less than twenty (20) business days prior
thereto.
The Company shall give written notice to all Holders of Registrable
Securities of the receipt of a request for registration pursuant to this Section
6 and shall provide a reasonable opportunity for other Holders to participate in
the registration pursuant to Section 5; provided, that if the registration is
for an underwritten offering, the following terms shall apply to all
participants in such offering: The right of any Holder to registration pursuant
to Section 5 or Section 6 shall be conditioned upon such Holder's participation
in such underwriting and, in the case of those Holders participating pursuant to
Section 5, the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided in such Section 5. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other Holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company. If
any Holder disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company and the underwriter. Subject
to the foregoing, the Company will use its best efforts to effect promptly the
registration of all shares of Registrable Securities on Form S-3 to the extent
requested by the Holder or Holders thereof for purposes of disposition.
7. EXPENSES OF REGISTRATION.
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<PAGE>
In addition to the fees and expenses contemplated by Section 8 hereof,
all expenses incurred in connection with registrations pursuant to Section 5 and
Section 6 hereof, including without limitation all registration, filing and
qualification fees, printing expenses, fees and disbursements of counsel for the
Company and expenses of any special audits of the Company's financial statements
incidental to or required by such registration, shall be borne by the Company,
except that the Company shall not be required to pay underwriters' fees,
discounts or commissions relating to Registrable Securities or fees of a
separate legal counsel of a Holder.
8. REGISTRATION PROCEDURES.
In the case of each registration effected by the Company pursuant to
this Agreement, the Company will keep each Holder participating therein advised
in writing as to the initiation of each registration and as to the completion
thereof. At its expense the Company will:
(a) keep such registration effective for a reasonable period as
necessary to permit the Holder or Holders to complete the distribution described
in the registration statement relating thereto;
(b) promptly 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 comply with the provisions of the Securities
Act, and to keep such registration statement effective for that period of time
specified in Section 8(a) above;
(c) furnish such number of prospectuses and other documents incident
thereto as a Holder from time to time may reasonably request;
(d) use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practical moment;
(e) register or qualify such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as any Holder
or underwriter reasonably requires, and keep such registration or qualification
effective during the period set forth in Section 8(a) above;
(f) cause all Registrable Securities covered by such registrations to
be listed on each securities exchange, including Nasdaq, on which similar
securities issued by the Company are then listed or, if no such listing exists,
use reasonable best efforts to list all Registrable Securities on one of the New
York Stock Exchange, the American Stock Exchange or Nasdaq;
(g) cause its accountants to issue to the underwriter, if any, or the
Holders, if there is no underwriter, comfort letters and updates thereof, in
customary form and covering matters of the type customarily covered in such
letters with respect to underwritten offerings;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably, request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by
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<PAGE>
any such seller, underwriter, attorney, accountant or agent in connection with
such registration statement;
(j) notify each Holder, at any time a prospectus covered by such
registration statement is required to be delivered under the Securities Act, of
the happening of any event of which it has knowledge as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(k) take such other actions as shall be reasonably requested by any
Holder.
9. INDEMNIFICATION.
(a) In the event of a registration of any of the Registrable
Securities under the Securities Act, the Company will indemnify and hold
harmless each Holder of such Registrable Securities thereunder, each underwriter
of such Registrable Securities thereunder and each other person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities (or actions in respect
thereof), joint or several, to which such Holder, underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
Registrable Securities were registered under the Securities Act, any final
prospectus contained therein, or any amendment or supplement thereof, 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, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, and will reimburse each such
Holder, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any reasonable legal and any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability arises
out of or is based on any untrue statement (or alleged untrue statement) or
omission (or alleged omission) based upon, and in conformity with, information
furnished to the Company in writing by such Holder or underwriter specifically
for use therein.
(b) Each Holder will, if Registrable Securities held by or issuable
to such Holder are included in the securities as to which such registration is
being effected, indemnify and hold harmless the Company, each of its directors
and officers, each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company and each
underwriter within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, any final prospectus contained therein, or any amendment or
supplement thereof, or any 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 the Company, such Holders, such
directors, officers, partners, persons or underwriters for any reasonable legal
or any other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, amendment or supplement in reliance upon and in
conformity with information furnished to the Company in writing by such Holder
specifically for use therein.
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<PAGE>
(c) Each party entitled to indemnification under this Section 9 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claims as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in actual detriment to
the Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation.
(d) Notwithstanding the foregoing, to the extent that the provisions
on indemnification contained in the underwriting agreements entered into among
the selling Holders, the Company and the underwriters in connection with the
underwritten public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall be controlling as to the
Registrable Securities included in the public offering.
(e) The indemnification provided by this Section 9 shall be a
continuing right to indemnification and shall survive the registration and sale
of any securities by any Person entitled to indemnification hereunder and the
expiration or termination of this Agreement.
10. INFORMATION BY HOLDER.
The Holder or Holders of Registrable Securities included in any
registration shall promptly furnish to the Company such information regarding
such Holder or Holders and the distribution proposed by such Holder or Holders
as the Company may request in writing and as shall be required in connection
with any registration referred to herein.
11. RULE 144 AND 144A REPORTING.
With a view to making available to Holders of Registrable Securities
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees at all times after ninety (90) days after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 and Rule 144A; and
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act.
12. TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities of a Holder under Sections 5 and 6, and keep
information available granted to a Holder by the Company under Section 8,may be
assigned by a Holder to any partner or shareholder of such Holder, to any other
Holder, or to a transferee or assignee who receives the lesser of 50,000 shares
of Registrable Securities (as adjusted for stock splits and the like) or all of
the shares of Registrable Securities originally issued by the Company to the
persons listed as a "Holder" on the signature page(s) hereof; provided, that the
Company is given written notice by the Holder at the time
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<PAGE>
of or within a reasonable time after said transfer, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being assigned.
13. TERMINATION OF RIGHTS.
(a) The rights of any particular Holder to cause the Company to
register securities under Sections 5 and 6 shall terminate with respect to such
Holder at such time as such Holder is able to dispose of all of his Registrable
Securities in one three-month period pursuant to the provisions of Rule 144.
(b) Notwithstanding the provisions of paragraph (a) of this Section
13, all rights of any particular Holder under this Agreement shall terminate at
5:00 p.m. Pacific Standard Time on the date five (5) years after the closing
date of the Company's initial registration.
14. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Holders as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Articles of Incorporation or Bylaws of the Company or any
provision of any indenture, agreement or other instrument to which it or any or
its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to:
(i) applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance and moratorium laws and other laws of general application
affecting enforcement of creditors' rights generally and
(ii) the availability of equitable remedies as such remedies may
be limited by equitable principles of general applicability (regardless of
whether enforcement is sought in a proceeding in equity or at law).
15. MISCELLANEOUS.
(a) Amendments. This Agreement may be amended only by a writing
signed by the Holders of more than fifty percent (50%) of the Registrable
Securities, as constituted from time to time. The Holders hereby consent to
future amendments to this Agreement that permit future investors, including
without limitation employees, officers or directors of the Company, to be made
parties hereto and to become Holders of Registrable Securities; provided,
however, that no such future amendment may materially impair the rights of the
Holders hereunder without obtaining the requisite consent of the Holders, as set
forth above.
(b) Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute a single instrument.
(c) Notices, Etc. All notices, requests, consents and other
communications required or provided for herein to any party shall be deemed to
be sufficient if contained in a written
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<PAGE>
instrument, and shall be deemed to be given when: (a) delivered in person; (b)
delivered by overnight receipted courier service; or (c) sent by facsimile
transmission with delivery confirmed and followed by delivery pursuant to
Subsection (b) hereof, which notice is addressed to the party at the address set
forth below, or such other address as may hereafter be designated in writing by
the party.
If to the Company:
ARIS Corporation
Suite 150
6720 Fort Dent Way
Seattle, Washington 98188-2555
Attention: General Counsel or President
Telephone: (206) 433-2081
Facsimile: (206) 433-1182
If to Holders: To the address set forth on the signature
page(s) hereof.
(d) Nonpublic Information. Any other provisions of this Agreement to
the contrary notwithstanding, the Company's obligation to file a registration
statement, or cause such registration statement to become and remain effective,
shall be suspended for a period not to exceed ninety (90) days (and for periods
not exceeding, in the aggregate, one hundred eighty (180) days in any twenty-
four (24) month period) if there exists at the time material non-public
information relating to the Company which, in the reasonable opinion of the
Company, should not be disclosed.
(e) Delay of Registration. No Holder shall have the right to take any
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
(f) Severability. If any provision of this Agreement shall be held
to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
(g) Dilution. If, and as often as, there is any change in the Common
Stock or the Preferred Stock by way of a stock split, stock dividend,
combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Common Stock or the
Preferred Stock as so changed.
(h) Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Washington without regard to principles of
conflict of law.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY: ARIS CORPORATION,
a Washington corporation
By: /s/ Norbert W. Sugayan, Jr.
--------------------------------------
Its: Secretary
--------------------------------------
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HOLDERS
(all of whom have demand
rights under Section 6): /s/ Annie Sly
------------------------------------------
Annie Sly
OLIVIA ADDA SETTLEMENT
By: /s/ Robin Nessim Smouha Adda
--------------------------------------
Robin Nessim Smouha Adda, Co-Trustee
By: /s/ Peter John Knight, duly authorized
--------------------------------------
attorney for Pernille Adda as Trustee
--------------------------------------
of the Olivia Adda Settlement
--------------------------------------
Pernille Adda, Co-Trustee
JACQUES ADDA SETTLEMENT
By: /s/ Robin Nessim Smouha Adda
--------------------------------------
Robin Nessim Smouha Adda, Co-Trustee
By: /s/ Peter John Knight, duly authorized
--------------------------------------
attorney for Pernille Adda as Trustee
--------------------------------------
of the Jacques Adda Settlement
--------------------------------------
Pernille Adda, Co-Trustee
JESSICA ADDA SETTLEMENT
By: /s/ Robin Nessim Smouha Adda
--------------------------------------
Robin Nessim Smouha Adda, Co-Trustee
By: /s/ Peter John Knight, duly authorized
--------------------------------------
attorney for Pernille Adda as Trustee
--------------------------------------
of the Jessica Adda Settlement
--------------------------------------
Pernille Adda, Co-Trustee
GEORGINA ADDA SETTLEMENT
By: /s/ Robin Nessim Smouha Adda
---------------------------------------
Robin Nessim Smouha Adda, Co-Trustee
By: /s/ Peter John Knight, duly authorized
--------------------------------------
attorney for Pernille Adda as Trustee
--------------------------------------
of the Georgina Adda Settlement
--------------------------------------
Pernille Adda, Co-Trustee
ADDA SETTLEMENT
By: STC INTERNATIONAL LIMITED
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By: /s/ Peter John Knight
---------------------------------------
Its: Duly authorized attorney for
-------------------------------------
STC International Limited as Trustee
-------------------------------------
of the Adda Settlement
-------------------------------------
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EXHIBIT 2.3
DATED 2 MARCH 1998
------------------
ARIS CORPORATION
and
COUTTS & CO
and
THE PERSONS whose names are set out in Schedule 1
and
ROBIN NESSIM SMOUHA ADDA
____________________________
ESCROW AGREEMENT
IN RELATION TO THE SALE AND PURCHASE OF
THE ENTIRE ISSUED SHARE CAPITAL OF
BAREFOOT COMPUTER TRAINING LIMITED
BY AN AGREEMENT DATED 28 FEBRUARY 1998
_____________________________
CLYDE & CO
AN INTERNATIONAL LAW FIRM
51 Eastcheap
London EC3M 1JP
Tel: 0171 623 1244
Fax: 0171 623 5427
Ref: KMW/CBH/9800503
<PAGE>
THIS ESCROW AGREEMENT (the "Escrow Agreement"), is made as a deed on 2 March
1998
BETWEEN:
(1) ARIS CORPORATION, a corporation organised and existing under the laws of
Washington, U.S.A, and having its principal place of business at Fort Dent
Two, Suite 250, 6720 Fort Dent Way, Seattle Washington 98188, United States
of America ("ARIS");
(2) COUTTS & CO, registered in England with registered number 36695 and whose
registered office is at 15 Lombard Street, London EC3V 9AU (the "Escrow
Agent");
(3) THE PERSONS whose names and addresses are set out in Schedule 1 (the
"Sellers"); and
(4) ROBIN NESSIM SMOUHA ADDA of 31 Felden Street, London SW6 5AE ("Mr
Adda"),
together "the Parties".
RECITALS
A. ARIS and the Sellers have entered into an agreement dated 28 February 1998
("the Agreement") whereby ARIS has agreed to purchase all of the issued
shares of Barefoot Computer Training Limited ("the Company").
B. It is an obligation of the Sellers under the Agreement that this Escrow
Agreement be entered into with ARIS.
C. Copies of this Escrow Agreement, the Tax Covenant (as defined in the
Agreement) and the Agreement have been delivered to the Escrow Agent, and
the Escrow Agent is willing to act as escrow agent hereunder.
NOW THIS DEED WITNESSES as follows:-
1. INTERPRETATION
1.1 Save as expressly provided in this Escrow Agreement, words and expressions
shall have the same meanings as in the Agreement.
1.2 The section headings contained in this Escrow Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement.
<PAGE>
2. THE ESCROW FUND
2.1 As soon as practicable after Completion of the transactions contemplated by
the Agreement, each of the Sellers shall deliver to the Escrow Agent share
certificates in respect of the number of Escrowed Shares set out opposite
his name in Schedule 1, such share certificates endorsed to effect transfer
of such Escrowed Shares to ARIS.
2.2 Such Escrowed Shares shall comprise the escrow fund (the "Escrow Fund"),
to be held, administered and disposed of as hereinafter provided.
2.3 The share certificates referred to in this clause 2 and any share
certificates issued by ARIS in accordance with clause 6.3 below shall
hereinafter be referred to as the "Share Certificates".
3. Legal and Beneficial Owners
3.1 Subject to the terms and conditions of this Escrow Agreement, each Seller
shall be the legal and beneficial owner of the number of Escrowed Shares
set out opposite his name in Schedule 1 and shall be entitled to exercise
the voting rights attaching thereto.
3.2 Except as might be occasioned by the death of a Seller, and then only by
will or pursuant to the laws of intestate succession, none of the Sellers
shall sell, assign or transfer his rights in the Escrow Fund or the
Escrowed Shares (or any of them) without obtaining the prior written
consent of ARIS; provided always, that the Sellers shall have the right to
sell the Escrowed Shares in the circumstances described in clause 4.
4. CONVERSION
At any time the Escrowed Shares remain in the Escrow Fund, the Sellers (or
any of them) shall have the right (subject to any restrictions on sale
under U.S. securities laws in relation to the Escrowed Shares) to sell the
Escrowed Shares provided that, until termination of escrow as described in
clause 8, any proceeds of sale of such Escrowed Shares ("the Escrowed
Cash") shall be held by the Escrow Agent as part of the Escrow Fund in
substitution for the Escrowed Shares so sold.
5. SELLER'S REPRESENTATIVE
5.1 By the execution and delivery of this Escrow Agreement, each of the Sellers
hereby constitutes and appoints Mr Adda, and Mr Adda hereby accepts his
appointment, as representative of all of the Sellers hereunder (the
"Sellers' Representative"), with full power and authority to receive, give
or make all notices, objections, directions and other communications to be
received, given or made by or on behalf of the
<PAGE>
Sellers hereunder, to take any action or give any consents or waivers which
may be taken or given by or on behalf of the Sellers hereunder, to bind and
act on behalf of the Sellers with respect to any matters which may arise
under or in connection with this Escrow Agreement, and to otherwise act for
and on behalf of the Sellers as provided herein.
5.2 If the Sellers' Representative should die or become incapacitated or be
otherwise unable or unwilling to act as the Sellers' Representative, the
Escrow Agent shall so notify the Sellers upon the Escrow Agent becoming
aware of any such event. Any Seller shall be entitled to nominate any
person as a successor Sellers' Representative, by notice of such nomination
to the Escrow Agent in such fashion as the Escrow Agent shall direct. If
only one person is so nominated during the thirty (30) calendar days
following receipt or deemed receipt of such notice by the last Seller to
receive it, the person nominated shall thereupon be the Sellers'
Representative. If more than one person is so nominated, the Sellers shall
thereupon elect the successor Sellers' Representative, each Seller having a
proportionate vote equivalent to his pro rata interest in the Escrow Fund.
6. CLAIMS AGAINST THE ESCROW FUND
6.1 The Escrow Fund shall be retained in escrow, on the terms herein set out,
to protect ARIS, its subsidiary, affiliated or related companies and
corporations, their officers, directors, agents and employees, and their
representatives, successors and assigns against and in respect of any and
all losses, damages, charges and expenses of any kind whatsoever
(including, without limitation, all out-of-pocket expenses, including
lawyers' and accountants' fees and expenses) arising out of or in
connection with:
(a) any breach of any of the Warranties;
(b) Property Liability;
(c) Taxation; and/or
(d) the Tax Covenant.
6.2 If ARIS shall claim that it has suffered a loss as to which it is entitled
to reimbursement hereunder, ARIS shall notify the Escrow Agent and the
Sellers' Representative, such notification to be made in a manner
subsequently set forth in this Escrow Agreement. Such notice shall describe
the claim by ARIS and shall specify the loss, damage, charge or expense
(including, without limitation, out-of-pocket expenses, including lawyers'
and accountants' fees and expenses) incurred by ARIS in connection with
such claim. If such loss, damage, charge or expense is liquidated in
amount, the notice shall so state and shall also set forth the manner in
which the loss, damage, charge or expense has been calculated. Such
liquidated
<PAGE>
amount shall be deemed to be the amount of the claim of ARIS against the
Escrow Fund. If the amount is not liquidated, the notice shall so state,
and, in such event, a claim shall be deemed asserted against the Escrow
Fund on behalf of ARIS, but no payment shall be made on account thereof
until the amount of such claim is liquidated and notice in the form
described above for loss, damage, charge or expense liquidated in amount
has been given by ARIS to the Escrow Agent and to the Seller's
Representative. Such liquidated amount shall be deemed to be the amount of
the claim of ARIS against the Escrow Fund.
6.3 If the Sellers' Representative shall not, within thirty (30) calendar days
after receipt or deemed receipt of such notice, advise ARIS and the Escrow
Agent, in writing, that he denies the right to reimbursement in respect of
such claim, the Escrow Agent is, at the end of such period, authorized to
release and shall release (at once if said claim is liquidated, or
subsequently at such time as any claim has become liquidated) to ARIS Share
Certificates for the total number of Escrowed Shares the "Value" (as
defined below) of which is equal to or more than the amount of ARIS' claim
or, to the extent that no Escrowed Shares remain in the Escrow Fund, the
Escrowed Cash; provided however, that the Escrow Agent shall ensure that
the Share Certificates which are released to ARIS in accordance with this
clause 6.3 as nearly as possible reflect a division between the Sellers of
the value of ARIS' claim pro rata to the Sellers' respective interests in
the Escrow Fund. The "Value" for the purposes of this Escrow Agreement
means the closing quotation for the Escrowed Shares on 27 February 1998 on
the Nasdaq National Market.
If the Escrow Agent releases to ARIS Share Certificates in respect of a
number of Escrowed Shares the "Value" of which exceeds the amount of ARIS'
claim, ARIS shall issue new Share Certificates in the stock of ARIS for the
excess number of Escrowed Shares, one Share Certificate to be issued to
each Seller in accordance with his pro rata interest in the Escrow Fund;
provided however, that each such Seller shall immediately endorse any Share
Certificate issued to him under this clause 6.3 to effect transfer of the
Escrowed Shares represented thereby to ARIS and shall thereupon deliver the
same to the Escrow Agent to be held in escrow in accordance with the terms
hereof.
6.4 If the Sellers' Representative shall notify ARIS and the Escrow Agent, in
writing, that he disputes any claim made against the Escrow Fund, ARIS and
the Sellers shall endeavour to settle or compromise said claim. In the
absence of any such settlement or compromise being reached within thirty
(30) calendar days after receipt or deemed receipt of such notice by ARIS,
such claim may be submitted by ARIS or the Sellers to an independent firm
of Chartered Accountants for final settlement, whereupon the Parties shall
be entitled to make reasonable representations to such independent firm of
chartered accountants with respect to such claim. Such firm of Chartered
Accountants shall be appointed by agreement between the parties but in
default of agreement within five (5) business days of ARIS making a
proposal to the Sellers' Representative (or vice versa) shall be
<PAGE>
appointed upon the request of either of them by the President for the time
being of the Institute of Chartered Accountants in England and Wales. Any
liability established by reason of such compromise or settlement shall be
satisfied from the Escrow Fund in the same manner set forth in clause 6.3
above with respect to undenied claims by ARIS.
6.5 ARIS will as soon as reasonably practicable give written notice to the
Sellers' Representative of the relevant facts of any claim of any third
party which may reasonably be expected to result in a claim by ARIS against
the Escrow Fund. The Sellers' Representative shall have the right, at his
expense and at no expense to ARIS, to participate in the defence of such
claim (with counsel selected by him and reasonably satisfactory to ARIS)
provided the Sellers' Representative shall consult and cooperate at all
times with counsel for ARIS and, if the proceedings involve matters of
concern to ARIS in addition to such a claim or the basis therefor, such
matters and the defence thereof shall be the sole responsibility of ARIS
and ARIS shall direct the defence thereof.
6.6 ARIS shall have the right to assert claims pursuant to this Escrow
Agreement against the Escrow Fund from time to time and the assertion
and/or disposition of any such claims shall be without prejudice to any
other rights or remedies available to ARIS from time to time pursuant to
the Agreement or otherwise.
6.7 In respect of any settlement, compromise or submission to an independent
firm of chartered accountants of any claim hereunder, or the determination
of any other matter requiring consent or approval of the Sellers in the
Escrow Fund, the Escrow Agent shall be fully authorized to act on the
written consent or approval of the Sellers' Representative. If at the time
of any claim made in accordance with this clause 6 there shall be no
Sellers' Representative, the Escrow Agent shall give notice of such claim
to each of the Sellers, and, if within thirty (30) calendar days after
receipt or deemed receipt of such notice by the last Seller to receive it,
the Sellers shall not have named a successor Sellers' Representative who
shall have admitted or disputed such claim, the Escrow Agent is authorised
at the end of such thirty (30) calendar day period to release and shall
release to ARIS Share Certificates in respect of the amount or in excess of
such claim determined in accordance with clause 6.3 above.
7. FEES AND EXPENSES
7.1 For its services the Escrow Agent shall be entitled to:
(a) an initial fee of one thousand seven hundred and fifty pounds sterling
(pounds 1,750) excluding value added tax ("VAT") plus the reasonable
legal costs incurred in relation to establishing the Escrow Fund, such
legal costs not to exceed one thousand five hundred pounds sterling
(pounds 1,500); and
<PAGE>
(b) an annual fee of seven hundred and fifty pounds sterling (pounds 750)
excluding VAT for the twelve (12) month period or fraction thereof
plus its reasonable expenses.
7.2 All such fees, costs and expenses of the Escrow Agent shall be borne
equally by ARIS on the one part and the Sellers on the other and shall be
paid within seven (7) days of the Escrow Agent's written demand therefor.
8. TERMINATION OF ESCROW; DISTRIBUTION OF ESCROW FUND
8.1 Subject always to the provisions contained in clause 8.2 below, any Share
Certificates then held by the Escrow Agent shall be released by the Escrow
Agent to the relevant Seller(s) on the earlier of twelve (12) months after
the date of Completion or the date upon which ARIS has completed its first
audit of ARIS' consolidated financial statements. Any such distribution
shall be made on a pro rata basis calculated with respect to each Seller's
interest in the Escrow Fund.
8.2 In the event that any claim of which the Escrow Agent has been notified by
ARIS remains unliquidated or unpaid in whole or in part on the earlier of
twelve (12) months after the date of Completion or the date upon which ARIS
has completed its first audit of ARIS' consolidated financial statements,
the Escrow Agent shall immediately release to the Sellers any Escrowed Cash
and Share Certificates (in that order) which are not then needed to protect
and secure ARIS in respect of any claim of which the Escrow Agent has been
notified, based (when such claim is unliquidated) on the amount notified to
the Escrow Agent by ARIS as the maximum amount of liability (including the
lawyers' and accountants' fees and expenses relating thereto) with respect
to such claim.
9. ESCROW AGENT
The Escrow Agent hereby accepts its appointment and agrees to act as Escrow
Agent under the terms and conditions of this Escrow Agreement. In taking
any action hereunder the Escrow Agent shall be protected in relying upon
any notice, paper or other document believed by it to be genuine or upon
any evidence deemed by it to be sufficient, and in no event shall it be
liable for any act performed or omitted to be performed by it hereunder in
the absence of negligence, recklessness or wilful misconduct. The Escrow
Agent may consult with a suitably qualified legal adviser in connection
with its duties hereunder and shall be fully protected by any act taken,
suffered or permitted by it in good faith in accordance with the written
advice of such legal adviser. The Escrow Agent shall be entitled to
recover, as an expense pursuant to clause 7 hereof, the reasonable fees and
expenses of such legal adviser.
<PAGE>
10. LITIGATION INVOLVING ESCROW AGENT
10.1 If the Escrow Agent becomes involved in litigation by reason hereof:
(a) it is hereby authorised to deposit with the clerk of the court in
which the litigation is pending any property held by it pursuant
hereto and, thereupon, shall stand fully relieved and discharged of
any further duties hereunder; and
(b) it shall be entitled to recover under clause 7 its reasonable
expenses arising as a result of such litigation.
10.2 If the Escrow Agent is threatened with litigation by reason hereof, it is
hereby authorised to interplead all interested parties in any court of
competent jurisdiction and to deposit with the clerk of such court any and
all property held by it pursuant hereto, and, thereupon, shall stand fully
relieved and discharged of any further duties hereunder.
11. INSPECTION
All property held as a part of the Escrow Fund shall at all times be
clearly identified as being held by the Escrow Agent hereunder. Any Party
hereto may inspect the Escrow Fund at any time during the Escrow Agent's
business hours, provided that twenty four (24) hours' prior written notice
has been given.
12. NOTICES
12.1 Any notice or other communication to be given under or in connection with
this Agreement shall be in writing, addressed to the Party to be served and
delivered personally or sent by international overnight courier or by
facsimile:
(a) in the case of an individual, to the address herein stated; and
(b) in the case of a company or corporation, to its principal place
of business for the time being,
or (in either case) to such other address as the addressee may from time to
time specify for the purpose of, and in accordance with the provisions of,
this clause 12.
12.2 In the absence of evidence of earlier receipt, a notice or other
communication is deemed given:
(a) if delivered personally, when left at the address referred to in
clause 12.1;
(b) if sent by international overnight courier, three (3) Business
Days after
<PAGE>
having been deposited with an international overnight courier; and
(c) if sent by facsimile, three (3) hours after completion of its
transmission if transmitted before 2.00 pm on any Business Day and
otherwise by 11.00 am on the next Business Day.
12.3 In proving the giving of notice it shall be sufficient to prove that the
notice was left or that the envelope containing such notice was properly
addressed and deposited with an international overnight courier or that the
facsimile was transmitted.
13. REMEDIES
Nothing contained in this Escrow Agreement is intended to or shall be
construed so as to limit any rights to remedies available to ARIS from time
to time arising out of or in connection with the Agreement, any of the
documents, appendices, exhibits or other agreements delivered pursuant
thereto (including without limitation the Tax Covenant) or otherwise.
14. BINDING EFFECT; BENEFIT
This Escrow Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns. The Escrow Fund provided for herein shall
be for the exclusive benefit of the Sellers and of ARIS, its subsidiary,
affiliated or related companies and corporations, their officers,
directors, agents and employees, and their representatives, successors and
assigns, and no other person, firm or corporation shall have any right,
title or interest hereunder; and any claim of any person, firm or
corporation to the Escrow Fund, or any part thereof, shall be subject and
subordinate to the prior rights and charge of ARIS and the Sellers under
the terms hereof.
15. MODIFICATION
No amendments, changes, modifications, or additions to this Agreement shall
be valid unless the same shall be in writing, signed by ARIS, the Escrow
Agent and the Sellers' Representative and made in accordance with the
provisions of this Escrow Agreement.
16. GOVERNING LAW
This Escrow Agreement shall be governed by and construed exclusively in
accordance with English Law and the parties submit to the exclusive
jurisdiction of the English courts.
17. COUNTERPARTS
<PAGE>
This Escrow Agreement may be executed in any number of separate
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
THIS AGREEMENT is executed as a Deed and is delivered on the date stated at the
beginning of this Agreement.
<PAGE>
SCHEDULE 1
THE SELLERS
Number of
Name Address Escrowed Shares
1. Robin Nessim Smouha Adda and 31 Felden Street, 488
Pernille Adda as trustees of the London,SW6 5AE
Olivia Adda Settlement
2. Robin Nessim Smouha Adda and 31 Felden Street, 488
Pernille Adda as trustees of the London, SW5 5AE
Jacques Adda Settlement
3. Robin Nessim Smouha Adda and 31 Felden Street, 488
Pernille Adda as trustees of the London, SW5 5AE
Jessica Adda Settlement
4. Robin Nessim Smouha Adda and 31 Felden Street, 287
Pernille Adda as trustees of the London, SW5 5AE
Georgina Adda Settlement
5. STC International Limited as PO Box 146, Roadtown, 26,110
Trustee of the Adda Settlement Tortola, British
Virgin Islands
TOTAL 27,861
<PAGE>
EXECUTED AS A DEED by )
ARIS CORPORATION
Acting by:
Director ) /s/ Hugh Simpson-Wells
Secretary ) /s/ Norbert W. Sugayan, Jr.
EXECUTED AS A DEED by )
COUTTS & CO
acting by:
Director ) /s/ signature illegible
Director/Secretary )
SIGNED AND DELIVERED AS A DEED ) /s/ Robin Nessim Smouha Adda
by ROBIN NESSIM SMOUHA ADDA AND ) /s/ Peter John Knight
PERNILLE ADDA AS TRUSTEES OF THE OLIVIA ) By Peter John Knight duly
ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
) the Olivia Adda Settlement
in the presence of: ) /s/ Christyne Mayberry
SIGNED AND DELIVERED AS A DEED ) /s/ Robin Nessim Smouha Adda
by ROBIN NESSIM SMOUHA ADDA AND ) /s/ Peter John Knight
PERNILLE ADDA AS TRUSTEES OF THE ) By Peter John Knight duly
JACQUES ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
) the Jacques Adda Settlement
in the presence of: ) /s/ Christyne Mayberry
SIGNED AND DELIVERED AS A DEED ) /s/ Robin Nessim Smouha Adda
by ROBIN NESSIM SMOUHA ADDA AND ) /s/ Peter John Knight
PERNILLE ADDA AS TRUSTEES OF THE ) By Peter John Knight duly
JESSICA ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
) the Jessica Adda Settlement
in the presence of: ) /s/ Christyne Mayberry
SIGNED AND DELIVERED AS A DEED ) /s/ Robin Nessim Smouha Adda
by ROBIN NESSIM SMOUHA ADDA AND ) /s/ Peter John Knight
PERNILLE ADDA AS TRUSTEES OF THE ) By Peter John Knight duly
GEORGINA ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
) the Georgina Adda Settlement
in the presence of: ) /s/ Christyne Mayberry
<PAGE>
EXECUTED AS A DEED by )
STC INTERNATIONAL LIMITED AS TRUSTEE OF )
THE ADDA SETTLEMENT )
Acting by: )
Director ) /s/ Peter John Knight
By Peter John Knight duly
authorised attorney for
STC International Limited
as Trustee of the Adda
Settlement
Director/Secretary )
SIGNED AND DELIVERED AS A DEED by ) /s/ Robin Nessim Smouha Adda
ROBIN NESSIM SMOUHA ADDA
in the presence of: ) /s/ Peter John Knight
<PAGE>
FOR IMMEDIATE RELEASE EXHIBIT 99.1
CONTACTS: Tom Averill Michael Newman
Chief Financial Officer Public Relations
Aris Corporation FiComm
(206) 433-2081 (206) 467-6732
SEATTLE, March 2 /PRNewswire/ -- ARIS Corporation (Nasdaq: ARSC) announced today
that it has acquired all of the outstanding shares of Barefoot Computer Training
Limited ("Barefoot"), a United Kingdom company based in London, England, in
exchange for 278,611 shares of ARIS common stock.
Barefoot is a Microsoft Authorized Technical Education Center (ATEC) which
provides high-end information technology training to corporate clients in the
London market. Barefoot operates 17 classrooms. For its fiscal year ended
November 30, 1997, Barefoot had revenues of approximately $7.3 million and
operating income of $661,000, excluding a one-time charge of $68,000.
The acquisition will be accounted for under the pooling of interest method of
accounting. In connection with the acquisition, ARIS expects to incur a one-time
charge of approximately $1.3 million in the first quarter. Excluding the one-
time charge, the transaction is expected to be accretive.
In February of 1997, ARIS acquired Oxford Computer Group Limited (OCG), an
information technology training and consulting company focusing on Microsoft
technologies having offices in Oxford, Birmingham and London, England. Since
acquiring OCG, ARIS has significantly grown operations, increasing their revenue
and profitability.
The Company expects that the acquisition of Barefoot will continue to strengthen
the presence and profitability of its combined UK operations, particularly in
the very competitive London market. Mr. Hugh Simpson-Wells, the Managing
Director of OCG, will assume full responsibility for Barefoot's operations.
"This acquisition makes ARIS a leading provider of IT services in the growing
London market," said Paul Song, President and CEO of ARIS Corporation. "We
believe our combined operations will make us the largest IT education provider
in the City of London, with 26 classrooms and over 250 training seats. This also
makes us one of the largest Microsoft ATECs in the United Kingdom and provides a
solid foundation for future European expansion."
"The addition of Barefoot gives our UK operations considerable economies- of-
scale in a very competitive market. We expect to recognize benefits across the
board -- by increasing fill rates in classes that were previously run separately
and competitively,
1
<PAGE>
sharing administrative overhead and offering a wider range of leading-edge
information technology services."
ARIS Corporation provides integrated information technology services which
enable companies and government agencies to use client/server and Internet
solutions to improve their business operations. The Company's consulting and
training services focus primarily on leading-edge technologies from Microsoft,
Oracle, Lotus and Sun Microsystems. ARIS has offices across the U.S. and in the
United Kingdom, with over 500 employees worldwide. Its corporate headquarters
are located in Seattle, WA.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the Company notes that the statements in this
press release, and elsewhere, that look forward in time, which include
everything other than historical information involve risks and uncertainties
that may affect the Company's actual results of operations. The following
important factors, set forth in more detail in the Company's final prospectus
from its recent public offering that it filed with the Securities and Exchange
Commission on June 18, 1997, among other risk factors set forth in the
prospectus, could cause actual results to differ materially from those set forth
in the forward-looking statements: the Company's ability to recruit and retain
IT professionals, its ability to manage growth and integrate acquisitions, the
fact that the Company derives a significant portion of its revenue from a
limited number of larger clients, that it depends on its relationships with
certain key vendors of software technology, that its quarterly operating results
may vary as a result of seasonality, that most of its consulting agreements are
terminable upon 14 days' notice, that it expects to continue to expand its
international operations and that it is in a competitive and rapidly changing
industry. SOURCE ARIS Corp
2
