SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 3, 2000
Datapoint Corporation
(Exact name of registrant as specified in its charter)
Delaware 001-07636 74-1605174
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
7 rue d'Anjou 75008, Paris, France;
8410 Datapoint Drive, San Antonio, TX 78229-8500
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 331-4007-3737; 210-593-7000
4 rue d'Aguesseau 75008, Paris, France
(Former name or former address, if changed since last report)
<PAGE>
Item 3. Bankruptcy or Receivership
On May 3, 2000, Datapoint Corporation (the "Company") filed a
petition for reorganization under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of Delaware. The
Company has also entered into a non-binding agreement in principle (the "Term
Sheet") with an ad hoc committee formed by holders of a significant portion of
its outstanding 8 7/8% debentures due June 1, 2006, with respect to a consensual
restructuring of the Company's debt and equity. The provisions of the Term
Sheet, which could develop into the basis for a plan of reorganization in the
bankruptcy, provides for the allocation of the proceeds of the sale of a
significant portion of the assets of the Company, as described in Item 5 below,
between the Company and its creditors, as well as equity distributions to
debentureholders and existing common and preferred shareholders of the Company.
Item 5. Other Events
On May 3, 2000, the registrant issued a press release, a copy
of which is attached as Exhibit 99.2 to this Form 8-K, indicating that it had
entered into a stock purchase agreement, a copy of which is attached hereto as
Exhibit 10 to this Form 8-K, to sell all of the issued and outstanding shares
of capital stock of certain of its subsidiaries and substantially all of the
assets of the Company (other than its e-commerce initiative via its Corebyte
subsidiary as described in the Press Release).
Item 7. Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
10 Stock Purchase Agreement
99 May 3, 2000 Press Release
<PAGE>
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.
Datapoint Corporation
(Registrant)
Date: May 15, 2000
By: /s/ Phillip P. Krumb
Phillip P. Krumb
Acting Chief Financial Officer
<PAGE>
EXHIBIT INDEX
(10) Stock Purchase Agreement
(99) May 3, 2000 Press Release
<PAGE>
Exhibit 10 - Stock Purchase Agreement
STOCK PURCHASE AGREEMENT
Dated as of April 19, 2000
By and Among
DATAPOINT NEWCO 1 LIMITED,
THE SELLERS NAMED HEREIN
and
DATAPOINT CORPORATION
===============================================================================
<PAGE>
THIS STOCK PURCHASE AGREEMENT is dated as of the 19th day of April,
2000, by and among (i) DATAPOINT NEWCO 1 LIMITED, a limited company organized
under the laws of England and Wales (the "Buyer"), (ii) the entities listed on
Schedule A attached hereto (collectively, the "Sellers" and individually, a
"Seller," which terms shall be qualified as provided in Section 14(c) hereof),
and (iii) DATAPOINT CORPORATION, a Delaware corporation and the direct or
indirect corporate parent of all of the Sellers (the "Parent"). The definitions
of certain capitalized terms are set forth in Section 14(a) hereof.
WHEREAS, the Sellers, or nominees of the Sellers, are collectively the
owners of all of the issued and outstanding shares of the capital stock (the
"Shares") of each of the entities listed on Schedule B attached hereto (together
with their respective Subsidiaries, the "Companies" (which term shall be
qualified as provided in Section 14(d) hereof), and together with such
Subsidiaries, the Parent and the Sellers, the "Datapoint Entities")(which term
shall be qualified as provided in Section 14(d) hereof), with each Seller, or,
in the case of a Company that is a Subsidiary of another Company, such other
Company, owning such percentage of the Companies as more particularly set forth
on Schedule C hereto; and
WHEREAS, the Buyer desires to purchase all of the Shares from the
Sellers, and the Sellers desire to sell all of the Shares to the Buyer on the
terms and conditions set forth herein; and
WHEREAS, the Buyer desires to purchase all of the assets set forth on
Exhibit A attached hereto (collectively, the "Acquired Assets") from the Parent,
and the Parent desires to sell all of the Acquired Assets to the Buyer on the
terms and conditions set forth herein; and
WHEREAS, the Parent intends to commence reorganization proceedings (the
"Chapter 11 Case") under Chapter 11 of the Bankruptcy Code in order to, among
other things, effect the transactions contemplated by this Agreement;
WHEREAS, the Buyer, the Parent and the Sellers have agreed to certain
other matters ancillary to the foregoing, all on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the Buyer, the Sellers and the Parent agree as follows:
<PAGE>
1. PURCHASE AND SALE.
1.1. Purchase and Sale. Subject to the terms and conditions set forth
in this Agreement, at the Closing (as defined in Section 3 hereof), the Sellers,
jointly and severally, agree to sell to the Buyer, and the Buyer agrees to
purchase from each Seller, such Shares as are set forth opposite the name of
each Seller on Schedule C hereto, and the Parent agrees to sell to the Buyer,
and the Buyer agrees to purchase from the Seller, the Acquired Assets, all in
exchange for the purchase price therefor as provided in Section 1.2 hereof.
1.2. Purchase Price.
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(a) The Buyer shall pay to the Sellers and the Parent, as the
aggregate purchase price for the Shares and the Acquired Assets, $49,500,000.
The amount paid pursuant to this Section 1.2(a) as adjusted pursuant to Section
1.3 is referred to herein as the "Purchase Price".
(b) The Purchase Price, less the amounts deposited into the
accounts described in Section 1.2(c) and 12.1(c), will be paid by wire transfer
of immediately available funds into the accounts specified by Parent in writing
to the Buyer, such writing to be delivered not less than five Business Days
prior to the Closing Date.
(c) At the Closing, Buyer shall deposit $2,000,000 of the
Purchase Price into the Purchase Price Adjustment Escrow Account and $4,000,000
of the Purchase Price into the UK Pension Fund Escrow Account.
1.3. Adjustment to Purchase Price.
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(a) As soon as practicable following the Closing Date (but not
later than 30 days after the Closing Date), the Buyer shall prepare and deliver
to the Parent an unaudited combined balance sheet of the Companies as at the
Closing Date (the "Closing Balance Sheet"). The Closing Balance Sheet shall be
prepared so as to present fairly in all material respects the financial position
of the Companies at such date and shall be prepared on a pro forma combined
basis in accordance with United States generally accepted accounting principles
consistently applied, adjusted using the procedures used in preparing the pro
forma combined balance sheet attached hereto as Exhibit B (the "Pro Forma
Balance Sheet").
(b) If the amount of total liabilities exceeds the amount of
total assets on the Closing Balance Sheet by more than $10,000,000, the Purchase
Price shall be reduced by the amount of such excess, and the Buyer shall be
entitled to repayment of such excess amount out of the Purchase Price Adjustment
Escrow Account and, to the extent that such amount exceeds the amount then on
deposit in the Purchase Price Adjustment Escrow Account, the Parent and the
Sellers, jointly and severally, agree to pay any such deficiency. Any amounts
payable pursuant to this Section 1.3(b) shall be paid within 2 Business Days
after the Closing Balance Sheet is deemed final and conclusive pursuant to
Section 1.4, by wire transfer in immediately available funds to an account
designated by the Buyer.
<PAGE>
1.4. Dispute and Resolution.
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(a) In the event the Parent does not agree with the Closing
Balance Sheet as prepared by the Buyer, the Parent shall so inform the Buyer in
writing within 30 days of the Parent's receipt thereof, such writing to set
forth the objections of the Parent in reasonable detail. If the Parent and the
Buyer cannot reach agreement as to any disputed matter relating to the Closing
Balance Sheet within 15 days of the Buyer's receipt of such objection, they
shall forthwith refer the dispute to PricewaterhouseCoopers LLP or such other
accounting firm of internationally recognized reputation as the Parent and the
Buyer may select (the "Arbitrator") for resolution, with the understanding that
such firm shall resolve all disputed items within 20 days after such disputed
items are referred to it. Each of the Parent and the Buyer shall bear one-half
of the costs of the Arbitrator. The decision of the Arbitrator with respect to
all disputed matters relating to the Closing Balance Sheet shall be deemed final
and conclusive and shall be binding upon the Buyer and the Parent. If the Parent
does not object to the Closing Balance Sheet as prepared by the Buyer within the
30-day period referred to above, the Closing Balance Sheet as so prepared shall
be deemed final and conclusive and binding upon the Buyer and the Parent.
(b) Until the Closing Balance Sheet is deemed final and
conclusive pursuant to Section 1.4(a), the Buyer shall provide the Parent and
its representatives reasonable access to the books, records, facilities and
employees of the Companies and shall cooperate fully with the Parent in
connection with its review of the Closing Balance Sheet.
1.5. Allocations.
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(a) The Purchase Price shall be allocated among the Shares
relating to the Companies and the Acquired Assets in the manner to be agreed
upon by the parties on or prior to the Closing Date.
(b) The Purchase Price shall be allocated among, and
distributed to, the Sellers and the Parent pro rata in accordance with the
percentages to be agreed upon by the parties on or prior to the Closing Date,
with such information to be filled in on Schedule C attached hereto.
<PAGE>
2. LICENSING AND OTHER MATTERS.
2.1. Datapoint Name.
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(a) On the Closing Date, each of the Parent and any other
entity which is a direct or indirect Subsidiary of the Parent (other than the
Companies) and which has included in its corporate or trade name the name
"Datapoint" or any derivative or variation thereof, shall (i) have delivered to
the Buyer an executed Certificate of Amendment or other amending document to its
respective Certificate of Incorporation or other charter or constitutional
documents in form and substance satisfactory to the parties (collectively, the
"Name Change Certificates"), suitable for filing with the Office of the
Secretary of State of the State of Delaware or the particular governmental
office located in the country or jurisdiction of organization of any such other
entity, as the case may be, effecting a change of its respective corporate name
to a new name not including the name "Datapoint" or any derivative or variation
thereof, and (ii) have executed and delivered to the Buyer an Assignment in form
and substance satisfactory to the parties (the "Name Assignment") pursuant to
which the Parent and each such other entity shall transfer and assign all of
their respective right, title and interest in and to the name, trademark and
servicemark "Datapoint" to the Buyer, together with all goodwill symbolized by
said name and mark.
(b) Except as provided in Section 2.1(c), from and after the
Closing Date, Parent agrees that it will not, and will cause each of its
Subsidiaries (other than the Companies) not to, use the "Datapoint" name or any
derivative thereof for any purpose whatsoever.
(c) On the Closing Date, the Buyer shall grant to the Parent
and any other entity which has executed a Name Assignment, a limited license in
form and substance satisfactory to the parties (the "Datapoint License") for the
"Datapoint" name to permit the Parent and each such other entity to utilize the
"Datapoint" name on existing stationery, inventory and marketing and promotional
materials for the limited purpose of enabling the Parent and each such other
entity to dispose of existing stationery, inventory and marketing and
promotional materials which utilize such trademark, as more particularly
provided in the Datapoint License.
2.2. Acquired Assets. On the Closing Date, the Parent shall transfer
ownership of the Acquired Assets to the Buyer. Other than the Shares and the
Acquired Assets, the Parent and the Sellers are transferring no other rights or
assets to the Buyer (collectively, the "Excluded Assets"), and the Buyer is
assuming no liabilities of the Parent or the Sellers (the "Excluded
Liabilities"). Without in any way limiting the foregoing, the Buyer is
specifically not acquiring, or assuming any liability for, (i) any U.S Employee
Benefit Plans of any Datapoint Entity or for compliance with COBRA (as defined
in Section 4.18(b)) with respect to any employee of the Parent, any Seller or
any of their Affiliates or any other "qualified beneficiary" (within the meaning
of COBRA) with respect to any such employee who has a "qualifying event" (within
the meaning of COBRA) on or before the Closing Date or by reason of the
transactions contemplated by this Agreement or (ii) any Foreign Employee Benefit
Plans of the Parent or any Seller.
2.3. Outstanding Ancillary Issues. The parties shall negotiate in good
faith with respect to and shall enter into such agreements or execute such
documents or other instruments as may be necessary or advisable to implement the
matters described on Exhibit C attached hereto.
<PAGE>
3. CLOSING.
3.1. Time and Place. The closing of the purchase and sale of the Shares
and the Acquired Assets (the "Closing") shall be held at the offices of White &
Case LLP, 1155 Avenue of the Americas, New York, New York 10036 at 10:00 a.m. on
a mutually acceptable date not more than five days after all of the conditions
in Articles 7 and 8 have been satisfied or waived but not later than September
30, 2000 (the "Outside Closing Date"), or at such other time and place as the
Buyer and the Parent may agree. The date on which the Closing is actually held
hereunder is sometimes referred to herein as the "Closing Date."
3.2. Transactions at Closing. At the Closing, in addition to any other
instruments or documents referred to herein:
(a) The Sellers shall deliver, or cause to be delivered, to
the Buyer, or, to the extent requested by the Buyer in writing, one or more
nominees of the Buyer, free and clear of any lien, claim or encumbrance, the
Shares and the Acquired Assets.
(b) The Parent and its appropriate Affiliates shall execute
and deliver to the Buyer such bills of sale, stock powers endorsed in blank, or
other instruments of transfer and assignment as the Buyer may reasonably request
in order to transfer to the Buyer the Shares and the Acquired Assets.
(c) The Buyer shall make the payments contemplated by Section 1.2 hereof.
(d) Each of the parties hereto shall execute and deliver each
of the agreements and documents required to be executed and delivered by such
party pursuant to Sections 7 and 8 hereof.
4. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE SELLERS . The
Parent and the Sellers, jointly and severally, represent and warrant to the
Buyer as follows (it being understood that the information set forth in the
Disclosure Schedule (as defined below) is as of March 31, 2000):
4.1. Organization of Companies; Authority. The Parent, each Seller and
each Company is a corporation duly organized, validly existing and in corporate
good standing (if applicable) under the laws of its respective country of
organization as set forth in Section 4.1 of the disclosure schedule attached
hereto (the "Disclosure Schedule"). Each Company is duly qualified and in good
standing as a foreign corporation in all jurisdictions in which the character of
the properties owned or leased or the nature of the activities conducted, or in
the case of Datapoint Germany II GmbH, to be conducted, by it makes such
qualification necessary, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect. Each Company has all
requisite power and authority to own or lease and operate its properties and to
carry on its business as such business is now conducted, or in the case of
Datapoint Germany II GmbH, to be conducted. The information filed on all
applicable public registers in respect of the Companies is true and complete in
all material respects. The statutory registers of each of the Companies have at
all times been kept up to date and contain all information required by
applicable law.
4.2. Corporate Approval; Binding Effect. The Parent and each Seller has
obtained all necessary authorizations and approvals from its respective Board of
Directors or other governing body required for the execution and delivery of the
Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby. Subject to obtaining the Approval
Order or other governmental approvals set forth in Section 4.2 of the Disclosure
Schedule ("Governmental Approvals"), each of the Transaction Documents to which
each Seller and the Parent is a party has been or will be duly executed and
delivered by each Seller and the Parent and constitutes or will constitute when
executed and delivered the legal, valid and binding obligation of such Seller
and the Parent, enforceable against them in accordance with its terms.
<PAGE>
4.3. Subsidiaries. Except as set forth in Section 4.3 of the Disclosure
Schedule, no Company has any Subsidiaries, owns or holds legally and/or
beneficially any shares or other securities of any class in the capital of any
corporations, or owns any legal and/or beneficial interests in any partnerships,
limited liability companies, business trusts or joint ventures or in any other
unincorporated trade or business enterprises.
4.4. Capitalization. The authorized and/or registered share capital, as
applicable, of each Company, and the issued and outstanding shares of each
Company, are set forth in Section 4.4 of the Disclosure Schedule. All of the
Shares are owned legally and beneficially by the Sellers as set forth opposite
the names of such Sellers on Schedule C attached hereto, and all such Shares are
validly issued and outstanding, fully paid and non-assessable. There are no
outstanding options, warrants, rights, calls, commitments, conversion rights,
rights of exchange plans or other agreements of any character providing for the
issuance, purchase or sale of any shares of capital stock or other securities of
any Company. The nominal capital of Datapoint Germany II GmbH has been fully
paid and has not been repaid.
4.5. Title to Stock and Acquired Assets, Liens, etc. (a) Each Seller
has, individually or though one or more nominees, and as of the consummation of
the Closing the Buyer or its nominees, as applicable, will have, full and sole
legal and beneficial ownership of all of the Shares set forth opposite the name
of such Seller on Schedule C hereto, free and clear of any mortgage, lien,
pledge, charge, security interest, encumbrance, restricting title retention
agreement, option, equity or other adverse claim thereto.
(b) The Parent has, and at the consummation of the Closing, the Buyer
will have, full and sole legal and beneficial ownership of all of the Acquired
Assets, in each case free and clear of any mortgage, lien, pledge, charge,
security interest, encumbrance, restricting title retention agreement, option,
equity or other adverse claim thereto.
4.6. Non-Contravention. Subject to obtaining the Approval Order and any
Governmental Approvals, the execution and delivery by the Parent and each Seller
of the Transaction Documents to which each is a party and the consummation by
the Parent and each Seller of the transactions contemplated thereby, including
those described in Exhibits C and D, (i) will not violate any provision of the
Articles of Incorporation or By-Laws or other organizational documents of any
Datapoint Entity, (ii) will not violate any statute, rule, regulation, order or
decree of any public body or authority by which any Datapoint Entity is bound or
which is binding upon any of their respective properties or assets and (iii)
will not result in a violation or breach of, or constitute a default under, any
license, franchise, permit, indenture, agreement or other instrument to which
any Datapoint Entity is a party, or by which any Datapoint Entity or any of
their respective assets or properties is bound, excluding from the foregoing
clauses (ii) and (iii) violations, breaches or defaults which, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
<PAGE>
4.7. Governmental Consents; Transferability of Licenses, Etc.
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(a) Except as set forth on Section 4.2 of the Disclosure Schedule, no
consent, approval or authorization of, or registration, qualification or filing
with, any governmental agency or authority, is required for the execution and
delivery by each Seller and the Parent of the Transaction Documents to which
each is a party or for the consummation by each Seller and the Parent of the
transactions contemplated thereby (including those described on Exhibits C and D
attached hereto).
(b) Each Company has and maintains, and Section 4.7 of the Disclosure
Schedule lists as to each Company, all licenses, permits and other
authorizations from all governmental authorities as are, individually or in the
aggregate, material to the conduct by each Company of its respective business,
including the business to be conducted by Datapoint Germany II GmbH. Except as
expressly designated in Section 4.7 of the Disclosure Schedule, all such
licenses, permits and authorizations will remain in full force and effect
immediately following the consummation of the transactions contemplated hereby.
4.8. Financial Statements. (a) The Parent has delivered the following
financial statements (the "Financial Statements") to the Buyer, and there are
included in Section 4.8 of the Disclosure Schedule: the separately unaudited
balance sheet of each Company as of January 31, 2000 (the "Balance Sheet Date"),
and the related statements of income and retained earnings of each Company for
the period then ended; provided, that (i) with respect to the Financial
Statements relating to Datapoint Nederland B.V., such statements are
consolidated with its corporate parent, Datapoint Beheer B.V., and (ii) with
respect to the Financial Statements relating to Datapoint U.K. Ltd., such
statements are consolidated with its corporate parent Datapoint Holdings, Ltd.
Each of the Financial Statements has been prepared in accordance with United
States generally accepted accounting principles applied on a basis consistent
with historical practice (subject to the absence of footnotes); each of such
balance sheets fairly presents the financial condition of each Company as of the
Balance Sheet Date and, except as indicated therein, reflects all claims
against, and all debts and liabilities of, each Company, whether fixed or
contingent; and such statements of income and retained earnings fairly present
the results of operations for the periods covered thereby. Since the Balance
Sheet Date, no event has occurred that could reasonably be expected to have a
Material Adverse Effect, whether as a result of any legislative or regulatory
change, revocation of any license or rights to do business, fire, explosion,
accident, casualty, labor trouble, flood, drought, riot, storm, condemnation,
act of God, public force or otherwise; and, to the knowledge of each Datapoint
Entity, no fact or condition exists or is contemplated or threatened which could
reasonably be expected to have a Material Adverse Effect.
(b) The Pro Forma Balance Sheet was derived from the Financial
Statements, was prepared in accordance with United States generally accepted
accounting principles applied on a basis consistent with historical practice
(subject to the absence of footnotes), and presents fairly the net liabilities
of the Companies.
4.9. Indebtedness. The Indebtedness of each Company (after elimination
of Intercompany Accounts but including any Indebtedness to be assumed by
Datapoint Germany II GmbH) is as described in Section 4.9 of the Disclosure
Schedule and collectively the Companies' Indebtedness (after elimination of
Intercompany Accounts but including any Indebtedness to be assumed by Datapoint
Germany II GmbH) outstanding as of the date hereof does not exceed $10.0
million. Except as disclosed in Section 4.9 of the Disclosure Schedule, no
Company is in default with respect to any outstanding Indebtedness or any
instrument relating thereto. Complete and correct copies of all instruments
(including all amendments, supplements, waivers and consents) relating to any
Indebtedness of each Company have been furnished to the Buyer. No Seller (other
than Datapoint Corporation) has any Indebtedness or any other liabilities,
contingent or otherwise, in excess of $50,000 individually and $250,000 in the
aggregate for all of the Sellers.
<PAGE>
4.10. Litigation, Etc. Except as set forth in Section 4.10 of the
Disclosure Schedule, no action, suit, proceeding or investigation is pending or,
to the knowledge of each Datapoint Entity threatened, relating to or affecting
the business, assets, rights or financial condition of any Company, or which
questions the validity of the Transaction Documents or challenges any of the
transactions contemplated hereby or thereby, nor is there any basis for any such
action, suit, proceeding or investigation.
4.11. Conformity to Law. Except as set forth in Section 4.11 of the
Disclosure Schedule, each Company has complied in all respects with, and is in
compliance in all respects with, all foreign, federal, state and local laws,
statutes, governmental regulations and all judicial or administrative tribunal
orders, judgments, writs, injunctions, decrees or similar commands applicable to
its business (including, without limitation, any labor, occupational health,
zoning or other law, regulation or ordinance but excluding environmental laws
which are covered in Section 4.13 hereof), except to the extent that any failure
to so comply could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Except as set forth in Section 4.11 of the
Disclosure Schedule, no Company has committed, been charged with, or been under
investigation with respect to, nor does there exist, any violation of any
provision of any foreign, federal, state or local law or administrative
regulation in respect of such Company or its respective business, assets or
operations.
4.12. Title to Assets. (a) Except as set forth in Section 4.12(a) of
the Disclosure Schedule and except for liens for Taxes that are not yet due and
payable or delinquent, each Company is the lawful owner of and has good and
valid record and marketable title to all of its respective properties and
assets, including, without limitation, all those reflected on the balance sheets
contained in the Financial Statements of such Company (other than any such
properties or assets sold in the ordinary course of such Company's business
after the dates of such balance sheets), free and clear of any security
interests, liens, claims, charges, options, mortgages, debts, leases (or
subleases), conditional sales agreements, title retention agreements,
encumbrances of any kind, material defects as to title or restrictions against
the transfer or assignment thereof. All such properties and assets are in good
condition and repair (reasonable wear and tear excepted) and are adequate and
sufficient to carry on the business of each Company as presently conducted, or,
in the case of Datapoint Germany II GmbH, as will be conducted.
(b) All of the Acquired Assets are in reasonably good condition and
repair (reasonable wear and tear excepted).
<PAGE>
4.13. Real Property and Environmental Matters.
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(a) Section 4.13(a) of the Disclosure Schedule sets forth complete and
accurate legal descriptions of all real property leased or used by each Company
(the "Real Property"). No Company owns any real property. The Sellers have
delivered to the Buyer a true, correct and complete copy of each lease of Real
Property. Each lease set forth in Section 4.13(a) of the Disclosure Schedule (or
required to be set forth on Section 4.13(a) of the Disclosure Schedule) is in
full force and effect; all rents and additional rents due to date on each such
lease have been paid; in each case, the lessee has been in peaceable possession
since the commencement of the original term of such lease and is not in default
thereunder and no waiver, indulgence or postponement of the lessee's obligations
thereunder has been granted by the lessor; and there exists no event of default
or event, occurrence, condition or act (including the transactions contemplated
hereby) which, with the giving of notice, the lapse of time or the happening of
any further event or condition, would become a default under such lease. Other
than pursuant to sublease agreements with Datapoint Vastgoed B.V. on the one
hand and Antenna Europe B.V. and Contrast B.V. on the other (copies of which
have been provided to the Buyer), none of the Real Property is sublet. In
respect of all Real Property located in France, the lessee has the right to
renew all leases to which it is a party. To the knowledge of each Datapoint
Entity, no lessor under any such lease is in breach thereof. The Real Property
is in a state of good maintenance and repair and is adequate and suitable for
the purposes for which it is presently being, or contemplated to be, used. None
of the Parent, the Seller or any Company has received any notice that either the
whole or any portion of the Real Property is to be condemned, requisitioned or
otherwise taken by any applicable governmental, local or public authority. There
are no public improvements which may result in special assessments against or
otherwise affect the Real Property. Datapoint Germany I GmbH's leases of Real
Property are freely assignable to Datapoint Germany II GmbH.
(b) Except as set forth on Section 4.13(b) of the Disclosure Schedule
no Company has any liability (whether actual, contingent or prospective) or
obligation in respect of any real property whether freehold, licensed or
occupied under an informal or undocumented arrangement in any part of world
(other than the Real Property) including without limitation any liability or
obligation to:
(i) perform covenants (restrictive or positive) or agreements affecting or
relating to land;
(ii) pay rent or rents, service charges, insurance premiums or other
monies or observe or perform covenants, obligations or conditions contained in
any lease, agreement for lease, license, deed, agreement or other document
ancillary or supplemental to a lease whether or not expressed to be so;
(iii) pay principal, interest or other monies or observe or perform
covenants or agreements contained in any mortgage, charge or other document
creating a security interest affecting any property to which this warranty
applies;
(iv) make payments under or otherwise observe or perform any guarantee
or surety, whether as primary or secondary obligor, or indemnity or otherwise
assume any liabilities of any third party by accepting a leasehold or in any
other manner.
(v) make payments under or otherwise observe or perform any agreement for
sale, option or right of pre-emption;
(vi) make payments under or otherwise observe or perform any building
contract, collateral warranty, duty of care agreement or professional
appointment.
<PAGE>
(c) Except as set forth on Section 4.13(c) of the Disclosure Schedule:
(i) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from or released on or from any
property currently or formerly owned, leased or operated by any Company
("Company Property") or, to the knowledge of each Datapoint Entity, any property
adjoining, adjacent to or in the vicinity of any Company Property, except in
small quantities necessary for the operation of business and in compliance with
Environmental Laws and so as not to give rise to an Environmental Claim;
(ii) The Companies are in compliance with all Environmental Laws and
the requirements of any permits issued under such Environmental Laws with
respect to any Company Property;
(iii) There are no past, pending or, to the knowledge of each Datapoint
Entity, threatened Environmental Claims against any Datapoint Entity or any
Company Property;
(iv) There are no facts, circumstances, conditions or occurrences
regarding any business or operations of any Company or any real property or
facility any time owned, operated or used by any Company (or its predecessor) or
its subsidiaries or, to the knowledge of each Datapoint Entity, any property
adjoining or in the vicinity of any Company Property, that could reasonably be
anticipated (i) to form the basis of an Environmental Claim against any Company,
or any Company Property or assets or (ii) to cause such Company Property or
assets of any Company to be subject to any restrictions on its ownership,
occupancy, use or transferability under any Environmental Law.
(v) To the knowledge of each Datapoint Entity, there are not now and
never have been any underground storage tanks located on any Company Property.
4.14. Equipment. Section 4.14 of the Disclosure Schedule sets forth a
complete and accurate list of all of the fixed assets of each Company other than
items having a book or market value individually of less than $1,000 as of March
31, 2000. All such fixed assets are utilized by each Company in the ordinary
course of business and are in good condition, ordinary wear and tear excepted.
<PAGE>
4.15. Insurance. Section 4.15 of the Disclosure Schedule lists all
policies of fire, liability, workmen's compensation, life, property and casualty
and other insurance owned or held by, or which cover, any Company. All such
policies of insurance (a) are, to the knowledge of each Datapoint Entity,
maintained with financially sound and reputable insurance companies, funds or
underwriters and are of the kinds and cover such risks and are in such amounts
and with such deductibles and exclusions as are consistent with prudent business
practice, (b) are in full force and effect, (c) are sufficient for material
compliance by each Company with all requirements of law and all agreements to
which each Company is a party, (d) provide that they will remain in full force
and effect through the respective dates set forth in Section 4.15 of the
Disclosure Schedule, (e) will not in any way be affected by, or terminate or
lapse by reason of, the transactions contemplated by this Agreement and (f) are
not subject to termination at the option of the insurer. No Company is in
default with respect to its obligations under any of such insurance policies and
has not received any notification of cancellation of any such insurance
policies. All of Datapoint Germany I GmbH's insurance policies are freely
assignable to Datapoint Germany II GmbH. Since January 1, 1999, there has been
no material adverse change in any Datapoint Entity's relationship with its
insurers, or in the premiums payable under its policies.
4.16. Contracts. Section 4.16 of the Disclosure Schedule sets forth a
complete and accurate list of all contracts to which each Company is a party or
by which each Company is bound or to which each Company is subject, except (a)
contracts entered into in the ordinary course of business after the date hereof
and prior to the Closing, which will be identified to the Buyer in writing prior
to the Closing, (b) non-material contracts terminable by any Company upon thirty
(30) days' notice or less without the payment of any termination fee or penalty,
and (c) contracts listed in other Sections of the Disclosure Schedule. As used
in this Section 4.16, the word "contract" means and includes every agreement or
understanding of any kind, written or oral, which is legally enforceable by or
against any Company, and specifically includes (a) contracts and other
agreements with any current or former officer, director, employee, consultant or
shareholder or any partnership, corporation, joint venture or any other entity
in which any such person has an interest; (b) agreements with any labor union or
association representing any employee; (c) contracts and other agreements for
the provision of services by each Company; (d) bonds or other security
agreements provided by any party in connection with the business of each
Company; (e) contracts and other agreements for the sale of any of any Company's
assets or properties other than in the ordinary course of business or for the
grant to any person of any preferential rights to purchase any of the assets or
properties of any Company; (f) joint venture agreements relating to the assets,
properties or business of each Company or by or to which each Company or any of
its assets or properties are bound or subject; (g) contracts or other agreements
under which each Company agrees to indemnify any party, to share Tax liability
of any party, or to refrain from competing with any party; (h) any contracts or
other agreements with regard to Indebtedness; or (i) any other contract or other
agreement whether or not made in the ordinary course of business. The Sellers
have delivered to the Buyer true, correct and complete copies of all such
contracts, together with all modifications and supplements thereto. Each of the
contracts listed in Section 4.16 of the Disclosure Schedule or any of the other
Sections in the Disclosure Schedule is in full force and effect, no Company is
in breach of any of the material provisions of any such contract, nor, to the
knowledge of any Datapoint Entity, is any other party to any such contract in
default thereunder, nor does any event or condition exist which with notice or
the passage of time or both would constitute a default thereunder. Each Company
has in all material respects performed all obligations required to be performed
by it to date under each such contract. Subject to obtaining any necessary
consents by the other party or parties to any such contract (the requirement of
any such consent being reflected in Section 4.16 of the Disclosure Schedule), no
contract includes any provision the effect of which may be to enlarge or
accelerate any obligations of the Buyer after the consummation of the
transactions contemplated hereby or give additional rights to any other party
thereto or will in any other way be affected by, or terminate or lapse by reason
of, the transactions contemplated by this Agreement. Except as set forth on
Section 4.16 of the Disclosure Schedule, no Datapoint Entity is subject to, or a
party to, any charter, by-law, mortgage, lien, lease, license, permit,
agreement, contract, instrument, law, rule, ordinance, regulation, order,
judgment or decree, or any other restriction of any kind or character, which (a)
could reasonably be expected to have a Material Adverse Effect, (b) which would
prevent consummation of the transactions contemplated by this Agreement,
compliance by any Datapoint Entity with the terms, conditions and provisions
hereof or the continued operation of any Company's business after the date
hereof or the Closing Date on substantially the same basis as heretofore
operated, or (c) would restrict the ability of any Company to acquire any
property or conduct business in any area.
<PAGE>
4.17. Compensation of and Contracts with Employees. Section 4.17 of the
Disclosure Schedule sets forth a complete and accurate list in all material
respects of each full-time employee of each Company and the rate, character and
amount of the compensation being provided to such employee as of December 31,
1999. Except as listed in Section 4.17 of the Disclosure Schedule, no Company
has any employment agreement, written or oral, with any currently active
employee, including any agreement to provide any bonus or benefit to any such
employee. Except as set forth in Section 4.17 of the Disclosure Schedule, no
Company has outstanding loans or advances to employees. Each Company has, in
relation to each of its officers and employees (and, so far as relevant, to each
of its former officers and employees) complied with all obligations imposed on
it by, and all orders and awards made under, all statutes, regulations, codes of
conduct and practice, collective agreements and customs and practices relevant
to the relations between it and its employees or any trades union, or to the
conditions of service of its employees (including any national legislation on
working time derived from Council Directive 93/104/EC). In the 12 months
preceding the date of this Agreement, no Company has been a party to a transfer
(within the meaning of Council Directive 77/187/EEC) or failed to comply with a
duty to inform and consult a trade union under such Council Directive.
4.18. Employee Benefit Plans.
----------------------
(a) Foreign Employee Benefit Plans.
(i) List of Plans. Set forth in Section 4.18(a) of
the Disclosure Schedule is an accurate and complete list of
each Foreign Employee Benefit Plan other than a Foreign
Governmental Employee Benefit Plan. Also set forth in Section
4.18(a) of the Disclosure Schedule is a general description of
each Foreign Governmental Employee Benefit Plan.
<PAGE>
(ii) Status, Operation, Liabilities, Documents, etc.
Each Foreign Employee Benefit Plan other than a Foreign
Collectively Bargained Employee Benefit Plan or a Foreign
Governmental Employee Benefit Plan has been maintained in
compliance with its terms and with the requirements of any and
all applicable laws, statutes, rules, regulations and orders
and has been maintained, where required, in good standing with
applicable regulatory authorities. All contributions required
to be made with respect to each Foreign Employee Benefit Plan
have been timely made. Neither a Company nor any of its
Subsidiaries has incurred any obligation in connection with
the termination of, or withdrawal from, any Foreign Employee
Benefit Plan. Except as described on Section 4.18(a) of the
Disclosure Schedule, the present value of the accrued benefit
liabilities (whether or not vested) attributable to employees
of a Company or any of its Subsidiaries or for which a Company
or any of its Subsidiaries is or may be liable under each
Foreign Employee Benefit Plan that is a pension or retirement
plan (including, without limitation, any superannuation fund)
or that provides for actuarially-determined benefits,
determined as of the end of the most recently ended fiscal
year of such Company or Subsidiary, on the basis of the
actuarial assumptions used in the latest valuation of such
Plan did not exceed the current value of the assets of such
Foreign Employee Benefit Plan allocable to such benefit
liabilities, or, alternatively, a Company or any such
subsidiary has established adequate reserves for the present
value of such accrued benefit liabilities, determined as
described herein, in the Financial Statements prepared in
accordance with Section 4.8 hereof and in calculating the
Aggregate Liabilities. No action, litigation, audit,
examination, investigation or administrative proceeding has
been made, commenced or, to the knowledge of any Datapoint
Entity, threatened with respect to any Foreign Employee
Benefit Plan (other than routine claims for benefits payable
in the ordinary course) that would reasonably be expected to
result in a liability of a Company or any of its Subsidiaries.
No Foreign Employee Benefit Plan which is not a Foreign
Collectively Bargained Employee Benefit Plan or a Foreign
Governmental Employee Benefit Plan provides for
post-employment or retiree health, life insurance and/or other
welfare benefits and having unfunded liabilities, and neither
a Company nor any of its Subsidiaries has any obligation to
provide any such benefits to any retired or former employees
or active employees following such employees' retirement or
termination of service and no proposals have been announced
for the establishment of any new arrangements for the
provision of such benefits. There are no liabilities of a
Company or any of its Subsidiaries with respect to any Foreign
Employee Benefit Plan that are not accrued or otherwise
disclosed in the Financial Statements prepared in accordance
with Section 4.8 hereof and that are not included in
calculating the Aggregate Liabilities. No condition or
circumstance exists that would prevent the amendment or
termination of any Foreign Employee Benefit Plan other than a
Foreign Collectively Bargained Employee Benefit Plan or a
Foreign Governmental Employee Benefit Plan. With respect to
each Foreign Employee Benefit Plan other than a Foreign
Collectively Bargained Employee Benefit Plan or a Foreign
Governmental Employee Benefit Plan, and, with respect to each
Foreign Collectively Bargained Employee Benefit Plan and each
Foreign Governmental Employee Benefit Plan, to the knowledge
of any Datapoint Entity, no event has occurred and no
condition or circumstance has existed that could result in a
material increase in the benefits under or the expense of
maintaining any such Foreign Employee Benefit Plan from the
level of benefits or expense incurred for the most recent
fiscal year ended thereof. The execution of this Agreement and
the consummation of the transactions contemplated hereby do
not constitute a triggering event under any Foreign Employee
Benefit Plan, whether or not legally enforceable, which
(either alone or upon the occurrence of any additional or
subsequent event) will or may result in any payment,
acceleration, vesting or increase in benefits to any employee
or former employee or director of a Company or any of its
Subsidiaries. No Foreign Employee Benefit Plan provides for
the payment of severance, termination, change in control or
similar-type payments or benefits. The Parent has delivered or
caused to be delivered to the Purchaser or its counsel (A)
true and complete copies of each Foreign Employee Benefit
Plan, other than a Foreign Collectively Bargained Employee
Benefit Plan or a Foreign Governmental Employee Benefit Plan,
together with all amendments thereto, and, if applicable, all
current trust agreements and other documents establishing
other funding arrangements, together with all amendments
thereto, and the latest financial statements and actuarial
valuation report, as applicable, thereof, and (B) true and
complete copies of, or a description of, each Foreign
Governmental Employee Benefit Plan and each Foreign
Collectively Bargained Employee Benefit Plan, as well as each
agreement creating an obligation of the Company or Subsidiary
to a Foreign Collectively Bargained Employee Benefit Plan.
Each Foreign Employee Benefit Plan complies with and has been
administered in all respects in accordance with all applicable
legislation, regulations and requirements (including, where
applicable, insofar as may be necessary to maintain the
approved status of such Foreign Employee Benefit Plan). There
are no disputes, claims or proceedings (other than routine
claims for benefits) in relation to any of the Foreign
Employee Benefit Plans and no such disputes, claims or
proceedings are pending or threatened.
<PAGE>
(b) U.S. Employee Benefit Plans.
Set forth on Schedule 4.18(b) of the Disclosure
Schedule is a true and complete list of each U.S. Employee
Benefit Plan. Neither the Parent nor any Seller nor any of
their Affiliates (nor any employer (whether or not
incorporated) that would be treated together with the Parent,
any Seller, or any such Affiliate as a single employer within
the meaning of Section 414 of the Code), has ever maintained
or contributed to, or had any obligation to contribute to (or
borne any liability with respect to) any "employee pension
benefit plan," within the meaning of Section 3(2) of ERISA,
that is a "multiemployer plan," within the meaning of Section
3(37) of ERISA, or subject to Section 412 of the Code, or
Section 302 or Title IV of ERISA. Each U.S. Employee Benefit
Plan intended to be qualified under Section 401(a) of the
Code, has, as currently in effect, been determined to be so
qualified by the IRS, and since the date of each such
determination, no event has occurred and no condition or
circumstance has existed that resulted or is likely to result
in the revocation of any such determination. The Parent and
each Seller have complied in all respects with the applicable
requirements of Part 6 of Subtitle B of Title I of ERISA and
Section 4980B of the Code ("COBRA"), and will comply with all
COBRA obligations arising in connection with the transactions
contemplated hereby, and neither the Parent nor any Seller is
subject to any liability as a result of any failure to
administer or operate any "group health plan" (as defined in
COBRA) in compliance with COBRA. Full payment has been made of
all amounts which the Parent and each Seller are required
under applicable law or under any U.S. Employee Benefit Plan
or any agreement relating to any U.S. Employee Benefit Plan to
have paid as contributions or premiums thereunder as of the
last day of the most recent fiscal year of such U.S. Employee
Benefit Plan ended prior to the date hereof. No litigation or
administrative or other proceeding, audit, examination or
investigation is pending or asserted, or, to the best
knowledge of any Datapoint Entity, threatened, anticipated or
expected to be asserted with respect to any U.S. Employee
Benefit Plan or the assets of any such plan (other than
routine claims for benefits arising in the ordinary course).
The execution of this Agreement and the consummation of the
transactions contemplated hereby, do not constitute a
triggering event under any U.S. Employee Benefit Plan, policy,
arrangement, statement, commitment or agreement, whether or
not legally enforceable, which (either alone or upon the
occurrence of any additional or subsequent event) will or may
result in any payment (whether of severance pay or otherwise),
"parachute payment" (as such term is defined in Section 280G
of the Code), acceleration, vesting or increase in benefits to
any present or former employee or director of the Parent or
any Seller. Neither the Parent nor any Seller has any
obligation under any U.S. Employee Benefit Plan or otherwise
to provide post-employment or retiree welfare benefits to any
former employee or any other person, except as specifically
required by COBRA.
<PAGE>
4.19. Labor Relations. Except as set forth in Section 4.19 of the
Disclosure Schedule, each Company is in compliance in all material respects with
all foreign, federal, state and local laws respecting employment and employment
practices, terms and conditions of employment, wages and hours and
nondiscrimination in employment, and is not engaged in any unfair labor
practice. Except as set forth in Section 4.19 of the Disclosure Schedule, there
is no charge pending or, to the knowledge of any Datapoint Entity, threatened
against any Company alleging any unlawful discrimination in employment practices
or any unfair labor practices before any court, regulatory agency or other
authority. There is no labor strike, dispute, slow-down or work stoppage pending
or, to the knowledge of any Datapoint Entity, threatened against or involving
any Company. Except as set forth in Section 4.19 of the Disclosure Schedule, no
Person has petitioned within the last three (3) years, and no Person is now
petitioning, for union representation of any employees of any Company. Except as
set forth in Section 4.19 of the Disclosure Schedule, no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is pending against any Company and no claim therefor has been
asserted. Except as described in Section 4.19 of the Disclosure Schedule, none
of the employees of any Company is covered by any collective bargaining
agreement, and no collective bargaining agreement is currently being negotiated
by any Company. Except as fully described in Section 4.19 of the Disclosure
Schedule, no Company has experienced any work stoppage during the last five (5)
years. No Company has initiated negotiations for the establishment of a European
Works Council (within the meaning of Council Directive 4/45/EC) or received a
request from 100 or more employees or their representatives in at least two
undertakings or establishments in at least two different member states of the
European Community for the initiation of such negotiations.
4.20. Trademarks, Patents, Etc. Section 4.20 of the Disclosure Schedule
sets forth a complete and accurate list of all Intellectual Property used or
proposed to be used by each Company or by the Parent in connection with the
European Operations, and all licenses (as licensee or licensor) and other
agreements relating thereto. Each such license or written agreement is a legal
valid and binding obligation of such Company and each of the parties thereto,
enforceable in accordance with the terms thereof. Except to the extent set forth
in Section 4.20 of the Disclosure Schedule and except as otherwise contemplated
under Section 2 hereof, each Company (or the Parent as regards Intellectual
Property used or proposed to be used by the Parent in connection with the
European Operations) owns or has the sole and exclusive right to use without
restrictions all Intellectual Property, free and clear of any liens, security
interests, charges, encumbrances and other adverse claims, used as or necessary
for the ordinary course of business as presently conducted or as proposed to be
conducted, and such rights will not be adversely affected by the consummation of
the transactions contemplated hereby. Within the four year period immediately
prior to the date of this Agreement, the business of each Company (or the Parent
as regards Intellectual Property used or proposed to be used by the Parent in
connection with the European Operations) made use of no Intellectual Property
other than such Intellectual Property listed on Section 4.20 of the Disclosure
Schedule. All Intellectual Property listed on Section 4.20 of the Disclosure
Schedule has been duly registered with, filed in, or issued by the appropriate
domestic or foreign governmental agency, to the extent required, and each such
registration, filing and issuance remains in full force and effect, and, in the
case of Intellectual Property of Datapoint Germany I GmbH, will have been
validly assigned to Datapoint Germany II GmbH prior to the Closing. Each Company
(or the Parent as regards Intellectual Property used or proposed to be used by
the Parent in connection with the European Operations) has the exclusive right
to file, prosecute and maintain all applications and registrations with respect
to the Intellectual Property that is owned by the Company (or the Parent as
regards Intellectual Property used or proposed to be used by the Parent in
connection with the European Operations). No claims have been asserted, and no
claims are pending, by any Person regarding the use of any Intellectual Property
or challenging or questioning the validity or effectiveness of any of the
Intellectual Property, licenses or agreements, and, there is no basis for such
claim. The use by each Company (or the Parent as regards Intellectual Property
used or proposed to be used by the Parent in connection with the European
Operations) of any Intellectual Property in the ordinary course of business does
not infringe on the rights of any Person.
<PAGE>
4.21. Suppliers and Customers. Section 4.21 of the Disclosure Schedule
sets forth the ten (10) largest suppliers and ten (10) largest customers of each
Company as of the date hereof, based on the dollar amount of sales for each
Company's 1999 fiscal year. The relationships of each Company with such
suppliers and customers are good commercial working relationships. Except as set
forth in Section 4.21 of the Disclosure Schedule, no supplier or customer of
material importance to any Company's business has canceled or otherwise
terminated, or threatened to cancel or otherwise to terminate, its relationship
with such Company, or has during the last twelve (12) months decreased
materially, or overtly threatened to decrease or limit materially, its services,
supplies or materials for use in such Company's business, or its usage or
purchase of the services or products of such Company except for normal cyclical
changes related to customers' businesses. To the knowledge of each Datapoint
Entity, no such supplier or customer intends to cancel or otherwise
substantially modify its relationship with any Company or to decrease materially
or limit its services, supplies or materials to any Company, or its usage or
purchase of any Company's services or products, and the communication of the
transactions contemplated hereby will not adversely affect the relationship of
any Company with any such supplier or customer.
4.22. Accounts Receivable. Except as set forth in Section 4.22 of the
Disclosure Schedule and with respect to the Intercompany Accounts, all accounts
and notes receivable reflected in the Financial Statements, and all accounts and
notes receivable arising subsequent to the respective dates thereof, have arisen
in the ordinary course of business, represent valid obligations owing to each
Company, and have been collected or are collectible in the aggregate recorded
amounts thereof (less amounts for doubtful accounts reflected in the Financial
Statements, or in the case of any accounts and notes receivable arising
subsequent to the respective dates thereof, less amounts for doubtful accounts
consistent with each Company's past practice) in accordance with their terms;
and to the knowledge of each Datapoint Entity, none of such accounts receivable
or other debts is, or at the Closing Date will be, subject to any counterclaim
or set-off except to the extent of any such provision or reserve. There has been
no material change since the date of the Financial Statements in the amount of
accounts receivable or other debts due each Company or its respective
subsidiaries or the allowances with respect thereto, or accounts payable of each
Company and its subsidiaries, from that reflected in the Financial Statements.
4.23. No Undisclosed Liabilities. Except to the extent (a) reflected or
reserved against in the Financial Statements, (b) incurred in the ordinary
course of business after the dates of the Financial Statements, (c) described in
the Disclosure Schedule, including Section 4.23 of the Disclosure Schedule, or
(d) with respect to the Intercompany Accounts, no Company has any liabilities or
obligations of any nature, whether accrued, absolute, contingent or otherwise
(including without limitation as guarantor or otherwise with respect to
obligations of others), other than performance obligations with respect to each
Company's contracts that would not be required to be reflected or reserved
against on a balance sheet prepared in accordance with United States generally
accepted accounting principles, or in the footnotes thereto.
<PAGE>
4.24. Taxes.
-----
(a) Tax Returns. The Parent and the Companies have timely
filed or caused to be timely filed with the appropriate taxing authorities all
returns, statements, forms and reports for Taxes ("Returns") that are required
to be filed by, or with respect to, the Companies and the Acquired Assets on or
prior to the Closing Date. The Returns have accurately reflected all liability
for Taxes of, or with respect to, the Companies and the Acquired Assets for the
periods covered thereby.
(b) Payment of Taxes. All Taxes and Tax liabilities of, or
with respect to, the Companies and the Acquired Assets for all taxable years or
periods that end on or before the Closing Date and, with respect to any taxable
year or period beginning before and ending after the Closing Date, the portion
of such taxable year or period ending on and including the Closing Date
("Pre-Closing Period") have been timely paid in full on or prior to the Closing
Date, except for Taxes of the Companies that have been accrued and adequately
disclosed and fully provided for on the Closing Balance Sheet.
(c) Other Tax Matters. (i) Except as set forth in Section 4.24
of the Disclosure Schedule, since January 1, 1995, none of the Datapoint
Entities has been the subject of an audit or other examination of Taxes by the
tax authorities of any nation, state or locality with respect to any of the
Companies or the Acquired Assets and none of the Datapoint Entities has received
any notices from any taxing authority relating to any issue which could affect
the Tax liability of any of, or with respect to any of the Companies or the
Acquired Assets.
(ii) Except as set forth in Section 4.24 of the Disclosure Schedule,
none of the Datapoint Entities, as of the Closing Date, (A) has
entered into an agreement or waiver or has been requested to
enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of Taxes of any
of the Companies, (B) is presently contesting any Tax liability
of any of the Companies before any court, tribunal or agency or
(C) has applied for and/or received a ruling or determination
from a taxing authority regarding a past or prospective
transaction of any of the Companies.
(iii) Except as set forth in Section 4.24 of the Disclosure Schedule,
none of the Datapoint Entities has been included in any
"consolidated," "unitary" or "combined" Return provided for under
the law of any jurisdiction or any state or locality with respect
to Taxes for any taxable period for which the statute of
limitations has not expired.
(iv) All Taxes which each of the Datapoint Entities is (or was)
required by law to withhold or collect have been duly withheld or
collected, and have been timely paid over to the proper
authorities to the extent due and payable.
<PAGE>
(v) No claim has ever been made by any taxing authority in a
jurisdiction where any of the Companies does not file Tax Returns
that any of the Companies is or may be subject to taxation by
that jurisdiction.
(vi) There are no tax sharing, allocation, indemnification or similar
agreements in effect as between any of the Datapoint Entities or
any predecessor or affiliate thereof and any other party
(including the Parent and the Sellers and any predecessors or
affiliates thereof) under which the Buyer or any Company could be
liable for any Taxes or other claims of any party.
(vii) None of the Companies has applied for, been granted, or agreed to
any accounting method change for which it will be required to
take into account any adjustment under the tax laws of any
nation, state or locality.
(viii)None of the Companies is a party to any agreement with any
employee that would require it or any affiliate thereof to make
any payment that would not be deductible by the employing
Company.
(x) None of the Companies is a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code.
(xi) The Parent is not a "foreign person" within the meaning of Section
1445 of the Code.
4.25. Ancillary Assets and Business. Except for the respective business
conducted by the Companies, and except with respect to the businesses conducted
by the entities listed on Schedule C hereto, none of the Parent, any Seller or
any of their respective Affiliates (other than the Companies) has any material
assets used in or relating to the business conducted or in the case of Datapoint
Germany II GmbH, to be conducted, by the Companies, nor do any of them conduct
any material business in Europe.
4.26. Broker. No Datapoint Entity has retained, utilized or been
represented by any broker, agent, finder or intermediary in connection with the
negotiation or consummation of the transactions contemplated by this Agreement.
4.27. Potential Conflicts of Interest. Except as set forth in Section
4.27 of the Disclosure Schedule, neither the Parent nor any of its Affiliates
(a) owns, directly or indirectly, any interest in (excepting not more than 5%
stock holdings for investment purposes in securities of publicly held and traded
companies) or is an officer, director, employee or consultant of any Person
which is a competitor, lessor, lessee, customer or supplier of any Company; (b)
owns, directly or indirectly, in whole or in part, any tangible or intangible
property which such Company is using or the use of which is necessary for the
business of such Company; or (c) has any cause of action or other claim
whatsoever against, or owes any amount to, such Company, except for claims in
the ordinary course of business, such as for accrued vacation pay, accrued
benefits under Employee Benefit Plans and similar matters and agreements.
<PAGE>
4.28. Bank Accounts, Signing Authority, Powers of Attorney. Except as
set forth in Section 4.28 of the Disclosure Schedule, no Company has an account
or safe deposit box in any bank, and no Person has any power, whether singly or
jointly, to sign any checks on behalf of any Company, to withdraw any money or
other property from any bank, brokerage or other account of any Company, or to
act under any power of attorney granted by any Company at any time for any
purpose. Section 4.28 of the Disclosure Schedule hereto also sets forth, the
names of all persons authorized to borrow money or sign notes on behalf of each
Company.
4.29. Minute Books. The minute books of each Company made available to
the Buyer for inspection, to the extent each such Company maintains a minute
book, accurately record therein all of the meetings of, and all material actions
taken by the Boards of Directors and shareholders of each Company. Except as set
forth in Section 4.29 of the Disclosure Schedule, no Company has any of its
records, systems, controls, data or information recorded, stored, maintained,
operated or otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of such Company.
4.30. Sophistication of the Sellers and the Parent. The Sellers and the
Parent are represented by legal counsel in connection with this Agreement and
the transactions contemplated hereby, and the Sellers and the Parent are not in
a disparate bargaining position relative to the Buyer.
4.31. No Changes Since Balance Sheet Date. Since the Balance Sheet
Date, except as expressly contemplated by this Agreement or approved in writing
by the Buyer, no Company has (a) incurred any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise), except in the
ordinary course of business, (b) permitted any of its assets to be subjected to
any mortgage, pledge, lien, security interest, encumbrance, restriction or
charge of any kind, (c) sold, transferred or otherwise disposed of any assets
except in the ordinary course of business, (d) made any capital expenditure or
commitment therefor, except in the ordinary course of business, (e) declared or
paid any dividend or made any distribution on any shares of its capital stock,
(f) redeemed, purchased or otherwise acquired any shares of its capital stock,
(g) granted or issued any option, warrant or other right to purchase or acquire
any shares of its capital stock, (h) made any bonus or profit sharing
distribution or payment of any kind, (i) increased its indebtedness for borrowed
money, except current borrowings from banks in the ordinary course of business,
or made any loan to any Person, (j) written off as uncollectible any notes or
accounts receivable, except write-offs in the ordinary course of business
charged to applicable reserves, none of which individually or in the aggregate
is material to such Company, (k) granted any increase in the rate of wages,
salaries, bonuses or other remuneration of any executive employee or other
employees, except in the ordinary course of business, (l) canceled or waived any
claims or rights of substantial value, (m) made any change in any method of
accounting or auditing practice, (n) otherwise conducted its business or entered
into any transaction, except in the usual and ordinary manner and in the
ordinary course of business, (o) agreed, whether or not in writing, to do any of
the foregoing; provided, that the foregoing shall not prohibit (i) the making of
any non-cash dividend in connection with the termination of Intercompany
Accounts, (ii) the cancellation of Intercompany Accounts, (iii) any bonuses
payable by the Parent or a Seller solely out of the proceeds of the Purchase
Price or (iv) payments to the Parent or any Subsidiary of the Parent other than
a Company in accordance with the timetable and up to the amounts set out in
Schedule F.
<PAGE>
4.32. Acquired Assets. The Acquired Assets are the only assets of the
Parent or any of its Subsidiaries (other than the Companies) currently used in
the European Operations.
4.33. Disclosure. No representation or warranty by the Parent or any
Seller in this Agreement or in any exhibit, schedule, written statement,
certificate or other document delivered or to be delivered to the Buyer pursuant
hereto or in connection with the consummation of the transactions contemplated
hereby contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading or necessary in order to
provide the Buyer with proper and complete information as to the business,
condition, operations and prospects of each Company. There is no fact known to
any Datapoint Entity which could reasonably be expected to have a Material
Adverse Effect which has not been set forth in this Agreement, the Financial
Statements or in any Schedule, Exhibit or Certificate attached hereto or
delivered pursuant to this Agreement. The Companies are the only Subsidiaries of
the Parent which comprise the European Operations.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to the Sellers as follows:
5.1. Organization of Buyer; Authority. The Buyer is a limited company,
validly existing and in good standing under the laws of England and Wales. The
Buyer has all requisite corporate power and authority to execute and deliver the
Transaction Documents to which it is a party and to carry out all of the actions
required of it pursuant to the terms of such Transaction Documents.
5.2. Corporate Approval; Binding Effect. The Buyer has obtained all
necessary authorizations and approvals required for the execution and delivery
of the Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby. Each of the Transaction Documents
to which the Buyer is a party has been or will be duly executed and delivered by
the Buyer and constitutes or will constitute when executed and delivered the
legal, valid and binding obligation of the Buyer, enforceable against the Buyer
in accordance with its terms, except as enforceability thereof may be limited by
any applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general principles of equity.
5.3. Non-Contravention. The execution and delivery by the Buyer of the
Transaction Documents to which it is a party and the consummation by the Buyer
of the transactions contemplated thereby (i) will not violate any provision of
the Articles of Incorporation or By-Laws or other organizational documents of
the Buyer, (ii) will not violate any statute, rule, regulation, order or decree
of any public body or authority by which the Buyer is bound or which is binding
upon any of its properties or assets and (c) will not result in a violation or
breach of, or constitute a default under, any license, franchise, permit,
indenture, agreement or other instrument to which the Buyer is a party, or by
which the Buyer or any of its assets or properties is bound, excluding from the
foregoing clauses (b) and (c) violations, breaches or defaults which, either
individually or in the aggregate, would not prevent the Buyer from performing
its obligations under this Agreement or consummation of the transactions
contemplated by this Agreement.
<PAGE>
5.4. Governmental Consents. Subject to obtaining the requisite approval
of the Bankruptcy Court as contemplated under Section 6.6 hereof, no consent,
approval or authorization of, or registration, qualification or filing with, any
governmental agency or authority is required for the execution and delivery by
the Buyer of the Transaction Documents to which it is a party or for the
consummation by the Buyer of the transactions contemplated hereby or thereby.
5.5. Broker. Other than KPMG Corporate Finance, the Buyer has not retained,
utilized or been represented by any broker, agent, finder or other intermediary
in connection with the negotiation or consummation of the transactions
contemplated by this Agreement.
5.6. Sophistication of the Buyer. The Buyer is represented by legal
counsel in connection with this Agreement and the transactions contemplated
hereby, and the Buyer is not in a disparate bargaining position relative to the
Parent and the Sellers.
6. CONDUCT OF BUSINESS PENDING CLOSING. The Sellers and the Parent, jointly
and severally, covenant and agree that, from and after the date of this
Agreement and until the Closing, except as otherwise specifically consented to
or approved by the Buyer in writing:
6.1. Conduct of Business. During the period from the date of this
Agreement to the Closing Date, the Parent and the Sellers shall cause the
Companies to conduct their respective operations only according to their
ordinary and usual course of business and to use their best efforts to preserve
intact their respective business organizations, keep available the services of
their officers and employees and maintain satisfactory relationships with
licensors, suppliers, distributors, clients and others having business
relationships with them. Notwithstanding the immediately preceding sentence,
prior to the Closing Date, except as may be first approved in writing by the
Buyer or as is otherwise permitted or required by this Agreement, the Parent and
the Sellers will cause (a) the Companies' respective Certificates of
Incorporation and By-Laws and other organizational documents to be maintained in
their form on the date of this Agreement, (b) the compensation payable or to
become payable by any Company to any officer, employee or agent being paid
$50,000 per year or more on the Balance Sheet Date to be maintained at their
levels on the date of this Agreement, (c) the Companies to refrain from making
any bonus (other than bonuses paid by the Parent or a Seller solely out of the
proceeds of the Purchase Price), pension, retirement or insurance payment or
arrangement to or with any such persons except those that may have already been
accrued, (d) the Companies to refrain from entering into any contract or
commitment except contracts in the ordinary course of business, (e) the
Companies to refrain from making any change affecting any bank, safe deposit or
power of attorney arrangements of any Company and (f) the Companies to refrain
from taking any of the actions referred to in Section 4.31. The Parent and the
Sellers agree not to take any action, or omit to take any action, which would
cause the representations and warranties contained in Article 4 hereof to be
untrue or incorrect. During the period from the date of this Agreement to the
Closing Date, the Parent and the Sellers shall confer on a regular and frequent
basis with one or more designated representatives of the Buyer to report
material operational matters and to report the general status of ongoing
operations. The Parent and the Sellers shall notify Parent of any unexpected
emergency or other change in the normal course of its business or in the
operation of its properties and of any governmental complaints, investigations
or hearings (or communications indicating that the same may be contemplated),
adjudicatory proceedings, budget meetings or submissions involving any material
property of any Company, and to keep the Buyer fully informed of such events and
permit its representatives prompt access to all materials prepared in connection
therewith.
<PAGE>
6.2. Review of the Company. The Buyer may, prior to the Closing Date,
directly or through its representatives, review the properties, books and
records of the Companies and their financial and legal condition to the extent
it deems necessary or advisable to familiarize itself with such properties and
other matters; such review shall not, however, affect the representations and
warranties made by the Parent and the Sellers in this Agreement or the remedies
of the Buyer for breaches of those representations and warranties. The Parent
and the Sellers shall cause the Companies to permit the Buyer and its
representatives to have, after the date of execution of this Agreement, full
access to the premises and to all the books and records of the Companies and to
cause the officers of the Companies to furnish the Buyer with such financial and
operating data and other information with respect to the business and properties
of the Companies as the Buyer shall from time to time reasonably request. In the
event of termination of this Agreement the Buyer shall keep confidential any
material information obtained from any Datapoint Entity concerning their
respective properties, operations and business (unless readily ascertainable
from public or published information or trade sources) until the same ceases to
be material (or becomes so ascertainable) and, at the request of the Parent,
shall return to the Parent all copies of any schedules, statements, documents or
other written information obtained in connection therewith. The Parent and the
Sellers shall deliver or cause to be delivered to the Buyer such additional
instruments, documents, certificates and opinions as the Buyer may reasonably
request for the purpose of (i) verifying the information set forth in this
Agreement and the Disclosure Schedule and (ii) consummating or evidencing the
transactions contemplated by this Agreement.
6.3. Exclusive Dealing. Except as otherwise mandated by and consistent
with the terms of the Scheduling Order and the Parent's fiduciary duties as a
debtor and debtor in possession under the Bankruptcy Code, during the period
from the date of this Agreement to the Closing Date, the Parent and the Sellers
shall not, and shall cause the Companies to refrain from taking any action to,
directly or indirectly, encourage, initiate or engage in discussions or
negotiations with, or provide any information to, any Person, other than the
Buyer, concerning any purchase of the Shares or the Acquired Assets or any
merger, sale of substantial assets or similar transaction involving any Company.
6.4. Consents of Third Parties. The Sellers and the Parent will employ
their reasonable best efforts (which shall not include (a) any obligation to pay
any additional money unless such obligation is triggered, pursuant to the
express terms of any then binding agreement (which agreement provides for a
liquidated amount of such obligation, or the exact amount of such obligation is
determinable pursuant to an express formula contained therein or the application
of the express terms thereof), by the transactions contemplated hereunder, or
(b) any obligation to restructure the terms of any then binding agreement) to
secure, before the Closing Date, the consent, in form and substance satisfactory
to the Buyer and its counsel, to the consummation of the transactions
contemplated by this Agreement by each party to any material contract,
commitment or obligation of each Company, under which such transactions would
constitute a default, would accelerate obligations of such Company or would
permit cancellation of any such contract. Without limiting the foregoing, the
Parent shall use its reasonable efforts to obtain the consent to the
consummation of the transactions contemplated by this Agreement of the holders
of the Parent's 8 7/8% Convertible Subordinated Debentures due June 1, 2006 .
<PAGE>
6.5. Satisfaction of Conditions Precedent. The Sellers and the Parent
will use their best efforts (which shall not include (a) any obligation to pay
any additional money unless such obligation is triggered, pursuant to the
express terms of any then binding agreement (which agreement provides for a
liquidated amount of such obligation, or the exact amount of such obligation is
determinable pursuant to an express formula contained therein or the application
of the express terms thereof), by the transactions contemplated hereunder, or
(b) any obligation to restructure the terms of any then binding agreement) to
cause the satisfaction of the conditions precedent set forth in Article 7 of
this Agreement.
6.6. Bankruptcy Court and French Commercial Court Approval. (a) As soon
as practicable after the date hereof, and in no event later than May 3, 2000,
the Debtor shall file in the Bankruptcy Court a petition for reorganization
under Chapter 11 of the Bankruptcy Code. As promptly as practicable after the
date hereof, and in no event later than May 4, 2000, the Debtor shall file a
motion with the Bankruptcy Court (the "Scheduling Motion") in support of, and
seeking entry of, the Scheduling Order.
(b) As promptly as practicable after the date hereof and in no event
later than May 5, 2000, the Parent shall file or cause to be filed a request
with the appropriate French Commercial Court to obtain a modification of the
business plan applicable to Datapoint S.A. in order to authorize the transfer of
its Shares to the Buyer or any permitted assignee of the Buyer, to remove any
restrictions on transfer of such Shares following such transfer and to authorize
the transferee of such Shares to vote such Shares at shareholder meetings of
Datapoint S.A.
7. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS. The obligation of the
Buyer to consummate the Closing shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions (to the extent noncompliance
is not waived in writing by the Buyer):
7.1. Representations and Warranties True at Closing and Signing. The
representations and warranties made by the Sellers and the Parent in or pursuant
to this Agreement shall be true and correct at and as of the date hereof and the
Closing Date with the same effect as though such representations and warranties
had been made or given at and as of the date hereof and the Closing Date.
7.2. Compliance with Agreement. The Sellers and the Parent shall have
performed and complied in all material respects with all of their respective
obligations under this Agreement to be performed or complied with by them on or
prior to the Closing Date.
<PAGE>
7.3. No Material Adverse Change. The business, assets or properties of
all of the Companies, taken as a whole, shall not have been, and shall not be
threatened to be, adversely affected in any material way as a result of fire,
explosion, earthquake, disaster, labor trouble or dispute, change in business
organization, any action by the United States or any other foreign governmental
authority, change in technology, flood, drought, embargo, riot, civil
disturbance, uprising, activity of armed forces or act of God or public enemy.
Following the execution of this Agreement, there shall not have occurred any
event that could reasonably be expected to have a Material Adverse Effect.
7.4. Closing Certificates. (a) The Parent and each Seller shall have
delivered to the Buyer in writing, at and as of the Closing, a certificate duly
executed by an Executive Officer of each such party, in form and substance
satisfactory to the Buyer and the Buyer's counsel, certifying that the
conditions in each of Sections 7.1, 7.2 and 7.3 hereof have been satisfied.
(b) Each of the Parent and each Seller shall have delivered to the
Buyer a certificate duly executed by its Secretary or Assistant Secretary as to
the genuineness of signatures of, and incumbency of, its signatories, and
attaching a true, correct and complete set of its organizational documents and
relevant resolutions and a true, correct and complete copy of the organizational
documents of each Company that is its Subsidiary.
7.5. Opinion of Counsel. U.S. and European counsel to the Datapoint
Entities shall have delivered to the Buyer written opinions, addressed to the
Buyer and dated the Closing Date, substantially in the form of Exhibit E hereto.
<PAGE>
7.6. Approvals. All corporate and other approvals (including, without
limitation, all Governmental Approvals) in connection with the transactions
contemplated by this Agreement shall have been received and shall be reasonably
satisfactory in form and substance to the Buyer and its counsel. Without
limiting the foregoing, the transfer of the Shares of Datapoint Germany II GmbH
shall have been approved or deemed approved under German statutory law by the
German Federal Cartel Office.
7.7. No Litigation. No restraining order or injunction shall prevent
the transactions contemplated by this Agreement and no action, suit or
proceeding shall be pending or threatened before any court or administrative
body in which it will be or is sought to restrain or prohibit or obtain damages
or other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
7.8. Scheduling Order/Approval Order. The Parent shall have filed the
Scheduling Motion on or before May 4, 2000. The Scheduling Order shall have been
entered by the Bankruptcy Court on or before May 15, 2000. The Approval Order
shall have been entered by the Bankruptcy Court on or before June 30, 2000, and
shall have become a Final Order on or before July 10, 2000.
7.9. Datapoint Name. The Parent and such of its Subsidiaries as is
contemplated under Section 2.1(a) hereof shall have executed and delivered the
Name Change Certificates and the Name Assignment to the Buyer, which Name Change
Certificates and Name Assignment shall be in full force and effect.
7.10. Consents of Third Parties. The Sellers and the Parent will have
obtained the consent, in form and substance reasonably satisfactory to the Buyer
and the Buyer's counsel, to the consummation of the transactions contemplated by
this Agreement by each party to any material contracts or agreement to which any
Company is a party under which such transactions would constitute a default,
would accelerate obligations of any such Company or would permit cancellation of
any such contract or agreement.
<PAGE>
7.11. Proceedings and Documents Satisfactory. All proceedings in
connection with the transactions contemplated by this Agreement and all
certificates and documents delivered to the Buyer in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory to
the Buyer and the Buyer's counsel, and the Buyer shall have received the
originals or certified or other copies of all such records and documents as the
Buyer may reasonably request.
7.12. Termination of Intercompany Accounts. Any and all Intercompany
Accounts shall be eliminated in a manner that results in no liability to the
Buyer or any of the Companies and that is otherwise satisfactory to the Buyer.
7.13. Assignment of Confidentiality Agreement. The Parent shall have
assigned to the Buyer its rights under the letter, dated January 26, 2000 from
Call Centric Ltd. to the Parent, relating to confidentiality issues.
7.14. Termination of Agreements. Except as contemplated by Section 2
hereof, any and all agreements and contracts between any Seller, the Parent or
any of their respective Affiliates (other than the Company) on the one hand, and
any Company on the other hand, including, without limitation, all management fee
agreements, shall be terminated.
7.15. Resolution of Outstanding Ancillary Issues. The Parent and the
Buyer shall have reached agreement as to the matters set forth in Section 2.3
hereof. Without limiting the foregoing, the transfers from Datapoint Germany I
GmbH to Datapoint Germany II GmbH shall have been completed.
7.16. Completion of Due Diligence. The Buyer and its representatives
shall have completed their legal due diligence review of the Datapoint Entities
by no later than April 28, 2000, and shall be reasonably satisfied in all
respects with the results thereof.
7.17. Transaction Documents and Related Items. (a) Forms of each of the
Transaction Documents (other than this Agreement), together with completed
Exhibits to this Agreement shall have been delivered to the Buyer by April 26,
2000, each in form and substance reasonably satisfactory to the Buyer and the
Parent. Each of the Transaction Documents shall have been duly executed and
delivered by the parties thereto and shall be in full force and effect.
<PAGE>
(b) Seven days before the Closing Date, the Parent shall have delivered
a revised Disclosure Schedule to the Buyer, all of the information in which
shall be materially complete as of such date.
8. CONDITIONS PRECEDENT TO THE PARENT'S AND THE SELLERS' OBLIGATIONS. The
obligation of the Parent and the Sellers to consummate the Closing shall be
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (to the extent noncompliance is not waived in writing by
the Parent):
8.1. Representations and Warranties True at Closing. The
representations and warranties made by the Buyer in this Agreement shall be true
and correct at and as of the Closing Date with the same effect as though such
representations and warranties had been made or given at and as of the Closing
Date.
8.2. Compliance with Agreement. The Buyer shall have performed and complied
in all material respects with all of its obligations under this Agreement that
are to be performed or complied with by it at or prior to the Closing.
8.3. Closing Certificate. The Buyer shall have delivered to the Sellers
in writing, at and as of the Closing, a certificate duly executed by an
Executive Officer of such Buyer, in form and substance satisfactory to the
Parent and the Parent's counsel, to the effect that the conditions in each of
Sections 8.1 and 8.2 hereof have been satisfied.
8.4. Opinion of Counsel. White & Case LLP and Macfarlanes, counsel to
the Buyer, shall have delivered to the Sellers a written opinion, dated the
Closing Date and addressed to the Sellers substantially in the form annexed
hereto as Exhibit F.
8.5. No Litigation. No restraining order or injunction shall prevent
the transactions contemplated by this Agreement and no action, suit or
proceeding shall be pending or threatened before any court or administrative
body in which it will be or is sought to restrain or prohibit or obtain damages
or other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
8.6. Documents Satisfactory. All certificates and documents delivered
to the Sellers by or on behalf of the Buyer in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory to the Parent
and its counsel, and the Sellers shall have received the originals or certified
or other copies of all such of the Buyer's records and documents as the Seller
may reasonably request.
<PAGE>
8.7. Datapoint License. The Buyer shall have delivered to the Parent and
such of its Subsidiaries as is contemplated under Section 2.1(c) hereof the
Datapoint License, which Datapoint License shall be in full force and effect.
8.8. Resolution of Outstanding Issues. The Parent and the Buyer shall have
reached agreement as to the matters set forth in Section 2.3 hereof.
8.9. Approval Order. The Approval Order shall have become a Final Order.
8.10. Transaction Documents. Forms of each of the Transaction Documents
(other than this Agreement) shall have been agreed upon by the Parent and the
Buyer by the Closing Date.
9. CERTAIN COVENANTS.
9.1. Confidentiality. Each of the Sellers and the Parent recognizes
that by reason of the Sellers' ownership of the Companies, the Sellers and the
Parent have acquired and possess confidential information and trade secrets
concerning the operations and business of the Companies, the use or disclosure
of which could cause the Companies substantial loss and damages that could not
be readily calculated and for which no remedy at law would be adequate.
Accordingly, each of the Sellers and the Parent shall not, and shall not permit
any of their Subsidiaries or Affiliates to, at any time after the date of this
Agreement, except with the prior written consent of the Buyer, directly or
indirectly, disclose any trade secret or confidential information relating to
the Companies, or use any such information in a manner detrimental to the
interests of any Company or the Buyer, unless (a) such information becomes known
to the public generally through no fault of any Seller or the Parent, or any of
their Subsidiaries or Affiliates or (b) disclosure is required by law or by the
Bankruptcy Court or any other court of competent jurisdiction, the rules and
regulations of the London Stock Exchange (or any other stock exchange on which
any Company's shares are listed or quoted), or any enquiry or investigation by
any governmental, official or regulatory body which is lawfully entitled to
require any such disclosure provided, that prior to disclosing any information
pursuant to clause (a) or (b) above, the Sellers and the Parent shall give prior
written notice thereof to the Buyer and provide the Buyer with the opportunity
to contest such disclosure or otherwise to agree to the timing and content of
such disclosure and shall cooperate with efforts to prevent such disclosure. As
used herein, the term "confidential information" includes, without limitation,
information with respect to any Company's products, services and facilities,
methods, trade secrets and other intellectual property, software, source code,
systems, procedures, manuals, confidential reports, product and service price
lists, customer lists, financial information (including the revenues, costs or
profits associated with any of the Company's products or services), business
plans, prospects or opportunities, but shall specifically exclude any
information already in the public domain.
<PAGE>
9.2. Non-Competition. Each of the Sellers and the Parent acknowledges
that the covenants and agreements in this Section 9.2 are a condition precedent
to the Buyer's obligations to acquire the Shares and the Acquired Assets from
the Sellers under this Agreement, and that the Buyer would not acquire the
Shares and the Acquired Assets but for the agreements of the Sellers and the
Parent with the Buyer in this Section 9.2. Each of the Sellers, the Parent and
the Buyer acknowledges that from and after the Closing Date the Companies and
the Buyer will sell products and services to customers located in markets
throughout Europe, North America and South America (the "Prohibited Area"), and
that any engagement by any Seller, the Parent or any of their Subsidiaries or
Affiliates in the Designated Industry (as hereinafter defined) could cause the
Buyer and the Companies irreparable damage. Accordingly, for a period from the
Closing Date until the second anniversary of the Closing Date, each of the
Sellers and the Parent shall not, and shall not permit any of their Subsidiaries
or Affiliates to, without the prior written consent of the Buyer, (i) engage
anywhere in the Prohibited Area, directly or indirectly, alone or as a
shareholder (other than as a holder of less than 5% of the capital stock of any
publicly-traded corporation), partner, officer, director, employee or
consultant, in any business organization that is engaged or becomes engaged in
the business of selling or providing (x) telephony, call-center, data processing
or networking products or services, including, without limitation, telephone
switches and dialers, personal computers, servers, printers and other peripheral
hardware and software used in connection therewith, or (y) business consulting
services with respect to the foregoing (the "Designated Industry"); provided,
that the Designated Industry shall not include the business of providing
internet or cybernet networking solutions, including, without limitation,
internal, external and hybrid networking solutions, hardware, software and
consulting services related thereto, (ii) divert to any competitor of any
Company, the Buyer or any of their Affiliates or Subsidiaries any customer of
any Company, the Buyer or such Affiliates or Subsidiaries, or (iii) solicit or
encourage any officer, employee or consultant of any Company, the Buyer or any
of their Affiliates or Subsidiaries to leave their employ for employment by or
with any Seller, the Parent or their Subsidiaries or Affiliates, or any
competitor of any Company or any of the Buyer's or any Company's Affiliates or
Subsidiaries. If at any time the provisions of this Section 9.2 shall be
determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 9.2 shall
be considered divisible and shall become and be immediately amended to only such
area, duration and scope of activity as shall be determined to be reasonable and
enforceable by the court or other body having jurisdiction over the matter; and
the Sellers and the Parent agree that this Section 9.2 as so amended shall be
valid and binding as though any invalid or unenforceable provision had not been
included herein. Notwithstanding the foregoing, Asher B. Edelman ("Edelman") and
his Affiliates (other than the Parent) shall not be bound by the provisions of
this Section 9.2 so long as Edelman and any such Affiliate is not involved in
any manner, directly or indirectly, in any operational capacity with any Person
that is engaged in the Designated Industry in the Prohibited Area; it being
agreed that if Edelman serves as a non-executive director or non-executive
chairman of any Person, he shall not be deemed to be involved in any operational
capacity with such Person.
<PAGE>
9.3. Remedies. It is understood and agreed that money damages would not
be sufficient remedy for any breach of Sections 9.1 or 9.2 hereof by any of the
Parent or the Sellers, and that the Buyer shall be entitled to specific
performance and injunctive relief as remedies for any such breach. Such remedies
shall not be deemed to be the exclusive remedies for the breach of such
Sections, but shall be in addition to all other remedies available at law or in
equity.
9.4. San Antonio Real Property and Employees. (a) Upon the written
request of the Buyer, the Buyer and the Parent shall at the Closing or at such
later date as the Buyer may request, enter into a sublease agreement for a term
of up to 30 days or such other period as the Buyer and the Parent may mutually
agree, pursuant to which the Parent shall sublease that portion of the San
Antonio Office as the Buyer shall request, at a rental rate equal to that
percentage of the total rent payable by the Parent under the San Antonio Lease
which is equal to that percentage of the total floor space of the San Antonio
Office being subleased to the Buyer. The sublease shall contain such further
terms as the Parent and the Buyer shall mutually agree.
(b) At the Closing, the Buyer shall offer employment to those
persons listed on Schedule D attached hereto.
10. INDEMNIFICATION.
10.1. Breach by the Sellers or the Parent. Subject to the overall
limitations, maximum amounts and time limitations set forth in Sections 10.2 and
10.5 hereof, but without limiting the Buyer's rights under Articles 11, 12 and
13 hereof, the Sellers and the Parent, jointly and severally, agree to indemnify
and hold the Buyer and the Companies harmless from and with respect to any and
all claims, liabilities (including, without limitation, Excluded Liabilities),
losses, damages, costs and expenses, including, without limitation, the
reasonable fees and disbursements of counsel (collectively, the "Losses"),
related to or arising directly or indirectly out of any failure or breach by the
Parent or any Seller of any representation or warranty, covenant, obligation or
undertaking made by the Parent or any Seller in this Agreement, and any failure
or any breach by any Seller or the Parent of any representation or warranty,
covenant, obligation or undertaking made by any Seller or the Parent in or
pursuant to this Agreement shall constitute a failure of a breach by all of the
Sellers and the Parent for which the Parent and the Sellers shall be jointly and
severally liable.
10.2. Limitation on Seller/Parent Losses. The aggregate losses payable
by the Sellers and the Parent hereunder pursuant to Section 10.1 with respect to
all claimed Losses shall not exceed $10,000,000.
10.3. Breach by the Buyer. Subject to the overall limitations, maximum
amounts and time limitations set forth in Sections 10.4 and 10.5 hereof, the
Buyer agrees to indemnify and hold the Parent and the Sellers harmless from and
with respect to any and all Losses, related to or arising directly or indirectly
out of any failure or breach by the Buyer of any representation or warranty,
covenant, obligation or undertaking made by the Buyer in this Agreement.
<PAGE>
10.4. Limitations on Buyer Losses. The aggregate Losses payable by the
Buyer to the Sellers and the Parent pursuant to this Section 10 with respect to
all claimed Losses shall not exceed $10,000,000.
10.5. Survival. The respective representations and warranties made
herein by the parties hereto shall survive the execution and delivery of this
Agreement until the Closing Date, after which no claim for a breach of these
representations and warranties may be asserted; provided, however, that the
representations and warranties set forth in, and any claim relating to, (i)
Section 4.8 or 4.9 shall survive for a period of one year after the date of this
Agreement, and (ii) Section 4.5 shall survive indefinitely.
10.6. Indemnity in Respect of Real Property. Without regard to the
limits set forth in Section 10.2 and 10.5, the Sellers and the Parent, jointly
and severally, agree to indemnify and hold the Buyer and the Companies harmless
from and with respect to any Losses incurred by each of them in relation to or
arising in relation to any real property whether freehold, leasehold, licensed
or occupied by the Companies in any part of the world (other than the Real
Property) including any actions, claims, proceedings, losses, damages, payments,
costs, expenses or liabilities arising directly or indirectly from any
obligation to:
(i) perform covenants, restrictive or positive, or agreements affecting or
relating to land;
(ii) pay rent or rents, service charges, insurance premiums or other
monies or observe or perform covenants, agreements or conditions contained in
any agreement for lease, license, deed, agreement or other document ancillary or
supplemental to a lease, whether or not expressed to be so;
(iii) pay principal, interest or other monies or observe or perform
covenants or agreements contained in any mortgage, charge or other document
creating a security interest affecting any property to which this indemnity
applies;
(iv) make payments under or otherwise observe or perform any guarantee
or surety (as primary or secondary obligor) or indemnity or otherwise assume any
liabilities of any third party by accepting a lease or in any other matter.
<PAGE>
(v) make payments under or other observe or perform any agreement for sale,
option or right of pre-emption; or
(vi) make payments under or otherwise observe or perform any building
contract, collateral warranty, duty of care agreement or professional
appointment.
11. TERMINATION OF AGREEMENT
11.1. Termination. This Agreement may be terminated as follows:
(a) By mutual consent of the Buyer and the Parent at any time.
(b) By the Buyer, if any of the conditions to the Buyer's
obligations contained in Section 7 hereof required to have been fulfilled (i)
are not fulfilled as of the date when the Approval Order shall become a Final
Order or (ii) at any time prior thereto, if such conditions become incapable of
being fulfilled by the Outside Closing Date, and such failure has not been
waived by the Buyer or cured by the Parent and/or the Sellers, in each case
prior to termination by the Buyer; provided, however, that the right of the
Buyer to terminate this Agreement under this Section 11.1(b) shall not be
available to the Buyer if its failure to fulfill any obligation under this
Agreement has been the direct cause of, or directly resulted in, the failure of
the conditions to the Buyer's obligations contained in Section 7 hereof to be
fulfilled.
(c) By the Parent, if any of the conditions to the Parents and
the Sellers' obligations contained in Section 8 hereof required to have been
fulfilled (i) are not fulfilled as of the date when the Approval Order becomes a
Final Order, (ii) at any time prior thereto, if such conditions become incapable
of being fulfilled by the Outside Closing Date, and such breach or failure has
not been waived by the Parent or cured by the Buyer, in each case prior to
termination by the Parent or (iii) if an Alternative Transaction is approved by
the Bankruptcy Court; provided, however, that the right of the Parent to
terminate this Agreement under this Section 11.1(c) shall not be available to
the Parent if its or any Seller's failure to fulfill any obligation under this
Agreement has been the direct cause of, or directly resulted in, the failure of
the conditions to the Parent and the Sellers' obligations contained in Section 8
hereof to be fulfilled.
(d) By the Parent or the Buyer if the Closing has not occurred
by the Outside Closing Date, provided that such party has not failed to fulfill
any of its obligations under this Agreement and such failure has been the direct
cause of, or directly resulted in, the failure of the conditions to the other
party's obligations contained in Section 7 or 8 hereof, as applicable, to be
fulfilled.
<PAGE>
11.2. Effect of Termination. Upon the termination of this Agreement,
the parties shall have the remedies available to them at law or in equity
(including the remedies provided in this Agreement), except as otherwise set
forth in this Section 11.2; provided, however, that neither the Sellers and the
Parent on the one hand, nor the Buyer on the other hand, shall be liable to the
other(s) for any indirect, special, incidental, consequential or punitive
damages claimed by the other(s) resulting from any such party's breach of its
obligations, agreements, representations or warranties hereunder, except in the
case of the fraud of any such party(ies). In the event of termination of this
Agreement under any of the circumstances that constitute a Break-Up Event (as
defined in Section 11.3 hereof), the sole and exclusive remedy of the Buyer for
the breach or failure by the Seller or the Parent giving rise to such Break-Up
Event shall be as provided in Section 11.3 hereof; provided, that the Buyer
shall also be entitled to the refund of the Purchase Price Deposit pursuant to
Section 12.2(b) hereof.
11.3. Break-Up Fee. If any Datapoint Entity consummates, or the
Bankruptcy Court approves, an Alternative Transaction, and provided that the
Buyer is not then in material breach of this Agreement (a "Breakup Event"), the
Buyer shall be entitled to be paid the sum of $3,000,000 (the "Breakup Fee").
Payment of the Breakup Fee will be made not later than the closing of the
Alternative Transaction. Until paid, the obligation to pay the Breakup Fee shall
be secured by a priority lien on all of the assets of the Parent and the Sellers
and shall be an Administrative Claim against the Parent, payable from the
proceeds of such Alternative Transaction and shall be a lien on the proceeds
thereof. The parties agree that the Breakup Fee is a reasonable estimate of
Buyer's costs, expenses and loss of business opportunity, and is fair
consideration to induce it to enter into this Agreement. It is an express
condition of this Agreement that the Scheduling Order shall specifically approve
and provide for the payment of the Breakup Fee as set forth herein.
11.4. Termination of Certain Agreements. In the event that the
Bankruptcy Court approves, or any Datapoint Entity consummates, an Alternative
Transaction in connection with an Acquisition Proposal, the letter dated March
24, 2000, from Alchemy Partners to the Parent shall immediately terminate and be
of no further force and effect.
12. GENERAL.
12.1. Expenses.
--------
(a) Except as otherwise exempted by Section 1146(c) of the
Bankruptcy Code all transfer and sales taxes payable with respect to the sale
and conveyance of the Shares and the Acquired Assets shall be paid by the Parent
or the particular Seller or Sellers transferring such Shares or Acquired Assets,
as the case may be.
<PAGE>
(b) Subject to Section 12.1(c), all expenses of the
preparation, execution and consummation of this Agreement and of the
transactions contemplated hereby, including, without limitation, attorneys',
accountants' and outside advisors' fees and disbursements, shall be borne by the
party incurring such expenses.
(c) If (i) the Buyer terminates this Agreement pursuant to
Section 11.1(b) (other than by reason of the failure of the condition set forth
in Section 7.16 to have been satisfied) or (ii) the Bankruptcy Court does not
enter the Scheduling Order by May 15, 2000, and provided that the Buyer is not
then in material breach of this Agreement (a "Termination Event"), the Buyer
shall be entitled to be reimbursed for its costs and expenses (including fees
and disbursements of all counsel) incurred in connection with the transactions
contemplated by the Transaction Documents (the "Termination Fee"); provided,
however, that the Termination Fee shall not exceed $1,500,000. Payment of the
Termination Fee will be made not later than five Business Days after the
Termination Event. Until paid, the obligation to pay the Termination Fee shall
be secured by a priority lien on all of the assets of the Parent and the Sellers
and shall be an Administrative Claim against the Parent. It is an express
condition of this Agreement that the Scheduling Order shall specifically approve
and provide for the payment of the Termination Fee as set forth herein. For the
avoidance of doubt, the Buyer shall not be entitled to a Termination Fee if it
has received the Break-Up Fee.
12.2. Purchase Price Deposit. (a) On or before May 2, 2000,
the Buyer shall deposit the sum of $5 million (the "Purchase Price Deposit")
into the Deposit Escrow Account; provided, that the Buyer shall not be required
to make such deposit if the Seller is in breach of its obligations under this
Agreement or the Buyer has terminated this Agreement pursuant to Section
11.1(b).
(b) If the Buyer terminates this Agreement pursuant to Section
11.1(b), if this Agreement is terminated pursuant to Section 11.1(a) or 11(d),
or if the Parent terminates this Agreement pursuant to Section 11.1(c)(iii) or
pursuant to Section 11.1(c)(i) or 11.1(c)(ii) (but only by reason of the failure
of the conditions set forth in Section 8.5, 8.8 or 8.9 to have been satisfied),
the Purchase Price Deposit will be refunded, together with all interest earned
on the Purchase Price Deposit to the Buyer. If the Parent terminates this
Agreement pursuant to Section 11.1(c)(i) or 11.1(c)(ii) (other than by reason of
the failure of the conditions set forth in Section 8.5, 8.8 or 8.9 to have been
satisfied), the Parent shall have the right to receive the Purchase Price
Deposit and any interest thereon. If, however, the Closing is consummated, the
Purchase Price Deposit, together with any interest thereon, shall be applied to
the Purchase Price.
<PAGE>
12.3. Notices. All notices, demands and other communications hereunder
shall be in writing or by written
telecommunication, and shall be deemed to have been duly given if delivered
personally, if sent by overnight courier, or sent by written telecommunication,
as follows:
If to any Seller or the Parent, to
Datapoint Corporation
717 Fifth Avenue, 15th Floor
New York, New York 10022
Attention: Gerald N. Agranoff, Esq.
Fax: (212) 750-9329
Tel: (212) 371-7713
with a copy sent contemporaneously to:
Joshua J. Angel, Esq.
Angel & Frankel, P.C.
460 Park Avenue, 8th Floor
New York, New York 10022
Fax: (212) 752-8393
Tel. (212) 752-8000
If to the Buyer, to:
Datapoint Newco 1 Limited
c/o Alchemy Partners
20 Bedfordbury
London WC2N 4BL
England
Attention: Mr. Robert Barnes
Fax: (44-207) 240-9594
Tel: (44-207) 240-9596
with copies sent contemporaneously to:
White & Case LLP
1155 Avenue of the Americas
New York, NY 10036
Attention: Timothy B. Goodell, Esq.
Fax: (212) 354-8113
Tel: (212) 819-8200
and to
Macfarlanes
10 Norwich Street
London EC4A 1BD
England
Attention: Charles Martin, Esq.
Fax: (44-207) 831-9607
Tel: (44-207) 831-9222
<PAGE>
Any such notice shall be effective (a) if delivered personally, when
received, (b) if sent by overnight courier, when receipted for, and (c) if sent
by written telecommunication, when dispatched.
12.4. Entire Agreement. This Agreement, together with the Exhibits,
Schedules, Disclosure Schedule and letters dated the date hereof between the
parties, contains the entire understanding of the parties, supersedes all prior
agreements and understandings relating to the subject matter hereof and shall
not be amended except by a written instrument hereafter signed by all of the
parties hereto.
12.5. Governing Law. The validity and construction of this Agreement shall
be governed by the internal laws (and not the choice-of-law rules) of the State
of New York.
12.6. Sections and Section Headings. The headings of sections and
subsections are for reference only and shall not limit or control the meaning
thereof.
12.7. Assigns. This Agreement, together with the Exhibits, Schedules
and Disclosure Schedule, shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors and permitted assigns.
Neither this Agreement nor the obligations hereunder of the Buyer on the one
hand, or the Parent or any Seller on the other hand, shall be assignable or
transferable by any such party without the prior written consent of the Buyer,
in the case of any such assignment or transfer by the Parent or any Seller, or
the Parent, in the case of any such assignment or transfer by the Buyer;
provided, however, that nothing contained in this Section 12.7 shall prevent the
Buyer, without the consent of the Parent, (a) from transferring or assigning
this Agreement or its rights or obligations hereunder to another Person or
Persons controlling, under the control of, or under common control with, the
Buyer, but no such transfer or assignment made pursuant to clause (a) shall
relieve the Buyer of its obligation under this Agreement.
12.8. Severability. In the event that any covenant, condition, or other
provision herein contained is held to be invalid, void, or illegal by any court
of competent jurisdiction, the same shall be deemed to be severable from the
remainder of this Agreement and shall in no way affect, impair, or invalidate
any other covenant, condition, or other provision contained herein.
<PAGE>
12.9. Further Assurances. The parties agree to take such reasonable steps
and execute such other and further documents as may be necessary or appropriate
to cause the terms and conditions contained herein to be carried into effect.
12.10. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give any Person other than the Parent, the
Sellers and the Buyer and their respective shareholders, any rights or remedies
under or by reason of this Agreement.
12.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.12. Public Statements or Releases. Each of the parties hereto agrees
that prior to the filing of the Scheduling Motion, no party to this Agreement
will make, issue or release any public announcement, statement or acknowledgment
of the existence of, or reveal the status of, this Agreement or the transactions
provided for herein, without first obtaining the consent of the other parties
hereto. Nothing contained in this Section 12.12 shall prevent either party from
making such disclosures as such party may consider necessary after consultation
with the other parties in order to obtain financing for the transactions
contemplated hereby or to satisfy such party's legal or contractual obligations.
12.13. Business Records. After the Closing Date, (a) the Buyer, the
Sellers and the Parent shall cooperate with each other in the conduct of any
audit or other proceedings with respect to any Tax matters involving the
Companies, and (b) the Buyer shall retain or cause to be retained all books and
records relating to the Companies for any period ending on or before the Closing
Date until the expiration of the applicable Tax statute of limitations (giving
effect to any and all extensions and waivers). In addition, the Buyer
acknowledges that the Sellers may from time to time require access to or copies
of the business records of the Companies in connection with Tax or other
matters, and the Buyer agrees that upon reasonable prior notice from any Seller,
it will, during normal business hours, provide such Seller with either access to
or, at the Buyer's option, copies of such records for such purposes. The Sellers
agree to hold any confidential information so provided in confidence and to use
such information only for the purposes described above.
<PAGE>
13. TAX MATTERS.
13.1. Amended Returns. None of the Sellers or the Parent shall file or
cause to be filed any amended Return or claim for refund that in any way relates
to the Companies or the Acquired Assets without the prior written consent of the
Buyer, which consent shall not be unreasonably withheld.
13.2. Post-Signing Tax Items. The Sellers and the Parent, jointly and
severally, covenant and agree that, from and after the date of this Agreement
and until the Closing Date, (i) to prepare all Returns of the Datapoint Entities
that in any way relate to the Companies or the Acquired Assets in a manner which
is consistent with the past practices of the Datapoint Entities with respect to
the treatment of items on such Returns; (ii) to refrain from incurring any
material liability for Taxes that in any way relate to the Companies or the
Acquired Assets other than in the ordinary course of business; (iii) to refrain
from entering into any settlement or closing agreement with a taxing authority
that materially affects or may materially affect the Tax liability of the Buyer
or any Company or any affiliate of the foregoing or with respect to any Acquired
Assets for any period ending after the Closing Date.
13.3 FIRPTA Certificates. On the Closing Date, (i) the Parent and each
Seller shall provide the Buyer, dated as of the Closing Date and as required by
Section 1445 of the Code and Treasury Regulations thereunder, with a statement
prepared by the Company of which the Parent or a Seller is selling Shares, that
such Company is not and never has been a "United States real property holding
corporation," as defined under Section 897(c)(2) of the Code, and (ii) Parent
shall provide the Buyer, dated as of the Closing Date and as required by Section
1445 of the Code and Treasury Regulations thereunder, with a statement that it
is not a "foreign person" within the meaning of Section 1445 of the Code.
14. CERTAIN DEFINITIONS
(a) As used herein the following terms not otherwise defined have the
following respective meanings:
"Acquisition Proposal" shall mean a proposal relating to any merger,
consolidation, business combination, sale or other disposition of the Shares or
any assets of the Companies (other than in the ordinary course of business to
the extent otherwise permitted by this Agreement) by any Person other than the
Buyer or any assignee of the Buyer.
<PAGE>
"Affiliate" shall mean, as to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with, such Person, and shall include (a) any other Person who is a director or
beneficial holder of at least 10% of any class of the then outstanding capital
stock (or other shares of beneficial interest) and Family Members of such
Person, (b) any other Person of which such Person or an Affiliate of the kind
listed in clause (a) above shall, directly or indirectly, either beneficially
own at least 10% of any class of the then outstanding capital stock (or other
shares of beneficial interest) or constitute at least a 10% equity participant,
and (c) in the case of a specified Person who is an individual, Family Members
of such Person.
"Alternative Transaction" shall mean a transaction contemplated by an
Acquisition Proposal, or a plan of reorganization of the Parent that does not
involve the sale of the Shares to the Buyer.
"Approval Order" shall mean the order of the Bankruptcy Court,
substantially in the form of Exhibit G hereto, pursuant to Sections 363 and 364
and 1146(c) of the Bankruptcy Code (i) approving this Agreement (ii) approving
the sale of the Shares and the Acquired Assets free and clear of all liens,
claims and encumbrances pursuant to Section 363(f) of the Bankruptcy Code, and
(iii) approving the assumption, and assignment to the Buyer, of the contracts
set forth on Exhibit A-1 attached hereto, and (iv) finding that the Buyer is a
good faith purchaser entitled to the protections of Section 363(m) of the
Bankruptcy Code.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, Title 11,
United States Code, 11 U.S.C.ss.ss.101, et. seq., as amended.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
the Southern District of New York.
"Bidding Procedures" shall mean the procedures set forth in the
Scheduling Order pursuant to which Acquisition Proposals may be solicited, made
and accepted.
"Business Day" shall mean each day other than a Saturday, Sunday or day
on which banks in London or The City of New York are authorized or required by
law to be closed.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder.
"Datapoint Germany I GmbH" shall mean Datapoint Deutschland GmbH.
"Datapoint Germany II GmbH" shall mean a corporation to be organized
under the laws of Germany to which certain property of Datapoint Germany I GmbH
will be transferred.
"Debtor" shall mean the Parent.
"Deposit Escrow Account" shall mean the account denominated as such in
the Escrow Agreement.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued under any such
Environmental Law, (for purposes of this definition, "Claims") including,
without limitation (i) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims, by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.
<PAGE>
"Environmental Law" shall mean any federal, state, local or foreign
statute, law, rule, regulation, ordinance, guideline, policy or rule of common
law in effect, and in each case as amended as of the Closing date, and any
judicial or administrative interpretation as of the Closing Date, including
without limitation, any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety or Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations thereunder.
"Escrow Agent" shall mean the Person named as such in the Escrow
Agreement.
"Escrow Agreement" shall mean the Escrow Agreement to be entered into
among the Buyer, the Parent, the Sellers and the Escrow Agent.
"European Operations" shall mean the business in the Designated
Industry carried on in Europe by the Parent or any of its Subsidiaries.
"Executive Officer" of a particular Person shall mean the Chief
Executive Officer, President or Chief Financial Officer of such Person.
"Family Member" as applied to any individual, shall mean any parent,
spouse, child, spouse of a child, brother or sister of the individual, and each
trust created for the benefit of one or more of such Persons, and each custodian
of property of one or more such Persons.
"Final Order" shall mean an order of the Bankruptcy Court as to which:
(a) the time to file an appeal, motion or petition for review or rehearing or
petition for certiorari has expired and no timely filed appeal or petition for
review, rehearing, remand or certiorari is pending; (b) any appeal taken or
petition for certiorari filed has been resolved by the highest court to which
the order or judgment was appealed or from which review, rehearing or certiorari
was sought; and (c) with respect to the Scheduling Order and the Approval Order
no stay has been obtained.
"Foreign Collectively Bargained Employee Benefit Plan" shall mean each
Foreign Employee Benefit Plan which is not a Foreign Governmental Employee
Benefit Plan and which is sponsored by any Person other than a Company or any of
its Subsidiaries.
"Foreign Employee Benefit Plan" shall mean each employee benefit plan;
employment, bonus, incentive, stock purchase and stock option plan, program,
agreement or arrangement; and each severance, termination pay, salary
continuation, retention, accrued leave, vacation, sick pay, sick leave, medical,
life insurance, disability, accident, profit-sharing, fringe benefit, pension,
deferred compensation or other retirement or superannuation plan, fund, program,
agreement, commitment or arrangement sponsored, established, maintained or
contributed to, or required to be contributed to, or with respect to which any
liability is borne, outside the fifty states of the United States of America, by
a Company or any of its Subsidiaries, including, without limitation, any such
plan, fund, program, agreement or arrangement sponsored by a government or
governmental entity.
<PAGE>
"Foreign Governmental Employee Benefit Plan" shall mean any Foreign
Employee Benefit Plan sponsored by a government or governmental entity.
"Hazardous Materials" shall mean (i) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, dielectric fluid containing levels
of polychlorinated biphenyls, and radon gas; (ii) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous substances,"
"restricted hazardous wastes," "toxic substances," "pollutants," "toxic
pollutants," or words of similar import, under any applicable Environmental Law;
and (iii) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority.
"Indebtedness" as applied to any Person, shall mean (a) all
indebtedness of such Person for borrowed money, whether current or funded, or
secured or unsecured, (b) all indebtedness of such Person for the deferred
purchase price of property or services represented by a note, (c) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (d) all indebtedness of such Person secured by a purchase money
mortgage or other lien to secure all or part of the purchase price of property
subject to such mortgage or lien, (e) all obligations under leases which shall
have been or must be, in accordance with generally accepted accounting
principles, recorded as capital leases in respect of which such Person is liable
as lessee, (f) any liability of such Person in respect of banker's acceptances
or letters of credit, (g) all interest, fees and other expenses owed with
respect to indebtedness described in the foregoing clause (a), (b), (c), (d),
(e) or (f) above, and (h) all indebtedness referred to in clause (a), (b), (c),
(d), (e), (f) or (g) above which is directly or indirectly guaranteed by such
Person or which such Person has agreed (contingently or otherwise) to purchase
or otherwise acquire or in respect of which it has otherwise assured a creditor
against loss.
"Intellectual Property" shall mean all domestic and foreign patents,
patent applications, trademarks, service marks and other indicia of origin,
trademark and service mark registrations and applications for registrations
thereof, copyrights and applications for registration thereof, Internet domain
names and universal resource locators ("urls"), inventions (whether or not
patentable), invention disclosures, moral and economic rights of authors and
inventors (however denominated), technical data, customer lists, corporate and
business names, trade names, trade dress, brand names, know how, formulae,
methods (whether or not patentable), designs, processes, procedures, technology,
source codes, object codes, computer software programs, databases, data
collectors, technology, and other proprietary information or material of any
type, whether written or unwritten owned by the Company (or the Parent as
regards Intellectual Property used or proposed to be used by the Parent in
connection with the European Operations) or used in connection with the business
of the Company (or the Parent as regards Intellectual Property used or proposed
to be used by the Parent in connection with the European Operations), and all
improvements and refinements of any of the foregoing.
"Intercompany Accounts" shall mean all intercompany accounts between
any Seller and/or the Parent, on the one hand, and any of the Companies, on the
other hand.
"IRS" shall mean the Internal Revenue Service.
<PAGE>
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, performance, properties, assets, liabilities, prospects or
condition (financial or otherwise) of any Company or all of the Companies taken
as a whole.
"Person" shall mean corporation, an association, a partnership, an
organization, a business, an individual, a limited liability company, a
government or political subdivision thereof or a governmental agency.
"Purchase Price Adjustment Escrow Account" shall mean the account
designated as such in the Escrow Agreement.
"San Antonio Lease" shall mean the Lease Agreement dated October 27,
1997 between S.P. Plaza, L.C., as lessor, and the parent, as Lessee.
"San Antonio Office" shall mean the building located at 8410 Datapoint
Drive in San Antonio, TX, currently leased to the Parent pursuant to the San
Antonio Lease.
"Scheduling Order" shall mean the order of the Bankruptcy Court (i)
approving the form of this Agreement pending the hearing on the Approval Order,
(ii) setting a deadline for the filing of objections to the entry of the
Approval Order, (iii) scheduling the hearing on the Approval Order, (iv)
approving the Breakup Fee and the Termination Fee and (v) approving the Bidding
Procedures, all substantially on the terms set forth in Exhibit H annexed
hereto.
"Subsidiary" shall mean, with respect to any Person, any corporation a
majority (by number of votes) of the outstanding shares of any class or classes
of which shall at the time be owned by such Person or by a Subsidiary of such
Person, if the holders of the shares of such class or classes (a) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the directors (or persons performing similar functions) of the
issuer thereof, even though the right so to vote has been suspended by the
happening of such a contingency, or (b) are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the issuer thereof, whether or not the right so
to vote exists by reason of the happening of a contingency.
"Taxes" shall mean all taxes, assessments, charges, duties, fees,
levies or other governmental charges, including, without limitation, all United
States Federal, state, local, non-U.S. and other income, franchise, profits,
capital gains, capital stock, transfer, value added, sales, use, occupation,
property, excise, severance, windfall profits, stamp, license, payroll,
withholding and other taxes, assessments, charges, duties, fees, levies or other
governmental charges of any kind whatsoever including all social insurance
premiums and contributions, (whether payable directly or by withholding and
whether or not requiring the filing of a Return), all estimated taxes,
deficiency assessments, additions to tax, penalties and interest and shall
include any liability for such amounts as a result either of being a member of a
combined, consolidated, unitary or affiliated group or of a contractual
obligation to indemnify any person or other entity.
<PAGE>
"Transaction Documents" shall mean this Agreement, the Escrow
Agreement, the Name Change Certificates, the Datapoint License, the Name
Assignment, the Scheduling Order and the Approval Order.
"UK Pension Fund Escrow Account" shall mean the account denominated as
such in the Escrow Agreement.
"U.S. Employee Benefit Plans" shall mean (i) "employee benefit plans,"
within the meaning of Section 3(3) of ERISA; (ii) bonus, stock option, stock
purchase, restricted stock, incentive, fringe benefit, VEBA, profit-sharing,
pension, or retirement, deferred compensation, medical, life insurance,
disability, accident, salary continuation, severance, accrued leave, vacation,
sick pay, sick leave, supplemental retirement and unemployment benefit plans,
programs, arrangements, commitments and/or practices (whether or not insured);
and (iii) employment, consulting, termination, and severance contracts or
agreements; in each case for active, retired or former employees or directors,
whether or not any such plans, programs, arrangements, commitments, contracts,
agreements and/or practices (referred to in (i), (ii) or (iii) above) are in
writing or are otherwise exempt from the provisions of ERISA; that have been
established, maintained or contributed to (or with respect to which an
obligation to contribute has been undertaken) or with respect to which any
potential liability is borne, in such case, within the fifty states of the
United States of America by the Parent, any Seller, or any of their Affiliates
(including any predecessors to the Parent, any Seller, or any of their
Affiliates and all employers (whether or not incorporated) that would be treated
together with the Parent, any Seller, or any of their Affiliates as a single
employer within the meaning of Section 414 of the Code, since January 1, 1993.
"VEBA" shall have the meaning set forth in section 501(c)(9) of the
Code.
(b) All references in this Agreement to any legal term or concept
(including, without limitation, those with respect to any action, remedy, method
of judicial proceeding, document, statute, court official, governmental
authority or agency) shall in respect of any jurisdiction other than the United
State of America be construed as references to the term or concept which most
nearly corresponds to it in that jurisdiction.
(c) For purposes of Articles 4 and 10 hereof, as to any Company, each
entity set forth opposite the name of such Company under the heading "Seller" on
Schedule E hereto shall constitute and be deemed a "Seller" of such Company.
(d) For the purposes of Articles 4, 6, 7, 9 and 13 hereof, references
to "Companies", "Company", "Datapoint Entities" or "Datapoint Entity" shall be
deemed to include references to Datapoint Germany I GmbH and, upon its creation,
to Datapoint Germany II GmbH, and, for the avoidance of doubt, references to the
"Sellers" or a "Seller" shall be deemed to include references to Datapoint
Germany I GmbH.
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Agreement to be duly executed and delivered as a
sealed instrument as of the date and year first above written.
BUYER:
DATAPOINT NEWCO 1 LIMITED
By:__/s/ David Berger___________
Name: David Berger
Title: Director
SELLERS:
DATAPOINT INTERNATIONAL, INC.
By:__/s/ Gerald N. Agranoff______
Name: Gerald N. Agranoff
Title: Vice President
DATAPOINT INTERNATIONAL INVESTMENTS, INC.
By:__/s/ Gerald N. Agranoff______
Name: Gerald N. Agranoff
Title: Vice President
INFOREX INTERNATIONAL, INC.
By:__/s/ Gerald N. Agranoff______
Name: Gerald N. Agranoff
Title: Vice President
<PAGE>
DATAPOINT HOLDINGS, LTD.
By:__/s/ Gerald N. Agranoff______
Name: Gerald N. Agranoff
Title: Director
DATAPOINT INTERNATIONAL HOLDINGS, INC.
By:__/s/ Gerald N. Agranoff______
Name: Gerald N. Agranoff
Title: Vice President
DATAPOINT DEUTSCHLAND GMBH
By:__/s/ Gerald N. Agranoff______
Name: Gerald N. Agranoff
Title: Managing Director
PARENT:
DATAPOINT CORPORATION
By:__/s/ Gerald N. Agranoff______
Name: Gerald N. Agranoff
Title: Vice President
<PAGE>
Schedule A
Sellers
Datapoint Corporation
Datapoint International, Inc.
Datapoint International Investments, Inc.
Inforex International, Inc.
Datapoint Holdings, Ltd.
Datapoint International Holdings, Inc.
Datapoint Germany I GmbH
<PAGE>
Schedule B
Companies
Datapoint Belgium S.A.
Datapoint S.A. (France)
Datapoint Beheer B.V.
Datapoint Italia S.P.A.
Datapoint Iberica S.A. (Spain)
Datapoint Svenska AB (Sweden) (including Datapoint Norway)
Datapoint U.K. Ltd.
Datapoint Germany II GmbH
Datapoint (Schweiz) A.G.
Datapoint Export S.A.R.L. (France)
<PAGE>
TABLE OF CONTENTS
Page
1. PURCHASE AND SALE....................................................2
1.1. Purchase and Sale....................................................2
1.2. Purchase Price.......................................................3
1.3. Adjustment to Purchase Price.........................................3
1.4. Dispute and Resolution...............................................3
1.5. Allocations..........................................................4
2. LICENSING AND OTHER MATTERS..........................................4
2.1. Datapoint Name.......................................................4
2.2. Acquired Assets......................................................5
2.3. Outstanding Ancillary Issues.........................................5
3. CLOSING..............................................................5
3.1. Time and Place.......................................................5
3.2. Transactions at Closing..............................................5
4. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE
SELLERS .............................................................6
4.1. Organization of Companies; Authority.................................6
4.2. Corporate Approval; Binding Effect...................................6
4.3. Subsidiaries.........................................................6
4.4. Capitalization.......................................................6
4.5. Title to Stock and Acquired Assets, Liens, etc.......................7
4.6. Non-Contravention....................................................7
4.7. Governmental Consents; Transferability of Licenses, Etc..............7
4.8. Financial Statements.................................................8
4.9. Indebtedness.........................................................8
4.10. Litigation, Etc......................................................8
4.11. Conformity to Law....................................................9
4.12. Title to Assets......................................................9
4.13. Real Property and Environmental Matters..............................9
4.14. Equipment...........................................................11
4.15. Insurance...........................................................11
4.16. Contracts...........................................................12
4.17. Compensation of and Contracts with Employees........................13
4.18. Employee Benefit Plans..............................................13
4.19. Labor Relations.....................................................16
4.20. Trademarks, Patents, Etc............................................16
4.21. Suppliers and Customers.............................................17
4.22. Accounts Receivable.................................................17
4.23. No Undisclosed Liabilities..........................................18
4.24. Taxes...............................................................18
4.25. Ancillary Assets and Business.......................................19
4.26. Broker..............................................................19
4.27. Potential Conflicts of Interest.....................................20
4.28. Bank Accounts, Signing Authority, Powers of Attorney................20
4.29. Minute Books........................................................20
4.30. Sophistication of the Sellers and the Parent........................20
4.31. No Changes Since Balance Sheet Date.................................20
4.32. Acquired Assets.....................................................21
4.33. Disclosure..........................................................21
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.........................21
5.1. Organization of Buyer; Authority....................................21
5.2. Corporate Approval; Binding Effect..................................21
5.3. Non-Contravention...................................................22
5.4. Governmental Consents...............................................22
5.5. Broker..............................................................22
5.6. Sophistication of the Buyer.........................................22
6. CONDUCT OF BUSINESS PENDING CLOSING.................................22
6.1. Conduct of Business.................................................22
6.2. Review of the Company...............................................23
6.3. Exclusive Dealing...................................................23
6.4. Consents of Third Parties...........................................24
6.5. Satisfaction of Conditions Precedent................................24
6.6. Bankruptcy Court and French Commercial Court Approval...............24
7. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS.....................24
7.1. Representations and Warranties True at Closing......................25
7.2. Compliance with Agreement...........................................25
7.3. No Material Adverse Change..........................................25
7.4. Closing Certificates................................................25
7.5. Opinion of Counsel..................................................25
7.6. Approvals...........................................................25
7.7. No Litigation.......................................................25
7.8. Scheduling Order/Approval Order.....................................26
7.9. Datapoint Name......................................................26
7.10. Consents of Third Parties...........................................26
7.11. Proceedings and Documents Satisfactory..............................26
7.12. Termination of Intercompany Accounts................................26
7.13. Assignment of Confidentiality Agreement.............................26
7.14. Termination of Agreements...........................................26
7.15. Resolution of Outstanding Ancillary Issues..........................26
7.16. Completion of Due Diligence.........................................26
7.17. Transaction Documents and Related Items.............................27
8. CONDITIONS PRECEDENT TO THE PARENT'S AND THE SELLERS' OBLIGATIONS...27
8.1. Representations and Warranties True at Closing......................27
8.2. Compliance with Agreement...........................................27
8.3. Closing Certificate.................................................27
8.4. Opinion of Counsel..................................................27
8.5. No Litigation.......................................................27
8.6. Documents Satisfactory..............................................27
8.7. Datapoint License...................................................28
8.8. Resolution of Outstanding Issues....................................28
8.9. Approval Order......................................................28
8.10. Transaction Documents...............................................28
9. CERTAIN COVENANTS...................................................28
9.1. Confidentiality.....................................................28
9.2. Non-Competition.....................................................28
9.3. Remedies............................................................29
9.4. San Antonio Real Property and Employees.............................29
10. INDEMNIFICATION.....................................................30
10.1. Breach by the Sellers or the Parent................................30
10.2. Limitation on Seller/Parent Losses.................................30
10.3. Breach by the Buyer................................................30
10.4. Limitations on Buyer Losses........................................30
10.5. Survival...........................................................30
10.6. Indemnity in Respect of Real Property..............................31
11. TERMINATION OF AGREEMENT............................................31
11.1. Termination........................................................31
11.2. Effect of Termination..............................................32
11.3. Break-Up Fee.......................................................32
11.4. Termination of Certain Agreements..................................32
12. GENERAL.............................................................33
12.1. Expenses...........................................................33
12.3. Notices............................................................34
12.4. Entire Agreement...................................................35
12.5. Governing Law......................................................35
12.6. Sections and Section Headings......................................35
12.7. Assigns............................................................35
12.8. Severability.......................................................35
12.9. Further Assurances.................................................35
12.10. No Implied Rights or Remedies......................................36
12.11. Counterparts.......................................................36
12.12. Public Statements or Releases......................................36
12.13. Business Records...................................................36
13. TAX MATTERS.........................................................36
13.1. Amended Returns....................................................36
13.2. Post-Signing Tax Items.............................................36
13.3. FIRPTA Certificates................................................37
14. CERTAIN DEFINITIONS.................................................37
SCHEDULES
Schedule A Sellers
Schedule B Companies
Schedule C Ownership of Shares
Schedule D San Antonio Employees
Schedule E Direct/Indirect Ownership of Companies
[Schedule F Budget]
EXHIBITS
Exhibit A ACQUIRED ASSETS
Exhibit B PRO FORMA BALANCE SHEET
Exhibit C UK PENSION PLAN
Exhibit D GERMANY
Exhibit E FORM OF DATAPOINT ENTITIES' COUNSEL OPINION(S)
Exhibit F FORM OF MACFARLANES AND WHITE & CASE LLP OPINIONS
Exhibit G APPROVAL ORDER
Exhibit H SCHEDULING ORDER
<PAGE>
Exhibit 99 - Press Release of Registrant
Contact: Sharon P. Riggs
Datapoint Corporation
(212) 371-7719
DATAPOINT CORPORATION ENTERS INTO AGREEMENT TO SELL OPERATIONS;
FILES REORGANIZATION PROCEEDING IN DELAWARE
SAN ANTONIO, Texas, May 3, 2000......Datapoint Corporation (EBB:DTPT)
announced today that it has entered into a Stock Purchase Agreement to sell its
global operations (other than its e-commerce initiative described below),
including the "Datapoint" name, for $49.5 million in cash and the assumption of
net liabilities of $10 million. A $5 million down payment was placed in escrow
by the purchaser. The purchaser is a newly formed entity that will combine
CallCentric Ltd., a European based company that provides call center solutions,
and Datapoint's operations. The purchase price is funded by Alchemy Partners,
who were advised by KPMG Corporate Finance.
The transaction is expected to be completed as part of a reorganization
of Datapoint Corporation under Chapter 11 of the Bankruptcy Code of the United
States. A petition for reorganization has been filed today in the United States
Bankruptcy Court for the District of Delaware. The Company also has entered into
a non-binding agreement in principle with an informal committee (the
"Committee") formed by a majority of the holders of its outstanding 8 7/8%
debentures due June 1, 2006 that provides for the allocation of the sale
proceeds between the Company and its creditors, as well as equity distributions
to bondholders and existing common and preferred shareholders. The Company
expects to file a "Plan and Disclosure Statement" detailing the treatment of all
creditors and holders of equity within 30 days.
The sale of the Company's operations is consistent with the Company's
direction to focus its efforts and resources on acquiring, developing and
marketing software with Internet and e-commerce applications. The Company's
recent acquisition of CoreByte, Inc. highlights this effort. The CoreByte
subsidiary specializes in the development of modular, web-based messaging and
collaboration software. All the fully integrated features of CoreByte include
e-mail, instant messenger, calendar, task manager, address book, notepad, links
manager and file manager. CoreByte's communications and data management software
is both powerful and inexpensive, thereby meeting the needs of the smallest
business to the largest enterprise. It is fully customizable at any level and
the interface can be designed to suit the branding needs of a business and/or
can support advertising in a branded online community hosted by network service
providers (www.corebyte.com).
With its U.S. headquarters in San Antonio, Texas, and international
headquarters in Paris, France, the Corporation is a recognized innovator in
modern networking infrastructure. The Corporation specializes in the design
integration and maintenance of data, voice and networking communication
solutions, including call center and computer-telephony integration (CTI).
This press release and the materials referred to hereby contain
forward-looking statements regarding the Company's business and future plans of
operations. When used herein, the words "intends," "expects," "plans,"
"estimates," "projects," "believes," "anticipates," "contemplates," "represents"
and similar expressions are intended to identify forward-looking statements.
Forward-looking statements involve known and unknown risks and uncertainties.
These and other important factors, including those set forth in the Company"
Annual and Quarterly Reports on Form 10-K and Form 10-Q (available to the public
at ww.sec.gov), may cause the actual results and performance to differ
materially from the future results expressed in or implied by such
forward-looking statements. The forward-looking statements contained in this
press release speak only as of the date hereof and the Company disclaims any
obligation to provide public updates, revisions or amendments to any
forward-looking statements made herein to reflect changes in the Company's
expectations or future events.
#####
