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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 1, 1998
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
-----------------------------------------
(Exact name of issuer as specified in charter)
DELAWARE 0-11521 23-1701520
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation or Organization) file number) Identification Number)
Four Country View Road
Malvern, PA 19355
(Address of principal executive offices)
(610) 647-5930
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
Systems & Computer Technology Corporation ("SCT") and Fygir Logistic
Information Systems BV ("Fygir"), a leading provider of supply chain planning
software, jointly announced on September 2, 1998, that Systems & Computer
Technology International B.V., an indirect wholly-owned subsidiary of SCT,
purchased all of the outstanding stock of Fygir. The purchase included all
existing software, technology, and operations for a purchase price of $34.5
million in cash. The sellers of Fygir are unaffiliated with SCT. The purchase
price for Fygir was determined by arm's-length negotiation between SCT and the
sellers.
Fygir, headquartered in The Hague, Netherlands, offers advance
planning and scheduling products GRIP and FIT. Like SCT's ADAGE enterprise
resource planning software, the products are object-based and focused on the
special business needs of process industries.
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Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
(c) Exhibits.
2.1 Stock Purchase Agreement dated as of September 1, 1998 among SCT
Holdings Corporation, Fygir Logistic Information Systems BV, Meunier
BV, L. A. D. Holding BV, Egon de Waart Resource Management BV,
Cyberfocus BV, Dupoirier Holding BV, Pieter Leijten and Jurriaan van
der Lingen. (Pursuant to Item 601(b)(2) of Regulation S-K, the
Appendices and Schedules to the Stock Purchase Agreement are not
being filed as Exhibits to this Current Report on Form 8-K. The
Company agrees to furnish supplementally a copy of any such
Appendices and Schedules to the Securities and Exchange Commission
upon request.)
2.2 Assignment and Assumption Agreement dated as of September 1, 1998
between SCT Holdings Corporation and Systems & Computer Technology
International B.V.
99.1 Press release dated September 2, 1998 titled "SCT Acquires Fygir
Logistic Information Systems, Inc., A Supply Chain Planning Software
Company".
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
Date: September 16, 1998 By: /s/ Eric Haskell
---------------------
Name: Eric Haskell
Title: Senior Vice President, Finance and
Administration, Treasurer and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit
No. Description
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2.1 Stock Purchase Agreement dated as of September 1, 1998 among SCT
Holdings Corporation, Fygir Logistic Information Systems BV, Meunier
BV, L. A. D. Holding BV, Egon de Waart Resource Management BV,
Cyberfocus BV, Dupoirier Holding BV, Pieter Leijten and Jurriaan van
der Lingen.
2.2 Assignment and Assumption Agreement dated as of September 1, 1998
between SCT Holdings Corporation and Systems & Computer Technology
International B.V.
99.1 Press release dated September 2, 1998 titled "SCT Acquires Fygir
Logistic Information Systems, Inc., A Supply Chain Planning Software
Company".
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STOCK PURCHASE AGREEMENT
Among
MEUNIER BV,
a private company with limited liability under
the laws of the Netherlands having its corporate
seat at Amsterdam, the Netherlands (hereinafter
referred to as: "Shareholder A");
EGON DE WAART RESOURCE MANAGEMENT BV,
a private company with limited liability under the laws of the
Netherlands having its corporate seat at Capelle a/d IJssel, the
Netherlands (hereinafter referred to as: "Shareholder B");
CYBERFOCUS BV,
a private company with limited liability under the laws
of the Netherlands having its corporate seat at Delft, the
Netherlands (hereinafter referred to as: "Shareholder C");
L.A.D. HOLDING BV,
a private company with limited liability under the
laws of the Netherlands having its corporate seat
at The Hague, the Netherlands (hereinafter
referred to as: "Shareholder D");
DUPOIRIER HOLDING BV,
a private company with limited liability under the
laws of the Netherlands having its corporate seat at The Hague, the
Netherlands (hereinafter referred to as: "Shareholder E"); and
PIETER LEIJTEN,
(hereinafter referred to as: "Shareholder F")
JURRIAAN VAN DER LINGEN,
(hereinafter referred to as: "Shareholder G")
the Shareholders A, B, C, D, E, F, and G collectively being referred to as:
the "Sellers"
SCT HOLDINGS CORPORATION, as Purchaser,
AND
FYGIR LOGISTIC INFORMATION SYSTEMS BV,
a private company with limited liability under the laws of the
Netherlands having its corporate seat at Rijswijk (ZH), the Netherlands;
September 1, 1998
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TABLE OF CONTENTS
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BACKGROUND........................................................................................................1
ARTICLE I - DEFINITIONS...........................................................................................2
Section 1.1. "Accounts Receivable"..................................................................2
Section 1.2. "Affiliate"............................................................................2
Section 1.3. "Affiliated Company"...................................................................2
Section 1.4. "Articles of Incorporation"............................................................2
Section 1.5. "Assets"...............................................................................2
Section 1.6. "Audited FY 1997 Financial Statements".................................................2
Section 1.7. "Books and Records"....................................................................2
Section 1.8. "Cash".................................................................................3
Section 1.9. "Civil Law Notary".....................................................................3
Section 1.10. "Closing"..............................................................................3
Section 1.11. "Closing Date".........................................................................3
Section 1.12. "Code".................................................................................3
Section 1.13. "Company Common Stock".................................................................3
Section 1.14. "Company's Information Technology".....................................................3
Section 1.15. "Condition"............................................................................3
Section 1.16. "Consents".............................................................................3
Section 1.17. "Contract".............................................................................3
Section 1.18. "Deed of Share Transfer"...............................................................3
Section 1.19. "Due Diligence Investigation"..........................................................3
Section 1.20. "Dutch GAAP"...........................................................................3
Section 1.21. "Employees"............................................................................3
Section 1.22. "Employment Agreements"................................................................4
Section 1.23. "Environmental Claim"..................................................................4
Section 1.24. "Environmental Laws"...................................................................4
Section 1.25. "Equipment"............................................................................4
Section 1.26. "ERISA"................................................................................4
Section 1.27. "Escrow Agreement".....................................................................4
Section 1.28. "Financial Statements".................................................................4
Section 1.29. "FY 1997 Balance Sheet"................................................................4
Section 1.30. "FY 1997 Financial Statements".........................................................4
Section 1.31. "Governmental Entity"..................................................................4
Section 1.32. "Intellectual Property and Information"................................................5
Section 1.33. "Inventory"............................................................................5
Section 1.34. "June 1998 Balance Sheet"..............................................................5
Section 1.35. "June 1998 Financial Statements".......................................................5
Section 1.36. "Leased Real Property".................................................................5
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Section 1.37. "Leasehold Improvements and Fixtures"..................................................5
Section 1.38. "Leases"...............................................................................5
Section 1.39. "Legal Expenses".......................................................................5
Section 1.40. "Liabilities"..........................................................................5
Section 1.41. "Liens"................................................................................5
Section 1.42. "Losses"...............................................................................6
Section 1.43. "Management Contracts".................................................................6
Section 1.44. "Material Adverse Effect"..............................................................6
Section 1.45. "Materials of Environmental Concern"...................................................6
Section 1.46. "Permitted Liabilities"................................................................6
Section 1.47. "Permitted Liens"......................................................................6
Section 1.48. "Person"...............................................................................6
Section 1.49. "Plans"................................................................................6
Section 1.50. "Prepaid Items"........................................................................6
Section 1.51. "Proprietary Information"..............................................................6
Section 1.52. "Purchase Price".......................................................................7
Section 1.53. "Purchaser Common Stock"...............................................................7
Section 1.54. "Rights and Other Property"............................................................7
Section 1.55. "Securities"...........................................................................7
Section 1.56. "Shareholder Loans"....................................................................7
Section 1.57. "Shareholder Receivables"..............................................................7
Section 1.58. "Shares Purchase"......................................................................7
Section 1.59. "Software".............................................................................7
Section 1.60. "Software Licenses"....................................................................7
Section 1.61. "Subsidiary"...........................................................................8
Section 1.62. "Tax Benefit"..........................................................................8
Section 1.63. "Tax Benefit Item".....................................................................8
Section 1.64. "Taxes"................................................................................8
Section 1.65. "Tax Returns"..........................................................................8
Section 1.66. "Third Party"..........................................................................8
Section 1.67. "Threshold Amount".....................................................................8
Section 1.68. "Transfer".............................................................................8
ARTICLE II - SALE AND PURCHASE OF SHARES; SATISFACTION
OF INDEBTEDNESS......................................................................................9
Section 2.1. Sale and Purchase of the Shares............................................................9
Section 2.2. Purchase Price and Consideration...........................................................9
ARTICLE III - CLOSING.............................................................................................9
Section 3.1. Closing....................................................................................9
3.1.1. General.......................................................................9
3.1.2. Transfer and Deliveries......................................................10
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3.1.3. Expenses.....................................................................10
3.1.4. Subsequent Documentation.....................................................11
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
RESPECTING THE COMPANY AND THE SELLER...............................................................11
Section 4.1. Organization, Power and Authority........................................................11
Section 4.2. Directorships and General Powers of Attorney.............................................12
Section 4.3. Authorization............................................................................12
Section 4.4. Capitalization of Company................................................................12
Section 4.5. Title to Shares..........................................................................13
Section 4.6. Subsidiaries; Investments in Other Entities..............................................13
Section 4.7. Conflict with other Instruments; Absence of Restrictions.................................14
Section 4.8. Government and Third-Party Approvals.....................................................14
Section 4.9. Title to Properties; Adequacy of Properties..............................................14
Section 4.10. Accounts Receivable......................................................................15
Section 4.11. Cash Accounts............................................................................15
Section 4.12. Equipment................................................................................15
Section 4.13. Inventory Generally......................................................................15
Section 4.14. Leasehold Improvements...................................................................15
Section 4.15. Owned Real Property......................................................................16
Section 4.16. Leased Real Property.....................................................................16
Section 4.17. Sufficiency of Assets....................................................................16
Section 4.18. Financial Statements.....................................................................17
Section 4.19. Absence of Undisclosed Liabilities.......................................................17
Section 4.20. Affiliated Relationships.................................................................18
Section 4.21. Permits and Approvals....................................................................18
Section 4.22. Compliance with Law......................................................................18
Section 4.23. Environmental Protection.................................................................18
Section 4.24. Litigation...............................................................................19
Section 4.25. Conduct of Business......................................................................19
Section 4.26. Absence of Changes.......................................................................20
Section 4.27. Contracts, Leases, Etc...................................................................21
Section 4.28. Warranties and Liabilities...............................................................23
Section 4.29. Tax Audit and Returns....................................................................23
Section 4.30. Prior Audit Information..................................................................24
Section 4.31. Insurance................................................................................24
Section 4.32. [This Section Intentionally Omitted.] ...................................................25
Section 4.33. Intellectual Property and Information....................................................25
Section 4.34. Infringement.............................................................................26
Section 4.35. Software.................................................................................26
(a) Specifications; Claims.......................................................26
(b) Software Licenses............................................................27
(c) Financial Matters............................................................27
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Section 4.36. Transactions with Affiliates.............................................................27
Section 4.37. Compensation to Employees, Etc...........................................................27
Section 4.38. Overtime, Back Wage, Vacation, and Discrimination Claims.................................28
Section 4.39. Pension and Other Employee Benefit Plans.................................................28
Section 4.40. Management Contracts.....................................................................30
Section 4.41. Commission...............................................................................30
Section 4.42. Corporate Records........................................................................30
Section 4.43. Hart-Scott-Rodino Antitrust Improvements Act.............................................30
Section 4.44. Dutch and European Competition Law.......................................................30
Section 4.45. Marital Status...........................................................................30
Section 4.46. Statements and Other Documents Not Misleading............................................30
ARTICLE V - REPRESENTATIONS AND WARRANTIES
RESPECTING PURCHASER.................................................................................31
Section 5.1. Organization..............................................................................31
Section 5.2. Due Authorization.........................................................................31
Section 5.3. Conflict With Other Instruments...........................................................31
Section 5.4. Commission................................................................................32
Section 5.5. Financing.................................................................................32
Section 5.6. Investment Purpose........................................................................32
Section 5.7. Statements and Other Documents Not Misleading.............................................32
Section 5.8. No Legal Actions..........................................................................32
ARTICLE VI - CERTAIN COVENANTS AND OTHER MATTERS.................................................................32
Section 6.1. Corporate Examinations and Investigations.................................................32
Section 6.2. Confidentiality...........................................................................33
Section 6.3. Restriction on Certain Discussions and Actions............................................33
Section 6.4. Conduct of Business Prior to the Closing..................................................34
Section 6.5. Publicity.................................................................................35
Section 6.6. Removal of Liens..........................................................................35
Section 6.7. Telephone Service and Internet Access.....................................................35
Section 6.8. Benefit Plans.............................................................................36
6.8.1. Plan Changes.................................................................36
6.8.2. Contributions and Payments...................................................36
Section 6.9. Employment Agreements.....................................................................36
Section 6.10. Guaranty Agreements......................................................................36
Section 6.11. Employee Bonuses.........................................................................36
Section 6.12. Escrow Agreemen.......................................................................36
ARTICLE VII - CONDITIONS TO THE OBLIGATION OF PURCHASER..........................................................37
Section 7.1. Representations and Warranties True.......................................................37
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Section 7.2. Performance of Obligations................................................................37
Section 7.3. Consents and Estoppels....................................................................37
Section 7.4. Absence of Litigation.....................................................................37
Section 7.5. Certified Resolutions.....................................................................37
Section 7.6. Delivery of Specified Documents...........................................................37
Section 7.7. Opinion of Counsel for Seller.............................................................37
Section 7.8. Assignment................................................................................39
ARTICLE VIII - CONDITIONS TO THE OBLIGATION OF SELLER............................................................39
Section 8.1. Representations and Warranties True.......................................................39
Section 8.2. Performance of Obligations................................................................39
Section 8.3. Absence of Litigation.....................................................................39
Section 8.4. No Material Changes.......................................................................39
Section 8.5. Delivery of Specified Documents...........................................................39
Section 8.6. Opinion of Counsel for Purchaser..........................................................39
ARTICLE IX - POST-CLOSING COVENANTS..............................................................................40
Section 9.1. Books and Records of Seller...............................................................40
Section 9.2. Books and Records of the Company..........................................................40
ARTICLE X - INDEMNIFICATION; EXPENSES............................................................................40
Section 10.1. General Indemnification..................................................................40
Section 10.2. Seller's Claims Against the Company......................................................42
Section 10.3. Survival.................................................................................43
Section 10.4. Limitation on Liability..................................................................43
Section 10.5. Computation of Losses....................................................................43
Section 10.6. Reduction of Indemnification Payments for Tax Benefits...................................44
ARTICLE XI - TERMINATION.........................................................................................45
Section 11.1. Termination..............................................................................45
Section 11.2. Survival.................................................................................46
ARTICLE XII - GENERAL............................................................................................46
Section 12.1. No Tax Representations...................................................................46
Section 12.2. Regarding the Representations and Warranties.............................................46
12.2.1. Independence.................................................................46
12.2.2. Knowledge Qualification......................................................46
Section 12.3. Binding Effect and Assignment............................................................47
Section 12.4. Consents, Further Assurances.............................................................47
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Section 12.5. Waiver...................................................................................47
Section 12.6. Notices..................................................................................47
Section 12.7. GOVERNING LAW............................................................................49
Section 12.8. Dispute Resolution.......................................................................49
12.8.1. Arbitration..................................................................49
12.8.2. Facilitation.................................................................50
12.8.3. Judgment. ..................................................................50
12.8.4. Award. .....................................................................50
12.8.5. Waiver.......................................................................51
Section 12.9. WAIVER OF JURY TRIAL.....................................................................51
Section 12.10. No Third-Party Beneficiaries............................................................51
Section 12.11. Severability............................................................................51
Section 12.12. Schedules...............................................................................51
Section 12.13. Section Headings........................................................................51
Section 12.14. Gender and Number.......................................................................51
Section 12.15. Governing Language......................................................................51
Section 12.16. Currency................................................................................51
Section 12.17. Contents of Agreement...................................................................52
Section 12.18. Counterparts............................................................................52
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Schedules:
Schedule 1.25 Equipment
Schedule 1.38 Leases
Schedule 2.2 Purchase Price and Consideration
Schedule 4.1 Organization Power and Authority
Schedule 4.4 Capitalization of Company
Schedule 4.6 Subsidiaries; Investments in Other Entities
Schedule 4.8 Government and Third-Party Approvals
Schedule 4.9 Title to Properties; Adequacy of Properties
Schedule 4.10 Accounts Receivable
Schedule 4.11 Cash Accounts
Schedule 4.13 Inventory Generally
Schedule 4.16 Leased Real Property
Schedule 4.17 Sufficiency of Assets
Schedule 4.18 Financial Statements
Schedule 4.19 Absence of Undisclosed Liabilities
Schedule 4.21 Permits and Approvals
Schedule 4.23 Environmental Protection
Schedule 4.26 Absence of Changes
Schedule 4.27 Contracts, Leases, Etc.
Schedule 4.29 Taxes
Schedule 4.30 Prior Audit Information
Schedule 4.31 Insurance
Schedule 4.33 Intellectual Property and Information
Schedule 4.33.3 Year 2000 Compliance
Schedule 4.35 Software
Schedule 4.36 Transactions with Affiliates
Schedule 4.37 Compensation to Employees, Etc.
Schedule 4.39 Pension and Other Employee Benefit Plans
Schedule 4.40 Management Contracts
Schedule 6.4 Conduct of Business Prior to the Closing
Schedule 6.6 Removal of Liens
Schedule 6.11 Employee Bonuses
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Appendices:
Appendix A - Articles of Incorporation
Appendix B - Extract from the Commercial Register
Appendix C - Form of Deed of Share Transfer
Appendix D - List of Persons Holding a Directorship or General
Power of Attorney in the Company or Any Subsidiary
Appendix E - Escrow Agreement
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 1st day of September, 1998 by and
among Shareholder A, Shareholder B, Shareholder C, Shareholder D, Shareholder
E, Shareholder F and Shareholder G (each a "Seller" and collectively the
"Sellers"), SCT Holdings Corporation, a Delaware corporation (the
"Purchaser"), and Fygir Logistic Information Systems BV (the "Company").
BACKGROUND
A. The Company and its Subsidiaries (as defined herein) are in the
business of developing and implementing supply chain management software for
process industries (the "Business").
B. Sellers own the entire issued and outstanding share capital of the
Company, which consists of 4,000 ordinary shares, numbered 0001 up to and
including 4000 with a par value of NLG 10 (ten guilders) each (the "Shares" or
"Company Common Stock"). The Shares are distributed among the Sellers as
follows:
(a) Shareholder A: 800 ordinary shares, numbers 0001 through 0800;
(b) Shareholder B: 800 ordinary shares, numbers 801 through 1600;
(c) Shareholder C: 733 ordinary shares, numbers 1601 through 2280
and 3748 through 3800;
(d) Shareholder D: 733 ordinary shares, numbers 2281 through 2960
and 3642 through 3694;
(e) Shareholder E: 733 ordinary shares, numbers 2961 through 3640
and 3695 through 3747;
(f) Shareholder F: 81 ordinary shares, numbers 3801 through 3880,
and 3641; and
(g) Shareholder G: 120 ordinary shares, numbers 3881 through 4000.
C. Purchaser desires to purchase, and Sellers desire to sell, all of
the Shares, as more fully set forth herein.
NOW THEREFORE, in consideration of the premises and of the
mutual promises, covenants, representations and warranties made in this
Agreement, Purchaser and Sellers, intending to be legally bound, hereby agree
as follows:
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ARTICLE I
DEFINITIONS
The following terms, as used herein, shall have the
following respective meanings, unless the context otherwise require:
Section 1.1. "Accounts Receivable" shall mean all of the
Company's and its Subsidiaries' accounts receivable (and notes receivable, if
any) created or arising in respect of the sale of products or other assets.
Section 1.2. "Affiliate" shall mean, as to any specified
person, (a) any other person controlling, controlled by or under common
control with such specified person, (b) any officer, director or partner of
such specified person, (c) an officer or director, or (d) any member of the
Family Group of such specified person or of any individual who is an Affiliate
of such specified person by reason of clause (a) or (b) of this definition.
The term "control," with respect to any person, means possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
a partnership interest, by contract or otherwise. "Family Group" means, as to
any individual, such individual's spouse, parents, grandparents, lineal
descendants and trusts for the benefit of any of the foregoing, provided that
all the income beneficiaries and remainderman of any such trust are such
individual's spouse, ancestors or lineal descendants.
Section 1.3. "Affiliated Company" shall have the meaning
assigned to it in Section 4.38 hereof.
Section 1.4. "Articles of Incorporation" shall mean the
articles of incorporation ("statuten") of the Company as last amended by deed
of May 11, 1998.
Section 1.5. "Assets" shall mean the Accounts Receivable,
Cash, Equipment, Intellectual Property and Information, Inventory, Leased Real
Property, Leasehold Improvements and Fixtures, Prepaid Items and Rights and
Other Property of the Company and its Subsidiaries.
Section 1.6. "Audited FY 1997 Financial Statements" shall
have the meaning assigned to it in Section 4.18 hereof.
Section 1.7. "Books and Records" shall mean all records,
documents, lists and files, relating to the Assets and the Business of the
Company and the Subsidiaries, including, without limitation, executed
originals of all contracts, purchase orders, sales orders, price lists, lists
of accounts, customers, suppliers and personnel, shipping records, all
product, business and marketing plans, sales and product brochures and
catalogs and other sales literature and materials, historical sales data and
all books, ledgers, files and business records, whether in hard copy,
electronic form or otherwise.
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Section 1.8. "Cash" shall mean all of the Company's and its
Subsidiaries' cash and cash equivalents in any currency.
Section 1.9. "Civil Law Notary" means the civil law notary
described in Section 3.1 hereof.
Section 1.10. "Closing" shall mean the consummation of the
transactions contemplated to occur hereunder on the Closing Date pursuant to
Article III hereof.
Section 1.11. "Closing Date" shall mean September 2, 1998 or
such other date and time as shall be mutually agreed to in writing by
Purchaser and Sellers.
Section 1.12. "Code" shall mean the United States Internal
Revenue Code of 1986, as amended.
Section 1.13. "Company Common Stock" shall have the meaning
assigned to it in the Background Section hereof.
Section 1.14. "Company's Information Technology" shall have
the meaning assigned to it in Section 1.68 hereof.
Section 1.15. "Condition" shall mean the assets,
liabilities, business, operations, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole.
Section 1.16. "Consents" shall mean any consent, waiver,
approval, authorization, certification or exemption required from any person
or under any Contract or requirement of law, as applicable.
Section 1.17. "Contract" shall mean any written or oral
agreement, contract, commitment, lease and other instrument, document and
undertaking.
Section 1.18. "Deed of Share Transfer" means the notarial
deed of transfer in respect of the Shares, to be executed before the Civil Law
Notary pursuant to Section 3.1 hereof.
Section 1.19. "Due Diligence Investigation" shall have the
meaning assigned to it in Section 6.1 hereof.
Section 1.20. "Dutch GAAP" shall mean the generally accepted
accounting principles following from the relevant provisions of book 2 of the
Dutch Civil Code and from "Richtlijnen van de Raad voor de Jaarverslaggeving."
Section 1.21. "Employees" shall mean each of the employees
of the Company and its Subsidiaries.
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Section 1.22. "Employment Agreements" shall mean the
employment agreements in a form to be mutually agreed upon between Systems &
Computer Technology Corporation and L. H. D. Mulder, Systems & Computer
Technology Corporation and L. A. Derks, the Company and A. S. L. Schuermans,
the Company and C. Fung-A-You, the Company and E. de Waart, the Company and
Pieter Leijten, and the Company and Jurriaan van der Lingen.
Section 1.23. "Environmental Claim" shall mean any written
or oral demand, claim, suit, lien, action, expense (including consequential
damages and counsel fees), cause of action, investigation or notice by any
person or entity alleging actual or potential liability under Environmental
Laws (including, without limitation, potential or actual liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties).
Section 1.24. "Environmental Laws" shall mean all laws and
regulations applicable to the Company and any of its Subsidiaries relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata).
Section 1.25. "Equipment" shall mean all of the Company's
and its Subsidiaries' furniture, fixtures, machinery, equipment, motor
vehicles, office equipment, computers, tools and replacement parts, wherever
located, all of the Equipment on the date hereof being listed on Schedule 1.25
hereof.
Section 1.26. "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
Section 1.27. "Escrow Agreement" shall mean the form of
Escrow Agreement attached as Appendix E to be entered into within two (2)
weeks following the Closing Date among the Sellers, Purchaser or its assignee
and a mutually agreed upon escrow agent.
Section 1.28. "Financial Statements" shall have the meaning
assigned to it in Section 4.18 hereof.
Section 1.29. "FY 1997 Balance Sheet" shall mean the balance
sheet included in the FY 1997 Financial Statements.
Section 1.30. "FY 1997 Financial Statements" shall have the
meaning assigned to it in Section 4.18 hereof.
Section 1.31. "Governmental Entity" shall mean any
governmental authority, or any administrative agency, department, commission,
board, body, official, bureau or other governmental authority or
instrumentality.
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Section 1.32. "Intellectual Property and Information" shall
mean all the following of the Company and any Subsidiary on a world-wide
basis: patents, applications for patents, trademarks, trademark registrations,
applications for trademark registrations, trade names, service marks,
copyrights, Software and applications, trade secrets, product related artwork
and know-how, (including any registrations and applications for registration
thereof).
Section 1.33. "Inventory" shall mean all of the Company's
and its Subsidiaries' packaging, finished goods, spare parts, work in process,
stockroom inventory and raw materials, wherever located.
Section 1.34. "June 1998 Balance Sheet" shall mean the
balance sheet for the accounting period ending in June, 1998 included in the
June 1998 Financial Statements.
Section 1.35. "June 1998 Financial Statements" shall have
the meaning assigned to it in Section 4.18 hereof.
Section 1.36. "Leased Real Property" shall mean the real
property leased by the Company and its Subsidiaries.
Section 1.37. "Leasehold Improvements and Fixtures" shall
mean all of the leasehold improvements, fixtures and appurtenances owned by
the Company and its Subsidiaries and attached to the Leased Real Property.
Section 1.38. "Leases" shall mean the leases pursuant to
which the Company or its Subsidiaries leases the Leased Real Property,
together with any and all riders, supplements, amendments, or modifications
thereto, a list of which is attached hereto as Schedule 1.38, and copies of
which have been provided to Purchaser.
Section 1.39. "Legal Expenses" shall mean any and all
reasonable out-of-pocket fees, costs and expenses of any kind incurred by such
person and its counsel in investigating, preparing for, defending against or
providing evidence, producing documents or taking other similar action with
respect to any threatened or asserted claim.
Section 1.40. "Liabilities" shall mean any and all
obligations or liabilities of the Company and its Subsidiaries whatsoever,
express or implied, matured or unmatured, disputed, liquidated, unliquidated,
absolute, fixed or contingent, known or unknown, except for any Permitted
Liabilities.
Section 1.41. "Liens" shall mean liens, pledges, claims,
charges, security interests, and other encumbrances of any nature whatsoever.
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Section 1.42. "Losses" shall mean any and all damages,
losses, obligations, deficiencies, liabilities, claims, encumbrances,
penalties, fines, costs and expenses, including, without limitation, any
diminution in value of any real or personal property and reasonable attorneys'
fees (including consequential damages but excluding punitive damages other
than Allowable Punitive Damages. Any Losses incurred by the Company and/or its
Subsidiaries shall be deemed to result in Losses to the Purchaser in the same
amount of Losses incurred by the Company. The term "Allowable Punitive
Damages" shall mean punitive damages required to be paid by an indemnified
party to a Third Party except to the extent such punitive damages are the
result primarily of the acts of the indemnified party.
Section 1.43. "Management Contracts" shall mean the
following contracts: those dated as of December 15, 1997 and between the
Company and Shareholder A, Shareholder B, Shareholder C, Shareholder D or
Shareholder E.
Section 1.44. "Material Adverse Effect" shall have the
meaning assigned to it in Section 4.1.1 hereof.
Section 1.45. "Materials of Environmental Concern" means any
toxic, reactive, corrosive, carcinogenic, flammable or hazardous pollutant or
other hazardous substance, including, but not limited to, petroleum and
petroleum products, natural gas or synthetic gas, or any radioactive material.
Section 1.46. "Permitted Liabilities" shall mean Liabilities
of the Company and its Subsidiaries (i) reflected in the June 1998 Financial
Statements, (ii) incurred in the ordinary course of business since the date
thereof, and (iii) Liabilities disclosed in this Agreement or any Schedules
hereto.
Section 1.47. "Permitted Liens" shall have the meaning
assigned to it in Section 6.6 hereof.
Section 1.48. "Person" shall mean an individual, a sole
proprietorship, a corporation, a partnership, a joint venture, an association,
a trust, or any other entity or organization, including a Governmental Entity.
Section 1.49. "Plans" shall have the meaning assigned to it
in Section 4.38 hereof.
Section 1.50. "Prepaid Items" shall mean all of the
Company's and its Subsidiaries' prepaid expenses, including but not limited to
advances and deposits, as reflected on the Company's June 1998 Financial
Statements.
Section 1.51. "Proprietary Information" shall have the
meaning assigned to it in Section 6.2 hereof.
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Section 1.52. "Purchase Price" shall have the meaning
assigned to it in Section 2.2 hereof.
Section 1.53. "Purchaser Common Stock" shall mean the
Purchaser's common stock, par value $.01 per share.
Section 1.54. "Rights and Other Property" shall mean all of
the Company's and its Subsidiaries' assets not included in the Accounts
Receivable, Cash, Equipment, Intellectual Property and Information, Inventory,
Leasehold Improvements and Fixtures and Prepaid Items, including, without
limitation, all of the following: rights of offset, bank and mutual fund
accounts, safe deposit boxes, credits, claims against third parties for
refunds, causes of action, judgments, proceeds of insurance in respect of
damage to or destruction or loss of assets, going concern value, goodwill,
rights in name "Fygir" or any variation thereof, contract rights, warranties
and licenses received from manufacturers and sellers of Equipment and
Inventory, vendor and customer records, franchises, licenses, permits,
consents, approvals, certificates of public convenience, waivers and
authorizations for the operation of the Business, including, without
limitation, those, if any, relating to the importation and exportation of
products and materials, technical information, telephone numbers, Internet
websites, e-mail addresses and other electronic communication systems.
Section 1.55. "Securities" shall mean any securities of the
Company and its Subsidiaries as more fully described in Section 4.4 hereof.
Section 1.56. "Shareholder Loans" shall have the meaning
assigned to it in Section 4.36 hereof.
Section 1.57. "Shareholder Receivables" shall have the
meaning assigned to it in Section 4.36 hereof.
Section 1.58. "Shares Purchase" shall have the meaning
assigned to it in Section 2.1 hereof.
Section 1.59. "Software" shall mean all computer software
programs and related object code, objects and source codes owned, marketed,
licensed to Third Parties ("Company Code") or under development by the Company
or any of its Subsidiaries in connection with the Business, together with
Third Party software programs and related object code, objects and source
codes as incorporated into the Company Codes. All documentation and other
related materials in any and all media used in connection with the Business
and related to the Software shall be included in the definition of "Software."
Section 1.60. "Software Licenses" shall mean the license
agreements and related documentation (including, without limitation, any
related support, development or maintenance agreements) between the Company or
any of its Subsidiaries, on the one hand, and each Person to
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whom the Company or any of its Subsidiaries has granted rights to use any of
the Software, on the other hand, a list of which is set forth on Schedule 4.35
attached hereto.
Section 1.61. "Subsidiary" means any corporation with
respect to which a specified Person (or a Subsidiary thereof) owns a majority
of the voting stock or otherwise has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
Section 1.62. "Tax Benefit" shall mean: (i) in the case of a
federal, state, or local Tax reported on any Tax Returns filed on a combined
or consolidated basis, the amount by which the Tax liability of the
indemnified party's affiliated group (within the meaning of Code ss.1504(a))
or other relevant group of corporations is reduced by a Tax Benefit Item; or
(ii) in the case of a Tax reported on any Tax Returns filed on a separate
company or individual basis, the amount by which the Tax liability of the
Companies or their successors or Affiliates (or the Sellers, where applicable)
is reduced by a Tax Benefit Item.
Section 1.63. "Tax Benefit Item" shall mean any item arising
out of or otherwise pertaining to an indemnifiable loss and that is actually
reported on any Tax Returns as a deduction, or which gives rise to a credit,
or other equivalent item.
Section 1.64. "Taxes" shall mean (i) all taxes, charges,
fees, levies or other assessments including, without limitation, all net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, payroll, employment, social security, unemployment,
excise, estimated, stamp, occupancy, occupation, property or other similar
taxes, including any interest or penalties thereon, and additions to tax or
additional amounts imposed by any Governmental Entity (a "Taxing Authority")
or (ii) all liability for the payment of any taxes, interest, penalty,
addition to tax or like additional amount resulting from the application of
the United States Treasury Regulation ss. 1.1502-6 or comparable law or
regulation in any other jurisdiction.
Section 1.65. "Tax Returns" shall mean any declaration,
return, report, estimate, information return, schedule, statements or other
document filed or required to be filed, with or when none is required to be
filed with a Taxing Authority, the statement or other document issued by, a
Taxing Authority.
Section 1.66. "Third Party" shall mean any Person other than
Purchaser, the Company or Sellers, or an affiliate of Purchaser, the Company,
its Subsidiaries or Sellers.
Section 1.67. "Threshold Amount" shall have the meaning
assigned to it in Section 10.4 hereof.
Section 1.68. "Transfer" shall mean the transfer of the
Shares from the Sellers to Purchaser as referred to in Section 3.1.2.(a)
hereof.
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ARTICLE II
SALE AND PURCHASE OF SHARES; SATISFACTION OF INDEBTEDNESS
Section 2.1. Sale and Purchase of the Shares. Subject to the
terms and conditions contained in this Agreement, at the Closing on the
Closing Date, (i) each of the Sellers agrees to sell to Purchaser such part of
the Shares, free and clear of all Liens, as it owns according to the
Background Section hereof and (ii) Purchaser shall purchase such Shares from
each of the Sellers (the "Shares Purchase").
Section 2.2. Purchase Price and Consideration.
(a) As full consideration for the Shares Purchase and all of
the obligations, covenants and conditions contained in this Agreement, the
Purchaser shall pay, deliver or cause to be delivered to the Sellers
Thirty-Three Million Nine Hundred Fifteen Thousand United States Dollars
($33,915,000) (the "Purchase Price"). The Purchase Price shall be paid to the
Sellers, subject to paragraph (b) below, pro rata to their respective stake in
the Shares as set out in the Background Section hereof, in the amounts set
forth on Schedule 2.2 hereof.
(b) Of the total Purchase Price, Thirty-One Million Six
Hundred and Sixty-Five Thousand Dollars ($31,665,000) shall be paid at Closing
in cash, by certified check or by wire transfer of immediately available
United States federal funds to the accounts set forth on Schedule 2.2 hereof.
The administrative, bank and other costs of the wire transfer shall be borne
by the Purchaser.
(c) Within two (2) weeks following the Closing Date,
Purchaser shall deposit in escrow the balance of the Purchase Price equal to
Two Million Two Hundred Fifty Thousand Dollars ($2,250,000) pursuant to the
Escrow Agreement to be held and dispersed in accordance with the terms of the
Escrow Agreement.
ARTICLE III
CLOSING
Section 3.1. Closing.
3.1.1. General. Unless otherwise agreed to by the
parties hereto, the closing under this Agreement (the "Closing") will be held
at the offices of Trenite Van Doorne located in Rijswijk, Netherlands on the
Closing Date two (2) hours after all conditions set forth in Article 7 and 8
have been satisfied or waived.
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3.1.2. Transfer and Deliveries. At the Closing and
as a condition to Closing:
(a) Sellers shall transfer the Shares to Purchaser.
(i) The Transfer will be effected by execution by
all parties hereto and by the Civil Law Notary Mr. Van Steenderen, holding
office at The Hague, the Netherlands, at the offices of Trenite van Doorne or
his substitute or another civil law notary holding office at the same address,
of the Deed of Share Transfer which shall be in conformity with the draft
attached hereto as Appendix C. The Company shall acknowledge the Transfer by
co-signing the Deed of Share Transfer.
(ii) Immediately after the Transfer, the Company
shall ensure that the Transfer is validly registered in the shareholders'
register.
(b) Sellers will deliver to Purchaser:
(i) All of the Company's Books and Records,
including without limitation all minute books, stock books, stock transfer
ledgers, financial and accounting records, and files; provided, however, that
unless Purchaser directs otherwise prior to the Closing, only the Company's
minute books, stock books and stock transfer legends will be required to be
delivered at the location of the Closing, and the remainder of the Books and
Records may be delivered at the Company's principal executive offices.
(ii) The Employment Agreements, as defined in
Section 1.22, executed by the persons named as parties therein.
(iii) All other agreements, certificates, consents,
approvals and documentary evidence required to be delivered pursuant to
Sellers' obligations hereunder.
(c) Purchaser will deliver to Sellers such agreements,
certificates, consents, approvals and documentary evidence required to be
delivered pursuant to Purchaser's obligations hereunder.
(d) The Company will repay the Shareholder Loans, as set
forth on Schedule 4.36 in full to the payees thereunder.
3.1.3. Expenses. Sellers shall be responsible for
the payment of costs they and the Company have incurred and will incur in
connection with the negotiation, execution and delivery of this Agreement and
consummation of the transactions contemplated hereby by Sellers. Purchaser
shall be responsible for the payment of costs it has incurred and will incur
in connection with the negotiation, execution and delivery of this Agreement
and consummation of the transactions contemplated hereby by Purchaser.
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3.1.4. Subsequent Documentation. Sellers shall at
any time and from time to time upon the request of Purchaser execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
all such further assignments, instruments of sale and transfer and other
documents as may be reasonably required for the better assigning, transferring
and confirming to Purchaser or its successors and assigns, the Shares, and for
the purpose of carrying out the intent of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
RESPECTING THE COMPANY AND THE SELLER
The Sellers and the Company hereby jointly and severally
make the following representations and warranties to Purchaser, each of which
shall survive the Closing as provided in this Agreement:
Section 4.1. Organization, Power and Authority.
4.1.1. The Company is a "besloten vennootschap met
beperkte aansprakelijkheid" (a closed company with limited liability). Each of
the Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the lack of such
qualification would not have a material adverse effect on the Business,
financial condition or results of operations of the Company and its
Subsidiaries taken as a whole or on the ability of the parties to consummate
the transactions contemplated by this Agreement. All of such jurisdictions are
listed on Schedule 4.1. Each of the Company and its Subsidiaries has full
corporate power and corporate authority, and all material governmental
permits, licenses and consents, to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it. The Company
does not own any equity interest in any corporation or other entity other than
the Subsidiaries listed in Schedule 4.1. The Company and each of the
Subsidiaries has the power and authority to own its property and to carry on
its business as presently conducted, and the Sellers and the Company have the
right, power and authority to enter into and perform this Agreement and to
carry out the transactions contemplated hereby. Each Seller has the right,
power and authority to enter into any agreements required hereunder in
connection with the Closing and to perform its obligations thereunder. The
Sellers are entitled without any restriction to sell and transfer the Shares.
Correct and complete copies of the Articles of Incorporation of the Company,
as amended through the date of this Agreement, are attached as Appendix A. The
information contained in the extract (uittreksel) dated July 31, 1998, from
the Commercial Register (Handelsregister) of the Delft-The Hague Chamber of
Commerce and Industry (Kamer van Koophandel en Fabrieken voor Haaglanden)
relating to the Company (Appendix B hereto) is correct. The Company and the
Subsidiaries are not in violation of any term of its Articles of
Incorporation, as amended to date, or any agreement, instrument, judgment,
decree,
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order, statute, rule or governmental regulation applicable to it which would,
individually or collectively, have a material adverse effect on the Condition
("Material Adverse Effect").
4.1.2. Each of the Sellers, in its capacity as a
shareholder of the Company hereby declares, represents and warrants that the
restrictions on the sale and transfer of the Shares have been duly observed
and that this Agreement is full evidence thereof, the Sellers being the owners
of the entire issued share capital of the Company.
Section 4.2. Directorships and General Powers of Attorney.
Appendix D hereto lists the names of all the persons who hold a directorship
or general power of attorney in the Company or any Subsidiary.
Section 4.3. Authorization. This Agreement constitutes the
valid and binding obligation of the Seller and the Company, enforceable
against each of them in accordance with its terms. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary
corporate and shareholder action of the Company.
Section 4.4. Capitalization of Company.
(a) The Company's authorized capital stock consists of
20,000 shares of capital stock, of which only the Shares are currently issued
and outstanding. The Shares are owned of record and beneficially solely by the
Sellers in the amounts as referred to in the Background Section hereof. Each
of the Shares has been validly issued, fully paid and nonassessable and none
of the Shares has been issued in violation of any preemptive or similar right.
Except for the Shares, the Company has issued no other shares of capital
stock, there are no outstanding warrants, options or other rights,
commitments, agreements or understandings to purchase or acquire any shares of
capital stock or other equity securities of the Company, and there are no
outstanding debt securities of the Company convertible into equity securities
or otherwise containing equity provisions. The Company has not reserved any of
its authorized shares of capital stock for any purpose. Except as set forth in
Schedule 4.4, (a) there are no restrictions on the transfer of the Company's
capital stock other than those arising from the Articles of Incorporation and
applicable laws of the Netherlands, and (b) the Company has no understandings
or agreements with the Sellers or any other person or entity respecting the
Company's capital stock or other securities of the Company. None of the
Sellers has entered into or granted any outstanding warrants, options,
commitments, agreements or understandings with any person or entity (except
for the transactions contemplated by this Agreement) to sell, transfer or
otherwise dispose of any of the Shares. The Company is not under any
obligation whatsoever to issue any further shares or debentures and no
resolution to that effect has been passed in respect of the Company. All
shares of capital stock, options, warrants, notes, bonds or other equity or
debt securities which have ever been offered or sold by the Company and its
Subsidiaries ("Securities") have been issued in compliance with all applicable
laws and regulations. Except as set forth on Schedule 4.4, there are no
outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to the Company or any of its
Subsidiaries.
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(b) All of the outstanding shares of capital stock of each
Subsidiary of the Company have been duly authorized and validly issued, are
fully paid and nonassessable, are not subject to, nor were they issued in
violation of, any preemptive rights, and are owned, of record and
beneficially, by the Company, free and clear of all liens, encumbrances,
options or claims whatsoever. No shares of capital stock of any such
Subsidiary are reserved for issuance and there are no outstanding or
authorized options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities, or other
commitments, contingent or otherwise, relating to the capital stock of any
such Subsidiary, pursuant to which such Subsidiary is or may become obligated
to issue any shares of its capital stock or any securities convertible into,
exchangeable for, or evidencing the right to subscribe for, any such shares.
Except as provided pursuant to applicable law, there are no restrictions of
any kind which prevent the payment of dividends by any such Subsidiary.
Section 4.5. Title to Shares.
(a) Shareholder A, Shareholder B, Shareholder C, Shareholder
D, Shareholder E and the Company hereby jointly and severally represent and
warrant to the Purchaser that: (i) each Seller has good and valid title to the
Shares reflected as owned by each Seller in the Background Section hereof,
free and clear of all Liens and (ii) upon transfer of the Shares to the
Purchaser and payment therefor pursuant hereto, good and valid title to the
Shares, free and clear of all Liens, will pass to the Purchaser.
(b) Shareholder F hereby represents and warrants to the
Purchaser that he: (i) has good and valid title to his respective shares
reflected as owned by him in the Background Section hereof, free and clear of
all Liens and (ii) upon transfer of his respective shares to the Purchaser and
payment therefor pursuant hereto, good and valid title to his respective
shares, free and clear of all Liens, will pass to the Purchaser.
(c) Shareholder G hereby represents and warrants to the
Purchaser that he: (i) has good and valid title to his respective shares
reflected as owned by him in the Background Section hereof, free and clear of
all Liens and (ii) upon transfer of his respective shares to the Purchaser and
payment therefor pursuant hereto, good and valid title to his respective
shares, free and clear of all Liens, will pass to the Purchaser.
Section 4.6. Subsidiaries; Investments in Other Entities.
The Company has no Subsidiaries other than Fygir, Inc., a corporation
organized under the laws of the Commonwealth of Massachusetts, United States
of America, and Fygir, Ltd., a company organized under the laws of the United
Kingdom. Other than those listed on Schedule 4.6, neither the Company nor any
of its Subsidiaries has any direct or indirect investments in, and the neither
the Company nor any of its Subsidiaries is a party to any agreement,
commitment or understanding requiring the Company to purchase or acquire any
interest in, the equity of any corporation, trust, partnership or business
entity, or debt securities convertible into such securities or otherwise
containing equity provisions.
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Section 4.7. Conflict with other Instruments; Absence of
Restrictions. The execution, delivery and performance of this Agreement by the
Company and Sellers will not contravene any provision of the Company's
Articles of Incorporation or bylaws or any documents of incorporation or
bylaws of any Subsidiary, as the case may be, and will not result in a breach
of, or constitute a default under, any agreement or other document to which
the Company, its Subsidiaries or any of the Sellers is a party or by which the
Company, its Subsidiaries or any of the Sellers is bound, or any decree, order
or rule of any court or Governmental Entity or any provision of applicable law
which is binding on the Company, its Subsidiaries or any of the Sellers or on
any of the Shares or any of the Company's or its Subsidiaries' assets, or
result in the creation or imposition of any mortgage, pledge, lien, charge,
assessment, encumbrance, claim or restriction of any nature on any of the
Shares or any of the Company's or its Subsidiaries' assets or give to others
any interest or rights therein or create in any Third Party the right to
modify, terminate or accelerate (or to make a claim for damages in respect of)
any instrument or Contract to which the Company, its Subsidiaries or any of
the Sellers is a party or by which the Company, its Subsidiaries or any of the
Sellers is bound. The Company has complied with all obligations deriving from
the "Wet op de ondernemingstaden" (Works Council Act).
Section 4.8. Government and Third-Party Approvals. Except as
listed on Schedule 4.8 attached hereto, neither the Sellers nor the Company
nor the Subsidiaries are required to obtain any consent, approval or
authorization of or file, register or qualify with any Governmental Entity, or
any corporation, person or other entity (including any party to any contract
or agreement with the Company, any of its Subsidiaries or any of the Sellers)
(i) for the execution, delivery and performance of this Agreement by the
Company and Sellers, (ii) in order for the Company and Sellers to consummate
the transactions contemplated hereby or (iii) in order to vest in Purchaser
good and marketable title in and to all of the Shares upon the Closing.
Section 4.9. Title to Properties; Adequacy of Properties.
The Company and its Subsidiaries have good and marketable title to their
properties and assets, whether tangible or intangible, including, without
limitation copyrights, patents, trademarks and other intangibles which it
purports to own, as well as all of the properties and assets reflected in the
FY 1997 Balance Sheet and those acquired since the date thereof (except in
each case for properties and assets sold or otherwise disposed of in the
ordinary course of business consistent with past practice since the date
thereof), free and clear of all Liens, except (i) liens for Taxes not yet due
and payable, (ii) utility easements, rights of way and other non-material
imperfections of title and encumbrances which do not and will not have a
Material Adverse Effect, (iii) liens reflected in any Financial Statements or
elsewhere in this Agreement or the Schedules attached hereto, or (iv) as
specifically disclosed in Schedule 4.9 attached hereto. All of said properties
and assets are in good working order subject to ordinary wear and tear and fit
for their intended use. The properties and assets of the Company and its
Subsidiaries are adequate in all material respects to conduct the operations
of the Company and its Subsidiaries as now conducted. Set forth on Schedule
4.9 is a list of all loans, leases or other financing to which such properties
and assets are or will be subject on the Closing. Except as set forth on
Schedule 4.9, no property used by the Company and its Subsidiaries in
connection with the
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Business (other than the Leased Real Property) is held under any lease,
security agreement, pledge agreement or security arrangement or is located
other than in the possession of the Company or its Subsidiaries. To the
knowledge of the Company, all of the Leases, and all leases of personal
property to which the Company or its Subsidiaries is a party, are fully
effective and afford the Company and its Subsidiaries possession of the
subject matter of the lease in accordance with their terms.
Section 4.10. Accounts Receivable. All of the Accounts
Receivable as of December 31, 1997 are reflected on the FY 1997 Balance Sheet,
all of the Accounts Receivable as of June 30, 1998 are reflected on the June
1998 Balance Sheet. Each of the Accounts Receivable constitutes a valid claim
in the full amount thereof against the debtor charged therewith on the books
of the Company and has been acquired in the ordinary course of business. To
the knowledge of the Sellers and the Company, no account debtor has any valid
set-off, deduction or defense with respect thereto, and no account debtor has
asserted such set-off, deduction or defense except as set forth in Schedule
4.10. Except as set forth on Schedule 4.10, the Accounts Receivable as of the
Closing Date are collectible in the ordinary course of business in the
aggregate recorded amounts thereof in accordance with their terms.
Section 4.11. Cash Accounts. Schedule 4.11 lists each bank
and mutual fund account and safe deposit box of the Company and each of its
Subsidiaries and each person authorized to sign checks or withdraw funds from
such accounts and to have access to such safe deposit boxes.
Section 4.12. Equipment. The items of Equipment are, and on
the Closing Date will be, in good working order subject to ordinary wear and
tear and fit for their intended use. The Equipment includes all of the
furniture, fixtures, machinery, equipment, motor vehicles, office equipment,
computers, tools and replacement parts currently used in the operation of the
Business.
Section 4.13. Inventory Generally. All of the Inventory as
of December 31, 1997 is reflected on the FY 1997 Balance Sheet, all of the
Inventory as of June 30, 1998 is reflected on the June 1998 Balance Sheet.
Substantially all items of Inventory are, and on the Closing Date will be in
good and merchantable condition and suitable and usable or salable in the
ordinary course of business within twelve (12) months of the Closing Date. The
Inventory is valued at lower of cost on a first-in, first-out basis, or market
in accordance with Dutch GAAP, and does not include any defective or obsolete
items except to the extent that old versions of the Software may become
obsolete upon issuance of newer versions. Except as set forth in Schedule
4.13, neither the Company nor its Subsidiaries holds any items of Inventory on
consignment or has title to any items of Inventory in the possession of others
except for items of Inventory in shipment to the Company or its Subsidiaries.
Section 4.14. Leasehold Improvements. The Leasehold
Improvements are, and on the Closing Date will be, in good working order
subject to ordinary wear and tear and fit for their intended use. The
Leasehold Improvements include all of the leasehold improvements, fixtures and
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appurtenances currently used by the Company and its Subsidiaries in operating
the Company's and the Subsidiaries' business.
Section 4.15. Owned Real Property. Neither the Company nor
any of its Subsidiaries owns any real property and neither the Company nor any
of its Subsidiaries is a party to any option, agreement or other document
pursuant to which the Company or a Subsidiary has the right or obligation to
purchase or acquire title to or any interest in any real property.
Section 4.16. Leased Real Property.
(a) The Leased Real Property constitutes all of the real
property which is leased or used by the Company or its Subsidiaries. The full
and accurate address of each parcel of Leased Real Property and the lessor of
each parcel of Leased Real Property is identified on Schedule 4.16, together
with the full and accurate mailing address of each such lessor known to the
Company. Seller has previously delivered to Purchaser all of the Leases.
(b) Except for the occupancy and use of the Leased Real
Property by the Company or its Subsidiaries, there are no leases, tenancies,
licenses or other rights of occupancy or use for any portion of the Leased
Real Property in favor of Third Parties, and no person or entity other than
the Company or its Subsidiaries occupies or uses any portion of the Leased
Real Property.
(c) There are no pending or, to the knowledge of the Company
or any Seller, threatened, condemnations, eminent domain or similar
proceedings which could affect any part of the Leased Real Property. Sellers
and the Company agree to notify Purchaser immediately upon learning that any
assessment, or any condemnation, eminent domain or similar proceeding, has
been commenced or is threatened, which could affect any part of the Leased
Real Property.
(d) To the knowledge of each Seller and the Company, the
buildings and improvements constituting a part of the Leased Real Property,
and the operation or maintenance thereof as operated and maintained, do not
contravene any zoning, building or safety law or ordinance or other
administrative regulation or violate any restrictive covenant or any other
provision of applicable law which would have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has received any notice of
violation of any such law, ordinance, regulation or covenant with which it has
not fully and timely complied which would have a Material Adverse Effect. To
the knowledge of each Seller and the Company, there is no outstanding notice
of violation, order or citation specifically against the Company or any of its
Subsidiaries under any law, ordinance, governmental rule or regulation
relating to any of the Leased Real Property, and all of the plants, buildings
and structures constituting a part of the Leased Real Property are in good
operating condition and in a state of good maintenance and repair sufficient
for the efficient operation of the Business except for ordinary wear and tear.
Section 4.17. Sufficiency of Assets. All of the assets of
the Company and its Subsidiaries are used in the operation of the Business.
The Accounts Receivable, Cash, Equipment,
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Intellectual Property and Information, Inventory, Leased Real Property,
Leasehold Improvements and Fixtures, Prepaid Items and Rights and Other
Property constitute all of the Assets set forth on the FY 1997 Balance Sheet
(other than such assets as the Company or its Subsidiaries shall have been
acquired or disposed of since December 31, 1997 in the ordinary course of
business consistent with past practices), to the extent the same are required
to be reflected thereon in accordance with Dutch GAAP, and there are no assets
used in the conduct of the Business other than such assets, except as set
forth on Schedule 4.17.
Section 4.18. Financial Statements.
(a) Schedule 4.18 consists of the following, referred to
collectively as the "Financial Statements:"
(i) the unaudited financial statements of the
Company for its fiscal years ended December 31, 1993, December 31, 1994,
December 31, 1995, and December 31, 1996 (including, in each case, a balance
sheet, a statement of income and retained earnings, and a statement of cash
flows), together with a review report thereon of Bouwer & Officier
Accountants;
(ii) the audited financial statements of the
Company (the "Audited FY 1997 Financial Statements") for its fiscal year ended
December 31, 1997 (including a balance sheet and profit and loss account,
together with "goedkeurende verklaring" (statement of approval) thereon of
Bouwer & Officier Accountants (collectively the "FY 1997 Financial
Statements"); and
(iii) the unaudited financial statements of the
Company for the six months ended June 30, 1998 (including a balance sheet and
profit and loss account) (the "June 1998 Financial Statements").
(b) The Financial Statements were prepared in accordance
with Dutch GAAP and fairly and accurately present the financial condition and
the results of the operations of the Company and its Subsidiaries as at the
respective dates thereof and for the periods reported therein, subject, in the
case of interim financial statements, to normal recurring year-end
adjustments, the effect of which will not have a Material Adverse Effect.
Section 4.19. Absence of Undisclosed Liabilities. On
December 31, 1997, the Company and its Subsidiaries had no material
Liabilities except for the Permitted Liabilities and to the extent reflected
in the Audited FY 1997 Balance Sheet or in this Agreement, on Schedule 4.19 or
on any other Schedule hereto. On June 30, 1998, the Company and its
Subsidiaries had no material Liabilities except for the Permitted Liabilities
and to the extent reflected in the June 1998 Balance Sheet or in this
Agreement, on Schedule 4.19 or on any other Schedule hereto or incurred in the
ordinary course of business since that date. On the date hereof, the Company
and its Subsidiaries do not have any Liabilities and no basis for any
Liability exists other than any reflected in the June 1998 Balance Sheet or in
this Agreement or on any Schedule hereto or incurred after June 30, 1998 in
the ordinary course of the Business. On the Closing Date, the Company and its
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Subsidiaries will not have any Liabilities and no basis for any Liability will
exist other than any Liabilities reflected in the June 1998 Balance Sheet and
which arose after the date of the Agreement in the ordinary course of business
of the Company and its Subsidiaries and in compliance with the covenants and
agreements of the Company herein contained.
Section 4.20. Affiliated Relationships. All services
rendered and all goods sold by the Company and its Subsidiaries to any Seller
or any Affiliate of any Seller have been recorded in the accounts of the
Company and its Subsidiaries at their full value as if they were transferred
in arm's length transactions. All services rendered and goods sold by any
Seller or any Affiliate of any Seller to the Company or its Subsidiaries have
been accounted for as if they were transferred in arm's length transactions.
Section 4.21. Permits and Approvals. Schedule 4.21 contains
a true and correct description of all material licenses, permits, approvals,
authorizations, and consents issued in favor of the Company and its
Subsidiaries and granted by Governmental Entities, all of which are in full
force and effect, and the Business is currently being operated in material
compliance with the terms of each of the foregoing. Purchaser will not be
required, prior to or following the Closing, to file, apply for or obtain any
license, permit, approval, authorization, consent or registration in order to
purchase the Shares pursuant to this Agreement and operate the Business as
currently owned and operated by Sellers.
Section 4.22. Compliance with Law. Except as disclosed on
Schedule 4.29, the Company and its Subsidiaries have complied with each, and
are not in violation of any, law, ordinance or governmental rule or regulation
to which the Company or its Subsidiaries is subject and has not failed to
obtain, or to adhere to the requirements of, any license, permit or
authorization necessary to the ownership of the Company's or the Subsidiaries'
assets or the operation of the Company's or its Subsidiaries' business except
where such violation or failure does not and will not have a Material Adverse
Effect.
Section 4.23. Environmental Protection.
(a) Except as set forth in Schedule 4.23, attached hereto,
(i) neither the Company nor any of its Subsidiaries has received any written
or oral notice, from any Governmental Entity or any individual, and has no
knowledge of a set of facts indicating that it is not in compliance in all
material respects with all Environmental Laws applicable to the Business,
which compliance includes, but is not limited to, the possession by the
Company and its Subsidiaries of all material permits and other governmental
authorizations currently or previously required at the Company, its
Subsidiaries and the Business under applicable Environmental Laws, and
material compliance with the terms and conditions thereof; and (ii) the
Company and its Subsidiaries have received no written or oral notice from any
Governmental Entity, citizens group, employee or otherwise, and have no
knowledge of a set of facts indicating that the Company, its Subsidiaries and
the Business are not in full compliance with the terms or conditions of any
permit or governmental authorization. All permits and other governmental
authorizations currently held by the Company and its Subsidiaries
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which relate to the Business pursuant to the Environmental Laws are identified
on Schedule 4.23, attached hereto.
(b) Except as set forth in Schedule 4.23, attached hereto,
the Company and its Subsidiaries have received no written or oral notice of
and have no knowledge of any past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge or disposal of any Materials of Environmental
Concern that form or could form the basis of any Environmental Claim against
the Company or its Subsidiaries or against any person or entity whose
liability for any Environmental Claim the Company or its Subsidiaries have or
may have retained or assumed either contractually or by operation of law in
each case which has had or will have a Material Adverse Effect.
(c) All on-site and off-site locations where the Company or
its Subsidiaries have stored, disposed or arranged for the disposal of
Materials of Environmental Concern are identified in Schedule 4.23, attached
hereto. To the Company's and the Sellers' knowledge, at no time have there
been above-ground or underground storage tanks located on or in any of the
Leased Real Property, except as set forth in Schedule 4.23. To the Company's
and Sellers' knowledge, there is no asbestos contained in or forming part of
any building, building component, structure or office space located on or in
any of the Leased Real Property. To the Company's and Sellers' knowledge, no
polychlorinated byphenyls (PCBs) are present, in use or stored at any of the
Leased Real Property.
(d) Except as set forth in Schedule 4.23, attached hereto,
there have been no spills, discharges, leaks, emissions, injections, escapes,
dumpings or releases, of any kind whatsoever, of any Materials of
Environmental Concern in, on or about any of the Leased Real Property by the
Company or its Subsidiaries, which has had or will have a Material Adverse
Effect.
(e) The Company and its Subsidiaries have complied with all
notice requirements of the Environmental Laws regarding any spills,
discharges, leaks, emissions, injections, escapes, dumpings or releases, of
any kind whatsoever, of any Materials of Environmental Concern in, on or about
any of the Leased Real Property by the Company or its Subsidiaries.
Section 4.24. Litigation. No litigation, arbitration,
investigation or other proceeding of or before any court, arbitrator or
Governmental Entity is pending or, to the knowledge of the Company or any
Seller, threatened against the Company or its Subsidiaries or the transactions
contemplated by this Agreement, and neither the Company nor any Seller knows
of any basis for any such litigation, arbitration, investigation or
proceeding. The Company and its Subsidiaries are not a party to or subject to
the provisions of any judgment, order, writ, injunction, decree or award of
any court, arbitrator or Governmental Entity.
Section 4.25. Conduct of Business. Since December 31, 1997,
the Business of the Company and its Subsidiaries has been conducted only in
the ordinary course and in a manner consistent with past practices.
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Section 4.26. Absence of Changes. Since December 31, 1997,
there has not been:
(a) Any material change in the Condition, except changes in
the ordinary course of business, none of which has been or could have a
Material Adverse Effect.
(b) Any event or condition of any nature whatsoever which
individually or in the aggregate has materially adversely affected or might
materially adversely affect the Condition;
(c) Any damage, destruction or Loss relating to the Business
or the Assets, whether or not covered by insurance or any other event or
condition which has had or is likely to have a Material Adverse Effect.
(d) Any claims not covered by applicable policies of
liability insurance within the maximum insurable limits of such policies (less
any deductibles);
(e) Any transaction by the Company or any Subsidiary not in
the ordinary course of business as conducted on that date;
(f) Any amendment to the Articles of Incorporation or bylaws
of the Company other than the amendments made to the Articles of Incorporation
by deed of May 11, 1998 or any amendments to any charters, articles or bylaws
of any Subsidiary;
(g) The creation or attachment, or notice thereof, of any
lien, encumbrance or charge on any of the Assets except as otherwise disclosed
in this Agreement and the Schedules hereto;
(h) Any sale or transfer of any of the Assets not in the
ordinary course of business;
(i) Any incurrence of any debts, Liabilities or obligations
except in the ordinary course, consistent with past practice, or any waiver of
any rights of substantial value except as otherwise disclosed in this
Agreement and the Schedules hereto;
(j) Any discharge or satisfaction of any Liens, or any
payment of any Liens or Liabilities, except in the ordinary course of
business, consistent with past practice except as otherwise disclosed in this
Agreement and the Schedules hereto;
(k) Any increase in the salary or other compensation payable
by the Company or any Subsidiary to, or any change of the labor conditions of,
any of its executive officers, key employees or directors or the declaration,
payment, commitment or obligation of any kind for the payment by the Company
or a Subsidiary of a bonus or other additional salary or compensation to any
such person except as disclosed in Schedule 4.26;
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(l) Any dividends or distributions of cash or property by
the Company or any Subsidiary to the Company's shareholders except as
disclosed in Schedule 4.26;
(m) Except as described on Schedule 4.26 and except for the
agreement of the Sellers to sell the Shares to Purchaser pursuant hereto, any
sale, transfer or issuance of any capital stock, equity security or debt
security of the Company or any Subsidiary or any option, warrant, right or
commitment or agreement entered into requiring or permitting any such sale,
transfer or issuance; or
(n) Any agreement by the Company or any Subsidiary to do any
act which would render any of the preceding clauses inaccurate (other than the
transactions specifically contemplated hereby) other than those which,
individually or in the aggregate, would not have a Material Adverse Effect.
Section 4.27. Contracts, Leases, Etc.
(a) Except as listed on Schedule 4.27, Schedule 4.35 or any
other Schedule attached hereto, neither the Company nor any Subsidiary is a
party to any Contracts of the type described below:
(i) agreement or commitment with any current or
former shareholder, director, or officer, or any of their Affiliates;
(ii) agreement, commitment or arrangement with any
labor union or other representative of Employees;
(iii) employment agreement or severance agreement
with any Employee involving the payment of the aggregate of salary, wages,
bonuses and other compensation of more than Twenty-Five Thousand Dollars
($25,000) individually during the term thereof;
(iv) agreement or commitment for the performance of
services by a Third Party which involves in any one case Fifty Thousand
Dollars ($50,000) and is not cancelable on thirty (30) days notice or less
without penalty. Schedule 4.27 also contains a list of the 20 largest (in
terms of dollar amount) outstanding customer orders for products as of June
30, 1998;
(v) agreement or commitment to sell or supply
products or to perform services which obligates the Company or any Subsidiary
to sell products or perform services which involves in any one case Fifty
Thousand Dollars ($50,000) which is not cancelable on thirty (30) days notice
or less without penalty;
(vi) distribution agreement where the Company or
any Subsidiary is acting as supplier or distributor or any agency agreement
where the Company or any Subsidiary is acting as principal or agent;
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(vii) lease under which the Company or any
Subsidiary is either lessor or lessee of personal property requiring annual
lease payments (including rent and any other charges) in excess of Fifty
Thousand Dollars ($50,000), and any lease under which the Company or any
Subsidiary is the lessor of Real Property;
(viii) note, debenture, mortgage, pledge, charge,
security agreement, bond, conditional sale agreement, equipment trust
agreement, letter of credit agreement, loan agreement or other contract or
commitment for borrowing or lending of money (including, without limitation,
loans to or from current or former officers, directors, shareholders or any
member of their Affiliates), agreement or arrangements for a line of credit or
guarantee, pledge or undertaking of the indebtedness of any other person;
(ix) agreement, contract or commitment for any
charitable or political contribution;
(x) agreement, contract or commitment for any
capital expenditure in excess of Twenty-Five Thousand Dollars ($25,000);
(xi) agreement, contract or commitment limiting or
restraining it from engaging or competing in any lines of business with any
person;
(xii) license, franchise, distributorship or other
similar agreement, including those which relate in whole or in part to any
patent, trademark, tradename, service mark or copyright or to any ideas,
technical assistance or other know-how of or used by it in the operation of
its business;
(xiii) agreement with any Governmental Entity;
(xiv) power of attorney granted by the Company or
any Subsidiary in favor of any person or entity;
(xv) except as set forth on Schedule 4.27, other
agreement requiring payments or other consideration by or from the Company or
any Subsidiary in excess of Twenty-Five Thousand Dollars ($25,000) during the
remainder of its term;
(xvi) licensing arrangements, joint ventures and
royalty and franchise agreements; or
(xvii) other material agreement, contract or
commitment not made in the ordinary course of business.
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(b) Each of the Contracts is valid and enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting creditor's rights or by
general principles of equity; the Company and its Subsidiaries, and to the
knowledge of any Seller, the other parties thereto, are in material compliance
with the provisions thereof; the Company and its Subsidiaries, and to the
knowledge of any Seller, none of the other parties thereto, is in default in
the performance, observance or fulfillment of any material obligation,
covenant or condition contained therein; and no event has occurred which with
or without the giving of notice or lapse of time, or both, would constitute a
material default thereunder by the Company or any Subsidiary, or to the
knowledge of any Seller, any other party.
(c) None of the Contracts contains any provisions which
would cause the Company or any Subsidiary which is a party thereto to be
liable to the other party thereto for any amount (or any increased price for
goods or services being provided by the other party thereto) as a result of
the consummation of the transactions contemplated hereby.
(d) None of the terms or provisions of any of the Contracts
includes a restriction on the Company's or any Subsidiary's ability to compete
except to the extent that such restriction does not and will not have a
Material Adverse Effect and will not materially affect the Company's or any
Subsidiary's prospects. None of the terms or provisions of any of the
Contracts has or will have a Material Adverse Effect.
Section 4.28. Warranties and Liabilities. No claims for
breach of product or service warranties or guarantees to customers have been
received by the Company which were not, or will not be, satisfied by the
performance of the Company's and the Subsidiaries' obligations pursuant to
maintenance agreements entered into in the ordinary course of business
provided, however, that no representation or warranty is given hereunder
regarding the Company's or any Subsidiary's performance on and after the
Closing Date. Other than the warranties set forth in the Company's and the
Subsidiaries' Contracts with their customers, neither the Company nor any of
its Subsidiaries has given or made any warranties to third parties with
respect to any products sold or services performed by it.
Section 4.29. Tax Audit and Returns. Except as set forth in
Schedule 4.29, the Company and each Subsidiary has duly and timely filed all
Tax Returns and has paid all Taxes shown thereon. Except as set forth in
Schedule 4.29, the Company and each Subsidiary has paid all Taxes required to
be paid and has made sufficient provision for the payment of all Taxes
required to be accrued which are not yet payable. The Tax Returns are true,
complete and correct in all material respects. No deficiency in the payment of
any Taxes for any period to the date hereof has been assessed against the
Company or any Subsidiary by any Taxing Authority which has not been
discharged in full. Except as listed on Schedule 4.29, no audits or other
proceedings have been instituted against the Company or any Subsidiary and, to
the knowledge of any Seller or the Company, no audits or other proceedings are
proposed or threatened against the Company or any Subsidiary for any Taxes.
Neither the Company nor any Seller knows of any basis for any potential
Liability for Taxes which would involve a material amount. There are not now
in force any waivers
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or agreements by the Company or any Subsidiary of any statute of limitation
for the assessment of any Tax. Without limiting the foregoing, amounts
required to have been withheld and paid by the Company or any Subsidiary prior
to the date hereof in compliance with the withholding provisions of all
applicable laws and regulations have been withheld and paid prior to the date
hereof to the proper Governmental Entities or have been properly deposited in
anticipation of such payment, and all estimated Tax payments have been made
and are sufficient to discharge all Taxes with respect to the periods covered.
Section 4.30. Prior Audit Information. Except as set forth
on Schedule 4.30, neither the Company's nor any of the Subsidiaries' Tax
information has ever been audited and neither the Company nor any of the
Subsidiaries have entered into any agreements for an extension of time for the
assessment of any Tax or Tax delinquency, nor have they waived or requested a
waiver of any statute of limitations with respect to any Tax or Tax
delinquency. Neither the Company nor any of the Subsidiaries have received
outstanding and unresolved notices from the applicable Taxing Authority or any
other taxing authority of any proposed examination or of any proposed change
in reported information which may result in a deficiency or assessment against
the Company, any of the Subsidiaries or the Sellers, and there are not suits,
actions, claims, investigations, inquiries or proceedings now pending against
the Company or any of the Subsidiaries in respect of Taxes, governmental
charges or assessments.
Section 4.31. Insurance. Schedule 4.31 sets forth a list of
all policies or binders of fire, liability, product liability, worker's
compensation, vehicular or other insurance held by or on behalf of the Company
and its Subsidiaries (specifying for each such insurance policy, the insurer,
the policy number or covering note number with respect to binders, and each
pending claim thereunder of more than Five Thousand Dollars ($5,000). Such
policies and binders are valid and in full force and effect. Neither the
Company nor any Subsidiary is in material default with respect to any
provision contained in any such policy or binder or in material violation of
any statutory regulation applicable to such policy or binder and neither the
Company nor any Subsidiary has failed to give any notice or present any claim
of which it has notice under any such policy or binder in a timely fashion.
Neither the Company nor any Subsidiary has received or given a notice of
cancellation or non-renewal with respect to any such policy or binder. Neither
the Company nor any Subsidiary has any knowledge of any material inaccuracy in
any application for such policies or binders, any failure to pay premiums when
due or any similar state of facts which might form the basis for termination
of any such insurance. Neither the Company nor any Subsidiary has failed to
report to any of its insurance carriers any material change in the state of
facts or the occurrence of any event which is reasonably likely to form
sufficient grounds for its insurance carriers for not having to fully
indemnify the Company or any Subsidiary for any damages resulting from any
insured event pursuant to and in accordance with the provisions of such
policies or any statutory provisions applicable to such policies. The Company
has not received written notice from any of its insurance carriers that any
insurance premiums will be materially increased in the future or that any
insurance coverage listed on Schedule 4.31 will not be available in the future
on substantially the same terms as now in effect. The Company and each
Subsidiary has fully complied with all statutory obligations to maintain
insurance with respect to any of its assets, liabilities and staff.
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Section 4.32. [This Section Intentionally Omitted.]
Section 4.33. Intellectual Property and Information.
4.33.1. Schedule 4.33 sets forth a complete and
accurate list and full description of all material Intellectual Property and
Information owned by the Company or any Subsidiary or used in respect of the
Business. With respect to any registrations of the Intellectual Property and
Information owned by the Company or any Subsidiary, Schedule 4.33 also sets
forth, as to each such item of the Intellectual Property and Information, the
(i) relevant application or registration number, (ii) relevant filing,
registration, issue or application date, (iii) record owner, (iv) country and
(v) title. In addition, Schedule 4.33 identifies material Intellectual
Property and Information possessed and used by the Company or any Subsidiary
under any license, contract, agreement or other commitment. Except as set
forth on Schedule 4.33, to the Company's knowledge, the Company and its
Subsidiaries own and possess all of the proprietary rights, know-how and trade
secrets not included in the Intellectual Property and Information necessary
for the Business as now being conducted.
4.33.2. Except as set forth in Schedule 4.33, the
Company and its Subsidiaries have obtained an enforceable written assignment
of all right, title and interest in and to each item of the Intellectual
Property and Information owned by the Company or any Subsidiary from each
person or entity participating in the discovery, development or creation of
such item and has provided to the Purchaser true and correct copies of each
such assignment. Each item of the Intellectual Property and Information
constitutes a valid and enforceable right of the Company or its Subsidiaries
and does not infringe with the rights of any other person or entity. Except as
otherwise provided in Schedule 4.33, neither the Company nor any Subsidiary
has the obligation to compensate, or to obtain the consent of, any Third Party
for the use of any item of the Intellectual Property and Information. Except
as disclosed on Schedule 4.33 there is neither pending (nor, to the Company's
knowledge, threatened) any suit, action, claim, arbitration, grievance,
litigation, administrative or legal or other proceeding, or to the Company's
knowledge, investigation, against the Company or any Subsidiary or its
licensors contesting the validity of, or the Company's or a Subsidiary's right
to use, any of the Intellectual Property and Information. Except as otherwise
provided on Schedule 4.33 (except for employees and authorized agents and
contractors of Company or its Subsidiaries, who have a need to know, and who
have the right to use the Intellectual Property and Information in connection
with the performance of their duties on behalf of the Company): (i) neither
the Company nor any Subsidiary has granted any license or other right to use,
in any manner, any item of the Intellectual Property and Information, whether
or not requiring the payment of royalties, and (ii) no Third Party has any
right to use any of the Intellectual Property and Information.
4.33.3. Except as set forth in Schedule 4.33.3, the
Software is designed to be used prior to, during, and after the calendar year
2000, and the Software used during such time period will accurately receive,
provide and process date/time data (including, but not limited to,
calculating, comparing, and sequencing) from, into and between the twentieth
and twenty-first
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centuries, including the years 1999 and 2000, and leap year calculations and
will not malfunction, cease to function, or provide invalid or incorrect
results as a result of date/time data, to the extent that other information
technology which interfaces with or provides data to the software complies
with the Company's requirements ("Year 2000 Compliant"). No warranty is
provided with respect to any hardware. The Company does not currently market,
any of the items of Software described on Schedule 4.33.3 and the Company has
no obligation to maintain or upgrade any such items which are currently
licensed or to cause any such items of Software to be or to become Year 2000
Compliant, except for those six items listed on Schedule 4.33.3 under the
heading "Bespoke software projects, licensed to one client only" (the "Bespoke
Software"). The Company represents and warrants that it has no express
obligation to cause any item of the Bespoke Software to be or become Year 2000
Compliant, and in the event the Company has, by implication, operation of law
or otherwise to have such an obligation, then the Sellers will indemnify,
pursuant to Section 10.1.1, the Purchaser and any other persons named therein;
provided, however, that the parties hereto shall take commercially reasonable
action to minimize any damage as a result of such obligation.
Section 4.34. Infringement.
(a) To the Sellers' and the Company's knowledge, no Third
Party is infringing all or any portion of the Intellectual Property and
Information.
(b) There is no interference action or other litigation
pending or, to the Sellers' and the Company's knowledge, threatened before any
Governmental Entity (including, without limitation, the United States Patent
and Trademark Office or corresponding Governmental Entities in non-U.S.
jurisdictions) in regard to any of the Intellectual Property and Information.
(c) The modification, use, promotion, distribution,
licensure and/or sale of the Intellectual Property and Information has not
infringed and does not infringe any Intellectual Property and Information
right of any Third Party. Neither the Company nor any Subsidiary has received
notice of infringement upon, misappropriation of or conflict with any asserted
right of any Third Party, and to the Company's knowledge, there is no basis
for any such notice.
(d) The creation, development and reduction to practice of
the Intellectual Property and Information have not constituted or involved,
and do not constitute or involve, the misappropriation of trade secrets or
other rights of any other Person (including, without limitation, any
Governmental Entity).
Section 4.35. Software.
(a) Specifications; Claims. The Software functions in
accordance with the published documentation and specifications therefor in all
material respects. Except as set forth on Schedule 4.35, all of the Software
is available in "general release" form (as opposed to only "alpha," "beta" or
"early release" forms) and except as set forth in Schedule 4.35 there exists
user and technical documentation that describes the functionality provided by
such Software and which is
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accurate in all material respects. The Software is not subject to any pending,
(or, to the knowledge of the Company and Sellers, threatened) litigation,
arbitration, or other proceeding (or, to the knowledge of the Company and
Sellers, any investigation) of or before any court, arbitrator or Governmental
Entity by any Person, nor to the knowledge of the Company and Sellers, does
any Person have the right to assert any such litigation, arbitration,
proceeding, or investigation that the Company is in material breach of any
license, lease or service agreement with respect to such Software, other than
claims for warranty granted by the Company.
(b) Software Licenses. Except as set forth on Schedule 4.35,
neither the Company nor any of its Subsidiaries has licensed, leased, sold or
otherwise transferred or disclosed the source code for any of the Software
Licenses to any Person other than pursuant to a valid and binding license
agreement identified in Schedule 4.35, or disclosure of such source code to
Employees and consultants pursuant to an agreement protecting the intellectual
property rights therein. A complete and accurate list of all Software Licenses
currently in effect is set forth on Schedule 4.35 attached hereto.
(c) Financial Matters. The cost, which is now known or
should with the exercise of reasonable diligence be known to the Company, of
the Company's and the Subsidiaries' outstanding obligations (i) to perform or
reperform for its customers any installation, implementation, warranty,
maintenance, modification, upgrade, enhancement, consulting, or other services
in connection with any Software, and (ii) to deliver, license, or develop
Software to or for its customers, does not exceed the aggregate payments to be
received from those customers attributable to each such obligation to a degree
which individually or in the aggregate would have a Material Adverse Effect.
Section 4.36. Transactions with Affiliates. No director,
officer, key employee or shareholder of the Company or any Affiliate of any of
the foregoing has during the past two (2) years: (a) received or earned, or
(b) had an ownership interest (whether direct or indirect) in any business,
corporate or otherwise (other than a 10% or less interest in any company or
other entity traded on any national security exchange), which has or had any
business arrangement or relationship of any kind under which it has received
or earned, payments from the Company in excess of Ten Thousand Dollars
($10,000) in any year, except as described in Schedule 4.36 attached hereto.
There are no contracts, obligations or arrangements between the Company or any
Subsidiary and any current or former director, officer, shareholder or
employee of the Company or any Affiliate of any such person except for those
identified on Schedule 4.36 or another Schedule hereto, a complete copy of
each of which (including all amendments) has been delivered to Purchaser.
Except as set forth on Schedule 4.36, neither the Company nor any of its
Subsidiaries are indebted to any Seller or his Affiliates (the "Shareholder
Loans"), and Schedule 4.36 contains a complete list of all amounts owed to the
Company or any Subsidiary by any Seller or his Affiliates (the "Shareholder
Receivables").
Section 4.37. Compensation to Employees, Etc. Schedule 4.37
lists each of the Employees. In addition, Schedule 4.37 lists (i) the base
salary, as currently in effect, for each
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Employee, (ii) the bonus arrangements, if any, currently in effect for each of
the Employees, (iii) the commission arrangements, if any, currently in effect
for each of the Employees and (iv) the date on which the most recent salary
increase went into effect for each of the Employees and the amount of each
such increase. There are no Contracts (including, without limitation,
collective bargaining agreements) with any officer, director, employee or
independent contractor of the Company or any Subsidiary, except as set forth
on Schedule 4.37. There are no pension plans or profit sharing plans,
commission agreements, bonus, stock options, other plans, agreements or
arrangements providing for any officer, director, employee or independent
contractor of the Company or any Subsidiary to receive any remuneration or
other benefit or right to be entitled thereto, except as set forth on Schedule
4.37 or the Contracts referred to therein. There is not pending or, to the
knowledge of the Company or any Seller, threatened any labor dispute or work
stoppage involving any employee or independent contractor of, or materially
affecting the business of the Company and the Subsidiaries, or any obligation
to continue the employment or engagement of any of the Company's officers,
directors or employees, except as set forth on Schedule 4.37 or required by
applicable law. Except as disclosed on Schedule 4.37 or the Contracts referred
to therein, neither the Company nor any Subsidiary has agreed to increase the
compensation level of any of its officers, directors, employees or independent
contracts or has any understanding respecting such an increase.
Section 4.38. Overtime, Back Wage, Vacation, and
Discrimination Claims. There are no outstanding material claims against the
Company or any Subsidiary (whether under any applicable law, under any
employment agreement, or otherwise) asserted by any present or former employee
of the Company or any Subsidiary on account of or for employment issues
including but not limited to (i) overtime pay, other than overtime pay for
work done during the current fiscal year; (ii) wages or salary for any period
other than the current fiscal year; (iii) any amount of vacation pay or pay in
lieu of vacation time, other than vacation time or pay in lieu thereof earned
in or in respect of the current fiscal year; (iv) any amount of unused
vacation days or pay in lieu of unused vacation days enjoyed before or during
the fiscal year 1996 or (v) any violation of any statute, ordinance or
regulation relating to minimum wages or maximum hours of work, and to the
Company's knowledge there are no such claims which have not been asserted. No
person or party (including any Governmental Entity) has asserted or, to the
knowledge of the Company or any Seller, either threatened to assert any claims
against or has any basis for any action or proceeding against the Company or
any Subsidiary under or arising out of any statute, ordinance or regulation
relating to employment issues including but not limited to discrimination or
occupational safety in employment or employment practices.
Section 4.39. Pension and Other Employee Benefit Plans.
Except for the items listed on Schedule 4.39 (the "Plans"), there are no
plans, funds, policies, programs, agreements, arrangements or understandings
sponsored, maintained or contributed to by the Company or any Affiliated
Company (as hereinafter defined) or to which the Company or any Subsidiary is
a party (other than Contracts with Employees required to be disclosed under
Schedule 4.37) which provide any employee of the Company or any Subsidiary (or
any dependent or beneficiary of any such employee) with (i) retirement
benefits or deferred compensation; (ii) severance or separation from service
benefits; (iii) incentive, performance, stock, share appreciation or bonus
awards; (iv) health
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care benefits; (v) disability income or wage continuation benefits; (vi)
supplemental unemployment benefits; (vii) life insurance, death or survivor's
benefits; (viii) accrued sick pay or vacation pay; or (ix) any other type of
employee benefit offered under any arrangement, whether or not subject to
characterization as an "employee benefit plan" within the meaning of Section
3(3) of ERISA. As to the Plans, each of the following is true: (a) all amounts
due as contributions to the Plans or payments from the Plans have been timely
paid; (b) the Company and any Affiliated Company have performed or satisfied
all material obligations required to be performed or satisfied by them under,
and are not in default under or in violation of, the Plans; (c) the form and
operation of each of the Plans complies in all material respects with the
requirements (including, but not limited to, reporting and disclosure
requirements applicable to them) prescribed by all statutes, orders or
governmental rules or regulations applicable to the Plans; (d) neither the
Company nor any Affiliated Company or any other "disqualified person" or
"party in interest" (as defined in Section 4975 of the Code and Section 3(14)
of ERISA, respectively) has engaged in any "prohibited transaction," as such
term is defined in Section 4975 of the Code or Section 406 of ERISA, which
could subject the Plans (or its related trust), the Company or any Affiliated
Company, Purchaser, any shareholder, officer, director, partner or employee of
the Company or of any Affiliated Company or Purchaser, or any trustee,
administrator or other fiduciary of the Plans to the tax or penalty imposed
under Section 4975 of the Code or Section 502(i) of ERISA; (e) there are no
actions, suits or claims pending (other than routine claims for benefits) or,
to the Company's knowledge, threatened, against the Plans or against the
assets of the Plans; (f) each of the Plans intended to be qualified under
Section 401 of the Code, has been so qualified during the period from its
adoption to the date hereof, and will continue to be so qualified through the
Closing Date; (g) each trust maintained in connection with any of the Plans
and intended to be exempt from tax under Section 501(a) of the Code, has been
so exempt during the period from its adoption to the date hereof, and will
continue to be so exempt through the Closing Date; and (h) except as disclosed
on Schedule 4.39, there has been no amendment to, written interpretation or
announcement (whether or not written) by either the Company or any Affiliated
Company relating to, or change in employee participation or coverage under,
the Plans which would increase materially the expense of maintaining the Plans
above the level of the expense incurred in respect thereof for the fiscal year
ended December 31, 1997. For purposes of this Section 4.39, "Affiliated
Company" means (x) a member of any "controlled group" (as defined in Section
414(b) of the Code) of which the Company is a member, (y) a trade or business,
whether or not incorporated, under common control (within the meaning of
Section 414(c) of the Code) with the Company, or (z) a member of any
affiliated service group (within the meaning of Section 414(m) of the Code) of
which either of the Company is a member. The Company and any Affiliated
Company do not sponsor or contribute to, and have not in the past sponsored or
contributed to, and have no Liabilities with respect to, any defined benefit
plan subject to Title IV of ERISA or any "multi-employer plan" (as defined in
Section 3(37) of ERISA). The Company delivered to Purchaser a complete copy of
the Plans, including any related trust agreement, all amendments to the Plans
or such trust agreement, the three most recent annual reports (Form 5500,
including all Schedules thereto) prepared in connection with the Plans and the
most recent Internal Revenue Service determination letters received with
respect to any of the Plans intended to be qualified under Code Section 401.
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Section 4.40. Management Contracts. The Management Contracts
do not qualify as employment contracts under Dutch law. The Sellers and the
Company agree that the Management Contracts will be deemed to be terminated by
the parties thereto as of the Closing Date without the need for any further
action on the part of any person or entity and this Agreement is full evidence
thereof. There are no outstanding or, to the knowledge of Sellers and the
Company, threatened claims against the Company in connection with the
Management Contracts and the Company has fully complied with all of its
material obligations pursuant to the Management Contracts. Except as set forth
on Schedule 4.40, no remuneration, wage tax or social premiums are due or
shall be payable by the Company at any time in connection with the Management
Contracts.
Section 4.41. Commission. Seller will pay Nationsbanc
Montgomery Securities LLC an advisory fee as required pursuant to Sellers'
engagement letter with Nationsbanc Montgomery Securities LLC dated May 31,
1998. Other than the fees payable to Nationsbanc Montgomery Securities LLC
described in the preceding sentence, neither the Company, its Subsidiaries,
any Seller nor anyone on its, his or their behalf has made any agreement or
taken any action which may cause anyone claiming through the Company, any
Subsidiary or any Seller to become entitled to a commission as a result of the
sale of the Shares or the other transactions contemplated pursuant to this
Agreement.
Section 4.42. Corporate Records. The corporate books and
records of the Company and its Subsidiaries have been maintained in accordance
with applicable law, including but not limited to those necessary to maintain
the limited liability characteristics of the Company and its Subsidiaries.
Section 4.43. Hart-Scott-Rodino Antitrust Improvements Act.
The Company had less than $15 million of "total assets" in the U.S. as at the
date of its "last regularly prepared balance sheet," and had less than $25
million of "annual sales" "into" the U.S. set forth on its "last regularly
prepared annual statement of income and expenses," as such terms are defined
in the Hart-Scott-Rodino Antitrust Improvements Act of 1986, as amended.
Section 4.44. Dutch and European Competition Law. In 1997,
the turnover of the Company in the Netherlands was not equal to or did not
exceed 30 million Dutch guilders as referred to in article 29 of the
"mededingingswet" (Competition Act), nor does the Company have or did the
Company have a turnover of at least 25 million ECU (European Currency Unit) in
each of three member states of the European Union.
Section 4.45. Marital Status. Of the following persons: L.
H. D. Mulder, E. de Waart, C. Fung-A-You, L. A. Derks and A. S. L. Schuermans,
the only ones who are married are E. de Waart (whose spouse is Wydia Nanhoe)
and A. S. L. Schuermans (whose spouse is Manon Verhoeven).
Section 4.46. Statements and Other Documents Not Misleading.
Neither this Agreement, including all Schedules, nor any other financial
statement, document or other instrument
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furnished by the Company or any Subsidiary or any Seller to Purchaser in
connection with the transactions contemplated hereby contains any untrue
statement of any material fact or omits to state any material fact required to
be stated in order to make such statement, document or other instrument not
misleading. Any disclosure or exception by Sellers or the Company in this
Agreement, in any exhibit or schedule hereto, or in any document, schedule or
other written information delivered to Purchaser in connection herewith, shall
be deemed to be a disclosure and exception with respect to the same or similar
matter contained elsewhere in this Agreement or any exhibit or schedule
hereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES RESPECTING PURCHASER
Purchaser hereby makes the following representations and
warranties to the Company and the Sellers, each of which shall survive the
Closing and expire as provided in this Agreement.
Section 5.1. Organization. Purchaser is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware.
Section 5.2. Due Authorization. The execution and delivery
of this Agreement by Purchaser and performance of the obligations of Purchaser
contemplated hereby have been duly and validly authorized by all necessary
corporate action. Purchaser has the right, power and authority to enter into
and perform this Agreement and any other agreements contemplated hereby, and
this Agreement constitutes the valid and binding obligations of Purchaser,
enforceable against Purchaser in accordance with their terms.
Section 5.3. Conflict With Other Instruments. The execution,
delivery and performance of this Agreement by Purchaser does not contravene
any provision of Purchaser's charter or bylaws and will not result in a breach
of, or constitute a default under, any agreement or other document to which
Purchaser is a party or by which Purchaser is bound, or any decree, order or
rule of any court or Governmental Entity or any provision of applicable law
which is binding on Purchaser. Purchaser is not required to obtain any
consent, approval or authorization of or file, register or qualify with any
Governmental Entity, or any corporation, person or other entity (including any
party to any contract or agreement with Purchaser) for the execution, delivery
and performance of this Agreement. Purchaser is not required to obtain any
consent, approval or authorization of or file, register or qualify with any
Governmental Entity, or any corporation, person or other entity (including any
party to any contract or agreement with Purchaser) (i) for the execution,
delivery and performance of this Agreement by Purchaser, (ii) in order for
Purchaser to consummate the transactions contemplated hereby, except where the
failure to obtain such consent, approval, authorization, filing, registration
or qualification would not have a materially adverse impact on the Purchaser
or upon the consummation of the transactions contemplated by this Agreement.
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Section 5.4. Commission. Purchaser will pay C. E. Unterberg,
Tobin an advisory fee as required pursuant to Purchaser's engagement letter
with C. E. Unterberg, Tobin dated June 25, 1998. Other than the fees payable
to C.E. Unterberg, Tobin described in the preceding sentence, neither the
Purchaser nor anyone on its behalf has made any agreement or taken any action
which may cause anyone claiming through the Purchaser to become entitled to a
commission as a result of the sale of the Shares or the other transactions
contemplated pursuant to this Agreement.
Section 5.5. Financing. Purchaser's obligation to consummate
the transactions contemplated by this Agreement is not subject to or
conditioned upon obtaining financing, and Purchaser has sufficient funds or
resources to pay in full the purchase price due to Sellers hereunder.
Section 5.6. Investment Purpose. Purchaser is acquiring the
Shares for its own account for investment purposes and not with a view toward
any resale or distribution in connection therewith.
Section 5.7. Statements and Other Documents Not Misleading.
Neither this Agreement nor any document or other instrument heretofore or
hereafter furnished by Purchaser to Sellers or the company in connection with
the transactions contemplated hereby contains or will contain any untrue
statement of any material fact or omits or will omit to state any material
fact required to be stated in order to make such statement, document or other
instrument not misleading.
Section 5.8. No Legal Actions. There is no legal action,
suit, arbitration, governmental investigation or other legal or administrative
proceeding, nor any order, decree or judgment in progress, threatened against
or relating to Purchaser in connection with or relating to the transactions
contemplated by this Agreement, and Purchaser does not know or have any reason
to be aware of any basis for the same.
ARTICLE VI
CERTAIN COVENANTS AND OTHER MATTERS
Section 6.1. Corporate Examinations and Investigations. Each
Seller and the Company agree to reasonably cooperate (and to cause the
Company's officers and the Company's and each Seller's employees, consultants,
agents, attorneys and accountants to reasonably cooperate) fully with
Purchaser and with its counsel, accountants and representatives in the conduct
of their due diligence investigation of the Company from legal, environmental,
insurance, valuation and solvency perspectives and, in connection with such
due diligence investigation, to grant to Purchaser and such representatives
reasonable access to the properties, books and records, contracts, creditors,
vendors and suppliers of the Company (the "Due Diligence Investigation"). The
Due Diligence Investigation shall not diminish any of the representations,
warranties, covenants or agreements of the Seller or the Company under this
Agreement or reduce Purchaser's right to pursue such remedies at law or
hereunder as it would otherwise have in the absence of having conducted such
Due Diligence
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Investigation. Any costs related to Purchaser's further examination and
investigation as described in this paragraph will be charged to Purchaser.
Section 6.2. Confidentiality. Unless otherwise agreed to in
writing by the Company or the Seller or as otherwise required by law,
Purchaser agrees for itself and its officers, directors, affiliates,
employees, attorneys, accountants, agents and representatives, (i) to keep all
Proprietary Information (as hereafter defined) confidential and not to
disclose or reveal any Proprietary Information to any person other than its
officers, directors, affiliates, employees, attorneys, accountants, other
agents and representatives who are participating in the evaluation of the
Company and the transactions contemplated hereby and who need to know the
Proprietary Information for the purpose of evaluating the Company and/or the
transactions contemplated hereby and who have been informed of the obligation
of confidentiality and nondisclosure contained in this section; and (ii) not
to use the Proprietary Information for any purpose other than in connection
with the evaluation and/or consummation of the transactions contemplated
hereby. As used herein, the term "Proprietary Information" means confidential
information about the Company furnished to Purchaser by the Company; provided,
however, that Proprietary Information shall not include information which (i)
is or becomes generally available to the public other than as a result of a
disclosure by Purchaser (or its officers, directors, affiliates, employees,
attorneys, accountants, agents and representatives) in violation of this
Agreement, (ii) was available to Purchaser on a non-confidential basis prior
to its disclosure by the Company as evidenced by existing records or (iii)
becomes available to Purchaser on a non-confidential basis from a person other
than the Company who is not otherwise bound by a confidentiality agreement
with the Company. The obligations of Purchaser under this Section 6.2 shall
terminate upon the Closing Date. Purchaser shall be responsible for any breach
of this section by any of its officers, directors, affiliates, employees,
attorneys, accountants, agents or representatives. For purposes of this
section "confidential information" includes all information disclosed by
Sellers, the Company and its Subsidiaries, or its employees, officers or
agents, or acquired by observation of Company and its Subsidiaries, which has
value, actual or potential, from not being generally known to others. If the
Closing is not consummated, Purchaser will, upon the request of the Company or
Seller, destroy or return to the Company or Seller, as the case may be, all
Proprietary Information which is in writing or can otherwise be destroyed or
returned.
Section 6.3. Restriction on Certain Discussions and Actions.
Each Seller and the Company agree that until the Closing Date, they will
refrain, and will direct and cause the Company's and its Subsidiaries'
officers and directors and the Company's, its Subsidiaries' and the Sellers'
affiliates, employees, attorneys, accountants and other agents and
representatives to refrain, from taking any action, directly or indirectly, to
solicit, encourage, initiate or participate in any way in discussions or
negotiations with, or furnish any information with respect to the Company to,
any person or other entity (other than Purchaser and its representatives) in
connection with any possible or proposed sale of capital stock, sale of a
substantial portion of the assets, merger or other business combination
involving the Company or the acquisition of an equity interest in the Company
or a subsidiary of the Company or any similar transaction involving the
Company or a subsidiary of the Company. Each Seller and the Company agree that
none of them will (without Purchaser's prior
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written consent) disclose this Agreement or the matters referred to herein to
any other prospective acquirer of the Company until the Closing Date.
Section 6.4. Conduct of Business Prior to the Closing.
Between the date of this Agreement and the Closing:
(a) The Company and its Subsidiaries shall conduct their
Business, operations, activities and practices in the usual and ordinary
course, consistent with its past practices;
(b) Neither the Company, any Subsidiary nor any Seller shall
take or suffer or permit any action which would render untrue any of the
representations or warranties of Seller and the Company herein contained, and
neither the Company, any Subsidiary nor any Seller shall omit to take any
action the omission of which would render untrue any such representation or
warranty;
(c) The Company and its Subsidiaries shall preserve their
business organization intact, use reasonable efforts to: keep available to
themselves the present services of their employees; preserve for themselves
the goodwill of the Company's and the Subsidiaries' suppliers and customers
and others with whom business relationships exist; maintain their tangible
property in the same condition as it now exists, ordinary wear and tear
excepted; maintain the insurance policies identified on Schedule 4.31 in full
force and effect; and maintain in full force and effect all agreements, and
all material licenses, permits, authorizations and approvals necessary for the
operation of the Business;
(d) Except as set forth in Schedule 6.4, neither the Company
nor any Subsidiary shall grant or otherwise make, or agree to grant or
otherwise make, any increase in the compensation payable or to become payable
by it to any employees of the Company or any Subsidiary.
(e) Neither the Company nor any Subsidiary shall sell or
dispose of any of its Assets used or useful in the operation of its Business
(otherwise than in the ordinary course of business consistent with past
practice);
(f) Neither the Company nor any Subsidiary shall enter into
any agreement not in the ordinary course of business;
(g) Neither the Company nor any Subsidiary shall cancel,
waive or modify any claims or rights owned by, or running in favor of, it;
(h) Neither the Company nor any Subsidiary shall make any
amendment to the Articles of Incorporation, by-laws or any document of
incorporation of the Company or any Subsidiary;
(i) Neither the Company nor any Subsidiary shall permit the
creation or attachment of any lien, encumbrance or charge on any of the
Company's or any Subsidiary's Assets;
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(j) Neither the Company nor any Subsidiary shall incur any
debts, Liabilities or obligations, or any waiver of any rights of substantial
value, except in the ordinary course, consistent with past practice, pursuant
to any existing loan agreements as in effect on the date hereof;
(k) Neither the Company nor any Subsidiary shall discharge
or satisfy of any Liens, or any payment of any Liens or Liabilities, except in
the ordinary course of business, consistent with past practice or except as
contemplated by this Agreement;
(l) Neither the Company nor any Subsidiary shall increase
the salary or other compensation payable to any of its executive officers or
directors or the declaration, payment, commitment or obligation of any kind
for the payment by the Company of a bonus or other additional salary or
compensation to any such person, except to the extent disclosed in this
Agreement;
(m) Neither the Company nor any Subsidiary shall declare or
pay any dividends or distributions of its Cash or property to its shareholder;
and
(n) Neither the Company nor any Subsidiary shall, except for
the agreement of each Seller to sell the Shares to Purchaser pursuant hereto,
make or authorize any sale, transfer or issuance of any capital stock, equity
security or debt security of the Company or any Subsidiary or any option,
warrant, right or commitment or agreement entered into requiring or permitting
any such sale, transfer or issuance, except to the extent disclosed in this
Agreement.
Section 6.5. Publicity. Purchaser shall determine whether
and when to make an initial press release, if any, announcing this Agreement,
and if it so determines to make such a release, it shall obtain prior approval
of Sellers, which shall not be unreasonably withheld, with respect to the
content of such release prior to making any such release. Except as may be
required by law, neither the Company nor any of the Sellers (or any of their
respective Affiliates) shall issue a press release or make any other public
announcement concerning this Agreement or its subject matter without advance
approval thereof by Purchaser.
Section 6.6. Removal of Liens. Each Seller covenants and
agrees to cause all of the liens other than the permitted liens identified on
Schedule 6.6 hereof (the "Permitted Liens") to be removed from the Assets on
or prior to the Closing Date.
Section 6.7. Telephone Service and Internet Access. Seller
and the Company agree to take such actions prior to the Closing as shall be
reasonably necessary in order for all telephone numbers and Internet websites,
e-mail addresses and other electronic communication systems, currently used in
connection with the Company's business to remain in operation for continued
use by the Company following the Closing.
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Section 6.8. Benefit Plans. Between the date hereof and the
Closing Date, the Company shall maintain in full force and effect the Plans as
they pertain to the Company's Employees or former Employees and, in connection
therewith:
6.8.1. Plan Changes. Except as may be required by
law or as may be necessary to continue the qualified status under Section 401
of the Code, the Company shall not adopt, terminate, amend, extend, or
otherwise change any Plans without the prior written consent of Purchaser, and
the Company and the Seller shall give Purchaser prior written notice of the
Company's intention to take any such action required by law or necessary to
continue the qualified status of any Plans as they pertain to such Company's
Employees or former Employees.
6.8.2. Contributions and Payments. The Company
shall not make, cause to be made, or agree to make any contribution, award, or
payment under any Plans as they pertain to the Company's Employees or former
Employees, except at the time and to the extent required by the written terms
thereof, without the prior written consent of Purchaser.
Section 6.9. Employment Agreements. At the Closing, the
Purchaser shall cause the employers named in the Employment Agreements to
sign, and the Sellers shall cause the employees named in the Employment
Agreement to sign, the Employment Agreements.
Section 6.10. Guaranty Agreements.
(a) The Purchaser shall cause Systems & Computer Technology
Corporation to sign, and each of the Sellers shall sign a guaranty agreement
in the form agreed to by the parties thereto, contemporaneous with the
execution of this Agreement.
(b) The Sellers shall cause L. H. D. Mulder, L. A. Derks, A.
S. L. Schuermans, C. Fung-A-You, E. de Waart, Wydia Nanhoe and Manon Verhoeven
to sign, and the Purchaser shall cause Systems and Computer Technology
International B.V. to sign, a guaranty agreement in the form agreed to by the
parties thereto, contemporaneous with the execution of this Agreement.
Section 6.11. Employee Bonuses. The Purchaser agrees to pay
or cause the Company to pay the retention bonuses in the amounts and to the
individuals listed on Schedule 6.11 according to the following schedule: 20%
of the retention bonus shall be paid no later than thirty (30) days following
the Closing Date, 40% shall be paid no later than October 31, 1999 and the
remaining 40% shall be paid no later than October 31, 2000; provided, however,
if any employee is not employed by the Company on the date any portion of the
retention bonus is payable then such employee shall not be entitled to receive
such portion of the retention bonus or any portion remaining payable
thereafter.
Section 6.12. Escrow Agreement. The Purchaser (or its
assignee) and the Sellers named in the Escrow Agreement shall enter into the
Escrow Agreement within two (2) weeks after the Closing Date.
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ARTICLE VII
CONDITIONS TO THE OBLIGATION OF PURCHASER
The obligation of Purchaser to proceed with the Closing
under this Agreement is subject to the satisfaction, on or prior to the
Closing, of each of the following conditions, each of which may be waived by
Purchaser:
Section 7.1. Representations and Warranties True. The
representations and warranties of each Seller and the Company contained in
this Agreement and the information contained in the Schedules to this
Agreement and any closing documents delivered by Sellers or the Company in
connection with this Agreement shall have been true and correct in all
material respects when made and shall be true and correct in all material
respects at the Closing Date as though made at such time, and Sellers shall
have executed and delivered to Purchaser a certificate to that effect.
Section 7.2. Performance of Obligations. The obligations of
each Seller and the Company to be performed by any of them on or before the
Closing pursuant to the terms of this Agreement shall have been duly performed
and complied with in all material respects and, at the Closing, Sellers shall
have executed and delivered to Purchaser a certificate to that effect.
Section 7.3. Consents and Estoppels. All Consents from third
parties (including, without limitation, lenders, creditors, vendors and
landlords) and Governmental Entities, required to consummate the transactions
contemplated hereby, shall have been obtained, and Purchaser shall have
received the acknowledgment of the landlord under each of the Leases that the
Company is not in default of any such Lease.
Section 7.4. Absence of Litigation. There shall not be any
litigation, action or proceeding pending (including, without limitation, any
litigation or proceeding arising under antitrust or securities laws) to
restrain or invalidate the sale and purchase of the Shares or the other
transactions contemplated herein.
Section 7.5. Certified Resolutions. Purchaser shall have
received a certified copy of the resolutions of the Board of Directors and of
the shareholders (if such approval is required pursuant to applicable
corporate law) of the Company authorizing and approving the execution and
delivery of this Agreement by the Company and the consummation by the Company
of the transactions contemplated herein.
Section 7.6. Delivery of Specified Documents. Sellers shall
have delivered to Purchaser all of the documents and instruments specified in
Section 3.1.2 hereof on or prior to the Closing Date.
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Section 7.7. Opinion of Counsel for Seller. Sellers shall
have delivered to Purchaser an opinion of their counsel, Trenite van Doorne,
dated the date of the Closing and satisfactory to Purchaser and its counsel,
to the effect that:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the Kingdom of the
Netherlands, and the Company is duly qualified and in good standing as a
foreign corporation authorized to transact business and to own and lease
property in each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties owned or leased by it
requires such qualification in order to avoid liability or disadvantage;
(b) The Company and each Seller have the right, power,
authority and capacity to enter into this Agreement and to perform their
respective obligations under this Agreement, and each Seller has the right,
power, authority and capacity to sell, assign, transfer, convey and deliver
the Shares to the Purchaser pursuant to this Agreement;
(c) The execution, delivery and performance of this
Agreement by the Company and Sellers will not contravene any provision of the
Company's Articles of Incorporation or bylaws as the case may be, and will not
result in a breach of, or constitute a default under, any agreement or other
document to which the Company or any Seller is a party or by which the Company
or any Seller is bound and of which such counsel has knowledge, or any decree,
order or rule of any court or Governmental Entity or any provision of
applicable law which is binding on the Company or any Seller or on any of the
Shares or any of the Assets;
(d) The execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate and shareholder
action of the Company;
(e) The Company's authorized capital stock consists of
20,000 shares of capital stock, and to the knowledge of such counsel, the
Shares are the only shares of capital stock of the Company issued and
outstanding. The Shares are owned of record and, to the knowledge of such
counsel, beneficially solely by the Sellers. Each of the Shares has been
validly issued, fully paid and nonassessable, and except for the Shares, the
Company has not issued other shares of capital stock. There are no outstanding
warrants, options or other rights, commitments, agreements or understandings
to purchase or acquire any shares of capital stock or other equity securities
of the Company, and there are no outstanding debt securities of the Company
convertible into equity securities or otherwise containing equity provisions;
and
(f) The instruments of transfer delivered by Sellers to
Purchaser at the Closing (i) have been duly authorized and executed by and are
binding and enforceable against each Seller in accordance with their
respective terms, subject to bankruptcy, reorganization, moratorium,
insolvency or other laws and decisions affecting creditors' rights generally
and to general equity principles, and (ii) assuming the Purchase Price has
been paid to the Sellers in accordance with this
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Agreement, convey good and marketable title in and to the Shares to the
Purchasers, free and clear of all Liens.
Section 7.8. Assignment. The rights of Purchaser under this
Agreement shall have been assigned to SCT BV.
ARTICLE VIII
CONDITIONS TO THE OBLIGATION OF SELLER
The obligation of Sellers to proceed with the Closing under
this Agreement is subject to the satisfaction, on or prior to the Closing, of
each of the following conditions, each of which may be waived by any Seller:
Section 8.1. Representations and Warranties True. The
representations and warranties of Purchaser contained in this Agreement and
the information in the Schedules to this Agreement and any closing documents
delivered by Purchaser in connection with this Agreement shall have been true
and correct in all respects when made and shall be true and correct in all
respects at the Closing Date as though made at such time and, at the Closing,
Purchaser shall have delivered to Sellers a certificate to that effect signed
by its President or any Vice President.
Section 8.2. Performance of Obligations. Each of the
obligations of Purchaser to be performed by it on or before the Closing
pursuant to the terms of this Agreement shall have been duly performed and
complied with in all respects and, at the Closing, Purchaser shall have
delivered to Sellers a certificate to that effect signed by its President or
any Vice President.
Section 8.3. Absence of Litigation. There shall not be any
litigation, action or proceeding, pending or threatened (including, without
limitation, any litigation or proceeding arising under antitrust or securities
laws), to restrain or invalidate the sale and purchase of the Shares or the
other transactions contemplated herein.
Section 8.4. No Material Changes. No material adverse change
shall have occurred in the results of operation or financial condition of the
Purchaser after the date of this Agreement.
Section 8.5. Delivery of Specified Documents. Purchaser
shall have delivered to Sellers all of the documents and instruments specified
in Section 3.1.2.
Section 8.6. Opinion of Counsel for Purchaser. Purchaser
shall have delivered to Sellers an opinion of its counsel, Pepper Hamilton
LLP, dated the date of the Closing and satisfactory to Seller and its counsel,
to the effect that:
(a) Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware;
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(b) [The execution and delivery by Purchaser of this
Agreement and the performance by it of the transactions contemplated
hereunder, have been duly authorized by all necessary corporate action, do not
and will not contravene any provisions of Purchaser's charter or bylaws] and
represent the valid and binding obligations of Purchaser enforceable in
accordance with their respective terms, subject to bankruptcy, reorganization,
moratorium, insolvency or other laws and decisions affecting the rights of
creditors generally and to general equity principles; and
(c) Such counsel has no knowledge, without having undertaken
an independent investigation, of any action or proceeding instituted or
threatened by or before any court or Governmental Entity to restrain or
prohibit or to obtain damages or other relief in connection with this
Agreement or the transactions contemplated hereby.
In rendering such opinion, such counsel may assume for purposes of its opinion
other than clause (a) and [bracketed part of (b)] that to the extent that
matters governed by Delaware law are opined upon, the laws of the State of
Delaware are the same as those of the Commonwealth of Pennsylvania.
ARTICLE IX
POST-CLOSING COVENANTS
Section 9.1. Books and Records of Seller. Following the
Closing, each Seller agrees to permit Purchaser and its representatives to
inspect the books and records of Sellers insofar as they relate to the Company
during regular business hours and at no expense to Sellers in order for
Purchaser and such representatives to obtain information relevant to the
Transaction and to Purchaser's tax returns, third party claims or litigation
involving Purchaser, or as otherwise reasonably required for the conduct of
Purchaser's business. Sellers agree to maintain such books and records insofar
as they relate to the Company for a period of five (5) years after the Closing
Date.
Section 9.2. Books and Records of the Company. Following the
Closing, Purchaser agrees to permit Sellers and their representatives to
inspect the books and records of the Company during regular business hours and
at no expense to Purchaser or the Company in order for Sellers and such
representatives to obtain information relevant to the transactions
contemplated hereby and to Sellers' tax returns, third party claims or
litigation involving Sellers, or as otherwise reasonably required for the
conduct of Sellers' business. The Company agrees to maintain such books and
records for a period of five (5) years after the Closing Date.
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ARTICLE X
INDEMNIFICATION; EXPENSES
Section 10.1. General Indemnification.
10.1.1. Each of the Sellers (and the Company in the
event this Agreement is terminated prior to the Closing) hereby jointly and
severally agree to indemnify, defend and hold harmless Purchaser (and the
Company in the event the Closing occurs) and each of their directors,
officers, employees, affiliates, agents and shareholders from and against any
and all Losses arising out of, based upon or resulting from (a) any inaccuracy
of any representation or warranty of any Seller or the Company which is
contained in or made pursuant to this Agreement; (b) any breach by any Seller
or the Company of any of their agreements or obligations contained in or made
pursuant to this Agreement; (c) any breach by any officer or director of the
Company of any fiduciary duty owed by such officer or director to any
shareholder of the Company, which breach occurred prior to, in connection with
or as a result of the Closing and the transactions contemplated to take place
at Closing; and (d) any and all Third Party Litigation arising out of any of
the foregoing. Notwithstanding anything to the contrary contained herein, (x)
Shareholder F shall have no obligation to indemnify, defend and hold harmless
the Purchaser or anyone else with respect to any inaccuracy of the
representations set forth in Section 4.5 (a) or Section 4.5 (c) and (y)
Shareholder G shall have no obligation to indemnify, defend and hold harmless
the Purchaser or anyone else with respect to any inaccuracy of the
representations set forth in Section 4.5 (a) or Section 4.5 (b).
10.1.2. Purchaser (and the Company in the event the
Closing occurs) hereby jointly and severally agree to indemnify, defend and
hold harmless Sellers and the Company and each of its directors, officers,
employees, affiliates, agents and shareholders from and against any and all
Losses arising out of, based upon or resulting from (i) any inaccuracy of any
representation or warranty of Purchaser which is contained in or made pursuant
to this Agreement, (ii) any breach of Purchaser of any of its agreements or
obligations contained in or made pursuant to this Agreement, or (iii) any and
all Losses arising out of, based upon or resulting from the operations or
conduct of the Business of the Company and its Subsidiaries on and after the
Closing Date, except to the extent that Sellers are liable for the same
pursuant to Section 10.1.1.
10.1.3. Promptly after receipt by any person
entitled to indemnification under this Section 10.1 (an "indemnified party")
of notice of the commencement of any action in respect of which the
indemnified party will seek indemnification hereunder, the indemnified party
shall so notify in writing the person(s) from whom indemnification hereunder
is sought (collectively, the "indemnifying party"), but any failure so to
notify the indemnifying party shall not relieve it from any liability that it
may have to the indemnified party under this Section 10.1 except to the extent
that the indemnifying party's ability to defend such claim is materially
prejudiced by the failure to give such notice. The indemnifying party shall be
entitled to participate in the defense of such action and to assume control of
such defense; provided, however, that:
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(a) the indemnified party shall be entitled to participate
in the defense of such claim and to employ counsel at its own expense to
assist in the handling of such claim;
(b) the indemnifying party shall obtain the prior written
approval of the indemnified party before entering into any settlement of such
claim or ceasing to defend against such claim, if, pursuant to or as a result
of such settlement or cessation, injunctive or other equitable relief would be
imposed against the indemnified party;
(c) the indemnifying party shall not consent to the entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to each
indemnified party of a release from liability in respect of such claim; and
(d) the indemnified party shall not admit any liability with
respect thereto or settle, compromise, pay or discharge the same without the
prior written consent of the indemnifying party, which shall not be
unreasonably withheld;
(e) the indemnified party shall cooperate with the
indemnifying party in the contest or defense thereof; and
(f) the indemnifying party shall not be entitled to control
but shall be entitled to participate at its own expense in the defense of, and
the indemnified party shall be entitled to have sole control at its own
expense over, the defense or settlement of any claim to the extent the claim
seeks an order, injunction or other equitable relief against the indemnified
party which, if successful, could materially interfere with the business,
operations, assets, condition or prospects of the indemnified party.
10.1.4. After written notice by the indemnifying
party to the indemnified party of its election to assume control of the
defense of any such action, the indemnifying party shall not be liable to such
indemnified party hereunder for any Legal Expenses subsequently incurred by
such indemnified party in connection with the defense thereof. If the
indemnifying party does not assume control of the defense of such claims as
provided in this Section 10.1.4, the indemnified party shall have the right to
defend such claim in such manner as it may deem appropriate at the reasonable
cost and expense of the indemnifying party, and the indemnifying party will
promptly reimburse the indemnified party therefor in accordance with this
Section 10.1.4. The reimbursement of fees, costs and expenses required by this
Section 10.1.4 shall be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
Section 10.2. Seller's Claims Against the Company. Each
Seller agrees that he, she or it will not seek, nor will he, she or it be
entitled to, contribution from, or indemnification by, the Company or any
Subsidiary, under the Company's or any Subsidiary's by-laws, this Agreement,
applicable corporate laws or other laws or otherwise, in respect of amounts
due from the Sellers to Purchaser under this Article X or otherwise under this
Agreement, and each Seller will hold the Company, each Subsidiary and
Purchaser harmless in respect of all such amounts and shall not seek
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to join the Company in connection with any suit arising under this Agreement.
Each Seller also agrees that he, she or it will not make claim against any
directors and officers insurance policy maintained or to be maintained by the
Company or any Subsidiary in respect of amounts due by the Sellers to
Purchaser under this Article X or otherwise under this Agreement, if the
carrier of such insurance policy would have any right of subrogation against
the Company or any Subsidiary in respect of such claim and shall indemnify and
hold harmless Purchaser from any such action.
Section 10.3. Survival. The representations and warranties,
agreements, and indemnifications of the parties contained in this Agreement or
in any writing delivered pursuant to the provisions of this Agreement shall
survive the date of the Closing and shall continue in full force and effect
for a period (the "Survival Period") beginning on the Closing Date and
continuing to and including the first anniversary of the Closing Date, and
thereafter shall terminate and be of no further force or effect, except with
respect to liabilities for any item as to which, prior to the first
anniversary of the Closing Date, Sellers or Purchaser shall have asserted a
claim in writing as required pursuant to the provisions of this Article X,
which claim shall identify the basis with reasonable specificity, in which
case the liability for such claim shall continue until it shall have been
finally settled, decided or adjudicated. Notwithstanding the foregoing, the
period in which Purchaser may make a claim for indemnification under this
Article X with respect to any breach of a representation or warranty made
under (i) Section 4.5 shall not expire until the expiration of the applicable
statute of limitation period imposed by applicable law, and (ii) Section 4.33,
Section 4.34, and Section 4.35 shall not expire until the second anniversary
of the date hereof.
Section 10.4. Limitation on Liability.
10.4.1. Any other provision hereof to the contrary
notwithstanding, neither party shall have any liability for indemnification
hereunder resulting from the inaccuracy of any of its representations or
warranties contained in or made pursuant to this Agreement until the aggregate
liability of such party resulting from such inaccurate representations or
warranties exceeds $350,000 (the "Deductible Amount"), whereupon such party
shall be liable for indemnification for all Losses above and beyond the
Deductible Amount, subject to the limit on liability set forth below. This
limitation shall not be applicable to liabilities hereunder resulting from any
other cause. For purposes of calculating the amount of Losses incurred by
Purchaser arising out of or resulting from any breach, of a representation,
covenant or agreement by any Seller, the Company or any Subsidiary, the
references to a "Material Adverse Effect" or materiality (or other correlative
terms) shall be disregarded. The limitations set forth in this Section 10.4
shall apply regardless of whether Purchaser or the Company pursue remedies
under this Article X or otherwise.
10.4.2. The maximum monetary liability of the
Sellers on the one hand or the Purchaser on the other hand under this Article
10 shall not exceed $15,000,000; provided, however, that the maximum monetary
liability of the Sellers for a breach of the representations and warranties
set forth in any of Sections 4.33, 4.34 or 4.35 may exceed $15,000,000 but
shall not exceed $17,250,000 (combined with the monetary liability of the
Sellers for a breach of any other representations and warranties made
hereunder other than in Section 4.5); and provided further, that
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the maximum monetary liability of the Sellers for a breach of the
representations and warranties set forth in Section 4.5 may exceed $15,000,000
but shall not exceed $34,500,000 (combined with the monetary liability of the
Sellers for a breach of any other representations and warranties made
hereunder).
Section 10.5. Computation of Losses. Anything in this
Agreement to the contrary notwithstanding, the amount of any Losses otherwise
payable to Purchaser or the Company shall be reduced: by the amount of net
insurance proceeds received by the Purchase or the Company (giving effect to
deductibles or self-insured or co-insurance payments made and the costs, if
any, of obtaining such insurance proceeds by the Company) as compensation for
the damage or Losses caused by the act, omission, fact or circumstance giving
rise to the Losses.
Section 10.6. Reduction of Indemnification Payments for Tax
Benefits. An indemnified party receiving a payment pursuant to this Article X
shall reimburse the indemnifying party for any Tax Benefit realized by the
indemnified party by reason of incurring an indemnifiable Loss. Such payment
shall be due on or before the due date for the first Tax Return on which the
Tax Benefit Item giving rise to the payment is reported. To the extent that a
Tax Benefit Item is disallowed by the relevant taxing authority the
indemnifying party shall reimburse the indemnified party. The parties shall
work together to determine the Tax Benefit; to the extent the parties cannot
agree on the amount of the Tax Benefit, a mutually agreeable independent
accounting firm shall be appointed to determine the amount of the Tax Benefit.
Any amount received by the indemnified party from the indemnifying party and
then reimbursed by the indemnified party to the indemnifying party pursuant to
this Article X shall be deemed never to have been received by the indemnified
party for purposes of the indemnification limits provided in Section 10.1
hereof.
10.6.1. If a Tax Benefit Item is fully deductible
in the tax year in which the Tax Benefit Item arose, and the Tax Return on
which such Tax Benefit Item was reported reports taxable net income, then the
Tax Benefit attributable to that Tax Benefit Item shall be paid dollar for
dollar.
10.6.2. If the Tax Return on which the indemnified
party reports a Tax Benefit Item reports a net loss then:
(a) If such loss results in a carry forward, the full amount
of such loss shall be treated as a Tax Benefit Item under this Section 10.6,
and the excess (if any) of the amount of the Tax Benefit Item over the loss
reported on the Tax Return shall be deemed to be fully deductible and the Tax
Benefit attributable to that portion of the Tax Benefit Item shall be paid
dollar for dollar pursuant to Section 10.6.1 hereof.
(b) To the extent a Tax Benefit Item generates a loss which
may be carried back, the amount of the Tax Benefit shall be increased by
interest (less any income tax due on that interest), but only if such interest
is actually paid by the taxing authority and only then to the extent the
interest paid is clearly traceable to the Tax Benefit Item.
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(c) If or to the extent a Tax Benefit Item results in a loss
carry forward, then the amount of the Tax Benefit payable shall be equal to
fifty percent (50%) of the amount that would have otherwise been calculated
under Section 10.6.1 using the following assumptions. For purposes of
calculating the amount of the Tax Benefit under this Section 10.6.1(c), (i) it
shall be assumed that the Tax Benefit Item was fully deductible, and (ii) the
tax law and highest marginal tax rate for the Tax Year when the Tax Benefit
Item was originally reported shall apply.
ARTICLE XI
TERMINATION
Section 11.1. Termination. This Agreement may be terminated
prior to the Closing as follows:
(a) at the election of Purchaser, if any one or more of the
conditions set forth in Article VII to its obligation to proceed with the
Closing has not been fulfilled on the Closing Date;
(b) at the election of all Sellers, if any one or more of
the conditions set forth in Article VIII to their obligation to proceed with
the Closing has not been fulfilled on the Closing Date;
(c) at the election of Purchaser, if any Seller or the
Company has breached any representation, warranty, covenant or agreement
contained in this Agreement, which breach cannot be or is not cured by the
Closing Date;
(d) at the election of all Sellers, if Purchaser has
breached any representation, warranty, covenant or agreement contained in this
Agreement, which breach cannot be or is not cured by the Closing Date;
(e) at the election of Purchaser or all Sellers, if any
legal proceeding is commenced or threatened by any Governmental Entity or
other person (other than Purchaser or Sellers) directed against the
consummation of the Closing and either Purchaser or Sellers, as the case may
be, reasonably and in good faith deems it impractical or inadvisable to
proceed in view of such legal proceeding or threat thereof, taking into
account the potential expense and delay likely to be involved;
(f) by Purchaser, provided that Purchaser is not in material
default hereunder, if all of the conditions precedent set forth in Article VII
hereof have not been met by September 30, 1998;
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(g) by all Sellers, provided that no Seller is in material
default hereunder, if all of the conditions precedent set forth in Article
VIII hereof have not been met by September 30, 1998;
(h) at any time on or prior to the Closing Date, by mutual
written consent of Purchaser and Sellers.
If this Agreement so terminates, it shall become null and void and have no
further force and effect, except as provided in Section 11.2.
Section 11.2. Survival. If this Agreement is validly
terminated pursuant to Section 11.1 and the transactions contemplated hereby
are not consummated as described above, this Agreement shall become void and
of no further force and effect; provided, however, that if Purchaser
terminates this Agreement because any of the conditions contained in Section
7.1 or Section 7.2 have not been satisfied, or if Sellers terminate this
Agreement because any of the conditions contained in Section 8.1 or Section
8.2 have not been satisfied then the terminating party shall have the right to
pursue all of its legal remedies for breach of contract and damages; provided,
however, Seller shall have no liability to Purchaser if (i) Sellers are unable
to obtain all of the consents and estoppels required under Section 7.3, (ii)
any party terminates if the conditions in Section 7.4 or Section 8.3 are not
met, or (iii) Purchaser terminates due to the failure to meet the conditions
in Section 8.4, provided further that if this Agreement is validly terminated
pursuant to Section 11.1 and the transactions contemplated hereby are not
consummated as described above, the provisions of Section 6.3 relating to the
obligation of Purchaser to keep confidential and not to use certain
information obtained by it from the Company and to return documents and copies
thereof to the Company shall survive. No party hereto shall have any liability
to any other party in respect of a valid termination of this Agreement
pursuant to Section 11.2, except to the extent set forth above.
ARTICLE XII
GENERAL
Section 12.1. No Tax Representations. Sellers and Purchaser
agree that no representation or warranty has been made by them as to the tax
consequences of the transactions contemplated by this Agreement, that each is
engaging separate counsel with respect to such tax consequences, and that each
is assuming its own respective tax liability, if any, arising out of this
Agreement or the consummation of the transactions contemplated hereunder.
Section 12.2. Regarding the Representations and Warranties.
12.2.1. Independence. Each of the representations
and warranties made by each Seller and the Company in Article IV is
independent of the other representations and warranties made therein, and each
of the representations and warranties made by Purchaser in Article V is
independent of the other representations and warranties made therein.
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12.2.2. Knowledge Qualification. Whenever a
representation or warranty is made herein based on the knowledge of Purchaser
or legal counsel, such representation or warranty is made based on the actual
knowledge of Purchaser or such legal counsel (as the case may be) and on the
knowledge which Purchaser or such legal counsel (as the case may be) would
have if he or it (as the case may be) had conducted a diligent inquiry into
the subject matter of the representation or warranty. Whenever a
representation or warranty is made herein based on the knowledge of any of the
Sellers or the Company, such representation or warranty is made based on the
actual knowledge of each of the Sellers, each of the beneficial owners of each
of the Sellers, the principal officers and directors of the Company and each
of the Subsidiaries, collectively, and on the knowledge which all such persons
and entities would have if each of them had conducted a reasonably
comprehensive investigation into the subject matter of the representation or
warranty.
Section 12.3. Binding Effect and Assignment. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by each
of the parties and their respective successors, assigns, heirs, administrators
and personal representatives. This Agreement may be assigned by Purchaser to
an Affiliate of Purchaser, provided that such Affiliate assumes all
obligations of Purchaser hereunder and provided, further, that Purchaser shall
remain jointly and severally liable with such Affiliate for all
representations, warranties, agreements and liabilities under this Agreement.
This Agreement may not be assigned by any of the Sellers without the prior
written consent of Purchaser.
Section 12.4. Consents, Further Assurances. Consistent with
the terms and conditions hereof, each party hereto will use its reasonable
best efforts to execute and deliver such other documents and take such other
actions as reasonably requested by the other party to fulfill the conditions
precedent to the obligation of the other party to consummate the purchase and
sale of the Shares, or as the other party hereto may reasonably request in
order to carry out this Agreement and the transactions contemplated hereby.
Purchaser, the Company and each Seller shall use their reasonable best efforts
and will cooperate with each other to the extent reasonably necessary to
obtain all consents, approvals and waivers, if any, from third parties
required to consummate the transactions contemplated hereby or which, if not
obtained, would materially adversely affect the Condition.
Section 12.5. Waiver. Any term or provision of this
Agreement may be waived at any time by the party entitled to the benefit
thereof by a written instrument duly executed by such party.
Section 12.6. Notices. All notices, requests, demands,
waivers, consents, approvals, or other communications which are required or
permitted hereunder shall be in writing and shall be delivered personally,
sent by reputable overnight courier service (such as Federal Express), sent by
telecopier, or sent by registered or certified mail, return receipt requested,
postage prepaid, to the addresses set forth below:
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If to Purchaser:
SCT Holdings Corporation
c/o PHS Corporate Services, Inc.
1201 Market Street, Suite 1600
Wilmington, DE 19801
Attention: Eileen Allen
Telecopier No.: (302) 656-8865
With a copy to:
SCT Holdings Corporation
c/o Systems & Computer Technology Corporation
4 Country View Road
Malvern, PA 19355
Attention: Senior Vice President and General Counsel
Telecopier No.: (610) 578-7457
With a copy to:
Robert A. Friedel, Esquire
Pepper Hamilton LLP
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103-2799
Telecopier No.: (215) 981-4750
If to Sellers:
Meunier BV
L. H. D. Mulder
Nieuw Herlaer 115
1083 BC Amsterdam, Netherlands
Egon De Waart Resource Management BV
Egon de Waart
Gounodstraat 102
2901 RE Capelle a/d IJssel, Netherlands
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Cyberfocus BV
Christian Fung-A-You
Woelwijkstraat 4
2271 RH Voorburg, Netherlands
L. A. D. Holding BV
Leo Derks
Prinsegracht 275
2512 DV Den Haag, Netherlands
Dupoirier Holding BV
Alain Schuermans
De Moucheronstraat 96
2593 RC Den Haag, Netherlands
Pieter Leijten
Dr. J. Presserstraat 129
2552 LS Den Haag, Netherlands
Jurriaan van der Lingen
Pieterstraat 31
2513 HX Den Haag, Netherlands
With a copy to:
Ivo Vissenberg, Esquire
Kilpatrick & Stockton LLP
Suite 2800, 1100 Peachtree Street
Atlanta, GA 30309-4530
Telecopier No.: (404) 815-6555
or to such other address or telecopier number as the party entitled to receive
such notice may, from time to time, specify in writing to the other party.
Section 12.7. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT
OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF PENNSYLVANIA OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION OTHER THAN THE COMMONWEALTH OF PENNSYLVANIA.
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Section 12.8. Dispute Resolution. For the purposes of this
Section, all of the Sellers, collectively, will be deemed to be one "party".
12.8.1. Arbitration. Any and all disputes arising
out of or in connection with the execution, interpretation, performance or
nonperformance of this Agreement shall be solely and finally settled by
arbitration, which shall be conducted in New York, New York, by a panel of
three arbitrators. The arbitrators shall be familiar with international
business transactions, fluent in the English language and fully capable of
conducting the arbitration in English, shall be impartial and shall not have
been employed by or affiliated with any of the parties hereto or any of their
respective affiliates. The arbitration procedure may be initiated by any party
by written notice to the other; such notice shall specify in reasonable detail
the dispute being submitted to arbitration and shall name one arbitrator to
the panel. The other party to such arbitration shall appoint one arbitrator to
the panel within 30 days after receipt of such notice. The two arbitrators so
appointed shall, within 30 days after appointment of the second arbitrator,
select a third arbitrator (the "Umpire") who, in addition to the foregoing
qualifications, shall be a lawyer admitted to practice in the United States.
If the two arbitrators selected by the parties cannot agree on a third
arbitrator within such 30-day period, or if either party fails or refuses to
appoint an arbitrator, then selection of such arbitrator shall be made, in
accordance with the foregoing qualifications, upon application of either
party, by the American Arbitration Association. The parties hereby renounce
all recourse to litigation and agree that the award of the arbitrators shall
be final and subject to no judicial review. The arbitrators shall conduct the
proceedings, including arguments and briefs, in the English language and
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association, as now or hereafter amended (the "Rules"); provided that the
provisions of this Agreement shall prevail in the event of any conflict
between the Rules and the provisions of this Agreement. The panel of
arbitrators shall decide the issues submitted to them in accordance with: (i)
the provisions and commercial purposes of this Agreement; and (ii) what is
just and equitable under the circumstances. All questions and issues in
connection with the dispute, including procedural issues, shall be decided by
the concurrence of at least two arbitrators, and all decisions shall be in
writing and submitted to both parties, provided that, if after a reasonable
period, concurrence of two arbitrators cannot be obtained with respect to a
question or issue, then the Umpire shall make all decisions necessary to
resolve the dispute.
12.8.2. Facilitation. The parties shall facilitate
the arbitration by: (i) making available to one another and to the arbitrators
for examination, inspection and extraction all documents, books, records and
personnel under their control if determined by the arbitrators to be relevant
to the dispute; (ii) conducting arbitration hearings to the greatest extent
possible on successive days; and (iii) observing strictly the time periods
established by the Rules or by the arbitrators for submission of evidence or
briefs.
12.8.3. Judgment. In the final award, the panel of
arbitrators shall divide all costs, other than fees of counsel incurred in
conducting the arbitration, in such manner as the panel deems just and
equitable under the circumstances. Judgment on the award of the panel of
arbitrators may be entered in any court having jurisdiction over the party
against which enforcement of the
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award is being sought. Each party hereby irrevocably submits and consents to
the jurisdiction of any such court for the purpose of rendering a judgment on
any such award.
12.8.4. Award. Each party agrees that any award of
the panel of arbitrators against it and on which judgment is entered as
provided in this Section 12.8 may be executed against the assets of such party
or its affiliates in any jurisdiction, including the Netherlands and the
United States of America. By execution of this Agreement, each party hereby
irrevocably submits to the jurisdiction of any court in any such jurisdiction
in any legal action or proceeding relating to such executions.
12.8.5. Waiver. Each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection it may now or
hereafter have to any suit, action or proceeding arising out of or relating to
this Agreement that is brought in any of the jurisdictions designated in
Section 12.8.3 or Section 12.8.4 above for the purposes envisioned by those
sections, and hereby further irrevocably waives any claim that any such suit,
action or proceeding so brought has been brought in an inconvenient forum.
Section 12.9. WAIVER OF JURY TRIAL. EACH OF THE PURCHASER
AND SELLERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 12.10. No Third-Party Beneficiaries. Notwithstanding
anything to the contrary contained herein, no provision of this Agreement is
intended to benefit any person other than the signatories hereto nor shall any
such provision be enforceable by any other person.
Section 12.11. Severability. Any provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall be ineffective to
the extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 12.12. Schedules. All Schedules referred to in this
Agreement are intended to be and are specifically incorporated by reference
herein.
Section 12.13. Section Headings. All section headings herein
have been inserted for convenience of reference only and shall in no way
modify or restrict any of the terms or provisions hereof.
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Section 12.14. Gender and Number. Words denoting the
singular number only shall include the plural and vice versa. Words denoting
any gender include all genders and words denoting persons shall include firms
and corporations and vice versa.
Section 12.15. Governing Language. The governing language of
this Agreement shall be English.
Section 12.16. Currency. All references in this Agreement to
"dollars," "$" and "U.S. $" are to United States dollars. With the exception
of any amounts due under this Agreement, which amounts will be due in United
States dollars, any conversions into other currencies for the purpose of
interpreting this Agreement shall be based on the amount of foreign currency
able to be purchased with each U.S. dollar on the day prior to the Closing
Date, with respect to trading among banks in amounts of $1 million or more, as
set forth in the Closing Date edition of the Wall Street Journal. All payments
under this Agreement are to be made in U.S. dollars.
Section 12.17. Contents of Agreement. This Agreement sets
forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby and shall not be amended or terminated except
by a written instrument duly executed by each of the parties hereto. Any and
all prior or contemporaneous agreements or understandings between or among the
parties regarding the subject matter hereof, including without limitation, the
letter of intent dated July 17, 1998, are superseded in their entirety by this
Agreement.
Section 12.18. Counterparts. This Agreement may be executed
in two or more fully executed counterparts, each of which shall be deemed an
original, but all of such counterparts together shall constitute but one and
the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first written above.
SCT HOLDINGS CORPORATION
By: /s/ Michael J. Emmi
----------------------------------
Michael J. Emmi
Chief Executive Officer
FYGIR LOGISTIC INFORMATION SYSTEMS
By: /s/ Denis Mulder
----------------------------------
Denis Mulder
President
MEUNIER BV
By: /s/ L.H.D. Mulder
----------------------------------
Name: L.H.D. Mulder
Title: President
[EXECUTIONS CONTINUED]
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EGON DE WAART RESOURCE MANAGEMENT BV
By: /s/ Egon de Waart
---------------------------------------
Name: Egon de Waart
Title: Director
CYBERFOCUS BV
By: /s/ Christian Fung-A-You
---------------------------------------
Name: Christian Fung-A-You
Title: President
L.A.D. HOLDING BV
By: /s/ L. A. Derks
---------------------------------------
Name: L. A. Derks
Title: Director
DUPOIRIER HOLDING BV
By: /s/ A.S.L. Schuermans
---------------------------------------
Name: A.S.L. Schuermans
Title: V.P. Prod. Dev.
[EXECUTIONS CONTINUED]
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PIETER LEIJTEN
By: /s/ Pieter Leijten
--------------------------------------
Name: Peter Leijten
Title: Sales Manager Europe APS
JURRIAAN VAN DER LINGEN
By: /s/ Jurriaan Van Der Lingen
--------------------------------------
Name: Jurriaan Van Der Lingen
Title: FIT Product Manager
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ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated this 1st day of
September, 1998, is by and among SCT HOLDINGS CORPORATION, a Delaware
corporation ("Assignor"), and SYSTEMS & COMPUTER TECHNOLOGY INTERNATIONAL
B.V., a private company with limited liability formed under the laws of the
Netherlands ("Assignee").
Background
WHEREAS, Assignor has entered into that certain Stock Purchase
Agreement dated September 1, 1998, (as the same may be further amended or
supplemented and in effect from time to time, the "Agreement"), pursuant to
which Assignor has the right to purchase all of the outstanding shares of
Fygir Logistic Information Systems B.V. (collectively, the "Shares"); and
WHEREAS, Assignor desires to assign and delegate to Assignee, and
Assignee desires to accept and assume, all of Assignor's rights to and
obligations under the Agreement upon the terms, and subject to the conditions,
set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements
herein contained and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Defined Terms.
All defined terms used herein that are not herein defined,
shall have the meaning ascribed to them in the Agreement.
2. Assignment and Delegation.
Assignor hereby absolutely and irrevocably grants,
transfers, conveys and assigns to Assignee all of its right, title and
interest to and under the Agreement, including, without limitation, its right
to purchase the Shares.
3. Acceptance and Assumption.
Assignee hereby accepts all of Assignor's rights, title and
interest in, to and under the Agreement, and Assignee hereby assumes
responsibility for all of Assignor's obligations, agreements, responsibilities
and undertakings of whatever nature arising under or related to the Agreement.
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4. Further Assurances.
The parties hereto shall, following the date hereof, take
all actions, and execute and deliver all documents reasonably necessary or
appropriate to effectuate the assignment and assumption contemplated hereby.
5. Governing Law.
This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania without giving effect to the conflicts of law
rules in that jurisdiction.
6. Entire Agreement; Amendments.
This Agreement constitutes the final, entire agreement among
the parties hereto and supersedes all prior and contemporaneous commitments,
agreements, representations and understanding, whether written or oral,
relating to the subject matter hereof. The provisions of this Agreement may be
amended or waived only by a written instrument signed by the parties hereto.
7. Due Authorization.
Each of the parties hereby represents and warrants that the
person executing this Agreement on its behalf is duly authorized to execute
this Agreement and that this Agreement constitutes a valid and binding
obligation enforceable according to its terms.
IN WITNESS WHEREOF, the parties have set their hands and seals to
this Agreement as of the date first written above.
SCT HOLDINGS CORPORATION SYSTEMS & COMPUTER TECHNOLOGY
as Assignor INTERNATIONAL B.V.
as Assignee
By: /s/ Michael J. Emmi By: /s/ Michael J. Emmi
------------------------------------------ ----------------------------
Name: Michael J. Emmi Name: Michael J. Emmi
Title: Chief Executive Officer Title: Managing Director
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SCT ACQUIRES FYGIR LOGISTIC INFORMATION SYSTEMS, INC.,
A SUPPLY CHAIN PLANNING SOFTWARE COMPANY
MALVERN, PA, September 2, 1998 -- Systems & Computer Technology Corp. (SCT)
(NASDAQ:SCTC) and Fygir Logistic Information Systems, Inc., a leading provider
of supply chain planning software, jointly announced today SCT's purchase of
Fygir, including all existing software, technology, and operations for $34.5
million in cash. Subject to completion of an appraisal, a portion of the
purchase price may be accounted for as purchased research and
development.
The Company will schedule a conference call next week to discuss details of
the acquisition. A conference call date, time and dial-in number will be
announced next week.
Fygir, headquartered in The Hague, Netherlands, offers market-leading advance
planning and scheduling products GRIP and FIT. Like SCT's ADAGE enterprise
resource planning software, the products are object-based and focused on the
special business needs of process industries. Fygir's products support
multi-national and multi-language implementations.
SCT, headquartered in Malvern, Pa., is a leading provider of client/server,
mission-critical, enterprise software and a series of information technology
services for manufacturing & distribution, government, higher education, and
utilities. The company provides long-term information and technology solutions
and is a recognized leader in outsourcing. SCT has approximately 3,400
employees and serves more than 2,500 clients worldwide.
