SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report: May 1, 1995
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INTERSOLV, Inc.
(Exact name of registrant as specified in charter)
Delaware 0-15188 52-0990382
(Stateof incorporation) (Commission File Number)(IRS Employer Identification)
3200 Tower Oaks Boulevard, Rockville, Maryland 20852
(Address of principal executive offices) (Zip Code)
Registrant's telephone no., including area code 301/230-3200
Item 2. Acquisition or Disposition of Assets.
Effective May 1, 1995, INTERSOLV, Inc. ("INTERSOLV")
acquired all of the outstanding capital stock of PC Strategies &
Solutions, Inc., a New Jersey corporation ("PCS"), pursuant to a
share exchange between INTERSOLV and Michael I. Goldman
("Goldman"). The exchange (the "Exchange") was effected
pursuant to an Exchange Agreement dated May 1, 1995, by and
among INTERSOLV, PCS and Goldman.
Under the terms of the Exchange, INTERSOLV acquired all of
Goldman's 100 shares of PCS common stock, which represented all
of the issued and outstanding shares of PCS capital stock, in
exchange for 675,000 shares of INTERSOLV common stock. The
Exchange was a private transaction and was not registered under
the Securities Act of 1933 (the "Act"). The number of shares of
INTERSOLV common stock exchanged for Goldman's shares of PCS
common stock was determined by arm's-length negotiations between
INTERSOLV and Goldman. INTERSOLV and Goldman also entered into a
Registration Rights Agreement dated May 1, 1995 pursuant to which
Goldman agreed not to sell any of his shares of INTERSOLV common
stock prior to August 21, 1995 and INTERSOLV agreed to prepare
and file a shelf registration statement under the Act with the
Securities and Exchange Commission for the resale of Goldman's
INTERSOLV shares and use its reasonable best efforts to cause
such registration statement to become effective on or before
August 21, 1995. INTERSOLV expects to account for the PCS acquisition using
the pooling of interests method.
PCS, based in Parsippany, New Jersey, is a
consulting and training organization focused on helping
companies implement object-oriented client/server technology.
With this acquisition, INTERSOLV extends its consulting and
education services and enhances its ability to assist its
customers with the implementation of object-oriented development
projects. Following the Exchange, INTERSOLV intends to continue
and expand upon the historical PCS businesses and to integrate
PCS's assets and operations with those of INTERSOLV.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
A. FINANCIAL STATEMENTS OF PC STRATEGIES & SOLUTIONS, INC. AND
PRO FORMA FINANCIAL STATEMENTS OF INTERSOLV, INC.
It is impracticable to provide the financial statements,
proforma financial statements and independent auditor's consent
required to be filed pursuant to this Item 7 with respect to the
Exchange and accordingly such items will be filed as soon as
practicable, but in any event not later than 60 days following
the date hereof.
B. EXHIBITS
Exhibit No. Exhibit
2 Exchange Agreement dated May 1, 1995
between INTERSOLV, PCS, and Goldman
4 Registration Rights Agreement dated May 1,
between INTERSOLV and Goldman.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
INTERSOLV, Inc.
Date: May 11, 1995 By /s/ Kenneth A. Sexton
Kenneth A. Sexton
Vice President,
Finance & Administration
??(..continued)
- 2 -
5/1/95
STOCK EXCHANGE AGREEMENT
BY AND AMONG
INTERSOLV, INC.,
PC STRATEGIES & SOLUTIONS, INC.,
AND
THE SHAREHOLDER NAMED HEREIN
MAY 1, 1995, EFFECTIVE DATE
TABLE OF CONTENTS
Page
ARTICLE I
EXCHANGE OF PCS COMMON STOCK 1
1.01 Exchange. 2
1.02 Exchange Consideration. 2
1.03 The Closing. 2
1.04 Deliveries at the Closing. 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDER AND THE COMPANY 3
2.01 Corporate Organization 3
2.02 Capital Stock 4
2.03 Subsidiaries 4
2.04 No Violation 6
2.05 Financial Statements 6
2.06 No Undisclosed Liabilities 8
2.07 Absence of Certain Changes 8
2.08 Contracts and Insurance 9
2.09 Title to Property; Leases 10
2.10 Litigation 15
2.11 Tax Matters 16
2.12 Intellectual Property Rights 19
2.13 Employee Benefit Plans; Employees 20
2.14 Labor Matters 23
2.15 Compliance with Applicable Laws 23
2.16 Accounts Receivable 23
2.17 Access 24
2.18 Accounting Treatment 24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDER 24
3.01 Stock Ownership 24
3.02 Authorization 25
3.03 Title to PCS Common Stock 25
3.04 No Violation 25
3.05 Public Announcements 26
3.06 Acquisition of INTERSOLV Common Stock 26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
INTERSOLV 27
4.01 Corporate Organization 27
4.02 Authorization 28
4.03 No Violation 28
4.04 Governmental Authorities 29
4.05 SEC Documents; Financial Statements 29
4.06 No Undisclosed Liabilities 31
4.07 Absence of Certain Changes 31
4.08 Public Announcements 32
ARTICLE V
CONDUCT OF THE COMPANY'S BUSINESS
PENDING THE CLOSING 33
5.01 General 33
5.02 Covenants 33
ARTICLE VI
OBLIGATIONS OF THE SHAREHOLDER 34
6.01 Confidentiality 34
6.02 Best Efforts 34
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF INTERSOLV 35
7.01 Representations and Warranties; PerformancE35
7.02 Opinion of Counsel. 36
7.03 Employment and Non-Competition Agreements 36
7.04 Resignation of Directors and Officers 36
7.05 Registration Rights Agreement 36
7.06 Accounting Treatment 36
7.07 Option Agreements 36
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
THE SHAREHOLDER 37
8.01 Representations and Warranties; PerformanCE37
8.02 Opinion of Counsel 37
8.03 Valid Issuance of INTERSOLV Shares 38
8.04 Registration Rights 38
8.05 Employment and Non-Competition Agreements 38
8.06 Option Agreements 38
ARTICLE IX
INDEMNIFICATION 38
9.01 Shareholder Indemnification. 39
9.02 INTERSOLV Indemnification 39
9.03 Claims by Third Parties 40
9.04 Set-off 40
9.05 Limitations 40
ARTICLE X
MISCELLANEOUS PROVISIONS 41
10.01 Amendment and Modification 41
10.02 Waiver of Compliance; Consents 42
10.03 Investigations; Survival of Representations
and Warranties 42
10.04 Notices 42
10.05 Assignment 43
10.06 Counterparts 44
10.07 Headings; Interpretation 44
10.08 Governing Law 44
10.09 Time of Essence 44
10.10 Specific Performance 45
10.11 Attorneys' Fees 45
10.12 Entire Agreement 45
10.13 Expenses 45
10.14 Severability 46
10.15 Personal Releases 46
10.16 Stock Options 47
10.17 Other Employment Agreements 47
10.18 Art Work 48
Exhibits
Exhibit 1A Employment and Non-Competition Agreement
Exhibit 1B Employment and Non-Competition Agreement
Exhibit 2 Registration Rights Agreement
Exhibit 3 Company Disclosure Schedule
Exhibit 4 Company Financial Statements
Exhibit 5 INTERSOLV Disclosure Schedule
Exhibit 6 Opinion of Counsel to the Shareholder
Exhibit 7 Opinion of Counsel to INTERSOLV
Exhibit 8 Option Letter Agreement
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT ("Agreement"), dated as of
May 1, 1995, by and among (i) INTERSOLV, Inc., a Delaware
corporation ("INTERSOLV"), (ii) Michael I. Goldman (the
"Shareholder"), and (iii) PC Strategies & Solutions, Inc., a
New Jersey corporation (the "Company").
R E C I T A L S:
A. The Company is a duly incorporated New Jersey
corporation; its authorized capital stock consists of 2,500
shares of common stock, no par value per share (the "PCS
Common Stock"), of which 100 shares are duly and validly
issued, outstanding and owned by the Shareholder.
B. The Shareholder intends to exchange with INTERSOLV
all of the outstanding PCS Common Stock (intended to be a tax
free reorganization under Section 368(a)(1) of the Internal
Revenue Code) for certain consideration under the terms and
conditions set forth herein.
FOR GOOD AND VALUABLE CONSIDERATION, the parties hereto
agree as follows:
ARTICLE I
EXCHANGE OF PCS COMMON STOCK
1.01 Exchange. On and subject to the terms and
conditions set forth herein, INTERSOLV agrees to acquire from
the Shareholder, and the Shareholder agrees to transfer and
deliver to INTERSOLV, all right, title and interest in and to
all outstanding PCS Common Stock, for the consideration
specified below in this Article I.
1.02 Exchange Consideration. At the "Closing" (as
defined below) INTERSOLV shall issue 675,000 shares of its
common stock, par value $0.01 per share ("INTERSOLV Common
Stock"), to the Shareholder in exchange for all of the PCS
Common Stock.
1.03 The Closing. Unless this Agreement shall have been
terminated and the transactions contemplated hereby shall have
been abandoned, the closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the
offices of Robert A. Sochor, Esq., or at such other place or
places and at such other time as the parties may agree. For
all purposes hereunder, the transactions contemplated hereby
shall be deemed to occur on May 1, 1995 (the "Closing
Effective Date").
1.04 Deliveries at the Closing. In addition to the
other documents and instruments required to be delivered by
any party pursuant to this Agreement, at the Closing, (i) the
Shareholder will deliver to INTERSOLV stock certificates
representing all of the outstanding PCS Common Stock, properly
endorsed in blank or accompanied by duly executed assignment
documents, (ii) INTERSOLV and the Shareholder will deliver to
each other an executed Employment and Non-Competition
Agreement in the form of Exhibit 1A hereto, (iii) INTERSOLV
will deliver to Safdie an executed Employment and Non-
Competition Agreement in the form of Exhibit 1B hereto,
provided Safdie has executed and delivered to INTERSOLV such
Agreement, (iv) each director and officer of the Company will
deliver to INTERSOLV a letter evidencing the resignation as of
the Closing of each such person from each such position with
the Company, (v) INTERSOLV will deliver to the Shareholder
stock certificates representing 607,500 shares of INTERSOLV
Common Stock and 67,500 shares of INTERSOLV Common Stock,
(vi) INTERSOLV and the Shareholder will execute and deliver a
Registration Rights Agreement substantially in the form of
Exhibit 2 hereto (the "Registration Rights Agreement"), and
(vii) the Shareholder will deliver to INTERSOLV fully executed
copies of the option letter agreement with Safdie
substantially in the form of Exhibit 8 hereto (the "Option
Letter Agreement") and the Option Escrow Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDER AND THE COMPANY
The Shareholder and the Company, jointly and severally,
hereby represent and warrant to INTERSOLV that, except as
stated in the disclosure schedule attached hereto as Exhibit 3
(the "Company Disclosure Schedule"):
2.01 Corporate Organization. The Company is a
corporation duly organized, validly existing and in good
standing under the laws of New Jersey and has full corporate
power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now
owns; the Company is duly qualified or licensed to do business
as a foreign corporation in each jurisdiction set forth on the
Company Disclosure Schedule, which are the only jurisdictions
in which such qualification or authorization is required by
law and in which failure so to qualify or be authorized could
have a material adverse effect on the business, properties,
condition (financial or otherwise), results of operations or
prospects of the Company and its Subsidiaries (as defined
below) considered as a whole; the Company Disclosure Schedule
contains complete and correct copies of the Company's articles
of incorporation and bylaws, as amended to date and as now in
effect.
2.02 Capital Stock. The Company's authorized capital
stock consists of 2,500 PCS Common Stock of no par value, of
which 100 shares are issued and outstanding. All issued and
outstanding PCS Common Stock are duly and validly issued,
fully paid and nonassessable. Except for such PCS Common
Stock, there are no shares of capital stock of the Company
issued and/or outstanding. There are no outstanding options,
warrants, rights, contracts, commitments, understandings or
arrangements by which the Company is bound to issue any
additional shares of its capital stock or any security
convertible thereunto or exercisable or exchangeable therefor.
2.03 Subsidiaries. Except for the subsidiaries listed
in the Company Disclosure Schedule (individually, a
"Subsidiary" and collectively, the "Subsidiaries"), each of
which is a duly organized and validly existing corporation in
good standing in the jurisdiction of its incorporation, as set
forth in the Company Disclosure Schedule, the Company does not
own, directly or indirectly, any capital stock or other equity
securities of any corporation, partnership or other entity or
have any direct or indirect equity or ownership interest in
any business other than the business conducted by the Company.
With respect to each Subsidiary: (a) the Company owns
directly or indirectly all of such Subsidiary's outstanding
capital stock; (b) all such outstanding capital stock is duly
and validly issued, fully paid and nonassessable; (c) there
are no outstanding options, warrants, rights, contracts,
commitments, understandings or arrangements by which the
Subsidiary is bound to issue any additional shares of its
capital stock or any security convertible thereunto or
exercisable or exchangeable therefor; (d) the Subsidiary is
qualified or licensed to do business as a foreign corporation
in the jurisdictions identified in the Company Disclosure
Schedule, which are all of the jurisdictions in which the
character of its properties or the nature of its business
makes such qualification or licensing necessary (except for
such jurisdictions in which the failure to so qualify or be
licensed could not have a material adverse effect on the
business, properties, condition (financial or otherwise),
results of operations or prospects of the Company and its
Subsidiaries considered as a whole); and (e) the Company
Disclosure Schedule contains complete and correct copies of
each Subsidiary's articles of incorporation and bylaws, as
amended to date and as now in effect.
2.04 No Violation. Other than as disclosed in the
Company Disclosure Schedule, neither the Company nor any
Subsidiary or any of their respective properties is subject to
or obligated under any law, rule or regulation of any
governmental authority, or any order, writ, injunction or
decree, or any agreement, instrument, license, franchise or
permit, which would be breached or violated by the performance
of this Agreement and the consummation of the transactions
contemplated hereby. The performance of this Agreement and
the consummation of the transactions contemplated hereby do
not and will not conflict with, result in a breach or
violation of, or a default under (i) the Company's articles of
incorporation or bylaws, (ii) any obligation under any
mortgage, lease, agreement or instrument applicable to the
Company or any Subsidiary or any of their respective
properties or (iii) any law, rule, regulation, judgment, order
or decree of any government or governmental or regulatory
authority or court having jurisdiction over the Company or any
Subsidiary or any of their respective properties, except, in
the case of clauses (ii) and (iii) hereof, where such
conflict, breach, violation or default would not have a
material adverse effect on the business, properties, condition
(financial or otherwise), results of operations or prospects
of the Company and its Subsidiaries considered as a
consolidated entity.
2.05 Financial Statements. The Shareholder has made
available to INTERSOLV and has attached hereto as Exhibit 4
true and complete copies of the Company's financial statements
for the years ended September 30, 1994, 1993 and 1992 each of
which has been reviewed by M.I. Grossman Company, independent
financial auditors (the "Company Financial Statements"). The
Company Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto), and fairly present the
consolidated financial position of the Company and its
Subsidiaries as of their respective dates and the related
consolidated results of operations and cash flows for the
periods then ended. For purposes of this Agreement, the
unaudited consolidated balance sheet of the Company and its
Subsidiaries at March 31, 1995, including the notes thereto,
is hereinafter referred to as the "Company Balance Sheet."
The Shareholder has provided to INTERSOLV the Company Balance
Sheet and the related consolidated statements of income and
cash flows, for the Company and its Subsidiaries, for the six
months ended March 31, 1995 (collectively, the "March
Financial Statements"). The March Financial Statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto),
and fairly present the consolidated financial position of the
Company and its Subsidiaries as of its date and the related
consolidated results of operations for the periods then ended,
except for any adjustment described therein and the absence of
complete footnotes thereto.
2.06 No Undisclosed Liabilities. Except for
(a) liabilities and obligations disclosed in the Company
Disclosure Schedule and (b) liabilities and obligations
incurred in the ordinary course of business since the date of
the Company Balance Sheet and the obligations expressly set
forth in this Agreement, neither the Company nor any
Subsidiary nor any of their respective properties is subject
to any material liability or obligation (absolute, accrued,
contingent or otherwise) which was not fully reflected or
reserved against in the Company Balance Sheet.
2.07 Absence of Certain Changes. Except as disclosed in
the Company Disclosure Schedule or as contemplated or
permitted by this Agreement, since the date of the Company
Balance Sheet there has not been: (a) any material adverse
change in the business, properties, condition (financial or
otherwise), operations or prospects of the Company and its
Subsidiaries considered as a consolidated entity; (b) any
damage, destruction or loss, whether covered by insurance or
not, materially and adversely affecting the properties or
business of the Company and its Subsidiaries considered as a
consolidated entity; (c) any declaration, setting aside or
payment of any dividend (whether in cash, stock or property)
in respect of the capital stock of the Company, or any
redemption or other acquisition of such stock by the Company
or any Subsidiary; (d) any increase in the compensation
payable or to become payable by the Company or any Subsidiary
to their respective employees or any adoption of or increase
in any bonus, insurance, pension or other employee benefit
plan, payment or arrangement made to, for or with any such
employees, except increases occurring in the ordinary course
of business, including payments to the Shareholder of $50,000
and to Safdie of $25,000 in earned compensation to be paid
prior to closing out of the Company's existing cash account,
as set forth in the Company Disclosure Schedule; (e) a loss of
five or more employees or the addition of five or more
employees; (f) any sale or transfer by the Company or any
Subsidiary affecting any tangible or intangible asset, any
mortgage or pledge or creation of any security interest, lien
or encumbrance affecting any such asset, any lease of
property, including equipment, or cancellation of any debt or
claim; (g) any transaction by the Company or any Subsidiary
not in the ordinary course of business; (h) any change by the
Company or any Subsidiary in accounting methods or principles;
or (i) any understanding or agreement, whether in writing or
otherwise, to take any action described in this Section 2.07.
2.08 Contracts and Insurance. Except as disclosed in
the Company Disclosure Schedule, there are (a) no employment
agreements, other personal service agreements, non-competition
agreements, confidentiality agreements or agreements with
respect to inventions to which the Company or any Subsidiary
is a party and (b) no contracts (including license agreements,
maintenance agreements, support contracts, distribution
agreements and leases, if any, but excluding employee benefit
plans or arrangements listed pursuant to Section 2.13) to
which the Company or any Subsidiary is a party, which is
material to the Company and its Subsidiaries considered as a
consolidated entity, or which by its terms involves the future
payment by or to the Company or a Subsidiary of $5,000 or
more. Neither the Company nor any Subsidiary, nor any other
party to any such agreement or contract, has breached or
violated any provisions of, or is in default under the terms
of, nor will compliance with the terms of this Agreement
result in a breach of or default in, any contract, agreement,
plan, lease or license, a breach or violation of which or a
default under which would have a materially adverse effect
upon the business, properties, condition (financial or other-
wise), operations or prospects of the Company and its Subsidi-
aries considered as a consolidated entity. The Company
Disclosure Schedule includes a true and correct schedule of
all policies of insurance carried by the Company and its
Subsidiaries. Such policies are in full force and effect, and
no notice of cancellation has been received for any of such
policies.
2.09 Title to Property; Leases.
(a) The Company or its Subsidiary, as the case may be,
has good and marketable title to all real property and good
and sufficient title to all material property and assets which
are not real property, reflected in the Company Balance Sheet
or acquired after the date of the Company Balance Sheet
(except properties and assets sold or otherwise disposed of
since the date of the Company Balance Sheet in the ordinary
course of business, and except those that are leased, as to
which it has valid and enforceable leases), free and clear of
all mortgages, liens, pledges, charges or encumbrances of any
kind or character, except (i) statutory liens for real and
personal property taxes not yet delinquent or payable
subsequent to the date of this Agreement and statutory or
common law liens securing the payment or performance of any
obligation of the Company or a Subsidiary, the payment or
performance of which is not delinquent, or which are payable
or performable without interest or penalty subsequent to such
date, or the validity of which are being contested in good
faith by the Company or a Subsidiary; (ii) the rights of
customers of the Company with respect to inventory or work in
process under orders or contracts entered into by the Company
or a Subsidiary in the ordinary course of business; (iii) such
imperfections or irregularities of title, liens, easements,
charges or encumbrances as do not materially detract from or
materially interfere with the use of the properties or assets
subject thereto, or affected thereby, or otherwise materially
impair business operations at such properties; (iv) such
imperfections or irregularities of title, liens, easements,
charges or encumbrances as would not materially interfere with
the sale of, or materially detract from the aggregate value
of, such properties and assets; and (v) as expressly disclosed
in the Company Disclosure Schedule. The material buildings,
machinery and equipment of the Company and its Subsidiaries
reflected in the Company Balance Sheet are in satisfactory
operating condition and repair (excepting normal wear and
tear, defects the cost of repairing which would not be
material, any need for ordinary, routine maintenance and
repairs, and such as have been sold or otherwise disposed of
since the date of the Company Balance Sheet in the ordinary
course of business).
(b) For the purposes of this Agreement:
(i) "Product" means the development stage and
prototype computer programs and work in process associated
therewith known as (A) Power Builder Class Library, (B) Power
Builder Developers Workbench, (C) Domain Login Facility
Prototype, and (D) Microsoft Mail Command Line Wrapper, all as
more fully described in the Company Disclosure Schedule and
including all copyrights (including rights in the structure,
sequence and organization of the Product, all screen layouts,
command sequences and user interfaces). The term "Product"
shall include all present and predecessor versions of the
above programs and related source and object code and all
right to manufacture, use and sell the same. "Product" shall
also include all rights, claims and causes of action arising
out of any employment, non-competition, confidentiality or
other similar agreement, obligation or understanding between,
or arising out of, any existing or former employee's
employment relationship with the Company or any Subsidiary, to
the extent that such rights relate to the software products
described above. There are no copyright registrations,
copyright applications or patent rights (including, without
limitation, issued patents, applications, divisions,
continuations and continuations-in-part, reissues, patents of
addition, utility models and inventors' certificates) on such
Product.
(ii) "Documentation" means all existing
specifications and documents for the use and maintenance of
the Product, including, but not limited to, all user guides,
installation guides, systems listings, narrative descriptions,
file layouts, logic flow diagrams, source and load modules,
output reports, test or other data, test programs, and other
necessary information that is owned, used or held by the
Company or any Subsidiary. Only limited documentation has
been created to date with respect to the Product.
(iii) "Intellectual Property" means any and all
right, title and interest of the Company or any Subsidiary in
and to: all patents, registered or unregistered tradenames,
trademarks and servicemarks and registered or unregistered
copyrights and applications therefor ("Rights") owned by the
Company or any Subsidiary (collectively, "Company Rights");
trade secrets, customer lists, methodologies, proprietary
development and marketing information and know-how,
inventions, inventors' notes, drawings, and designs associated
with any of the foregoing, relating to the business of the
Company.
(iv) The Company or its Subsidiaries have full and
exclusive right, title and interest in and to the Product,
Documentation and Intellectual Property, free and clear of all
claims, liens, encumbrances, licenses and other interests,
except for those specifically disclosed on the Company
Disclosure Schedule, and neither the Company nor any of its
Subsidiaries has any obligation to any other person or entity
with respect to the Product, Documentation or Intellectual
Property, except as disclosed in the Company Disclosure
Schedule. The Company has the right to bring actions for
infringement of the Product, the Documentation and the
Intellectual Property, and none of the Intellectual Property
infringes the rights of any other person. The Company has
taken all action necessary to maintain as trade secrets the
source codes and all other proprietary portions of the Product
described in the Company Disclosure Schedule. Except as set
forth in the Company Disclosure Schedule, no source or object
code of any software included in the Product is subject to
escrow. Except as disclosed in the Company Disclosure
Schedule, the Company has all rights to any existing versions
of the Product for use in various computer operating
environments and has all rights to convert the Product for use
in all other computer operating environments.
(c) Set forth in the Company Disclosure Schedule is a
true and correct list of each lease or occupancy agreement
with respect to which the Company or any of its Subsidiaries
is the tenant (collectively, the "Company Leases" and
individually, a "Company Lease"), which list sets forth the
date of each such Company Lease and any amendment thereto.
The information set forth in the Company Disclosure Schedule
with respect to each Company Lease is true and correct in all
material respects. Each of the Company Leases is in full
force and effect and, except as expressly set forth in the
Company Disclosure Schedule, (i) no Company Lease has been
modified, amended, cancelled or terminated; (ii) neither the
Company, nor any of its Subsidiaries nor any other party to
any Company Lease, is in material default of any of its
respective obligations thereunder; (iii) no notice has been
given or received by the lessee under any Company Lease,
alleging a default by the recipient of such notice or a claim
or offset against the enforcement of such recipient's rights
under such Company Lease; and (iv) no consent or approval of
the lessor under any Company Lease or of any other party is
required to permit the transactions contemplated by this
Agreement, and such transactions will not conflict with, or
result in any breach or violation of, or default under, any
Company Lease, entitle the lessor to cancel or terminate the
same or otherwise materially adversely affect the rights of
the lessee thereunder. The copies of the Company Leases that
have heretofore been delivered or made available to INTERSOLV
are true, complete and correct copies of the Company Leases
and reflect and constitute the entire agreement between the
lessor and lessee thereunder concerning the leasing of and/or
occupancy of the premises or property covered thereby.
2.10 Litigation. There is no investigation, suit,
action, proceeding or claim (including breach of warranty and
product liability claims) involving $5,000 or more (or of
material significance because of the nonmonetary relief
sought), pending or threatened or contemplated against the
Company or any Subsidiary or materially affecting the
business, properties, condition (financial or otherwise),
results of operations or prospects of the Company and its
Subsidiaries considered as a consolidated entity, nor is there
any such judgment, decree, injunction, or order of any court
or governmental department, commission, agency or
instrumentality outstanding against the Company or any
Subsidiary. Neither the Company nor any Subsidiary nor any of
their respective properties or assets is subject to any other
judgment, injunction or decree that materially and adversely
affects the business, properties (financial or otherwise),
results of operations or prospects of the Company and its
Subsidiaries considered as a consolidated entity.
2.11 Tax Matters.
(a) For purposes of this Agreement, (i) "Taxes" shall
mean all taxes, assessments, charges, duties, fees, levies or
other governmental charges (including interest, penalties or
additions associated therewith) (including, without
limitation, federal, state, city, county, local, foreign, or
other income, franchise, capital, withholding, real or
tangible property, employment, unemployment compensation,
transfer, sales, use, excise and all other taxes of any kind)
imposed by the United States or any state, city, county,
country or foreign government or subdivision or agency
thereof, whether disputed or not, and (ii) "Transaction" means
any one or more transactions, acts, events, or omissions of
whatever nature.
(b) The Company and each of its Subsidiaries have filed
on a timely basis all returns and reports, including all
estimated returns and reports of every kind, and have timely
given all notices, in respect of Taxes required to be filed or
given under applicable law within the applicable statute of
limitations period by any of them. Such returns, reports and
notices are complete and accurate in all material respects.
All Taxes shown on such returns or reports have been, and all
Taxes subsequently assessed with respect to the periods and or
Transactions to which such returns or reports relate have been
or will be, timely, and fully paid except for amounts that the
Company is contesting in good faith, as set forth in the
Company Disclosure Schedule. Except as set forth in the
Company Disclosure Schedule, no extensions of time to file
such reports or returns or waivers of statutes of limitation
have been granted. The provisions in the March Financial
Statements for Taxes currently payable and for deferred Taxes
are adequate in all material respects to provide for such
Taxes for which the Company and its Subsidiaries taken as a
whole may be liable in respect of periods or Transactions
through the dates thereof. Such provisions do not assume the
availability of any loss carryforwards. Based on the
Company's federal income tax returns as filed (taking into
account any amendments) and based on estimates for its current
taxable year, the Company has no federal net operating losses,
capital losses or tax credits available for carryforward. The
federal income taxes of the Company and its Subsidiaries have
not been examined by the Internal Revenue Service (the "IRS").
No fact or condition exists relating to any past or present
Transaction, except as set forth in the Company Disclosure
Schedule, which, if known to any tax authority having
jurisdiction, would likely result in a successful challenge by
such authority of the treatment or omission of such factor or
condition on any tax return, report or notice of the Company
or its Subsidiaries, and no issue has arisen in any
examination of the Company by the IRS that, in either case, if
raised with respect to any other period not so examined would
result in a proposed material deficiency for any other period
not so examined, if upheld. The Company and its Subsidiaries
have made all payments of estimated Taxes required to be made
under Section 6655 of the Internal Revenue Code of 1986, as
amended (the "Code") and any comparable provisions of state,
local or foreign law. All such amounts that are required to
be remitted to any taxing authority have been duly remitted,
except for such amounts as the Company is contesting in good
faith as set forth in the Company Disclosure Schedule. Except
as set forth in the Company Disclosure Schedule, there is no
pending nor threatened or contemplated action, audit,
proceeding or investigation for the assessment or collection
of Taxes of the Company or any of its Subsidiaries. Except as
set forth in the Company Disclosure Schedule, there are no
requests for rulings, outstanding subpoenas or requests for
information with respect to Taxes of the Company or any of its
Subsidiaries, proposed reassessments of any property owned or
leased by the Company or any of its Subsidiaries, or similar
matters pending with respect to any taxing authority. Except
as set forth in the Company Disclosure Schedule, no power of
attorney has been granted by the Company or any of its
Subsidiaries with respect to any matter relating to Taxes
which is currently in force. Any adjustment of Taxes of the
Company or its Subsidiaries made by the IRS in any examination
which is required to be reported to the appropriate state,
local or foreign taxing authorities has been reported and any
additional amount due with respect thereto has been paid
except for amounts that the Company is contesting in good
faith, as set forth in the Company Disclosure Schedule.
(c) The Company has provided to INTERSOLV copies of all
material revenue agent's reports, and other material written
assertions of deficiencies or other liabilities for Taxes, of
the Company and its Subsidiaries with respect to past periods
for which the limitations period has not run.
(d) The Shareholder has provided to INTERSOLV a copy of
the Company's election to be taxed as an S corporation. Such
election was duly and timely filed with the IRS and the
Company qualified as an S corporation from its inception
through September 30, 1993.
2.12 Intellectual Property Rights. The Company
Disclosure Schedule accurately identifies all Product, Company
Rights and all Rights licensed to the Company by third
parties, the ownership as well as the registered or
unregistered status of all the foregoing being separately
stated. The effective date of each of the Company Rights is
set forth in the Company Disclosure Schedule. The Product,
Documentation and Intellectual Property (including all Company
Rights), together with all Rights licensed to the Company by
third parties are adequate for the conduct of the business of
the Company and its Subsidiaries considered as a consolidated
entity. Products manufactured and/or sold and services
provided by the Company and its Subsidiaries do not infringe
the Rights owned by any other person or entity. Except the
Shareholder by virtue of his ownership of PCS Common Stock, no
holder of any equity security, director, officer or employee
of the Company or any Subsidiary owns, directly or indirectly,
any interest in (i) any Product, Documentation or Intellectual
Property, or (ii) any Rights which infringe upon, conflict
with, or relate to any Product, Documentation or Intellectual
Property which may supplement, substitute for or compete with
any of the Product, Documentation or Intellectual Property or
Rights now used by the Company or any Subsidiary.
2.13 Employee Benefit Plans; Employees.
(a) All employee benefit plans or other material
arrangements under which or to which the Company or any
Subsidiary contributes to or for the benefit of their
respective employees are accurately identified in the Company
Disclosure Schedule. All such plans and arrangements have
been, and up to the Closing shall continue to be, maintained
in compliance in all material respects with, where applicable,
the Employee Retirement Income Security Act, as amended
("ERISA"), the Code, all federal and state securities laws,
all other applicable federal and state laws, and all
regulations and rulings issued by government agencies
responsible for the administration or enforcement of one or
more such laws. There is no current matter, including any
matter involving the administration and operation of such
plans or arrangements, which would either materially adversely
affect the likelihood of any of such plans or arrangements
being deemed to be in compliance with the applicable
provisions of any such laws, regulations or rulings or impose
any material liability upon the Company and its Subsidiaries
considered as a consolidated entity with respect to such plans
or arrangements. No such plan or arrangement, nor any trust
established thereunder, shall be amended or terminated prior
to the Closing, except as may be adopted as a condition to the
issuance of a favorable determination letter by the IRS, or as
otherwise may be required to comply with the requirements of
applicable laws.
(b) Neither the Company, any Subsidiary, the employee
benefit plans listed in the Company Disclosure Schedule nor
any trustee or administrator of any such plan has engaged in a
transaction in connection with which the Company or any of its
Subsidiaries could be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed
by Section 4975 of the Code.
(c) The employee retirement plans listed in the Company
Disclosure Schedule as being tax-exempt (collectively the
"Pension Plans"), at all times have qualified as tax-exempt
plans under Section 401 of the Code, and the trusts which are
a part of such Pension Plans (collectively, the "Trusts") at
all times have qualified as tax-exempt trusts under Section
501(a) of the Code. All such Pension Plans and Trusts shall
continue to so qualify up to the Closing and the Shareholder
shall promptly notify INTERSOLV if, at any time, the
Shareholder or the Company has knowledge or believes that any
Pension Plan or Trust no longer qualifies as such a tax-exempt
plan or as such a tax-exempt trust.
(d) No liability to the Pension Benefits Guaranty
Corporation ("PBGC") has been incurred, with respect to any
Pension Plan, by the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries has received
notice of the institution of proceedings by the PBGC to
terminate any Pension Plan. Included in the Company
Disclosure Schedule is a true and correct list of all notices
of reportable events (within the meaning of Section 4043(b) of
ERISA) which the Company or any of its Subsidiaries has filed
with the PBGC.
(e) The Company has not been a participating employer in
any "multi-employer" or "multiple employer" plans (within the
meaning of Sections 4063 and 4064 of ERISA).
(f) The Company Disclosure Schedule contains a true and
complete list identifying each employee of the Company and its
Subsidiaries, each such employee's position with the Company
and/or its Subsidiaries and the salary and other compensation
currently payable to each such employee.
2.14 Labor Matters. The Company and each of its
Subsidiaries have complied in all material respects with the
Occupational Safety and Health Act, the regulations
promulgated thereunder and all other applicable federal,
state, local and foreign laws relating to the employment of
labor, including any provisions thereto relating to wages,
bonuses, collective bargaining, equal opportunity, equal pay
and the payment of social security and similar payroll taxes.
No employees of the Company or any of its Subsidiaries are on
strike nor have threatened to strike. Except as set forth in
the Company Disclosure Schedule, no unfair labor practice
charges are pending or are threatened or contemplated against
the Company or any Subsidiary.
2.15 Compliance with Applicable Laws. The Company and
each of its Subsidiaries are in compliance with all foreign,
federal, state or local laws, statutes, ordinances,
regulations, orders, decrees and judgments applicable to them,
the enforcement of which, if any one were not in compliance,
would have a materially adverse effect on the business,
properties, condition (financial or otherwise), results of
operations or prospects of the Company and its Subsidiaries
considered as a consolidated entity.
2.16 Accounts Receivable. Except as set forth in the
Company Disclosure Schedule, the accounts receivable reflected
on the Company Balance Sheet (or any accounts receivable sold
by the Company or any Subsidiary on a recourse basis) arose
and will arise from bona fide transactions in the ordinary
course of business (except for amounts which are not,
individually or in the aggregate, material) and neither the
Company nor the Shareholder has any reason to believe that
such receivable will not be collected in full or be fully
collectible at their face amounts (less any applicable
reserves reflected in the March Financial Statements or
thereafter established on a basis consistent with the reserves
reflected on the March Financial Statements) within 90 days
after the Closing.
2.17 Access. All persons who have had access to the
Intellectual Property have executed a non-disclosure agreement
with the Company.
2.18 Accounting Treatment. Neither the Company nor the
Shareholder has taken any action which would prevent the
transactions contemplated by this Agreement from being
accounted for using the pooling of interests method.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDER
The Shareholder hereby represents and warrants to
INTERSOLV that:
3.01 Stock Ownership. The Shareholder owns all of the
outstanding PCS Common Stock and is the exclusive record and
beneficial owner of such PCS Common Stock, except for the
option granted to Safdie pursuant to the letter agreement
dated December 1, 1992. Such letter agreement has not been
amended or modified since December 1, 1992.
3.02 Authorization. The Shareholder has full power and
authority to enter into this Agreement and to carry out the
transactions contemplated hereby. No other action by or on
behalf of the Shareholder is necessary to authorize and
approve this Agreement and the transactions contemplated
hereby, and this Agreement has been duly executed and
delivered by, and is the legal, valid and binding obligation
of, the Shareholder, enforceable against the Shareholder in
accordance with its terms.
3.03 Title to PCS Common Stock. Good and valid title to
the PCS Common Stock to be sold by the Shareholder to
INTERSOLV under this Agreement, free and clear of any claim,
interest, mortgage, pledge, lien or security interest, will be
transferred to INTERSOLV at the Closing.
3.04 No Violation. The Shareholder is not subject to or
obligated under any law, rule or regulation of any
governmental authority, or any order, writ, injunction or
decree, or any agreement, instrument, license, franchise or
permit, which would be breached or violated by the
Shareholder's execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby. The execution and delivery of this
Agreement by the Shareholder and the consummation of the
transactions contemplated hereby do not and will not conflict
with or result in a breach or violation of (i) any obligation
under any mortgage, lease, agreement or instrument applicable
to the Shareholder or (ii) any law, rule, regulation,
judgment, order or decree of any government, governmental or
regulatory authority or court having jurisdiction over the
Shareholder.
3.05 Public Announcements. Neither the Shareholder nor
the Company will issue any press release or otherwise make any
public statement with respect to this Agreement or the
transactions contemplated hereby without the prior approval of
INTERSOLV, except as may be required by law or rules of
national securities exchange or quotation system.
3.06 Acquisition of INTERSOLV Common Stock. The
Shareholder is acquiring the INTERSOLV Common Stock for such
Shareholder's own account, for investment purposes only and
without any view to resell or effect any distribution of such
INTERSOLV Common Stock, other than as contemplated by the
Registration Rights Agreement. The Shareholder has been fully
informed as to the circumstances under which the Shareholder
is required to take and hold such INTERSOLV Common Stock
pursuant to the requirements of the Securities Act of 1933
(the "Securities Act") and applicable state securities laws,
and that such Shareholder may have to continue to bear the
economic risk of such INTERSOLV Common Stock indefinitely.
The Shareholder has been informed that such INTERSOLV Common
Stock may not be transferred or otherwise disposed of unless
the INTERSOLV Common Stock is registered or an exemption from
such registration is available, as determined by INTERSOLV.
The Shareholder is an "accredited investor" (as defined under
Regulation D of the Securities Act) and is otherwise qualified
under state and federal securities laws to receive INTERSOLV
Common Stock pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
INTERSOLV
INTERSOLV represents and warrants to the Shareholder that
except as stated in the disclosure schedule attached hereto as
Exhibit 5 (the "INTERSOLV Disclosure Schedule"):
4.01 Corporate Organization. INTERSOLV is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Delaware. INTERSOLV has full
corporate power and authority to carry on its business as it
is now being conducted and to own the properties and assets it
now owns.
4.02 Authorization. INTERSOLV has full corporate power
and authority to enter into this Agreement and to carry out
the transactions contemplated hereby. The Board of Directors
of INTERSOLV (the "INTERSOLV Board") has duly authorized and
approved the execution and delivery of this Agreement and the
transactions contemplated hereby; and no other corporate
proceedings on the part of INTERSOLV are necessary to
authorize and approve this Agreement and the transactions
contemplated hereby. This Agreement is a legal, valid and
binding obligation of INTERSOLV, enforceable against INTERSOLV
in accordance with its terms.
4.03 No Violation. Neither INTERSOLV nor any of its
subsidiaries (individually, an "INTERSOLV Subsidiary" and
collectively, the "INTERSOLV Subsidiaries"), nor any of their
respective properties is subject to or obligated under any
law, rule or regulation of any governmental authority, or any
order, writ, injunction or decree, or any material agreement,
instrument, license, franchise or permit, which would be
materially breached or violated by the execution, delivery and
performance of this Agreement and consummation by INTERSOLV of
the transactions contemplated hereby. The execution, delivery
and performance of this Agreement by INTERSOLV and the
consummation of the transactions contemplated hereby do not
and will not conflict with, result in a breach or violation
of, or a default under (i) INTERSOLV's charter or bylaws, (ii)
any obligation under any mortgage, lease, agreement or
instrument applicable to INTERSOLV or any INTERSOLV Subsidiary
or any of their respective properties or (iii) any law, rule,
regulation, judgment, order or decree of any government or
governmental or regulatory authority or court having
jurisdiction over INTERSOLV or any INTERSOLV Subsidiary or any
of their respective properties, except in the case of clauses
(ii) and (iii) where such conflict, breach, violation or
default would not have a material adverse effect on the
business, properties, condition (financial or otherwise),
results of operations or prospects of INTERSOLV and the
INTERSOLV Subsidiaries considered as a consolidated entity.
INTERSOLV and each INTERSOLV Subsidiary will comply in all
material respects with all applicable laws, and with all
applicable rules and regulations of any governmental
authority, in connection with INTERSOLV's execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby.
4.04 Governmental Authorities. No consent, approval,
order or authorization of, or registration, declaration or
filing with, any governmental entity is required by or with
respect to INTERSOLV or any INTERSOLV Subsidiary in connection
with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, except
for (i) such disclosures, filings, statements and reports
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with this
Agreement and the transactions contemplated hereby to be filed
with the Securities and Exchange Commission ("SEC") or NASDAQ-
NMS, and (ii) such other consents, authorizations, filings,
approvals and registrations which if not obtained or made
would not have a material adverse effect on INTERSOLV's
ability to consummate the transactions hereunder.
4.05 SEC Documents; Financial Statements. INTERSOLV
has made available to the Shareholder true and complete copies
of all the documents (other than preliminary material) filed
by INTERSOLV with the SEC since April 30, 1994 (collectively,
and including all exhibits and schedules thereto and documents
incorporated by reference therein, the "INTERSOLV SEC
Documents"). As of their respective filing dates, all
INTERSOLV SEC Documents complied in all material respects with
the requirements of the Exchange Act or the Securities Act, as
applicable, and none of the INTERSOLV SEC Documents contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The
audited consolidated financial statements and unaudited
consolidated interim financial statements of INTERSOLV and the
INTERSOLV Subsidiaries included or incorporated by reference
in the INTERSOLV SEC Documents (collectively, the "INTERSOLV
Financial Statements") have been prepared in accordance with
generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto), and fairly present the
consolidated financial position of INTERSOLV and the INTERSOLV
Subsidiaries as of their respective dates and the consolidated
results of their operations and cash flows for the periods
then ended, subject, in the case of any unaudited interim
financial statements, to the absence of complete footnotes
thereto. For purposes of this Agreement, the unaudited
consolidated balance sheet of INTERSOLV and the INTERSOLV
Subsidiaries at January 31, 1995, including the notes thereto
is hereinafter referred to as the "INTERSOLV Balance Sheet."
INTERSOLV has provided to the Shareholder the unaudited
consolidated balance sheet, and related unaudited consolidated
statements of income and cash flows, for INTERSOLV, for the
fiscal quarter ended January 31, 1995 (collectively, the
"INTERSOLV January Financial Statements"). The INTERSOLV
January Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a
consistent basis for the periods involved (except as may be
indicated in the notes thereto), and fairly present the
consolidated financial position of INTERSOLV and the INTERSOLV
Subsidiaries as of its date and the consolidated results of
their operations and cash flows for the periods then ended,
subject to the absence of complete footnotes thereto.
4.06 No Undisclosed Liabilities. Except for
(a) liabilities and obligations disclosed in the INTERSOLV
Disclosure Schedule and the INTERSOLV SEC Documents and
(b) liabilities and obligations incurred in the ordinary
course of business since the date of the INTERSOLV Balance
Sheet, liabilities and obligations incurred in connection with
the transactions contemplated by this Agreement, and
liabilities and obligations contemplated or permitted by this
Agreement, neither INTERSOLV nor any INTERSOLV Subsidiary nor
any of their respective properties is subject to any material
liability or obligation (absolute, accrued, contingent or
otherwise) which was not fully reflected or reserved against
in the INTERSOLV Balance Sheet.
4.07 Absence of Certain Changes. Except as disclosed in
the INTERSOLV Disclosure Schedule or as contemplated or
permitted by this Agreement, since the date of the INTERSOLV
Balance Sheet there has not been: (a) any material adverse
change in the business, condition (financial or otherwise),
operations or prospects of INTERSOLV and the INTERSOLV
Subsidiaries considered as a consolidated entity; (b) any
damage, destruction or loss, whether covered by insurance or
not, materially and adversely affecting the properties or
business of INTERSOLV and the INTERSOLV Subsidiaries
considered as a consolidated entity; (c) any sale or transfer
by INTERSOLV or any INTERSOLV Subsidiary of any tangible or
intangible material asset, any mortgage or pledge or creation
of any security interest, lien or encumbrance of any such
material asset, any lease of material real property, including
equipment, or cancellation of any material debt or claim, all
except in the ordinary course of business; (d) any transaction
not in the ordinary course of business; or (e) any change by
INTERSOLV or any INTERSOLV Subsidiary in accounting methods or
principles whether or not required to be disclosed in a filing
under the Exchange Act.
4.08 Public Announcements. Prior to the Closing
Effective Date, INTERSOLV will not issue any press release or
otherwise make any public statement with respect to this
Agreement or the transaction contemplated hereby without the
prior approval of the Shareholder, except as may be required
by law or rules of national securities exchange or quotation
system.
ARTICLE V
CONDUCT OF THE COMPANY'S BUSINESS
PENDING THE CLOSING
5.01 General. Pending the Closing, in order to maintain
the current status quo, and except as otherwise expressly
consented to or approved in writing by INTERSOLV, the
Shareholder, on behalf of the Company and its Subsidiaries,
covenants and agrees with INTERSOLV as set forth in Section
5.02. Any consent or approval requested by any party shall be
subject to the reasonable discretion of INTERSOLV.
5.02 Covenants.
(a) Neither the Company nor any of its Subsidiaries
shall: (i) amend its charter or bylaws; (ii) effect any
material change to its business, assets or organization; (iii)
enter into any agreement, understanding, commitment,
relationship or transaction with the Shareholder, or otherwise
enter into any agreement, understanding, commitment,
relationship or transaction except in the ordinary course of
business consistent with past practices; (iv) amend, terminate
or modify its articles of incorporation or bylaws or any
agreement or instrument identified on the Company Disclosure
Schedule; (v) issue, sell, distribute, redeem or otherwise
reacquire any securities (including, without limitation, any
PCS Common Stock or options thereon); or (vi) declare or pay
any dividend or other distribution on or with respect to any
shares of its capital stock.
(b) The Company and each of its Subsidiaries shall:
(i) operate their respective businesses diligently, in good
faith and in the ordinary course of business, consistent with
past practices; and (ii) preserve its business, goodwill and
business relationships.
ARTICLE VI
OBLIGATIONS OF THE SHAREHOLDER
The Shareholder hereby covenants and agrees with
INTERSOLV that:
6.01 Confidentiality. The Shareholder shall hold and
shall cause his attorneys, accountants or other agents or
authorized representatives to hold, in strict confidence, and
not disclose to any other party or use for any purpose other
than to consummate the transactions contemplated by this
Agreement without the express prior written consent of
INTERSOLV, all information contained in the INTERSOLV
Disclosure Statement, except as may be required by applicable
law or as otherwise contemplated herein. Without the express
prior written consent of INTERSOLV, the Shareholder shall not
provide any person a copy of this Agreement or communicate to
any person the contents of this Agreement, except to his
attorneys, accountants or other agents or authorized
representatives on a need to know basis (all of whom shall
have agreed to comply with the provisions of this Section
6.01) or as required by applicable law.
6.02 Best Efforts. The Shareholder shall use his best
efforts to prevent any of his representations and warranties
from becoming untrue. In addition, the Shareholder shall use
his best efforts to take, or cause to be taken, all action or
do, or cause to be done, all things necessary, proper or
advisable under this Agreement, applicable laws and
regulations to enable, consummate, make effective and evidence
the transactions contemplated hereby.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF INTERSOLV
Each and every obligation of INTERSOLV under this
Agreement to be performed at or before the Closing shall be
subject to the satisfaction, at or before the Closing, of each
of the following conditions, except to the extent that
INTERSOLV shall have waived such satisfaction:
7.01 Representations and Warranties; Performance. Each
of the representations and warranties made by the Shareholder
and the Company herein shall be true and correct in all
material respects as of the Closing with the same effect as
though made at such time; and the Shareholder and the Company
shall have performed and complied in all material respects
with all agreements, covenants and conditions required by this
Agreement to be performed and complied with by them prior to
the Closing. The Shareholder shall have delivered to
INTERSOLV a certificate certifying to the fulfillment of the
foregoing conditions.
7.02 Opinion of Counsel. INTERSOLV shall have received
an opinion of counsel to the Shareholder, in form and
substance reasonably satisfactory to INTERSOLV, dated as of
the date of the Closing (the "Closing Effective Date"),
substantially to the effect set forth in Exhibit 6 hereto.
7.03 Employment and Non-Competition Agreements.
INTERSOLV and the Shareholder shall have executed and
delivered an Employment and Non-Competition Agreement
substantially in the form attached hereto as Exhibit 1A, and
INTERSOLV and Safdie shall have executed and delivered an
Employment and Non-Competition Agreement substantially in the
form attached hereto as Exhibit 1B.
7.04 Resignation of Directors and Officers. Each
director and officer of the Company and its Subsidiaries shall
have resigned from each such position effective as of the
Closing.
7.05 Registration Rights Agreement. INTERSOLV and the
Shareholder shall have executed the Registration Rights
Agreement substantially in the form of Exhibit 2 hereto.
7.06 Accounting Treatment. INTERSOLV's independent
certified public accountants shall have determined that
INTERSOLV is entitled to account for the transaction
contemplated by this Agreement using the pooling of interests
method.
7.07 Option Agreements. The Shareholder and Safdie
shall have executed and delivered the Option Letter Agreement
substantially in the form attached hereto as Exhibit 8.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
THE SHAREHOLDER
Each and every obligation of the Shareholder under this
Agreement to be performed at or before the Closing (except for
his obligations with respect to confidentiality) shall be
subject to the satisfaction, at or before the Closing, of each
of the following conditions, except to the extent that the
Shareholder shall have waived such satisfaction with respect
to his obligations:
8.01 Representations and Warranties; Performance. Each
of the representations and warranties made by INTERSOLV herein
shall be true and correct in all material respects as of the
Closing with the same effect as though made on such date; and
INTERSOLV shall have performed and complied in all material
respects with all agreements, covenants and conditions
required by this Agreement to be performed and complied with
by it prior to the Closing. INTERSOLV shall have delivered to
the Shareholder a certificate, signed on its behalf by its
President and Secretary or Assistant Secretary, dated the
Closing Effective Date, certifying to the fulfillment of the
foregoing conditions.
8.02 Opinion of Counsel. The Shareholder shall have
received an opinion of counsel to INTERSOLV, dated the Closing
Effective Date, in form and substance reasonably satisfactory
to the Shareholder, substantially to the effect set forth in
Exhibit 7 hereto.
8.03 Valid Issuance of INTERSOLV Shares. The shares of
INTERSOLV Common Stock to be issued to the Shareholder
pursuant to this Agreement when so issued will be duly and
validly authorized and issued, fully paid and nonassessable.
8.04 Registration Rights. INTERSOLV and the Shareholder
shall have executed the Registration Rights Agreement
substantially in the form of Exhibit 2 hereto.
8.05 Employment and Non-Competition Agreements.
INTERSOLV and the Shareholder shall have executed the
Employment and Non-Competition Agreement substantially in the
form of Exhibit 1A hereto.
8.06 Option Agreements. The Shareholder and Safdie
shall have executed and delivered the Option Letter Agreement
substantially in the form attached hereto as Exhibit 8.
ARTICLE IX
INDEMNIFICATION
9.01 Shareholder Indemnification. The Shareholder
hereby indemnifies, defends and holds harmless INTERSOLV, its
permitted successors and assigns, officers, directors and
shareholders (collectively, the "INTERSOLV Indemnitees") from
and against, and shall reimburse each of the INTERSOLV
Indemnitees for, all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and
expenses, including interest, penalties, court costs and
reasonable attorneys' fees and expenses, asserted against,
resulting to, imposed upon or incurred by any of the INTERSOLV
Indemnitees, directly or indirectly, with respect to any
misrepresentation or breach by the Shareholder or the Company
of any representation, warranty, undertaking or covenant of
the Shareholder or the Company contained herein.
9.02 INTERSOLV Indemnification. INTERSOLV hereby
indemnifies, defends and holds harmless the Shareholder, his
permitted successors and assigns, officers, directors and
shareholders (collectively, the "Shareholder Indemnitees")
from and against, and shall reimburse each of the Shareholder
Indemnitees for, all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and
expenses, including interest, penalties, court costs and
reasonable attorneys' fees and expenses, asserted against,
resulting to, imposed upon or incurred by any of the
Shareholder Indemnitees, directly or indirectly, with respect
to any misrepresentation or breach by INTERSOLV of any
representation, warranty, undertaking or covenant of INTERSOLV
contained herein.
9.03 Claims by Third Parties. A party seeking
indemnification pursuant to Section 9.01 or 9.02 (an
"Indemnitee") shall give the party from whom indemnification
is sought (an "Indemnifying Party") notice of any claim or the
commencement of any action or proceeding for which such
Indemnitee seeks indemnification, and such Indemnitee shall
permit the Indemnifying Party to assume the defense of any
claim or any litigation resulting from such claim with counsel
satisfactory to the Indemnitee. The failure by any Indemnitee
to give an Indemnifying Party timely notice shall not preclude
any Indemnitee from seeking indemnification from any
Indemnifying Party except to the extent that such failure has
materially prejudiced the Indemnifying Party's ability to
defend the claim or litigation. No Indemnifying Party shall
settle any claim for which any Indemnitee seeks
indemnification in respect of an indemnifiable claim hereunder
or consent to entry of any judgment in litigation arising from
such a claim without obtaining a release of each Indemnitee
from all liability in respect of such claim or litigation. If
an Indemnifying Party shall not assume the defense of any such
claim or litigation resulting therefrom, or if injunctive
relief is sought against an Indemnitee, the Indemnitee may,
but shall have no obligation to, defend against or settle such
claim or litigation in such manner as it may deem appropriate.
The Indemnifying Party shall promptly reimburse each
Indemnitee for the amount of all expenses, legal or otherwise,
incurred by such Indemnitee in connection with the defense
against or settlement of such claim or litigation. If no
settlement of the claim or litigation is made, the
Indemnifying Party shall promptly reimburse each Indemnitee
for the amount of any judgment rendered with respect to such
claim or in such litigation and of all expenses, legal and
otherwise, incurred by each Indemnitee, in the defense against
such claim or litigation.
9.04 Set-off. INTERSOLV in its sole discretion, and
upon notice to the Shareholder, may elect to set-off any
amount payable to the Shareholder by INTERSOLV, against any
amount for which INTERSOLV is entitled to indemnification
under this Article or any other amount payable by the
Shareholder to INTERSOLV, provided that INTERSOLV shall be
indemnified in the manner provided in this Article for any
amount for which it is entitled to indemnification which is
not covered by such set-off.
9.05 Limitations. The liability of the Indemnifying
Party under this Article IX shall not exceed the Purchase
Price. The Indemnifying Party shall not have any obligations
under this Article IX until the aggregated amount of liability
of the Indemnifying Party exceeds $100,000 and then only to
the extent in excess of $100,000.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01 Amendment and Modification. This Agreement may be
amended, modified and supplemented only by written agreement
of the Shareholder, the Company and INTERSOLV.
10.02 Waiver of Compliance; Consents. Any failure of
the Shareholder, the Company or INTERSOLV to comply with any
obligation, covenant, agreement or condition herein may be
waived in writing by the other party or parties, but no waiver
shall be effective for any purpose unless it is expressed and
in writing, and any such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any
party or parties hereto, such consent shall be effective only
if given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in this
Section 10.02.
10.03 Investigations; Survival of Representations and
Warranties. The respective representations and warranties of
the Shareholder, the Company and INTERSOLV contained herein or
in any certificates or other documents delivered prior to or
at the Closing shall not be deemed waived or otherwise
affected by any investigation made by any party or parties
hereto. Each and every such representation and warranty,
together with the indemnification contained in Article IX
hereof, shall survive the Closing for five (5) years after the
Closing, except (i) to the extent that a longer period is
otherwise specifically provided hereunder and (ii) the
representations set forth in Section 2.11 or otherwise herein
relating to federal, state, local or foreign taxes shall
survive until the later of (A) the final resolution of any
contingencies involved in any open tax year and (B) the
expiration of all applicable statutes of limitations and
extensions thereof.
10.04 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when
delivered by hand, facsimile transmission or mailed first
class with postage prepaid:
(a) If to the Shareholder, to:
Mr. Michael I. Goldman
170 Glenview Road
South Orange, New Jersey 07079
with copy to:
Robert A. Sochor, Esq.
Carchman, Sochor
23 Vreeland Road
Florham Park, New Jersey 07932
or to such other person or address as the Shareholder shall
furnish to INTERSOLV in writing pursuant to the above;
(b) If to INTERSOLV, to:
INTERSOLV, Inc.
3200 Tower Oaks Boulevard
Rockville, Maryland 20852
Attention: Kevin J. Burns
President
with copy to:
Arent Fox Kintner Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
Attention: Robert B. Hirsch, Esq.
or to such other person or address as INTERSOLV shall furnish
to the Shareholder in writing pursuant to the above.
10.05 Assignment. This Agreement and all of the
provisions hereof shall be binding upon the parties hereto and
their respective successors and assigns and inure to the
benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior
written consent of the other parties.
10.06 Counterparts. This Agreement may be executed in
two or more fully or partially executed counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
10.07 Headings; Interpretation. The article and section
headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Words of any gender used in
this Agreement shall include any other gender. Words in the
singular number shall include the plural, and words in the
plural shall include the singular, when the sense requires.
Except to the extent the context requires otherwise,
(i) "including" means "including, but not limited to,"
(ii) "any" means "any and all," (iii) "may" means "may, but
shall not be obligated to," and (iv) "at any time" means "at
any time and from time to time."
10.08 Governing Law. This Agreement shall be governed
by and enforced and construed in accordance with the laws of
the State of Delaware as applied to contracts entered into in
and to be wholly performed within such State, except with
regard to the internal affairs of corporations not
incorporated in Delaware (which internal affairs shall be
governed by the laws of the state or other jurisdiction of
incorporation).
10.09 Time of Essence. Time is of the essence with
respect to each provision of this Agreement in which time is
an element.
10.10 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any of
provisions of this Agreement were not to be performed in
accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity, without any
need to post any bond or other security.
10.11 Attorneys' Fees. In the event of any action
instituted by any party or parties hereto arising under this
Agreement, the prevailing party or parties shall be entitled
to recover from the losing party or parties all of its costs
and expenses, including attorneys' fees, in addition to any
other available remedy.
10.12 Entire Agreement. This Agreement and the attached
Exhibits embody the entire agreement and understanding of the
parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations,
warranties, covenants, or undertakings, other than those
expressly set forth or referred to herein. This Agreement
supersedes all prior negotiations, agreements and
understandings among the parties with respect to such subject
matter.
10.13 Expenses. All costs and expenses incurred in
connection with the Agreement and the transactions
contemplated hereby shall be paid by the party or parties
incurring such expenses, except that INTERSOLV or the Company
shall pay the reasonable and customary costs incurred by the
Company for the rendition of professional services directly
related to this transaction (the following being agreed upon:
$50,000 to Updata; $30,000 to Carchman, Sochor; up to $20,000
to M. I. Grossman & Co; and up to $3,000 for legal costs
incurred by Barney J. B. Safdie).
10.14 Severability. Whenever possible, each provision
of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited or invalid under
applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of this Agreement.
10.15 Personal Releases.
(a) The Company Disclosure Schedule accurately
reflects all Company leases, agreements, contracts, promissory
notes, and loan agreements (collectively, the "Obligations")
to which the Shareholder and/or his spouse (Esther Goldman)
are personally obligated by virtue of their being guarantors,
obligors, endorsers or the like. The Shareholder and the
Company represent and warrant that all payments that are
currently due on the Obligations have been made as prescribed
by the documents evidencing the Obligations, and that no
Obligations are in default on account of non-payment.
INTERSOLV agrees to use its best efforts to secure consents
from the appropriate parties to the assignment of the
Obligations to itself or any Subsidiary of INTERSOLV, as well
as to secure the release of the Shareholder and his spouse
from their personal responsibility or obligation with respect
thereto. In the event that INTERSOLV is unable to secure said
release(s), then it hereby agrees to indemnify and hold
harmless the Shareholder and his spouse, and their heirs,
successors and personal representatives, from any and all
demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including
interest, court costs and reasonable attorneys' fees and
expenses asserted against, resulting to, imposed upon or
incurred by the Shareholder and/or his spouse with respect to
any such Obligation.
(b) In the event of any demand or claim, the
Shareholder and/or his spouse, as the case may be, shall give
notice to INTERSOLV as described in Section 10.04, and the
procedures, rights and obligations contained therein
applicable to an indemnitor and indemnitee shall apply to the
indemnity contained in this Section.
10.16 Stock Options. Subject to the approval of the
appropriate committee of INTERSOLV's Board of Directors,
following the Closing INTERSOLV shall grant options for a
total of 50,000 shares of INTERSOLV Common Stock to specified
Company employees in amounts to be mutually agreed upon by
INTERSOLV and the respective Company employees and on terms
and conditions customary for other similarly situated
INTERSOLV employees.
10.17 Other Employment Agreements. INTERSOLV intends to
offer one year employment agreements to approximately seven
employees of the Company, the terms and conditions to be
mutually agreed upon.
10.18 Art Work. The Company Disclosure Schedule
reflects works of art located at the Company's offices in
Parsippany, New Jersey. Certain pieces of art work identified
in the Company Disclosure Schedule are the personal property
of the Shareholder and his spouse which are to remain their
personal property and may be removed by either of them at will
at any time. In addition, there are certain works of art
identified in the Company Disclosure Schedule that are the
property of the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered, all as of the
date first above written.
INTERSOLV: INTERSOLV, INC. (Corporate Seal)
By: s/s Kevin J. Burns
Kevin J. Burns
President
The Shareholder: s/s Michael I. Goldman
MICHAEL I. GOLDMAN
The Company: (Corporate Seal)
PC STRATEGIES AND SOLUTIONS,
INC.
By: s/s Michael I. Goldman
Michael I. Goldman
President
(..continued)
- i -
- 6 -
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of May 1, 1995, by and between INTERSOLV, Inc., a
Delaware corporation (the "Company") and Michael I. Goldman (the
"Investor").
WHEREAS, the Investor concurrently with the execution of this
Agreement is acquiring shares of the Company's
common stock, par value $.01 per share ("Common Stock"); and
WHEREAS, as a condition to such acquisition, the
parties are willing to enter into the agreements contained herein.
NOW, THEREFORE, in consideration of the foregoing and
of the mutual covenants and agreements set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
Section 1. Definitions.
"Affiliate" means, with respect to
any Person, any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person.
"Agreement" is defined in the Preamble to this
Agreement.
"Common Stock" is defined in the
Recitals to this Agreement.
"Company" is defined in the Preamble
to this Agreement.
"Holder" is defined in section 3.1 hereof. "Investor" is defined in
the Preamble to this Agreement.
"Lock-Up Period" is defined in section 2.1 hereof.
"Other Holders" is defined in section 5.3 hereof.
"Permitted Transfer" is defined in section 2.2 hereof.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and government or
any department or agency thereof.
"Piggyback Notice" is defined in section 5.1 hereof.
"Piggyback Registration" is defined in section 5.1 hereof.
"Registrable Securities" means (i) the Common Stock issued to the
Investor pursuant to the Stock Purchase Agreement dated simultaneously
herewith (the "Stock Purchase Agreement") by and among the Company, and
Michael I. Goldman ("Purchase Common Stock"), (ii) any Purchase Common
Stock issued to the Investor's transferees pursuant to a Permitted
Transfer, and (iii) any Common Stock issued or issuable with respect to
the Common Stock referred to in clauses (i) or (ii) by way of
replacement, share dividend, share split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization.
"Registration Expenses" is defined in section 7.1 hereof.
"Registration Notice" is defined in section 3.3 hereof.
"Restricted Shares" is defined in section 2.1 hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Shelf Period" is defined in section 3.1 hereof.
"Shelf Registration Statement" is defined in section 3.1 hereof.
"Transfer" is defined in section 2.1 hereof. Section 2. Restrictions
on Transfer of Common Stock.
2.1 Lock-Up Period. Without the express
prior written consent of the Company, the Investor agrees that, except
as set forth in Section 2.2 below, he will not (a) directly or
indirectly, offer, sell, contract to sell or otherwise dispose of (or
announce any offer, sale, contract of sale or other disposition of)
("Transfer") any Registrable Securities ("Restricted Shares") prior to
August 21, 1995 and (b) Transfer more than 49% of the Restricted Shares
received by him concurrently with the execution of this Agreement prior
to December 31. 1995 (the "Lock-Up Period").
2.2 Permitted Transfers. The restrictions
contained in this Section 2 will not apply with respect to any of the
following transactions (each, a "Permitted Transfer"):
2.2.1 an Investor who is a
natural person may Transfer Restricted Shares to his or her spouse,
siblings, parents or any natural or adopted children or other
descendants or to any personal trust in which such family members or
such Investor retains the entire beneficial interest;
2.2.2 an Investor may Transfer
Restricted Shares on his or her death or mental incapacity to such
Investor's estate, executor, administrator or personal representative or
to such Investor's beneficiaries pursuant to a devise or bequest or by
the laws of descent and distribution; or
If the Investor Transfers Restricted Shares as described in this Section
2.2, such Restricted Shares shall remain subject to this Agreement and,
as a condition of the validity of such Transfer, the transferee shall be
required to execute and deliver a counterpart of this Agreement.
Thereafter, such transferee shall be deemed to be an Investor for
purposes of this Agreement.
2.3 Rights of Subsequent Holder. Subject to
the foregoing restrictions, the Company and the Investor hereby agree
that any subsequent holder of Registrable Securities shall be entitled
to all benefits hereunder as a holder of such securities.
Section 3. Shelf Registration.
3.1 Shelf Period. Subject to the terms and conditions set
forth herein, the Company shall prepare and file a shelf registration
statement with the SEC and shall use its reasonable best efforts to
cause such registration statement to become effective on or before
August 21, 1995, and to remain effective until the second anniversary of
the Effective Time of the Agreement of Merger (the "Shelf Period"),
pursuant to Rule 415 of Regulation C promulgated under the Securities
Act (or any successor rule) (the "Shelf Registration Statement")
providing for the sale by holders of Registrable Securities (each, a
"Holder") of all of the Registrable Securities in accordance with the
terms hereof. The Company agrees to use its reasonable efforts to keep
the Shelf Registration Statement continuously effective for a period
expiring on the earlier of (i) the date on which all of the Registrable
Securities covered by the Shelf Registration Statement have been sold
pursuant thereto or (ii) the end of the Shelf Period. The Company
further agrees to promptly amend the Shelf Registration Statement if and
as required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or any rules and regulations
thereunder. The Company may, in the exercise of its sole discretion,
extend the Shelf Registration Statement for a period beyond the Shelf
Period but shall in no event be required to do so.
3.2 Inclusion in Shelf Registration Statement. Any
Holder who does not provide the information reasonably requested by the
Company in connection with the Shelf Registration Statement as promptly
as practicable after receipt of such request, but in no event later than
ten (10) days thereafter, shall not be entitled to have its Registrable
Securities included in the Shelf Registration Statement.
3.3 Registration Notice.
3.3.1 Any Holder intending to make offers or sales of
Registrable Securities pursuant to a Shelf Registration Statement
prepared in connection with this Section 3 shall provide the Company
with written notice (the "Registration Notice") of such intent at least
five (5) business days prior to commencing such offers or sales. Once a
Holder has delivered a Registration Notice to the Company, such Holder
shall promptly provide the Company such information as the Company
reasonably requests in order to identify such Holder and the method of
distribution in any necessary post-effective amendment to the Shelf
Registration Statement. Such Holder shall also notify the Company in
writing upon completion of such offer or sale or at such time as such
Holder no longer intends to make offers or sales under the Shelf
Registration Statement. A sample Registration Notice to be completed,
signed and delivered to the Company is attached hereto as Exhibit A.
3.3.2. Once a Holder has provided a Registration Notice
(the "Initiating Holder"), during the following sixty (60) day period
specified in subsection 3.4.2 any additional Holder may provide a
Registration Notice concurrent with commencing offers or sales, provided
that (i) any such Holder providing such a subsequent Registration Notice
shall complete all offers and sales under the Shelf Registration
Statement within the sixty (60) day period commenced by the Registration
Notice given by the Initiating Holder and (ii) if the method of
distribution to
be used by such additional Holder differs from that set forth in the
Shelf Registration Statement, such additional Holder prior to commencing
offers or sales shall provide the Company with such information as the
Company reasonably requests with respect to such method of distribution.
3.4 Conditions to Sale.
3.4.1 In connection with and as a condition to the
Company's obligations with respect to any Shelf Registration Statement
prepared pursuant to this Section 3, each Holder covenants and agrees
that (i) it will not offer or sell any Registrable Securities under the
Shelf Registration Statement until it has provided a Registration
Notice, received copies of the Prospectus as then amended or
supplemented and received notice from the Company that the Registration
Statement and any post-effective amendments thereto have become
effective; and (ii) upon receipt of any notice from the Company as
provided by Section 6.3 hereof, such Holder shall not offer or sell any
Registrable Securities pursuant to the Shelf Registration Statement
until such Holder receives copies of the supplemented or amended
Prospectus and receives notice that any post effective amendment has
become effective, and, if so directed by the Company, such Holder will
deliver to the Company (at the expense of the Company) all copies in its
possession, other than permanent file copies then in such Holder's
possession, of the Prospectus as amended or supplemented at the time of
receipt of such notice.
3.4.2 All offers and sales under the Shelf
Registration Statement shall be completed within sixty (60) days after
the date on which offers or sales can be made pursuant to subsection
3.4.1 above, and upon expiration of such sixty (60) day period, the
Holder will not offer or sell any Registrable Securities under the
Registration Statement until it has again complied with the provisions
of subsection 3.4.1 above.
Section 4. Demands for Registration.
4.1 Demand Period. From September 4, 1995 until the date
which is two (2) years from the date hereof (the "Demand Period"),
subject to the terms and conditions set forth herein, all Holders, will
have three (3) opportunities, in addition to other rights enumerated in
this Agreement, to request registration under the Securities Act of all
or part of their Registrable Securities (a "Demand Registration");
provided, however, that (i) between the date hereof and the first
effectiveness of the Shelf Registration Statement, provided that the
Company is diligently pursuing the effectiveness of such Shelf
Registration Statement, and (ii) for so long as the Company maintains an
effective Shelf Registration Statement covering all Registrable
Securities and otherwise complies with the terms of this Agreement,
Holders shall not be entitled to request a Demand Registration.
4.2 Demand Procedure.
4.2.1 Subject to subsections 4.2.2 and 4.2.4 below,
during the Demand Period any Holder or combination of Holders (the
"Demanding Shareholders") may deliver to the Company a written request
(a "Demand Registration Request") that the Company register any or all
of such Demanding Shareholders' Registrable Shares.
4.2.2 Holders, in the aggregate, may only make one
Demand Registration Request in each nine-month period during the Demand
Period (the "Interim Demand Periods"). The Company shall only be
required to file one registration statement (as distinguished from
supplements or pre-effective or post-effective amendments thereto) in
response to each Demand Registration Request.
4.2.3 A Demand Registration Request from Demanding
Shareholders shall (i) set forth the number of Registrable Securities
intended to be sold pursuant to the Demand Registration Request (ii)
disclose whether all or any portion of a distribution pursuant to such
registration will be sought by means of an underwriting, and (iii)
identify any underwriter or underwriters proposed for the underwritten
portion, if any, of such registration.
4.2.4 If during any Interim Demand Period, the Company
receives a Demand Registration Request from Demanding Shareholders for
the registration of Registrable Securities having an aggregate market
value of $500,000 or greater, as determined according to the closing
price of the Common Stock on the NASDAQ National Market on the date of
such Demand Registration Request, then the Company shall, subject to the
limitations in subsection's 4.2.5 and 6 hereof, (i) use its reasonable
best efforts to prepare and file within thirty (30) days of receipt of
the Demand Registration Request with the SEC a registration statement
under the Securities Act with respect to all the Registrable Securities
that the Demanding Shareholders requested to be registered in the Demand
Registration Request, (ii) use its reasonable best efforts to cause such
registration statement to become effective within forty-five (45) days
of receipt of the Demand Registration Request, and (iii) if such
registration can be accomplished by means of a registration statement on
Form S-3, keep such registration statement effective until the earlier
of (x) such time as the Demanding Shareholders shall have sold or
otherwise disposed of all of their Registrable Securities included in
the registration or (y) the end of the Shelf Period. If such
registration cannot be accomplished by means of a registration statement
on Form S-3, the Company shall use its reasonable best efforts to keep
such registration statement effective for up to 120 days.
4.2.5 It is anticipated that the
registration contemplated under this Section 4 will be accomplished by
means of the filing of a Form S-3, and that registration on such a form
will allow for different means of distribution, including sales by means
of an underwriting as well as sales into the open market. If the
Demanding Shareholders desire to distribute all or part of the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company in writing in their
initial Demand Registration Request as described in Section 4.2.3 above.
A determination of whether all or part of the distribution will be by
means of an underwriting shall be made by Demanding Shareholders holding
a majority of the Registrable Securities to be included in the
registration. If all or part of the distribution is to be by means of
an underwriting, all subsequent decisions concerning the underwriting
which are to be made by the Demanding Shareholders pursuant to the terms
of this Agreement, which shall include the selection of the underwriter
or underwriters to be engaged and the
representative, if any, of the underwriters so engaged, shall be made by
the Demanding Shareholders who hold a majority of the Registrable
Securities to be included in the underwriting, subject to approval by
the Board of Directors of the Company.
4.2.6 Upon the receipt by the Company of a Demand
Registration Request in accordance with subsection 4.2.4 hereof, the
Company shall, within ten (10) days following receipt of such Demand
Registration Request, give written notice of such request to all
Holders. The Company shall include in such notice information concerning
whether all, part or none of the distribution is expected to be made by
means of an underwriting, and, if more than one means of distribution is
contemplated, may require Holders to notify the Company of the means of
distribution of their Registrable Securities to be included in the
registration. If any Holder who is not a Demanding Shareholder desires
to sell any Registrable Securities owned by such Holder, such Holder may
elect to have all or any portion of their Registrable Securities
included in the registration statement by notifying the Company in
writing (a "Supplemental Demand Registration Request") within 20 days of
receiving notice of the Demand Registration Request from the Company.
The right of any Holder to include all or any portion of its Registrable
Securities in an underwriting shall be conditioned upon the Company's
having received a timely written request for such inclusion by way of a
Demand Registration Request or Supplemental Demand Registration Request
(which right shall be further conditioned to the extent provided in this
Agreement). All Holders proposing to distribute their Registrable
Securities through an underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters
selected for such underwriting.
4.2.7 Notwithstanding any other provision of this
Section 4, if an underwriter advises the Company in writing that
marketing factors require a limitation on the number of shares to be
underwritten, then the number of shares of Registrable Securities that
may be included in the underwriting shall be allocated among the Holders
in proportion (as nearly as practicable) to the respective amounts of
Registrable Securities each Holder otherwise sought to have registered
pursuant to its Demand Registration Request or Supplemental Demand
Registration Request (or in such other proportion as they shall mutually
agree). Registrable Securities excluded or withdrawn from the
underwriting in accordance with this section 4.2.7 shall be withdrawn
from the registration.
4.3 Priority on Request Registration. The
Company will not include in any Demand Registration any securities which
are not Registrable Securities without the prior written consent of the
Holders of a majority of the shares of Registrable Securities included
in such registration. If a Demand Registration is an underwritten
offering and the managing underwriters advise the Company in writing
that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such
offering exceeds the number of securities that can be sold in an orderly
manner in such offering within a price range acceptable to the Holders
of a majority of the shares of Registrable Securities initially
requesting registration, the Company will include in such registration
prior to the inclusion of any securities which
are not Registrable Securities the number of shares of Registrable
Securities requested to be included that in the opinion of such
underwriters can be sold in an orderly manner within such acceptable
price range, pro rata among the respective Holders thereof on the basis
of the number of shares of Registrable Securities owned by each such
Holder.
Section 5. Piggyback Registrations.
5.1 Right to Piggyback. After the end of the Lock-Up
Period, if the Company proposes to undertake an offering of shares of
Common Stock for its account or for the account of Other Holders and the
registration form to be used for such offering may be used for the
registration of Registrable Securities (a "Piggyback Registration"),
each such time the Company will give prompt written notice to all
Holders of Registrable Securities of its intention to effect such a
registration (each, a "Piggyback Notice") and, subject to sections 5.3
and 5.4 hereof, the Company will use its best efforts to cause to be
included in such registration all Registrable Securities with respect to
which the Company has received written requests for inclusion therein
within 20 days after the date of sending the Piggyback Notice.
5.2 Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included
in such registration exceeds the number that can be sold in an orderly
manner within a price range acceptable to the Company, the Company will
include in such registration (a) first, the securities the Company
proposes to sell and (b) second, the Registrable Securities requested to
be included in such registration and any other securities requested to
be included in such registration that are held by Persons other than the
Holders of Registrable Securities pursuant to registration rights, pro
rata among the holders of Registrable Securities and such other
securities requesting such registration on the basis of the number of
shares of such securities owned by each such Holder.
5.3 Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of
holders of the Company's securities other than the Holders of
Registrable Securities (the "Other Holders"), and the managing
underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration
exceeds the number that can be sold in an orderly manner in such
offering within a price range acceptable to the Other Holders requesting
such registration, the Company will include in such registration (a)
first, the securities requested to be included therein by the Other
Holders requesting such registration and (b) second, the Registrable
Securities requested to be included in such registration hereunder, pro
rata among the Holders of Registrable Securities requesting such
registration on the basis of the number of shares of such securities
owned by each such Holder.
5.4 Selection of Underwriters. In the case of an
underwritten Piggyback Registration, the Company will have the right to
select the investment banker(s) and manager(s) to administer the
offering.
Section 6. Registration Procedures. Whenever the Holders of
Registrable Securities have requested that any
Registrable Securities be sold pursuant to this Agreement, the Company
will use its reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:
6.1.1 Registration Statement. Prepare and file with the
SEC a registration statement with respect to such Registrable Securities
and use its reasonable best efforts to cause such registration statement
to become effective.
6.1.2 Amendments and Supplements. Promptly prepare and
file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period
required by the intended method of disposition and the terms of this
Agreement or to describe the terms of any offering made from an
effective Shelf Registration Statement, and comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in accordance
with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
6.1.3 Provision of Copies. Promptly furnish to each
seller of Registrable Securities the number of copies of such
registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
6.1.4 Blue Sky Laws. Use its reasonable best efforts to
register or qualify such Registrable Securities under the securities or
blue sky laws of such jurisdictions as any seller reasonably requests
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by
such seller, provided, that the Company will not be required to (a)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection 6.1.4, (b)
subject itself to taxation in any such jurisdiction or (c) consent to
general service of process in any such jurisdiction.
6.1.5 Anti-Fraud Rules. Promptly notify each seller of
such Registrable Securities when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of
any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact
or omits any material fact necessary to make the statements therein not
misleading, and in such event, at the request of any such seller, the
Company will promptly prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading;
6.1.6 Securities Exchange Listings. Use its
reasonable best efforts to cause all such Registrable Securities to be
listed on each securities exchange on which securities of the same class
issued by the Company are then listed and use its reasonable best
efforts to qualify such Registrable Securities for trading on each
system on which securities of the same class issued by the Company are
then qualified;
6.1.7 Underwriting Agreements. Enter into such
customary agreements (including underwriting agreements in customary
form) and take all such other actions as the holders of a majority of
the shares of Registrable Securities being sold or the underwriters, if
any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
6.1.8 Due Diligence. Make available for inspection by
any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent
retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such registration
statement;
6.1.9 Earning Statement. Otherwise use its best efforts
to comply with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable, an
earning statement covering the period of at least twelve months
beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which
earning statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
6.1.10 Deemed Underwriters or Controlling Persons.
Permit any Holder of Registrable Securities which Holder, in such
Holder's reasonable judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of
such registration or comparable statement and to require the insertion
therein of material in form and substance satisfactory to such Holder
and to the Company and furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included;
6.1.11 Management Availability. In connection with
underwritten offerings, make available appropriate management personnel
for participation in the preparation and drafting of such registration
or comparable statement, for due diligence meetings and for "road show"
meetings;
6.1.12 Stop Orders. Promptly notify Holders of the
Registrable Securities of the threat of issuance by the SEC of any stop
order suspending the effectiveness of the registration statement or the
initiation of any proceeding for that purpose, and make every reasonable
effort to prevent the entry of any order suspending the effectiveness of
the registration statement. In the event of the issuance of any stop
order suspending the effectiveness of a registration statement, or of
any order suspending or preventing the use of any related prospectus
or suspending the qualification of any Registrable Securities included
in such registration statement for sale in any jurisdiction, the Company
will use its reasonable best efforts promptly to obtain the withdrawal
of such order; and
6.1.13 Opinions. At each closing of an underwritten
offering, request opinions of counsel to the Company and updates thereof
(which opinions and update shall be reasonably satisfactory to the
underwriters of the Registrable Securities being sold) addressed to the
underwriters covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such Holders or their counsel.
6.1.14 Comfort Letter. Obtain a cold comfort letter
from the Company's independent public accountants addressed to the
selling Holders of Registrable Securities in customary form and covering
such matters of the type customarily covered by cold comfort letters as
the Holders of a majority of the Registrable Securities being sold
reasonably request.
6.2 Further Information. The Company may require each Holder of
Registrable Securities to furnish to the Company in writing such
information regarding the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably
request.
6.3 Notice to Suspend Offers and Sales. Each Investor severally
agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subsections 6.1.5 or
6.1.12 hereof, such Investor will forthwith discontinue disposition of
shares of Common Stock pursuant to a registration hereunder until
receipt of the copies of an appropriate supplement or amendment to the
prospectus under subsection 6.1.5 or until the withdrawal of such order
under subsection 6.1.12. If any such registration or comparable
statement refers to any Holder by name or otherwise as the holder of any
securities of the Company and if, in the Holder's reasonable judgment,
such Holder is or might be deemed to be a controlling person of the
Company, such Holder shall have the right to require (a) the insertion
therein of language in form and substance satisfactory to such Holder
and the Company and presented to the Company in writing, to the effect
that the holding by such Holder of such securities is not to be
construed as a recommendation by such Holder of the investment quality
of the Company's securities covered thereby and that such holding does
not imply that such Holder will assist in meeting any future financial
requirements of the Company, or (b) in the event that such reference to
such Holder by name or otherwise is not required by the Securities Act
or any similar Federal statute then in force, the deletion of the
reference to such Holder; provided that with respect to this clause (b)
such Holder shall furnish to the Company an opinion of counsel to such
effect, which opinion and counsel shall be reasonably satisfactory to
the Company.
6.4 Company's Ability to Postpone. Notwithstanding anything to
the contrary contained herein, the Company shall have the right once in
any twelve month period to postpone the filing of any registration
statement under sections 3, 4 or 5 hereof for a reasonable period of
time (not exceeding 75 days) if the Company furnishes the Holders of
Registrable Securities a certificate signed by the Chairman of the Board
of Directors or the President of the Company stating that, in its good
faith judgment, the Company's Board of Directors (or the executive
committee thereof) has determined that effecting the registration at
such time would adversely affect a material financing, acquisition,
disposition of assets or stock, merger or other comparable transaction,
or would require the Company to make public disclosure of information
the public disclosure of which would have a material adverse effect upon
the Company.
Section 7. Registration Expenses.
7.1 Expenses Borne by Company. Except as specifically
otherwise provided in section 7.2 hereof, the Company will be
responsible for payment of all expenses incident to any registration
hereunder, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified
public accountants and other Persons retained by the Company in
connection with such registration (all such expenses borne by the
Company being herein called the "Registration Expenses").
7.2 Expenses Borne by Selling Security Holders. The
selling security holders will be responsible for payment of brokerage
discounts, commissions and other sales expenses incident to any
registration hereunder. In addition, the selling security holders will
be responsible for the payment of their own legal fees if they retain
legal counsel separate from that of the Company, unless the Company
requires the selling security holders to obtain their own legal counsel,
in which case the reasonable fees and expenses of one counsel
representing the security holders jointly shall be paid by the Company.
The selling security holders shall also be responsible for payment of
any underwriting fees if the selling security holders have requested
participation of an underwriter with respect to an offering subject to
the Shelf Registration or a Demand Registration or have elected to
participate in a Piggyback Registration using an underwriter. Any such
expenses which are common to the selling security holders shall be
divided among such security holders (including the Company and holders
of the Company's securities other than Registrable Securities, to the
extent that securities are being registered on behalf of such Persons)
pro rata on the basis of the number of shares being registered on behalf
of each such security holder, or as such security holders may otherwise
agree.
Section 8. Indemnification.
8.1 Indemnification by Company. The Company agrees to
indemnify, to the fullest extent permitted by law, each Holder of
Registrable Securities and each Person who controls (within the meaning
of the Securities Act) such Holder against all losses, claims, damages,
liabilities and expenses in connection with defending against any such
losses, claims, damages and liabilities or in connection with any
investigation or inquiry, in each case caused by or based on any untrue
or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arise out of any
violation by the Company of any rules or regulation
promulgated under the Securities Act applicable to the Company and
relating to action or inaction required of the Company in connection
with such registration except in so far as the same are caused by or
contained in (i) any information furnished in writing to the Company by
such Holder expressly for use therein, (ii) such Holder's failure to
deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto, or (iii) such Holder's failure to
discontinue disposition of shares after receiving notice from the
Company pursuant to section 6.3 hereof. In connection with an
underwritten offering, the Company will indemnify such underwriters,
their officers and directors and each Person who controls (within the
meaning of the Securities Act) such underwriters at least to the same
extent as provided above with respect to the indemnification of the
Holders of Registrable Securities.
8.2 Indemnification by Holder. In connection with any
registration statement in which a Holder of Registrable Securities is
participating, each such Holder will furnish to the Company in writing
such information as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to
the extent permitted by law, will indemnify the Company, its directors
and officers and each Person who controls (within the meaning of the
Securities Act) the Company against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information so furnished in
writing by such Holder expressly for use in connection with such
registration; provided that the obligation to indemnify will be
individual to each Holder and will be limited to the net amount of
proceeds received by such Holder from the sale of Registrable Securities
pursuant to such registration statement. In connection with an
underwritten offering, each such Holder will indemnify such
underwriters, their officers and directors and each Person who controls
(within the meaning of the Securities Act) such underwriters at least to
the same extent as provided above with respect to the indemnification of
the Company.
8.3 Assumption of Defense by Indemnifying Party. Any Person
entitled to indemnification hereunder will (a) give prompt written
notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (b) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but
such consent will not be unreasonably withheld). An indemnifying party
who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties
with respect to such claim.
8.4 Binding Effect. The indemnification provided for
under this Agreement will remain in full force and effect regardless of
any investigation made by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and
will survive the transfer of securities. The Company also agrees to make
such provisions, as are reasonably requested by any indemnified party,
for contribution to such party in the event the Company's
indemnification is unavailable for any reason. Each Holder of
Registrable Securities also agrees to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such
party in the event such Holder's indemnification is unavailable for any
reason.
Section 9. Participation in Underwritten Registrations. No
Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements
approved by the Person or Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
Section 10. Miscellaneous.
10.1 No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which
violates the rights granted to the Holders of Registrable Securities in
this Agreement.
10.2 Remedies. Any Person having rights under any
provision of this Agreement will be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by
law. The parties hereto agree and acknowledge that money damages may
not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any
bond or other security) for specific performance and for other
injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
10.3 Term. Except as specifically otherwise provided
herein, the provisions of this Agreement shall apply until such time as
all Registrable Securities have ceased to be Registrable Securities
hereunder but in no event later than 3 years from the Effective Time of
the Purchase Agreement.
10.4 Amendments and Waivers. Except as otherwise
specifically provided herein, this Agreement may be amended or waived
only upon the prior written consent of the Company and of the Holders of
a majority of the then outstanding shares of Registrable Securities.
10.5 Successors and Assigns. Subject to Section 2
hereof, all covenants and agreements in this Agreement by or on behalf
of any of the parties hereto will bind and
inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not. In addition, whether or not
any express assignment has been made, but subject in any case to Section
2 hereof, the provisions of this Agreement which are for the benefit of
Investor or Holders of Registrable Securities are also for the benefit
of, and enforceable by, any subsequent holder of such securities so long
as such securities continue to be restricted securities, as that term is
defined in Securities Act Rule 144.
10.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
held to be prohibited by or invalid under applicable law, such provision
will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
10.7 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, any one of which need not
contain the signatures of more than one party, but all such counterparts
taken together will constitute one and the same Agreement.
10.8 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
10.9 Governing Law. All questions concerning the
construction, validity and interpretation of this Agreement will be
governed by and construed in accordance with the domestic laws of the
State of Delaware, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Delaware.
10.10 Entire Agreement. This Agreement is
intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto with respect of the subject matter
contained herein. This agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
10.11 Notices. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this
Agreement shall be in writing and shall be deemed to have been given
when delivered personally to the recipient, sent to the recipient by
reputable express courier service (charges prepaid) or mailed to the
recipient by certified or registered mail, return receipt requested and
postage prepaid. Such notices, demands and other communications will be
sent to each Investor at the address indicated on the records of the
Company and to the Company at the address indicated below:
(a) If to the Company:
INTERSOLV, Inc.
3200 Tower Oaks Boulevard Rockville, MD 20852
Attn: General Counsel
with a copy, which shall not constitute notice, to:
Arent Fox Kintner Plotkin & Kahn 1050 Connecticut Avenue N.W.
Washington, DC 20036
Attn: Robert B. Hirsch, Esq.
(b) If to the Investor:
Mr. Michael I. Goldman
170 Glenview Road
South Orange, New Jersey 07079
with a copy, which shall not
constitute notice, to:
Robert A. Sochor, Esq. Carchman, Sochor
23 Vreeland Road
Union, New Jersey 07083
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending
party.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
THE COMPANY:
INTERSOLV, Inc.
By: s/s Kevin J. Burns
Its: President
THE INVESTOR:
s/s Michael I.
Goldman Michael I.
Goldman
EXHIBIT A
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