FORM 8K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event report)
March 17, 1998
Intersolv, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-15188
(State or other jurisdiction) (Commission File Number)
52-0990382 (IRS Employer of Identification No.)
9420 Key West Avenue, Rockville, Maryland 20850
(Address of principal executive offices)
Registrant's telephone number, including area code 301/838-5000
(Former name or former address, if changed since last report)
Item 2.
On March 2, 1998, the Company acquired all the
outstanding shares of SQL Software, Ltd. ("SQL"), a
U.K. corporation engaged in the software life cycle
management business, in exchange for 1,251,450 shares
of Company's Common Stock. The approximate
consideration value is $19 million. The transaction
will be accounted for under the purchase rules of
accounting as delineated in A.P.B. 16.
SQL is a privately held company incorporated under the
laws of England and Wales with principal offices
located in Hertford, U.K. and Vienna, Virginia. SQL
provides software configuration management solutions to
software developers and end users. SQL shareholders
were comprised of its key management, as well as a
private investment firm.
In connection with the transaction, the Company granted
to SQL shareholders certain shelf registration rights
under the 1933 Act.
Item 7.
2.1 Share Exchange Agreement
Execution Copy
2/28/98
SHARE EXCHANGE AGREEMENT
BY AND AMONG
INTERSOLV, INC.
AND
THE SHAREHOLDERS OF SQL HOLDINGS LTD.
DATED
MARCH 2, 1998
TABLE OF CONTENTS
Page
ARTICLE I THE SHARE EXCHANGE AND OTHER CLOSING
TRANSACTIONS 3
1.01 Defined Terms 3
1.02 The Exchange 3
1.03 Payment, Redemption and Repayment 4
1.04 The Closing. 4
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE
WARRANTORS 5
2.01 Corporate Organization 5
2.02 Capital Shares 5
2.03 Subsidiaries 6
2.04 No Violation 7
2.05 Financial Statements 8
2.06 No Undisclosed Liabilities 8
2.07 Absence of Certain Changes 9
2.08 Contracts and Insurance 10
2.09 Title to Property; Leaseholds 12
2.10 Litigation 16
2.11 Tax Matters 17
2.12 Employee Benefit Plans; Employees 20
2.13 Labor Matters 21
2.14 Compliance with Applicable Laws 22
2.15 Accounts Receivable 22
2.16 Access 23
2.17 [Intentionally omitted] 23
2.18 Governmental Authorities 23
2.19 Limitation of Liability of Warrantors 23
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SQL
SHAREHOLDERS 25
3.01 Legal Title 25
3.02 Authorization; No Conflicts 26
3.03 Investment Intent 26
3.04 No U.S. Person 27
3.05 Limitation of Liability of SQL
Shareholders 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF INTERSOLV 29
4.01 Corporate Organization 29
4.02 Authorization 29
4.03 No Violation 30
4.04 Governmental Authorities 31
4.05 SEC Documents; Financial Statements. 31
4.06 No Undisclosed Liabilities 33
4.07 Absence of Certain Changes 33
4.08 Capital Stock 34
4.09 Litigation 34
ARTICLE V COVENANTS OF THE SQL SHAREHOLDERS AND INTERSOLV 35
5.01 Confidentiality 35
5.02 Press Release 36
ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
INTERSOLV 36
6.01 Delivery of Share Certificates 36
6.02 Representations and Warranties;
Performance 37
6.03 Opinion of Counsel. 37
6.04 Resignation of Directors and
Officers 37
6.05 Registration Rights Agreement 37
6.06 Securities Laws 37
6.07 Agreement with Option Holders 37
6.08 Haque Employment 38
6.09 Powers of Attorney 38
6.10 Trustees= and Others' Authority 38
6.11 Release of Charges 38
6.12 NASDAQ 38
6.13 Board Meetings. 39
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
SQL SHAREHOLDERS 39
7.01 Representations and Warranties;
Performance 39
7.02 Opinion of Counsel 39
7.03 Valid Issuance of Intersolv Shares 39
7.04 Registration Rights 40
7.05 Redemption and Repayment 40
7.06 NASDAQ 40
ARTICLE VIII MISCELLANEOUS PROVISIONS 40
8.01 Amendment and Modification 40
8.02 Waiver of Compliance; Consents 40
8.03 Investigations; Survival of
Representations and Warranties 41
8.04 Notices 41
8.05 Assignment 43
8.06 Counterparts 43
8.07 Headings 44
8.08 Governing Law 44
8.09 Time of Essence 44
8.10 Entire Agreement 44
8.11 Expenses 44
8.12 Severability 45
8.13 Broker 45
8.14 Pre-emption Rights. 45
8.15 Release by SQL Shareholders. 45
8.16 Signatures. 46
LIST OF ATTACHMENTS
Appendix R-2 Allocation of Consideration
Appendix 1.01 Definitions; Interpretation
Schedule 1 SQL Disclosure Schedule
Schedule 2 Intersolv Disclosure Schedule
Exhibit A-1 Opinion of Tucker, Flyer & Lewis, a
Professional Corporation
Exhibit A-2 Opinion of Paisner & Co.
Exhibit A-3 Opinion of Slaughter & May
Exhibit A-4 Opinion of Jenners
Exhibit B-1 Registration Rights Agreement (SQL
Shareholders other than 3i)
Exhibit B-2 Registration Rights Agreement (3i)
Exhibit C Form of Agreement with Option Holder
Exhibit D [Intentionally Omitted]
Exhibit E-1 Board Resolutions (SQL)
Exhibit E-2 Board Resolutions (SQL Software
Limited)
Exhibit E-3 Board Resolutions (SQL Software Inc.)
Exhibit F Opinion of Arent Fox Kintner Plotkin &
Kahn, PLLC
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT ("Agreement") is
made
as of March 2, 1998, by and among (1) Intersolv, Inc.,
a
Delaware corporation ("Intersolv"), and (2) (i) 3 i
Group
plc, 91 Waterloo Road, London SE1 8XP England (A3 i@),
(ii) Tanweer Haque, Green Den, Broad Green, Chrishall,
Herts, Essex, SG8 8QR England (AMr. Haque@),
(iii) Michael Dudley, 31 Hurst Road, Buckhurst Hill,
Essex 1G9 6AB England (AMr. Dudley@), (iv) Alastair
Bone,
The Old White Hart, Cambridge Road, Ugley, Herts CM22
6HR
England (AMr. Bone@), (v) SEFTA Trustees Limited, 12
Hill
Street, St. Helier, Jersey, CI, as trustee for Mr.
Haque
under that certain T.A. Haque Settlement dated
November 23, 1988, (in such capacity, the AHaque
Trustee
Seller@), (vi) SEFTA Trustees Limited, at the above
address, as trustee for Mr. Dudley under that certain
M.R. Dudley Settlement dated November 23, 1988, (in
such
capacity the ADudley Trustee Seller@), and (vii) SEFTA
Trustees Limited, at the above address, as trustee for
Mr. Bone under that certain A.J.M. Bone Settlement
dated
November 23, 1988, (in such capacity, the ABone Trustee
Seller@ and, together with the Haque Trustee Seller,
and
the Dudley Trustee Seller, collectively, the ATrustee
Sellers@) (all of the foregoing (i) through (viii)
being
hereinafter referred as the ASQL Shareholders@).
R E C I T A L S:
R-1. The SQL Shareholders own all of the
issued
and outstanding AA@ Ordinary Shares of ,1.00 par value
each (AAA@ Ordinary Shares@), Ordinary Shares of ,1.00
par value each (AOrdinary Shares@), and Preference
Shares of 50p par value each (APreference Shares@)
(collectively, the ASQL Shares@) of SQL Holdings Ltd.
(ASQL@), a company incorporated in England and Wales,
and
desire to exchange all of their SQL Shares for shares
of
common stock of Intersolv (all such authorized shares
being the AIntersolv Common Stock@) on the terms and
conditions provided herein.
R-2. Attached hereto as Appendix R-2 is a list
of the SQL Shareholders with the number of SQL Shares
owned by each of them set opposite their names, and a
list of the holders of Options and the number of SQL
Shares owned by them at the Closing Date pursuant to
their exercise of the Options, along with the
respective
number of Consideration Shares to be allocated to each,
subject to the conditions set forth hereunder.
R-3. SQL owns all of the issued and
outstanding
share capital of SQL Software Ltd., a company
incorporated in England, which in turn owns all of the
issued and outstanding share capital of SQL Software
Inc., a Delaware corporation, and all of the issued and
outstanding share capital of SQL GmbH, a company
incorporated under the laws of Germany (each a
ASubsidiary@ and together the ASubsidiaries@).
R-4. The Intersolv Common Stock is publicly
traded on the National Association of Securities
Dealers
Automated Quotation National Market System (ANASDAQ@).
R-5. The board of directors of Intersolv has
approved and adopted this Agreement and the issuance of
1,251,450 shares of Intersolv Common Stock (the
AConsideration Shares@) in exchange for all of the
issued
and outstanding "A" Ordinary and Ordinary Shares,
options, and rights entitling the holder to receive
share
capital of SQL or securities convertible into share
capital of SQL, it being understood that simultaneously
with Closing, but deemed to be immediately prior
thereto,
SQL shall have paid ,556.559.52 to 3i in cash to redeem
the Preference Shares and repay the Loan (which
includes
the early repayment compensation on the Loan), plus
dividends on the Preference Shares and interest on the
Loan accrued through the Closing Date.
NOW THEREFORE, in consideration of the premises
and
of the mutual provisions, agreements, and covenants
herein contained, Intersolv and the SQL Shareholders
agree as follows:
ARTICLE I
THE SHARE EXCHANGE AND OTHER CLOSING TRANSACTIONS
1.01 Defined Terms. All capitalized terms
used
herein and not otherwise defined herein shall have the
meanings set forth in Appendix 1.01.
1.02 The Exchange. At the Closing, the SQL
Shareholders shall transfer all of their AA@ Ordinary
Shares and Ordinary Shares to Intersolv, and in
exchange
therefor (the AShare Exchange@), Intersolv shall issue
to
each SQL Shareholder a temporary share certificate
evidencing such SQL Shareholders' ownership of the
Consideration Shares in accordance with
Appendix R-2. Intersolv shall not issue fractional
shares of Intersolv Common Stock in connection with the
transaction contemplated by this Agreement.
Consequently, de minimus adjustments have been made to
the allocations in Appendix R-2. Intersolv has
instructed its transfer agent to prepare certificates
in
the form held by Intersolv's public shareholders
evidencing such SQL Shareholders' ownership of the
Consideration Shares in accordance with Appendix R-2,
and
will promptly deliver to each SQL Shareholder a new
certificate in exchange for its or his respective
temporary share certificate.
1.03 Payment, Redemption and Repayment.
Simultaneously with the Closing, but deemed to be
immediately prior thereto, SQL shall pay to 3i: (a)
,556,559.52 in cash to redeem the Preference Shares and
repay the Loan (which includes the early repayment
compensation on the Loan), plus dividends on the
Preference Shares and interest on the Loan accrued
through the Closing Date.
1.04 The Closing. The closing of the Share
Exchange and the other transactions contemplated by
this
Agreement (the "Closing") shall take place at the
offices
of Intersolv located at 9420 Key West Avenue,
Rockville,
MD 20850, USA, at 4:00 a.m. E.S.T. on March 2, 1998, or
at such other place or places and at such other time as
the parties may agree (the "Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS
Warrantors, jointly and severally, represent and
warrant to Intersolv, except as stated in the
disclosure
schedule attached hereto as Schedule 1 (the ASQL
Disclosure Schedule@), that:
2.01 Corporate Organization. SQL is a
corporation duly organized and validly existing under
the
laws of England and Wales, 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; SQL is duly qualified or licensed to do business
as
a foreign corporation in each jurisdiction set forth in
Section 2.01 of the SQL Disclosure Schedule, which, to
the Knowledge of Warrantors, are the only jurisdictions
in which SQL or any of its Subsidiaries conducts
business; Section 2.01 of the SQL Disclosure Schedule
contains correct copies of SQL=s articles of
incorporation and bylaws, as amended to date and as now
in effect; and the statutory books of SQL and its
Subsidiaries contain an accurate record of all material
matters which should be dealt with therein, and, to the
Warrantors= Knowledge, no notice or allegation has been
received that any of such books are incomplete or
incorrect.
2.02 Capital Shares. SQL's authorized share
capital consists of 450 AA@ Ordinary Shares, 598
Ordinary
Shares, and 325,000 Preference Shares of which 450 AA@
Ordinary Shares, and 550 Ordinary Shares are issued and
outstanding. Immediately prior to the redemption
described in Recital R-5, 216,667 Preference Shares
were
issued and outstanding. The SQL Shares constitute the
whole of SQL=s issued and allotted share capital and
all
such shares are duly and validly issued and are fully
paid-up. Except for such AA@ Ordinary Shares, such
Ordinary Shares, and such Preference Shares, there are
no
capital shares of SQL issued and/or outstanding.
Simultaneously with the Closing, all issued and
outstanding Preference Shares will be redeemed by SQL.
Immediately prior to Closing, except for options to
subscribe for a total of forty-eight (48) Ordinary
Shares
which have been granted pursuant to Option Certificates
evidencing options granted pursuant to SQL=s Executive
Share Option Scheme included in the SQL Disclosure
Schedule (the "Options"), there are no outstanding
options, warrants, rights, contracts, commitments,
understandings or arrangements by which SQL is bound to
issue any additional share capital or any security
convertible into shares or exercisable or exchangeable
therefor. Section 2.02 of the SQL Disclosure Schedule
sets forth true and complete information concerning
(i) the identity of each holder of any Options, (ii)
the
number of shares of SQL issuable upon the exercise of
each such Option, (iii) the dates on which such Options
have vested or will vest and became or will become
exercisable, and (iv) the exercise price payable upon
exercise of the Options.
2.03 Subsidiaries. Except for the
Subsidiaries, each of which is a duly organized and
validly existing corporation and, to the extent
applicable, in good standing in the jurisdiction of its
incorporation, SQL does not own, directly or
indirectly,
any capital shares or other equity securities of any
corporation, partnership or other entity. With respect
to each Subsidiary: (a) SQL owns directly or
indirectly
all of such Subsidiary's outstanding capital shares;
(b) all such outstanding capital shares are duly and
validly issued and fully paid-up; (c) there are no
outstanding options, warrants, rights, contracts,
commitments, understandings or arrangements by which
the
Subsidiary is bound to issue any additional capital
shares of such Subsidiary or any security convertible
into shares or exercisable or exchangeable therefor;
(d) there are no outstanding options, warrants, rights,
contracts, commitments, understandings or arrangements
by
which SQL or another Subsidiary is bound to transfer
any
capital shares of such Subsidiary or any security
convertible into shares or exercisable or exchangeable
therefor; (e) the Subsidiary is qualified or licensed
to
do business as a foreign corporation in the
jurisdictions
identified in Section 2.03 of the SQL Disclosure
Schedule, which, to the Knowledge of Warrantors, are
the
only jurisdictions in which the subsidiary conducts its
business; and (f) the SQL Disclosure Schedule contains
correct copies of each Subsidiary's articles of
incorporation and bylaws, as amended to date and as now
in effect.
2.04 No Violation. 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) SQL's or any Subsidiary's articles of incorporation
or bylaws, (ii) any obligation under any mortgage,
lease,
agreement or instrument applicable to SQL, 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 SQL, 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
reasonably foreseeable prospects of SQL and its
Subsidiaries considered as a consolidated entity, and
provided further that no representation or warranty is
given with respect to the possible application of any
law, rule or regulation pertaining to the preservation
of
competition as a result of the consummation of the
transactions contemplated hereby.
2.05 Financial Statements. Included in the
SQL Disclosure Schedule are true and complete copies of
(i) SQL=s financial statements for each of the years
ended December 31, 1994, 1995, and 1996, each of which
has been audited by Wilkins Kennedy, independent
chartered accountants, and (ii) SQL=s financial
statements for the year ended December 31, 1997 which
have been reviewed by Wilkins Kennedy and have been
prepared by management in a manner consistent with the
financial statements for each of the years ended
December
31, 1994, 1995 and 1996. (Such financial statements
are
hereinafter referred to as the A1994 Financial
Statements,@ the A1995 Financial Statements,@ the A1996
Financial Statements,@ and the A1997 Financial
Statements,@ respectively, and, collectively, as the
"SQL
Financial Statements".) The SQL Financial Statements
have been prepared in accordance with UK 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 in
all
material respects the consolidated financial position
of
SQL and its Subsidiaries as of their respective dates
and
the related consolidated results of operations and cash
flows for the periods then ended.
2.06 No Undisclosed Liabilities. Except for
(a) liabilities and obligations disclosed in Section
2.06
of the SQL Disclosure Schedule, (b) liabilities and
obligations incurred in the ordinary course of business
since the date of the 1996 Financial Statements,
(c) costs and expenses incurred in connection with
entering into and consummating the transactions
contemplated by this Agreement, and (d) the obligations
expressly set forth in this Agreement, none of SQL, any
Subsidiary, or any of their respective properties is
subject to any material liability or obligation
(absolute, accrued, contingent or otherwise) which was
not fairly reflected or reserved against in the 1996
Financial Statements.
2.07 Absence of Certain Changes. Except as
disclosed in the Section 2.07 of the SQL Disclosure
Schedule, or as contemplated or permitted by this
Agreement, since the date of the 1996 Financial
Statements, there has not been: (a) any change that
has
had or would have a Material Adverse Effect on the
financial position, business, operations or reasonably
foreseeable prospects of SQL and its Subsidiaries
considered as a consolidated entity which is not
specifically identified and reserved against in the
1997
Financial Statements; (b) any damage, destruction or
loss, whether covered by insurance or not, materially
and
adversely affecting the properties or business of SQL
and
its Subsidiaries considered as a consolidated entity
which is not specifically identified and reserved
against
in the 1997 Financial Statements; (c) any declaration,
setting aside or payment of any dividend (whether in
cash, shares or property) in respect of the capital
shares of SQL, or any redemption or other acquisition
of
such shares by SQL or any Subsidiary; (d) any increase
in
the compensation payable or to become payable by SQL 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 as set
forth
in Section 2.07 of the SQL Disclosure Schedule;
(e) except in the ordinary course of business, any sale
or transfer by SQL or any Subsidiary affecting a
tangible
or intangible asset having an aggregate value in
excess
of US$50,000 (other than an asset no longer necessary
or
useful in the business), 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; (f) any material transaction by SQL or any
Subsidiary not in the ordinary course of business; or
(g)
any change by SQL or any Subsidiary in accounting
methods
or principles.
2.08 Contracts and Insurance.
(a) Except as is included in Section
2.08(a) of the SQL Disclosure Schedule, there are no
written understandings or agreements, or any provisions
thereof, including without limitation any SQL Lease (as
defined below) which contains change of control
assignment prohibitions or change of control
termination
provisions, except for standard provisions set forth in
licensing agreements of SQL or any of its Subsidiaries
which agreements are consistent with the standard form
referred to in Schedule 2.08(a).
(b) Except as disclosed in Section
2.08(b)
of the SQL Disclosure Schedule, there are not
outstanding
any of the following arrangements, to which SQL or a
Subsidiary is a party and which remain, to any extent
to
be performed by SQL, a Subsidiary or another party:
(i) contracts of employment of, or
any
other contracts with, any director, officer or
employee, or any person connected with any of
them;
(ii) contracts (including license
agreements, maintenance agreements, distribution
agreements, support agreements, personal service
agreements, or agreements regarding inventions)
sales orders or commitments for the sale of goods
where the contract prices for any one contract
aggregate US$10,000 or more;
(iii) contracts, purchase orders or
commitments providing for expenditure by SQL or a
Subsidiary for the purchase of goods where the
contract prices for any one contract aggregating
US$10,000 or more;
(iv) any non-competition provisions
or
agreements other than those contained in the
employment agreements referenced in Section
2.08(b)(i) of the SQL Disclosure Schedule and
those
contained in standard terms and conditions of
licenses for product evaluation;
(v) any loan agreements and
overdraft
agreements;
(vi) any commitment or arrangement
to
participate in a partnership or a joint venture,
or
any shareholder agreement or agreement regarding
distributions of dividends;
(vii) any confidentiality provisions
or agreements other than those contained in the
employment agreements referenced in Section
2.08(b)(i) of the Disclosure Schedule and those
contained in standard terms and conditions of
licenses for product evaluation; and
(viii) any lease agreements except
the
leases referenced in Section 2.09(b) of the
Disclosure Schedule.
(c) None of the Warrantors has Knowledge
of
any breach of, violation of, or default in, any such
agreement, plan or arrangement, a breach or violation
of
which or a default under which would have a Material
Adverse Effect upon the business, properties, condition
(financial or otherwise), operations or reasonably
foreseeable prospects of SQL and its Subsidiaries
considered as a consolidated entity. SQL or one of its
Subsidiaries may terminate all of the distribution
agreements entered into by SQL or any of its
Subsidiaries
without penalty upon prior unilateral notice given by
SQL
or such Subsidiary on the expiration of their
respective
current terms. The SQL Disclosure Schedule includes a
true and correct schedule of all policies of insurance
carried by SQL 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; Leaseholds.
(a) SQL or one of its Subsidiaries, as
the
case may be;
(i) has good and sufficient title
to
all real property; and
(ii) has good and sufficient
title to all material property and assets
which are not real property, reflected in the
1996 Financial Statements or acquired after the
date of the 1996 Financial Statements (except
(A) properties and assets sold or otherwise
disposed of since the date of the 1996
Financial Statements in the ordinary course of
business, (B) assets no longer necessary or
useful in the business, and (C) properties and
assets 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
(1) 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 SQL 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
SQL or a Subsidiary; (2) the rights of customers of SQL
with respect to inventory or work in process under
orders
or contracts entered into by SQL or a Subsidiary in the
ordinary course of business; (3) 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;
(4) 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 (5) as expressly disclosed in Section
2.09(a)
of the SQL Disclosure Schedule. The material
buildings,
machinery and equipment of SQL and its Subsidiaries
reflected in the 1996 Financial Statements 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, such as have been sold or
otherwise disposed of since the date of the 1996
Financial Statements in the ordinary course of business
or such as are no longer necessary or useful in the
business).
(b) Set forth in Section 2.09(b) of the
SQL
Disclosure Schedule is a true and correct list of each
lease or occupancy agreement with respect to which SQL
or
any of its Subsidiaries is the tenant (collectively,
the
"SQL Leases" and individually, an "SQL Lease"), which
list sets forth the date of each such SQL Lease and any
amendment thereto. Neither SQL nor any of its
Subsidiaries has any liability or obligation in respect
of any property, whether freehold, leasehold, licensed
or
occupied under an informal or undocumented arrangement
other than is disclosed in Section 2.09(b) of the SQL
Disclosure Schedule. The information set forth in
Section 2.09(b) of the SQL Disclosure Schedule with
respect to each SQL Lease is true and correct in all
material respects. Each of the SQL Leases is in full
force and effect and (i) no SQL Lease has been
modified,
amended, canceled or terminated; (ii) none of SQL, any
of
its Subsidiaries or any other party to any SQL Lease is
in material default of any of its respective
obligations
thereunder; (iii) no notice has been given or received
by
the tenant under any SQL 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 SQL
Lease; and (iv) no consent or approval of the landlord
under any SQL 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
SQL
Lease, entitle the landlord to cancel or terminate the
same or otherwise materially adversely affect the
rights
of the tenant thereunder. The copies of the SQL Leases
are included in the SQL Disclosure Schedule and are
true
and correct copies of the SQL Leases and reflect and
constitute the entire agreement between the landlord
and
tenant thereunder concerning the leasing of and/or
occupancy of the premises or property covered thereby.
(c) SQL 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 as disclosed in
Section 2.09(c) of the SQL Disclosure Schedule, and
neither SQL 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 Section 2.09(c) of the SQL
Disclosure Schedule. SQL and its Subsidiaries have the
right to bring actions for infringement of the Product,
the Documentation, and the Intellectual Property
(except
for that Intellectual Property not comprising SQL
Rights,
and none of the Intellectual Property infringes the
rights of any other person. SQL and its Subsidiaries
have taken all action reasonably necessary to maintain
as
trade secrets the source codes and all other
proprietary
portions of the Product described in Section 2.09(c) of
the SQL Disclosure Schedule. Except as set forth in
Section 2.09(c) of the SQL Disclosure Schedule, (i) no
source or object code of any software included in the
Product is subject to escrow, and (ii) SQL and its
Subsidiaries have all rights to any existing versions
of
the Product for use in various computer operating
environments and, to the Knowledge of the Warrantors,
is
not prohibited from converting the Product for use in
all
other computer operating environments.
(d) Section 2.09(d) of the SQL Disclosure
Schedule accurately identifies all Product, SQL Rights
and all Rights licensed to SQL or its Subsidiaries by
third parties, the ownership as well as the registered
or
unregistered status of all the foregoing being
separately
stated. The Product, Documentation and Intellectual
Property (including all SQL Rights), together with all
rights licensed to SQL or its Subsidiaries by third
parties, are adequate for the conduct of the business
of
SQL and its Subsidiaries as in existence immediately
prior to the Closing Date, considered as a consolidated
entity. To the Warrantors= Knowledge, Products
manufactured and/or sold and services provided by SQL
and
its Subsidiaries do not infringe the intellectual
property rights owned by any other person or entity.
Except by virtue of their ownership of SQL Shares, no
Warrantor, and to the Knowledge of any such Warrantor,
no
director, officer or employee of SQL or any Subsidiary,
owns 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 SQL or any Subsidiary.
(e) Any Product that could have
application
with respect to any time period on or after January 1,
2000, is designed to be used prior to, during, and
after
the calendar year 2000 A.D., and that the Product, as
applicable, will operate during each such time period
without error relating to date and time data,
specifically including any error relating to, or the
product of, date and time data that represents or
references different centuries or more than one
century.
The preceding provision includes a warranty that the
Product:
(i) will correctly handle
calculations
(periods between dates); branching (using date
comparisons); format (conversions between date
representations); and storage (sorting, searching,
storing and retrieving); and
(ii) has been designed and tested to
ensure year 2000 compatibility, including date and time
data century recognition, calculations that accommodate
same century and multi-century formulas and date
values,
date data interface values that reflect the century,
and
leap years.
2.10 Litigation. There is no suit, action,
proceeding, claim (including breach of warranty and
product liability claims) or, to the Warrantors=
Knowledge, any investigation involving $50,000 or more
(or of material significance because of the nonmonetary
relief sought), pending, or to the Warrantors=
Knowledge,
threatened or contemplated against SQL or any
Subsidiary
or materially affecting the business, properties,
condition (financial or otherwise), results of
operations
or reasonably foreseeable prospects of SQL 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 SQL or any
Subsidiary. None of SQL nor any Subsidiary is subject
to
any judgment, injunction or decree that materially and
adversely affects the business, properties (financial
or
otherwise), results of operations or reasonably
foreseeable prospects of SQL 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 and penalties associated
therewith)
including, without limitation, all country, state,
city,
county, local, foreign, or other income, franchise,
capital, withholding, real or tangible property,
employment, unemployment compensation, transfer, sales,
use, valued added, excise and all other taxes of any
kind) imposed by any taxing authority in the UK,
France,
the USA, any other government or any state, city,
county
or other subdivision or agency thereof (each such
jurisdiction being hereinafter referred to as an
AApplicable Tax Jurisdiction@ and each such taxing
authority being hereinafter referred to as a ATaxing
Authority@), whether disputed or not, (ii) "Tax Return"
shall mean any return, declaration of estimated tax,
report or other information to be required to be
supplied
to a Taxing Authority with respect to Taxes, and
(iii) "Transaction" means any one or more transactions,
acts, events or omissions of whatever nature.
(b) SQL and each of its Subsidiaries have
filed on a timely (which for the UK shall mean within
the
time limit required by law) basis all Tax Returns and
have timely given all notices in respect of Taxes
required to be filed or given by any of them under
applicable law within the applicable statute of limita
tions period. Except as contemplated in this Section
2.11(b), such Tax Returns were when filed and remain
(to
the extent relevant) complete and accurate in all
material respects. All Taxes shown on such Tax Returns
have been, and all Taxes subsequently and properly
assessed by a Taxing Authority with respect to the
periods and/or Transactions to which such Tax Returns
relate have been or will be timely and fully paid,
which
in relation to UK shall mean paid without giving rise
to
any charge of interest or penalty for late payment,
except for amounts that SQL or a Subsidiary is
contesting
in good faith, as set forth in Section 2.11(b) of the
SQL
Disclosure Schedule. No extensions of time to file
such
Tax Returns or waivers of statutes of limitation have
been granted. The provisions in the 1996 Financial
Statements for Taxes currently payable and for deferred
Taxes are properly made in accordance with accounting
principles and properly provide for such Taxes for
which
SQL 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 carry forwards. Based on SQL=s UK
corporation tax returns as filed (taking into account
any
amendments) and based on estimates for its current
taxable year, except as indicated in Section 2.11(b) of
the SQL Disclosure Schedule, neither SQL nor its
Subsidiaries have (net) operating losses, capital
losses,
or tax credits available for carryforward. Included in
Section 2.11(b) of the SQL Disclosure Schedule are
complete copies of all Tax Returns filed on behalf of
SQL and its Subsidiaries for tax periods referenced in
Section 2.11(b) of the SQL Disclosure Schedule. No Tax
affairs of SQL and its Subsidiaries are currently under
investigation by any Taxing Authority. Other than
routine and immaterial matters arising from the
submission of Tax Returns, no fact or condition exists
relating to any past or present Transaction, except as
set forth in Section 2.11(b) of the SQL Disclosure
Schedule, which if known to any Taxing Authority having
jurisdiction would in the SQL Shareholders' reasonable
judgment likely result in a successful challenge by
such
authority of the treatment or omission of such fact or
condition on any tax return, report, or notice of SQL
or
its Subsidiaries, and no issue has arisen in any
examination of SQL or any Subsidiary by any Taxing
Authority that, in either case, if raised with respect
to
any other accounting period not so examined would
result
in a proposed material deficiency for any other period
not so examined, if upheld. SQL and its Subsidiaries
have made all payments of estimated Taxes required to
be
made under the tax laws applicable to the Transaction
and
any comparable provisions of any Applicable Tax
Jurisdiction (the ATax Laws@). All such amounts that
are
required to be remitted to any Taxing Authority have
been
duly remitted, except for such amounts as SQL or a
Subsidiary is contesting in good faith as set forth in
Section 2.11(b) of the SQL Disclosure Schedule. Except
as set forth in Section 2.11(b) of the SQL Disclosure
Schedule, to the Knowledge of the Warrantors, there is
no pending or threatened action, audit, proceeding or
investigation for the assessment or collection of Taxes
of SQL or any of its Subsidiaries other than routine
inquiries and investigations. Except as set forth in
Section 2.11(b) of the SQL Disclosure Schedule, there
are
no requests for rulings or clearances, outstanding
subpoenas or requests for information other than
routine
inquiries with respect to Taxes of SQL or any of its
Subsidiaries, proposed reassessments by a Taxing
Authority of any property owned or leased by SQL or any
of its Subsidiaries, or similar matters pending with
respect to any Taxing Authority. Except as set forth
in
Section 2.11(b) of the SQL Disclosure Schedule, no
power
of attorney currently in force has been granted by SQL
or
any of its Subsidiaries with respect to any matter
relating to Taxes. Any adjustment of Taxes of SQL or
its
Subsidiaries which is required to be reported to any
Taxing Authority has been reported, and any additional
amount due with respect thereto has been paid, except
for
amounts that SQL or Subsidiary is contesting in good
faith as set forth in Section 2.11(b) of the SQL
Disclosure Schedule.
(c) Included in the SQL Disclosure
Schedule
are copies of all material outstanding assessments or
other material written assertions of deficiencies or
other liabilities for Taxes issued by a Taxing
Authority,
of SQL and its Subsidiaries with respect to past
periods
for which the limitations period has not expired.
2.12 Employee Benefit Plans; Employees.
(a) All employee benefit plans or schemes
or other material arrangements under which or to which
SQL or any Subsidiary contributes to or for the benefit
of their respective employees are accurately identified
in Section 2.12(a) of the SQL Disclosure Schedule. All
such plans and arrangements have been maintained in
compliance in all material respects with, where
applicable, all securities laws in any applicable
jurisdiction, all other laws relating to employee
benefit
plans 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 have a Material Adverse
Effect
on 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 SQL and its
Subsidiaries considered as a consolidated entity with
respect to such plans or arrangements.
(b) The employee retirement plans
listed
in Section 2.12(b) of the SQL Disclosure Schedule as
being tax-exempt (collectively the "Pension Plans"), at
all times have qualified as tax-exempt plans under the
applicable Tax Laws, and the trusts which are a part of
such Pension Plans (collectively, the "Trusts") at all
times have qualified as tax-exempt trusts under the
applicable Tax Laws. All such Pension Plans and Trusts
shall continue to so qualify up to the Closing.
(c) Section 2.12(c) of the SQL Disclosure
Schedule contains a true and complete list identifying
each employee of SQL and its Subsidiaries, each such
employee's position with SQL and its Subsidiaries, and
the salary and other compensation currently payable to
each such employee.
2.13 Labor Matters. SQL and each of its
Subsidiaries have complied in all material respects
with
all applicable national, state, local and other laws
and
regulations in any applicable jurisdiction relating to
the employment, health and safety of employees and any
provisions of such laws and regulations relating to
wages, bonuses, collective bargaining, equal
opportunity,
equal pay and the payment of social security and
similar
payroll taxes. No employees of SQL or any of its
Subsidi
aries are on strike or have threatened to strike.
Except
as set forth in Section 2.13 of the SQL Disclosure
Schedule, no unfair labor practice charges are to
Warrantors= Knowledge pending, threatened or
contemplated, against SQL or any Subsidiary. Neither
SQL
nor any of its Subsidiaries are a party to a collective
bargaining agreement, nor are any of them required to
participate in a works council or a health and safety
committee, as such arrangements are provided for under
applicable law.
2.14 Compliance with Applicable Laws. To
Warrantors= Knowledge, SQL and each of its Subsidiaries
are in compliance with all national, state and local
laws, statutes, ordinances, regulations, orders,
decrees
and judgments applicable to them in any applicable
jurisdiction, the enforcement of which, if any one were
not in compliance, would have a Material Adverse Effect
on the business, properties, condition (financial or
otherwise), results of operations or reasonably
foreseeable prospects of SQL and its Subsidiaries
considered as a consolidated entity.
2.15 Accounts Receivable. Except as set forth
in Section 2.15 of the SQL Disclosure Schedule, the
accounts receivable reflected on the 1996 Financial
Statements (or any accounts receivable sold by SQL 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 the Warrantors have no 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 1996 Financial
Statements or thereafter established on a basis
consistent with the reserves reflected in the 1996
Financial Statements) within 90 days after the Closing.
2.16 Access. All persons who have had access
to
any material portion of the Intellectual Property which
is proprietary and non-public have executed non-
disclosure agreements with SQL or a Subsidiary, except
as
disclosed in Section 2.16 of the SQL Disclosure
Schedule.
2.17 [Intentionally omitted]
2.18 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 SQL or any Subsidiary in
connection with the execution and delivery of this
Agreement or the consummation of the transactions
contemplated hereby, except for (i) such consents as
have
been obtained in connection with the transactions
contemplated herein, and (ii) such other consents,
authorizations, filings, approvals and registrations
which if not obtained or made would have a Material
Adverse Effect on SQL's ability to consummate the
transactions hereunder.
2.19 Limitation of Liability of Warrantors.
Notwithstanding anything to the contrary contained in
this Article II, the representations and warranties of
the Warrantors under this Article II (collectively, the
AArticle II Warranties@) shall be qualified as set
forth
in this Section 2.19.
(a) The Warrantors shall not be liable in
respect of any claims under the Article II Warranties
to
the extent that the matter or matters, and related
facts
giving rise to such claims are fairly disclosed in the
SQL Disclosure Schedule.
(b) The aggregate maximum liability of
the
Warrantors in respect of any and all of the claims
under
the Article II Warranties shall in no event exceed: (i)
in respect of such claims notified to any Warrantor
from
the Closing Date until the date which occurs six months
thereafter, seventy-five percent (75%) of the aggregate
value at the date of this Agreement of all of the
Consideration Shares; and (ii) in respect of such
claims
notified to any Warrantor thereafter until the first
anniversary of the Closing Date (except, in the case of
the continuing warranties described in sub-clause (f)
below, until the date such warranty expires), the
aggregate value of the Consideration Shares received by
all of the Warrantors and the Trustee Sellers.
(c) The maximum liability of each
Warrantor
in respect of the amount of any claim or claims under
the
Article II Warranties in the aggregate shall be his
Relevant Percentage (as hereinafter defined) of the
aggregate maximum liability in effect from time to time
under sub-clause (b).
(d) For the purposes of sub-clause (c)
above the expression Ahis Relevant Percentage@ shall
mean, with respect to each Warrantor, a fraction
expressed as a percentage, the denominator of which
shall
be the total number of Consideration Shares issued to
the
Warrantors and the Trustee Sellers, and the numerator
of
which shall be: (i) with respect to Mr. Haque, the
number
of Consideration Shares issued to Mr. Haque and the
Haque
Trustee Seller; (ii) with respect to Mr. Bone, the
number
of Consideration Shares issued to Mr. Bone and the Bone
Trustee Seller; and (iii) with respect to Mr. Dudley,
the
number of Consideration Shares issued to Mr. Dudley and
the Dudley Trustee Seller.
(e) The Warrantors shall not be liable in
respect of all and any claims made by Intersolv under
the
Article II Warranties unless and until the cumulative
liability of the Warrantors in respect of each separate
claim in excess of US$25,000 exceeds in the aggregate
US$250,000, after which the Warrantors shall be liable
for the amount of any claim (including the claim which
takes the cumulative liability above US$250,000) in
excess of US$10,000.
(f) The Warrantors shall not be liable in
respect of any claim under the Article II Warranties
unless (i) the same shall have been made before the
expiry of one year from the Closing, except that with
respect to the representations and warranties set forth
in Section 2.09(e), the Warrantors shall not be liable
unless such claim is made prior to January 1, 2001; and
(ii) notice of such claim was made in writing to the
Warrantors specifying in reasonable detail the event of
default to which the claim relates and the nature of
the
breach and the amount claimed.
(g) If a third party notifies Intersolv
that such third party believes that it has rights
which,
if correct, would result in there being a breach of an
Article II Warranty, Intersolv shall within a
reasonable
time thereafter notify the Warrantors of such third
party
notice and provide Warrantors an opportunity to assist
Intersolv in disputing such third party claim.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SQL
SHAREHOLDERS
Each of the SQL Shareholders severally represents
as
to itself or himself, as the case may be, and severally
warrants in respect of itself or himself, as the case
may
be, to Intersolv that:
3.01 Legal Title. It or he, other than the
Trustee Sellers, owns and has good, full legal and
beneficial title to the SQL Shares owned by him or it
to
be acquired by Intersolv pursuant to this Agreement,
and
there are no liens, encumbrances, or restrictions upon
said SQL Shares; and each Trustee Seller represents and
warrants that it is the registered holder of the SQL
shares set opposite its name in Appendix R-2 and has
the
right to transfer such shares with limited title
guarantee, free from all charges, liens, claims and
encumbrances.
3.02 Authorization; No Conflicts. It or he
has
full power and authority to enter into this Agreement
and
to carry out its or his obligations contemplated
hereby.
This Agreement has been duly executed and delivered by,
and is the legal, valid and binding obligation of it or
him, enforceable against it or him in accordance with
its
terms, and it or he is not subject to or obligated
under
any law, rule or regulation of any governmental
authority, or any judgment, order, writ, injunction or
decree, or any license, franchise or permit, which
would
be breached or violated by its or his execution,
delivery
and performance of this Agreement and the consummation
by
it or him of the transactions contemplated hereby. The
execution and delivery of this Agreement by it or him
and
the consummation of the transactions contemplated
hereby
do not and will not conflict with or result in the
violation of any obligation under any mortgage, lease,
agreement or instrument applicable to any of them.
3.03 Investment Intent. It or he is acquiring
the Intersolv Common Stock for its or his own account,
for investment purposes and without any view to resell
or
effect any distribution of such Intersolv Common Stock,
other than as contemplated in the Registration Rights
Agreement or as otherwise permitted by applicable law.
It or he has been fully informed as to the
circumstances
under which it or he is required to take and hold such
Intersolv Common Stock pursuant to the requirements of
the Securities Act of 1933, as amended (the "Securities
Act"), and any applicable state securities laws. It or
he understands that the Intersolv Common Stock has not
been registered under the Securities Act or any
applicable state securities law and may not be offered
or
sold in the USA or to a "U.S. Person" (as defined under
Regulation S of the Securities Act) unless registered
under the Securities Act and any applicable state law
or
an exemption therefrom is available (including, but not
limited to, Rule 904 under Regulation S). It or he is
sophisticated and experienced in business and
investments, and it or he, as the case may be, is not a
U.S. Person.
3.04 No U.S. Person. It or he has no
knowledge
of any U.S. Person who has a beneficial interest in
SQL=s
share capital or other of its securities.
3.05 Limitation of Liability of SQL
Shareholders. Notwithstanding anything to the contrary
contained in Article III, the representations and
warranties of the SQL Shareholders under this Article
III
(collectively, the AArticle III Warranties@) shall be
qualified as set forth in this Section 3.05.
(a) The SQL Shareholders shall not be
liable in respect of any claim under the Article III
Warranties to the extent that the matter or matters,
and
the related facts, giving rise to such claim are fairly
disclosed in the SQL Disclosure Schedule.
(b) The aggregate maximum liability of
the
SQL Shareholders in respect of all and any claims under
the Article III Warranties shall in no event exceed the
value at the date of this Agreement of the
Consideration
Shares issued to the SQL Shareholders; provided,
however,
that the aggregate maximum liability of the Warrantors
in
respect of the Article II Warranties and Article III
Warranties shall not exceed the value at the date of
this
Agreement of the Consideration Shares received by the
Warrantors and the Trustee Sellers, except that the
foregoing shall not alter of the amount of liability of
a
Warrantor under an Article II Warranty under
Section 2.19.
(c) Notwithstanding the provisions of sub-
clause (b), the maximum liability of each SQL
Shareholder
in respect of the amount of any claim or claims under
the
Article III Warranties given by such SQL Shareholder
shall be his or its Relevant Percentage (as hereinafter
defined) of the aggregate maximum liability under sub-
clause (b), subject to the limitation set forth in the
proviso of such sub-clause (b).
(d) For the purposes of sub-clause (c)
above the expression Ahis or its Relevant Percentage@
shall mean, with respect to each SQL Shareholder, a
fraction expressed as a percentage, the denominator of
which shall be the total number of Consideration Shares
issued to the SQL Shareholders, and the numerator of
which shall be with respect to each SQL Shareholder,
the
number of Consideration Shares issued to such SQL
Shareholder; provided, however, that (i) Mr. Haque
shall
also, along with the Haque Trustee Seller, be liable
for
the Relevant Percentage of the Haque Trustee Seller,
(ii)
Mr. Dudley shall also, along with the Dudley Trustee
Seller, be liable for the Relevant Percentage of the
Dudley Trustee Seller and (iii) Mr. Bone shall also,
along with the Bone Trustee Seller, be liable for the
Relevant Percentage of the Bone Trustee Seller.
(e) If a third party notifies Intersolv
that such third party believes that it has rights
which,
if correct, would result in there being a breach of an
Article III Warranty, Intersolv shall within a
reasonable
time thereafter notify the SQL Shareholders of such
third
party notice and provide SQL Shareholders an
opportunity
to assist Intersolv in disputing such third party
claim.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INTERSOLV
Intersolv represents and warrants to the SQL
Shareholders, subject to the referenced exceptions set
forth in the disclosure schedule attached hereto as
Schedule 2 (the AIntersolv Disclosure Schedule@), that:
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. Included in the
Intersolv Disclosure Schedule are copies of its
Certificate of Incorporation and By-laws, as amended to
date.
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
certificate of incorporation or bylaws, (ii) any
obligation under any mortgage, lease, agreement or
instrument applicable to Intersolv, 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, 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 reasonably foreseeable prospects of Intersolv and
the
Intersolv Subsidiaries considered as a consolidated
entity and provided further that no representation or
warranty is given with respect to the possible
application of any law, rule or regulation pertaining
to
the preservation of competition as a result of 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, (i) such disclosures, filings,
statements and reports under the Securities Exchange
Act
of 1934, as amended (the "Exchange Act"), or otherwise
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
National Market, (ii) such consents as have been
obtained
in connection with the transactions contemplated
herein,
and (iii) such other consents, authorizations, filings,
approvals and registrations which if not obtained or
made
would have a Material Adverse Effect on Intersolv's
ability to consummate the transactions hereunder.
4.05 SEC Documents; Financial Statements.
Included in the Intersolv Disclosure Schedule are the
true and complete copies of Intersolv's Annual Report
on
Form 10-K for its fiscal year ended April 30, 1997,
Intersolv's Annual Report to Stockholders for its
fiscal
year ended April 30, 1997, its proxy statement with
respect to its annual meeting of shareholders held on
September 24, 1997, and Intersolv's Quarterly Report on
Form 10-Q for its quarters ended July 31, 1997 and
October 31, 1997 (collectively, and including all
exhibits and schedules thereto and documents
incorporated
by reference therein, the "Intersolv SEC Documents"),
and
will make the Intersolv SEC Documents available to the
holders of the SQL Options. 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.
No subsequent event has made any of the Intersolv SEC
Documents materially misleading, except to the extent
superseded or corrected by a subsequent Intersolv SEC
Document. 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. The unaudited
consolidated balance sheet of Intersolv and the
Intersolv
Subsidiaries at July 31, 1997 and October 31, 1997,
including the notes thereto, and related unaudited
consolidated statements of income and cash flows, for
Intersolv, for the fiscal quarters ended July 31, 1997
and October 31, 1997 (collectively, the "Interim
Financial Statements"). The Interim 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 SEC Documents and in Section 4.06 of the
Intersolv Disclosure Schedule, and (b) liabilities and
obligations incurred in the ordinary course of business
since the date of the Intersolv balance sheet at
October
31, 1997, liabilities and obligations incurred in
connection with entering into and consummating (i) the
transactions contemplated by this Agreement, and (ii)
obligations expressly set forth in this Agreement, none
of Intersolv, any Intersolv Subsidiary or 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 such October 31, 1997 balance sheet, as
modified by Intersolv=s balance sheet at January 31,
1998.
4.07 Absence of Certain Changes. Except as
disclosed in Section 4.07 of the Intersolv Disclosure
Schedule or as contemplated or permitted by this
Agreement, since the date of the Interim Financial
Statements, there has not been: (a) any material
adverse
change in the business, condition (financial or
otherwise), operations or reasonably foreseeable
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 Capital Stock. As of the date hereof,
Intersolv's authorized capital stock consists of
53,000,000 shares, consisting of 50,000,000 shares of
Intersolv Common Stock, $0.01 par value, of which
21,399,004 shares are issued and outstanding and no
shares are held in Intersolv's treasury, and of
3,000,000
shares of Preferred Stock, $0.10 par value, of which no
shares are issued and outstanding and no shares are
held
in Intersolv's treasury. All issued and outstanding
Intersolv Common Stock is duly and validly issued,
fully
paid and nonassessable. Except for such Intersolv
Common
Stock, there are no shares of capital stock of
Intersolv
issued and/or outstanding. Except as otherwise
disclosed
in Section 4.08 of the Intersolv Disclosure Schedule,
there are no outstanding options, warrants, rights,
contracts, commitments, understandings or arrangements
by
which Intersolv is bound to issue any additional shares
of its capital stock or any security convertible
hereunto
or exercisable or exchangeable therefor.
4.09 Litigation. Except as disclosed in
Section 4.09 of the Intersolv Disclosure Schedule,
there
is no suit, action, proceeding, claim (including breach
of warranty and product liability claims) or, to
Intersolv's knowledge, investigation involving $25,000
or
more (or of material significance because of the
nonmonetary relief sought), pending or, to Intersolv's
knowledge, threatened or contemplated against Intersolv
or any Intersolv Subsidiary or materially affecting the
business, properties, condition (financial or
otherwise),
results of operations or reasonably foreseeable
prospects
of Intersolv and the Intersolv 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 Intersolv or any Intersolv
Subsidiary. None of Intersolv, any Intersolv
Subsidiary
or 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
reasonably foreseeable prospects of Intersolv and the
Intersolv Subsidiaries considered as a consolidated
entity.
ARTICLE V
COVENANTS OF THE SQL SHAREHOLDERS AND INTERSOLV
5.01 Confidentiality. Each SQL Shareholder
shall hold and shall cause their attorneys,
accountants,
other agents or authorized representatives, and SQL and
its Subsidiaries 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 Schedule, except (i) 3 i may summarize such
information for its partners or investors, (ii) as such
information shall become public without violation of
this
Section 5.01, which is at the time of disclosure
already
known by the person to whom the disclosure is made,
(iii) as may be required by applicable law, court, or
regulatory requirement, or as otherwise contemplated
herein, or (iv) by the Mr. Haque in his capacity as an
employee of Intersolv and used or disclosed in the
ordinary course of his employment by Intersolv.
Without
the express prior written consent of Intersolv, neither
SQL, any Subsidiary, or any SQL Shareholder shall
provide
any person a copy of this Agreement or communicate to
any
person the contents of this Agreement, except to their
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 5.01) or as required by applicable law, court,
or regulatory requirement.
5.02 Press Release. Neither Intersolv nor
the
SQL Shareholders will issue, or allow SQL or its
Subsidiaries to issue, a press release or other
announcement with respect to the transactions
contemplated herein without giving the other of them a
reasonable opportunity to comment and without such
other
party=s approval, such approval not to be unreasonably
withheld or delayed
ARTICLE VI
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:
6.01 Delivery of Share Certificates. The SQL
Shareholders shall have delivered to Intersolv duly
executed transfers in favor of Intersolv in respect of
the SQL Shares, together with all of the certificates
for
the SQL Shares.
6.02 Representations and Warranties;
Performance. Each of the representations and
warranties
made by the SQL Shareholders shall be true and correct
in
all material respects as of the date hereof; and each
SQL
Shareholder 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 such party prior to the Closing.
6.03 Opinion of Counsel. Intersolv shall
have
received opinions of counsel to the SQL Shareholders,
in
form and substance reasonably satisfactory to
Intersolv,
dated as of the (date hereof) (which opinions may be
combined or separate), substantially to the effect set
forth in Exhibits A-1 (Tucker, Flyer & Lewis), A-2
(Paisner & Co.), A-3 (Slaughter & May), and A-4
(Jenners)
hereto.
6.04 Resignation of Directors and Officers.
Each director and officer of SQL and its Subsidiaries
shall have delivered his written resignation from each
such position effective as of the Closing.
6.05 Registration Rights Agreement. Intersolv
and the SQL Shareholders shall have executed the
Registration Rights Agreement substantially in the form
of Exhibit B hereto.
6.06 Securities Laws. Intersolv shall have
received such documents as it may reasonably require to
establish that the delivery of Intersolv Common Stock
in
connection with the Closing complies generally with
applicable requirements of the securities laws of each
jurisdiction in which shareholders of SQL reside.
6.07 Agreement with Option Holders. Each of
the holders of SQL Options shall have entered into an
agreement with Intersolv in the form attached hereto as
Exhibit C pertaining to the exercise of the SQL Options
by the Option Holders and the exchange at the Closing
of
Intersolv Common Stock for SQL Shares acquired by the
holders of the SQL Options pursuant to the exercise of
the SQL Options.
6.08 Haque Employment. Mr. Haque and
Intersolv shall have entered into an employment
agreement
mutually acceptable to them and Mr. Haque and Intersolv
shall have entered into a Deed of Covenants mutually
acceptable to them.
6.09 Powers of Attorney. The SQL Shareholders
shall deliver to Intersolv such powers of attorney as
shall enable Intersolv to exercise its rights in the
SQL
Shares pending the payment of any applicable stamp
taxes.
6.10 Trustees= and Others' Authority. The
representative of each of the Trustee Sellers (or other
SQL Shareholder who is executing documents under a
power
of attorney) shall deliver to Intersolv powers of
attorney or other documentation as reasonably required
by
Intersolv to establish the authority of such
representative to act on behalf of its respective
Trustee
Seller or other SQL Shareholder with respect to this
Agreement and the transactions contemplated hereunder.
6.11 Release of Charges. 3i shall deliver to
Intersolv instruments reasonably satisfactory to
Intersolv releasing all security granted by SQL and any
Subsidiary in relation to the Preference Shares, the
Loan, and any other obligations or liabilities to 3i.
6.12 NASDAQ. NASDAQ shall have given
Intersolv
and the SQL Shareholders such approvals as shall be
necessary for listing the Consideration Shares.
6.13 Board Meetings. The SQL Shareholders
shall
procure the holding of meetings of the boards of
directors of SQL and each of the Subsidiaries to adopt
the resolutions set out in the draft minutes in the
forms
attached as Exhibits E-1, E-2 and E-3.
ARTICLE VII
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF THE SQL SHAREHOLDERS
Each and every obligation of SQL Shareholders
under
this Agreement to be performed at or before the Closing
(except for its 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 SQL
Shareholders shall have waived such satisfaction with
respect to its obligations:
7.01 Representations and Warranties;
Performance. Each of the representations and
warranties
made by Intersolv 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.
7.02 Opinion of Counsel. The SQL Shareholders
shall have received an opinion of counsel to Intersolv
(Arent Fox), dated the Closing Date, in form and
substance reasonably satisfactory to the SQL
Shareholders, substantially to the effect set forth in
Exhibit F hereto.
7.03 Valid Issuance of Intersolv Shares. The
shares of Intersolv Common Stock to be issued to the
SQL
Shareholders pursuant to this Agreement when so issued
will be duly and validly authorized and issued, fully
paid and nonassessable, and certificates evidencing
such
shares shall have been delivered to the SQL
Shareholders.
7.04 Registration Rights. Intersolv and the
SQL
Shareholders shall have executed the Registration
Rights
Agreement substantially in the form of Exhibit B
hereto.
7.05 Redemption and Repayment. The Preference
Shares shall have been redeemed in full by payment to
3i
of the redemption price plus any accrued dividends and
the Loan shall have been repaid in full, including the
early repayment compensation and any accrued interest,
by
the cash payment referenced in clauses (a) and (b) of
Section 1.03.
7.06 NASDAQ. NASDAQ shall have given
Intersolv
and the SQL Shareholders such approvals as may be
necessary for listing the Consideration Shares.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.01 Amendment and Modification. This
Agreement
may be amended, modified, and supplemented only by
written agreement of Intersolv and the SQL Shareholders
(or their authorized representatives) affected by any
such amendment, modification, or supplement.
8.02 Waiver of Compliance; Consents. Any
failure of Intersolv or any of the SQL Shareholders 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 8.02.
8.03 Investigations; Survival of
Representations
and Warranties. The respective representations and
warranties of the SQL Shareholders 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, shall
survive
the Closing subject to the provisions of Section
2.19(f).
8.04 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, when sent by facsimile
transmission or three business days after being mailed
first class with postage prepaid:
(a) if to the SQL Shareholders, to:
3 i Group Plc
91 Waterloo Road
London SE1 8XP
England
Attention: Company Secretary
Fax: 011-44-171-928-0058
(b) if to Mr. Haque, to:
Tanweer Haque
Green Den
Broad Green
Chrishall
Herts SG8 8QR
England
Fax: 011-44-01763 837345
(c) if to the Haque Trustee Seller, the
Dudley Trustee Seller, or the Bone
Trustee
Seller, to:
SEFTA Trustees Limited
12 Hill Street
St. Helier, Jersey CI
Fax: 011-44-15-343-3919
(d) if to Mr. Dudley, to:
Michael Dudley
31 Hurst Road
Buckhurst Hill
Essex 1G9 6AB
England
(e) if to Mr. Bone, to:
Alastair Bone
The Old White Hart
Cambridge Road
Ugley, Herts CM22 6HR
England
or to such other person or address as an SQL
Shareholder
shall furnish to Intersolv pursuant to the above;
(f) If to Intersolv, to:
Intersolv, Inc.
9420 Key West Avenue
Rockville, MD 20850
U.S.A.
Attention: Gary G. Greenfield,
President and Chief Executive
Officer
Fax: 301-315-7022
with copy to:
Intersolv, Inc.
9420 Key West Avenue
Rockville, MD 20850
U.S.A.
Attention: Worth D. MacMurray
General Counsel
Fax: 301-315-7022
or to such other person or address as Intersolv shall
furnish to the SQL Shareholders in writing pursuant to
the above.
8.05 Assignment. This Agreement and all of
the
provisions hereof shall be binding upon the parties
hereto and their respective successors, heirs, 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.
8.06 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.
8.07 Headings. 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.
8.08 Governing Law. The parties agree that
this
Agreement shall be governed and construed by the laws
of
the state of Delaware, and that no conflict-of-laws
provision shall be invoked to permit the laws of any
other country, state, or jurisdiction to apply, except
that the provisions of Section 5.01 of this Agreement
(Confidentiality) shall be governed by the laws of
England and Wales.
8.09 Time of Essence. Time is of the essence
with respect to each provision of this Agreement in
which
time is an element.
8.10 Entire Agreement. This Agreement and the
attached Schedules and Exhibits embody the entire
agreement and understanding of the parties hereto in
respect of the subject matter contained herein, and
each
of the parties hereto acknowledges that in agreeing to
enter into this Agreement, it or he has not relied on
any
representation or warranty not expressly contained in
this Agreement. 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.
8.11 Expenses. All costs and expenses
incurred
in connection with the Agreement and the transactions
contemplated hereby shall be the responsibility of the
party or parties incurring such expenses; provided,
however, that Intersolv agrees that, in the event there
is a Closing, such reasonable costs and expenses
incurred
by the SQL Shareholders (other than the brokerage fee
mentioned in Section 8.13), shall be paid by Intersolv
in
an aggregate amount not to exceed $150,000.
8.12 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.
8.13 Broker. Intersolv and the SQL
Shareholders
acknowledge that Broadview Associates has acted as a
broker in connection with this transaction pursuant to
an
engagement letter dated November 30, 1996, and in
connection with such services shall be entitled to a
brokerage fee in accordance with the terms therein, the
payment of which shall be the responsibility of
Intersolv. There are no other brokers in connection
with
this Agreement.
8.14 Pre-emption Rights. Each of the SQL
Shareholders consents to the sale by the other SQL
Shareholders of his or its SQL Shares pursuant to this
Agreement and accordingly waives any rights of pre-
emption over the SQL Shares conferred on him or it or
held by association or by express agreement or
otherwise.
8.15 Release by SQL Shareholders. Each of the
SQL Shareholders confirms that he or it has no claim
(whether in respect of any breach of contract,
compensation for loss of office or monies due to him or
it on any account whatsoever except, in the case of any
SQL Shareholder who is also an employee, in respect of
any salary, commissions, bonuses and other employment
emoluments, or expenses accruing in the ordinary course
of business) outstanding against SQL or any Subsidiary
or
against any of the directors or employees of SQL or any
Subsidiary and that no agreement or arrangement is
outstanding under which SQL, any Subsidiary or any such
person has or could have any obligation of any kind to
him or it. To the extent that any such claim or
obligation exists or may exist, each of the SQL
Shareholders irrevocably and unconditionally waives
such
claim or obligation and releases SQL and each
Subsidiary
and any such other persons from any liability
whatsoever
in respect of such claim or obligation.
8.16 Signatures. Signatures of the parties
are
on the following four signature pages.
IN WITNESS WHEREOF, Intersolv, Inc., has caused
this
Agreement to be duly executed and delivered as of the
date first above written.
INTERSOLV, INC.
By:
____________________________________________
Gary G. Greenfield,
President and
Chief Executive
Officer
IN WITNESS WHEREOF, 3 i Group plc has caused this
Agreement to be duly executed and delivered, as of the
date first above written.
3 i Group plc
By:
____________________________________________
IN WITNESS WHEREOF, Tanweer Haque, Michael Dudley,
and Alastair Bone have signed this Agreement, as of the
date first above written.
___________________________
Tanweer Haque
___________________________
Michael Dudley
___________________________
Allstair Bone
IN WITNESS WHEREOF, SEFTA Trustees Limited has
caused this Agreement to be duly executed and
delivered,
as of the date first above written.
SEFTA Trustees Limited, as
trustee under separate
trust instruments, for the
Haque Trustee Seller, the
Dudley Trustee Seller, and the
Bone Trustee Seller:
By:
____________________________________________
Appendix R-2
Allocation of Consideration Shares
Number of
Consideration
Shares to be
Name of SQL Shareholder
Number of
Shares Issued
AA@ Ordinary
Ordinary
A. Under Share Exchange Agreement
(i) 3 i Group plc 450
540,000
(ii) Tanweer Haque
260
312,000
(iii) SEFTA Trustees Limited,
170
204,000
as Haque Trustee Seller
(iv) Michael Dudley
69
82,800
(v) SEFTA Trustees Limited,
21
25,200
as Dudley Trustee Seller
(vi) Alastair Bone
9
10,800
(vii) SEFTA Trustees Limited,
21
25,200
as Bone Trustee Seller
B. Under Agreements with Option Holders
(viii) Reggie Phillips
16
17,150
(ix) Gabriel Gribbin
16
17,150
(x) John Palmer ____
16
17,150
TOTALS: 450
598
1,251,450
Appendix 1.01
Definitions; Interpretation
As used in the Agreement, each of the following
capitalized
terms shall have the meaning indicated below:
Agreement: See preamble.
"A" Ordinary Shares" See Recital R-1
Applicable Tax Jurisdiction: See Section
2.11(a)(ii).
Article II Warranties: See Section 2.19.
Article III Warranties: See Section 3.03.
Bone Trustee Seller: See preamble.
CM: See definition of AProduct.@
CCM: See definition of AProduct.@
Closing: See Section 1.03.
Closing Date: See Section 1.03.
Consideration Shares: See Recital R-5.
Documentation: All existing and prior
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 SQL or any Subsidiary.
Dudley Trustee Seller: See preamble.
Exchange Act: See Section 4.04.
Haque Trustee Seller: See preamble.
Indemnitee: See Section 9.03.
Intellectual Property: Any and all right, title
and
interest of SQL or any Subsidiary in and to: all
patents, registered or unregistered trade names,
trademarks and servicemarks (including any
associated
goodwill attached to the trademarks and
servicemarks)
and registered or unregistered copyrights and
applications therefor ("Rights") owned by SQL or
any
Subsidiary (collectively, "SQL Rights"); trade
secrets,
customer lists, methodologies (to the extent
protectible), proprietary development and
marketing
information and know-how, inventions, inventors'
notes
(to the extent such notes exist), drawings, and
designs
associated with any of the foregoing, relating to
the
business of SQL or its Subsidiaries.
Intersolv Board: See Section 4.02.
Intersolv Company Stock: See Recital R-1.
Intersolv Disclosure Schedule: See Article III.
Intersolv Financial Statements: See Section 4.05.
Intersolv January Financial Statements: See
Section
4.05.
Intersolv SEC Documents: See Section 4.05.
Intersolv Subsidiary or Intersolv Subsidiaries:
See
Section 4.03.
Knowledge: With respect to representations and
warranties made by a party hereto, conscious
awareness
of the relevant facts or information upon which
such
representations and warranties are based, after
the
exercise of reasonable care in the ascertainment
of
such facts.
Loan: The indebtedness of SQL to 3i pursuant to
an
offer letter dated March 23, 1993, having a
capital
balance of ,216,667 immediately prior to repayment
as
described in R-5.
Material Adverse Effect: An occurrence that has
or may
have an adverse effect to Intersolv, SQL or any of
its
Subsidiaries with a value of US$50,000 or more per
single occurrence or any series of related or
connected
events.
Mr. Bone: See preamble.
Mr. Dudley: See preamble.
Mr. Haque: See preamble.
NASDAQ: See Recital R-4.
Options: See Section 2.02.
Ordinary Shares: See Recital R-1
Pension Plans: See Section 2.12(b).
,: The lawful currency of England.
Preference Shares: See Recital R-1.
Product: The computer programs and components
thereof
known as Version Control (AVC@), Change Control
Management (ACCM@) and Configuration Management
(ACM@),
all as more fully described in Section 2.09(b) of
the
SQL Disclosure Schedule, including all product,
options, features or programs marketed with or as
a
part of, or adjunct to, the foregoing, and all
copyrights and other Intellectual Property Rights
(as
hereinafter defined) related thereto (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 prior versions of the above programs,
products and components and related source and
object
code and all rights to manufacture, use, license,
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
employees'
employment relationship with SQL or any
Subsidiary, to
the extent that such rights relate to the
Products,
including rights which SQL or any of its
Subsidiaries
has by license or otherwise obtained from third
parties.
Relevant Percentage: For purposes of Section
2.19, see
Section 2.19(d); and for purposes of Section 3.06,
see
Section 3.06(d).
Rights: See definition of AIntellectual
Property.@
SEC: See Section 4.04.
Share Exchange: See Section 1.02.
Subsidiary and Subsidiaries: See Recital R-3.
SQL: See Recital R-1.
SQL Disclosure Schedule: See Article II.
SQL Lease: See Section 2.09(c).
SQL Rights: See definition of AIntellectual
Property.@
SQL Shareholders: See preamble.
SQL Shares: See Recital R-1.
Tax Return: See Section 2.11(a)(ii).
Taxes: See Section 2.11(a)(i).
Taxing Authority: See Section 2.11(a)(ii).
3i: See preamble.
Transaction: See Section 2.11(a)(iii).
Trustee Sellers: See preamble.
Trusts: See Section 2.12(b).
UK: The United Kingdom.
US$ or $: The lawful currency of the United
States of
America.
USA or U.S.: The United States of America
U.S. Person: Any of the following: (i) any
natural
person resident in the United States, even if that
person is the citizen of another country; (ii) any
partnership or corporation organized under U.S.
laws;
(iii) any partnership or corporation organized
under
the laws of a foreign country if formed by a U.S.
person principally for the purpose of investing in
securities not registered under the U.S.
Securities Act
of 1933 (the A1933 Act@), unless it was organized
and
owned by accredited investors (as defined in
Regulation
D under the 1933 Act) who are not natural persons,
estates, or trusts; (iv) any estate of which the
executor or administrator is a U.S. person, unless
(a)
the U.S. executor or administrator is a
professional
fiduciary, (b) a non-U.S. person has sole or
shared
investment discretion, and (c) the estate is
governed
by foreign law; (v) any trust of which any trustee
is a
U.S. person, unless (a) the U.S. trustee is a
professional fiduciary, (b) a non-U.S. person has
sole
or shared investment discretion of the trust
assets,
and (c) no U.S. person is a beneficiary; (vi) any
nondiscretionary account held by a dealer or other
fiduciary for the benefit of a U.S. person; (vii)
any
discretionary account held by a dealer or other
fiduciary organized or resident in the United
States,
unless for the benefit of a non-U.S. person; and
(viii)
any agency or branch of a foreign entity located
in the
United States.
VC: See definition of AProduct.@
Warrantors: Collectively, Mr. Haque, Mr. Dudley,
and
Mr. Bone.
Schedule 1
SQL Disclosure Schedule
Schedule 2
Intersolv Disclosure Schedule
Exhibit A-1
Opinion of Tucker, Flyer & Lewis, a Professional
Corporation
Exhibit A-2
Opinion of Paisner & Co.
Exhibit A-3
Opinion of Slaughter & May
Exhibit B-1
Registration Rights Agreement
(SQL Shareholders other than 3i)
Exhibit B-2
Registration Rights Agreement
(3i)
Exhibit C
Form of Agreement with Option Holder
Exhibit D
[Intentionally Omitted]
Exhibit E-1
Board Resolutions (SQL)
Exhibit E-2
Board Resolutions
(SQL Software Limited)
Exhibit E-3
Board Resolutions
(SQL Software Inc.)
Exhibit F
Opinion of Arent Fox Kintner Plotkin & Kahn, PLLC
