SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 16, 1999
ENTERPRISE SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-18034 68-0158367
(State or Other (Commission File No.) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
8415 Explorer Drive, Colorado Springs, Colorado 80920
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (719) 548-1800
38705 Seven Mile Road, Suite 435, Livonia, Michigan 48152
(Former Name or Former Address, If Changed Since Last Report)
<PAGE>
ITEM 2. Acquisition Or Disposition Of Assets.
On April 16, 1999, REVIVE Technologies Incorporated ("REVIVE"), a
Delaware corporation and a wholly-owned subsidiary of Enterprise Software, Inc.
("Enterprise"), completed the sale of substantially all of its assets to ManTech
Systems Solutions Corporation ("Buyer"), a Virginia corporation and a subsidiary
of ManTech International Corporation ("ManTech"). Prior to the asset sale,
REVIVE was engaged in the business of designing legacy software conversion
products and providing legacy software conversion services related thereto.
The transaction was effected pursuant to that certain Asset Purchase
Agreement, dated as of April 16, 1999, among REVIVE, Enterprise and Buyer. Buyer
paid REVIVE an aggregate purchase price equal to $1,650,000 (the "Purchase
Price"), based upon the value set forth in REVIVE's balance sheet at December
31, 1998, for the assets purchased and the liabilities assumed by Buyer. The
Purchase Price is subject to adjustment based upon changes reflected in REVIVE's
balance sheet at April 16, 1999.
Buyer paid $500,000 of the Purchase Price to REVIVE in cash at closing
and delivered a promissory note in the amount of $1,150,000 (the "Note"). The
Note bears interest at the rate of 6.5% per annum and is payable in four equal
quarterly installments of principal and interest, commencing on June 30, 1999.
ManTech guaranteed Buyer's obligations under the Note.
REVIVE and Enterprise also entered into a Non-Competition Agreement
with Buyer. Pursuant to the terms thereof, REVIVE and Enterprise are prohibited
for a period of 4 years from (i) competing directly or indirectly with Buyer or
any of its affiliates in the legacy software conversion service industry, (ii)
soliciting for employment any employees, agents or representatives of Buyer or
any of its affiliates, and (iii) soliciting any customers of Buyer to terminate
their legacy software conversion services agreements with Buyer or its
affiliates.
The foregoing description is qualified in its entirety by reference to
the definitive asset purchase agreement attached as an exhibit to this Current
Report on Form 8-K.
ITEM 7. Financial Statements, Pro Forma Financial Information And Exhibits.
(a) Pro Forma Financial Information. It is impracticable for Enterprise
to provide the required pro forma financial information on the business disposed
at this time. Accordingly, Enterprise will file the required pro forma financial
information for the business disposed under cover of an amendment to this
Current Report on Form 8-K as soon as practicable, but not later than June 29,
1999 (60 days after the date (April 30, 1999) that this Current Report on Form
8-K was required to be filed).
<PAGE>
(b) Exhibits.
Item 601
Regulation S-K
Exhibit Reference
Number Exhibit Description
----------------- -------------------
2.1 Asset Purchase Agreement, dated as of April 16, 1999,
among ManTech Systems Solutions Corporation,
Enterprise Software, Inc. and REVIVE Technologies
Incorporated
99.1 Press Release of Enterprise Software, Inc. dated
April 23, 1999
99.2 Press Release of Enterprise Software, Inc.
dated April 26, 1999
<PAGE>
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 hereunto duly authorized.
Enterprise Software, Inc.
By: /s/ Richard Schleufer
---------------------
Richard Schleufer
Chief Executive Officer
April 27, 1999
<PAGE>
E-1
EXHIBIT INDEX
Exhibit Reference
Number Exhibit Description
----------------- -------------------
2.1 Asset Purchase Agreement, dated as of April 16, 1999,
among ManTech Systems Solutions Corporation,
Enterprise Software, Inc. and REVIVE Technologies
Incorporated
99.1 Press Release of Enterprise Software, Inc. dated
April 23, 1999
99.2 Press Release of Enterprise Software, Inc.
dated April 26, 1999
ASSET PURCHASE AGREEMENT
AMONG
MANTECH SYSTEMS SOLUTIONS CORPORATION,
ENTERPRISE SOFTWARE, INC.
AND
REVIVE TECHNOLOGIES INCORPORATED
APRIL 16, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
Page
Section 1. Incorporation of Preamble and Recitals.............................................................1
Section 2. Purchase and Sale of Assets........................................................................1
2.1 Method of Transfer.................................................................................2
2.2 Limited Assumption of Liabilities..................................................................2
2.3 Purchase Price and Method of Payment...............................................................2
2.4 Adjustments to Purchase Price......................................................................2
2.5 Allocation of Purchase Price.......................................................................4
2.6 Adjustments and Proration..........................................................................4
Section 3. Non-Compete........................................................................................5
Section 4. Employees or Consultants...........................................................................5
Section 5. Representations and Warranties of Seller...........................................................5
5.1 Organization and Standing..........................................................................5
5.2 Financial Statement................................................................................5
5.3 Unbooked Losses....................................................................................5
5.4 Taxes..............................................................................................6
5.5 Assets.............................................................................................6
5.6 Leases.............................................................................................6
5.7 Contracts..........................................................................................7
5.8 Proposals..........................................................................................7
5.9 Litigation and Disputes............................................................................7
5.10 Environmental......................................................................................7
5.11 Intellectual Property..............................................................................8
5.12 Employment Practices/Health Claims.................................................................9
5.13 Authorization......................................................................................9
5.14 Absence of Violation..............................................................................10
5.15 Binding Obligation................................................................................10
5.16 Books and Records.................................................................................10
5.17 Brokers and Consultants...........................................................................10
5.18 Complete Disclosure...............................................................................10
Section 6. Representations and Warranties of Buyer...........................................................10
6.1 Organization and Standing.........................................................................10
6.2 Authorization.....................................................................................10
6.3 Binding Obligation................................................................................11
6.4 Brokers and Consultants...........................................................................11
6.5 Absence of Violation..............................................................................11
6.6 Litigation........................................................................................11
<PAGE>
Section 7. Covenants and Further Agreements..................................................................12
7.1 Expenses..........................................................................................12
7.2 Performance of Contracts..........................................................................12
7.3 Corporate Name/Trademark..........................................................................12
7.4 No Publicity......................................................................................13
7.5 Reliance Upon and Survival of Representations and Warranties......................................13
7.6 Indemnification...................................................................................13
7.7 Access to Records.................................................................................16
7.8 Non-Solicitation..................................................................................16
7.9 Further Assurances................................................................................16
7.10 Bulk Sales Laws...................................................................................16
7.11 Employment of Christopher Tett....................................................................16
7.12 Reimbursement Payment.............................................................................16
7.13 Certain Tax Returns...............................................................................17
Section 8. Conditions to the Obligations of Seller...........................................................17
8.1 Representations and Warranties....................................................................17
8.2 Performance.......................................................................................17
8.3 Documents at Closing..............................................................................17
8.4 Consents and Approvals............................................................................17
8.5 Releases..........................................................................................17
Section 9. Conditions to the Obligations of Buyer............................................................17
9.1 Representations and Warranties....................................................................17
9.2 Performance.......................................................................................18
9.3 Access to Information.............................................................................18
9.4 Consents..........................................................................................18
9.5 Deferred Compensation.............................................................................18
9.6 Documents at Closing..............................................................................18
Section 10. The Closing.......................................................................................18
10.1 In General........................................................................................18
10.2 Deliveries at Closing.............................................................................18
Section 11. Benefit; No Third Party Beneficiaries.............................................................20
Section 12. Adequate Representation...........................................................................20
Section 13. Notices...........................................................................................20
Section 14. Entire Agreement..................................................................................21
Section 15. Governing Law.....................................................................................22
Section 16. Waiver............................................................................................22
Section 17. Execution in Counterparts.........................................................................22
Section 18. Severability......................................................................................22
Section 19. Descriptive Headings..............................................................................23
Section 20. Construction......................................................................................23
Section 21. Definitions.......................................................................................23
</TABLE>
<PAGE>
SCHEDULES
5.2 Financial Statements
5.3 Unbooked Losses
5.4 Outstanding Tax Returns
5.5 Material Assets Not Included on Other Schedules
5.6 Material Leases and Other Agreements
5.7 Seller's Contracts
5.8 Outstanding Written Proposals
5.9 Litigation and Disputes
5.10(a) Environmental Law Compliance
5.10(b) Notification of Environmental Law Violations
5.10(c) Environmental Law Permits and Authorizations
5.10(d) Threatened Environmental Claims
5.10(e) Hazardous Material Claims
5.10(f) Storage of Hazardous Materials
5.10(g) Seller's Methods of Inspection, Testing, Assessment and
Remediation
5.11 Intellectual Property
5.13 Seller's Outstanding Authorizations
6.2 Buyer's Outstanding Authorizations
8.5 Employee Releases
9.5 Deferred Compensation
21(r) Excluded Assets
21(jj) Trademarks
<PAGE>
EXHIBITS
A. REVIVE Technologies Incorporated Consolidated Balance Sheet as of
December 31, 1998
B. Unsecured Promissory Note
C. Non-Competition Agreement
D. Bill of Sale
E. Assignment and Assumption Agreement
<PAGE>
EXECUTION COPY
Asset Purchase Agreement
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") dated as of April 16,
1999, by and among: REVIVE Technologies Incorporated, a Delaware corporation,
having an address at 230 E. Main Street, Suite 200, Carnegie, Pennsylvania 15106
(hereinafter referred to as "Seller"); Enterprise Software, Inc., a Delaware
corporation, Revive's parent corporation and a party hereto solely for purposes
of Sections 7.6 and 9.5 hereof (hereinafter referred to as "Parent Company"),
--------------------
having an address at 8415 Explorer Drive, Colorado Springs, Colorado 80920; and
ManTech Systems Solutions Corporation, a Virginia corporation (hereinafter
referred to as "Buyer"), having an address at 12015 Lee Jackson Highway,
Fairfax, Virginia 22033-3300. Seller and Buyer are sometimes also referred to
herein individually as "Party" and collectively as "Parties", otherwise
capitalized terms appearing herein shall have the meanings set forth in Section
-------
21.
- --
RECITALS
WHEREAS, Seller is in the business of designing legacy software
conversion products and providing legacy software conversion services in
connection therewith (the "Business");
WHEREAS, as part of the Business, Seller owns and employs certain
proprietary technology used for the conversion of certain database management
systems also known as the "REVIVE WORx" (the "Technology"); and
WHEREAS, subject to the terms and conditions set forth herein, Buyer
desires to purchase from Seller and Seller desires to sell and transfer to Buyer
the Assets, and Buyer has agreed to assume certain Liabilities related to the
Business as contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the agreements,
covenants, representations and warranties contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto hereby agree as follows:
SECTION 1. INCORPORATION OF PREAMBLE AND RECITALS
1.1 The preamble and recitals set forth above are an integral part of this
Agreement, evidencing the intent of the Parties in executing this Agreement and
describing the circumstances surrounding its execution. The preamble and
recitals are by express reference made a part of the promises contained in this
Agreement and this Agreement shall be construed in light of them.
SECTION 2. PURCHASE AND SALE OF ASSETS.
2.1 Method of Transfer. At the Closing, subject to Sections 8 and 9 herein,
------------------- ---------- -
Buyer hereby agrees to purchase and accept, and Seller hereby agrees to sell,
transfer, assign, deliver and convey by bills of sale, assignments and
<PAGE>
other instruments of transfer and conveyance to vest in Buyer all of Seller's
right, title and interest in, free and clear of all Encumbrances, the Assets,
including, but not limited to, the Technology, Intellectual Property, Current
Assets, property and equipment, office supplies, customer lists, goodwill and,
subject to assignment or subcontract as provided in Section 7.2 hereof,
------------
contracts, written agreements, leases, current contract backlog, rights, options
and proposals and any documents, materials or property, tangible or intangible
relating to the foregoing and such other assets of the Business, in each case as
the same shall exist on the Closing Date, as particularly described herein,
including the Schedules hereto.
2.2 Limited Assumption of Liabilities. With the exception of (i) Seller's
------------------------------------
Current Liabilities and Customer Advances less all amounts Due to Corporate as
shown on the balance sheet of the Business at 31 December 1998 attached hereto
as Exhibit A (the "31 December Balance Sheet"), (ii) all obligations and
----------
Liabilities of Seller expressly assumed by Buyer under this Agreement, and (iii)
all Liabilities and unperformed and unfulfilled obligations arising from and
after the Closing Date relating to all contracts, written agreements, purchase
orders, current contract backlog, rights, options, proposals, leases and
licenses of Seller that are assigned to Buyer pursuant to the terms hereof
(collectively, the "Assumed Liabilities"), Buyer shall not assume any
Liabilities in connection with the purchase of the Assets.
2.3 Purchase Price and Method of Payment. Subject to Section 2.4 herein, the
------------------------------------- -----------
total purchase price (the "Purchase Price") for the transactions contemplated
hereby shall be One Million Six Hundred Fifty Thousand Dollars ($1,650,000)
which shall be paid as follows: (i) Five Hundred Thousand Dollars ($500,000)
payable at Closing by Buyer to Seller in immediately available funds by
certified or official bank check or by wire transfer to an account or accounts
designated by Seller to Buyer in writing prior to Closing (the "Closing
Payment"), plus (ii) the execution and delivery by Buyer to Seller at the
Closing of an unsecured promissory note in the form attached hereto as Exhibit B
---------
(the "Note") in the principal amount of One Million One Hundred Fifty Thousand
Dollars ($1,150,000) as described herein. The outstanding principal amount plus
accrued interest on the Note shall be paid to Revive as follows. The Note shall
bear simple interest at a rate of six and one half percent (6.5%) per year
calculated on the basis of a 360 day year of twelve equal months and shall be
paid to Seller in four (4) installments. The first installment in the principal
amount of Two Hundred and Eighty-Seven Thousand Five Hundred Dollars ($287,500)
plus interest shall be paid three (3) months after Closing. The second
installment in the principal amount of Two Hundred and Eighty-Seven Thousand
Five Hundred Dollars ($287,500) plus interest shall be paid six (6) months after
Closing. The third installment in the principal amount of Two Hundred and
Eighty-Seven Thousand Five Hundred Dollars ($287,500) plus interest shall be
paid nine (9) months after Closing. The fourth and final installment in the
principal amount of Two Hundred and Eighty-Seven Thousand Five Hundred Dollars
($287,500) plus interest shall be paid twelve (12) months after Closing.
2.4 Adjustments to Purchase Price. The Purchase Price is based in part on the 31
-----------------------------
December Balance Sheet (the "Assessed Book Value"). Within thirty (30) days of
the Closing Date, Seller will prepare and submit to Buyer a balance sheet as of
the Closing Date, which shall include in Current Liabilities, among other
things, One Hundred Eight Thousand Seventy-Four Dollars and Ninety-Eight Cents
($108,074.98) for deferred compensation obligations owing through March 31, 1999
to certain employees of Seller and shall be prepared in accordance with GAAP and
consistent with Seller's past practices and the 31 December Balance Sheet (the
<PAGE>
"Closing Book Value"). Buyer shall have a period of thirty (30) calendar days
after delivery of the Closing Book Value to present in writing to Seller any
objections Buyer may have with respect to any of the matters set forth therein.
If no objections are raised within such 30-day period, Seller's determination of
the Closing Book Value shall be deemed accepted and approved by Seller and by
Buyer. If Buyer shall raise any objection within such 30-day period, Buyer and
Seller shall attempt to resolve the matter or matters in dispute. If all such
objections are resolved within forty (40) calendar days after delivery of the
Closing Book Value, Seller shall send to Buyer a confirmation of the original
Closing Book Value or, if necessary, a revised Closing Book Value prepared in
accordance with such resolution, and Buyer shall send a letter to Seller
confirming that such confirmed or revised Closing Book Value is in accordance
with such resolution, whereupon the confirmed or revised Closing Book Value
shall be final and binding on the Parties hereto. For purposes of this Section
2.4, Buyer shall provide Seller and its agents and representatives from and
after the Closing Date with reasonable access, during normal business hours, to
all of the business records and Buyer's personnel necessary for the preparation
of the Closing Book Value and any revisions thereto.
If all such disputes cannot be so resolved in writing by Buyer and
Seller within forty (40) calendar days after the delivery of the Closing Book
Value, then the specific matter or matters in dispute shall be submitted to an
independent nationally recognized accounting firm mutually selected by the
Parties (the "Accountants"), which shall make a final and binding determination
as to such matter or matters. The fees and expenses of the Accountants shall be
borne one-half by Buyer and one-half by Seller.
During the pendency of any such dispute, Seller or Buyer, as the case
may be, shall promptly remit to the other party any portion of the Purchase
Price adjustment which is not in dispute, and the dispute resolution procedures
set forth herein shall continue to operate with respect to the remaining
disputed item or items.
In the event the Closing Book Value reflects different values for
Property and Equipment, Current Assets, Current Liabilities and/or Customer
Advances than those values reflected in the Assessed Book Value, the Parties
shall adjust the Purchase Price as provided herein to reflect such change(s) by
adjusting the principal amount of the Note (beginning with the first
installment) to reflect the change to the value of the Business. If so required,
Buyer shall promptly execute and deliver to Seller an adjusted Note in exchange
for the original Note which shall be marked "cancelled" and returned to Buyer.
In the event that the Closing Book Value exceeds the Assessed Book Value (an
"Overage") and the Overage exceeds the sum of One Hundred Thousand Dollars
($100,000), the Note shall be increased by the exact amount that the Overage
exceeds the sum of One Hundred Thousand Dollars ($100,000). In the event that
the Closing Book Value is less than the Assessed Book Value (an "Underage"), the
Note shall be decreased by an amount equal to the Underage.
2.5 Allocation of Purchase Price. The Parties agree to allocate the Purchase
------------------------------
Price (and all other capitalizable costs) among the Assets as mutually agreed to
by the Parties in accordance with the requirements of Section 1060 of the Code
and the Treasury regulations thereunder. The Parties agree to file Form 8594
with their federal income tax returns for the taxable year that includes the
Closing, and to file all federal, state, local and foreign Tax returns, each in
<PAGE>
accordance with the allocation of the Purchase Price among the Assets as set
forth herein. The Parties shall report the transaction contemplated by this
Agreement for federal income tax and all other purposes in a manner consistent
with such allocation.
2.6 Adjustments and Proration.
-------------------------
(a) To the extent the specific amounts for the following matters
and items are included in the Assumed Liabilities and are
properly reflected on the Closing Book Value as Assumed
Liabilities they shall be Liabilities of Buyer. Otherwise, the
following matters and items, in each case to the extent
related to the Business, shall be apportioned between the
Parties pro-rata or, where applicable, credited in total to a
particular party, as of 11:59 p.m. of the day immediately
preceding the Closing Date (the "Cut-Off Time"):
(i) Rents, common area charges, fees and other amounts
payable under the leases listed on Schedule 5.6 and
------------
taxes and fees, including, real estate taxes to the
extent not prepaid and to the extent payable pursuant
to or as required by such leases, personal property,
business, occupation, sales and gross revenue taxes,
and other similar Taxes, if any (based on the most
current available information), and water and sewer
charges shall be prorated as of the Cut-Off Time
based on the benefit received or to be received by
Seller and Buyer, respectively.
(ii) Telephone contracts and contracts for the supply of
heat, steam, electricity, gas, lighting and any other
service to the extent not prepaid shall be reflected
on an invoice or estimated and accrued prorated as of
the Cut-Off Time on the basis of the most recent
utility bills.
(iii) Employee salaries and wages with respect to employees
of Seller that are hired by Buyer or any of its
affiliates and such other items as are provided for
in this Agreement or as are normally prorated and
adjusted in the sale of a business similar to the
Business, including, without limitation, amounts
payable to the extent not prepaid under the
proposals, contracts and other agreements listed on
Schedules 5.7 and 5.8 shall be prorated as of the
----------------------
Cut-Off Time.
(b) Buyer and Seller shall account and pay for the foregoing, and
any other applicable prorations and allocations as soon as
practicable after the Closing. The prorations, allocations,
adjustments and other accountings required under this
Agreement shall be made by authorized representatives of
Seller and Buyer, with each party to bear its own costs and
expenses in connection therewith.
SECTION 3. NON-COMPETE.
3.1 Non-Compete. Seller agrees to enter into a Non-Competition Agreement
-----------
substantially in the form attached hereto as Exhibit C (the "Non-Competition
---------
Agreement") to be delivered at the Closing, pursuant to which Seller and Parent
<PAGE>
Company shall agree not to compete with Buyer in the same field as the Business
for a period of four (4) years following the Closing Date, all as more
particularly described in the Non-Competition Agreement.
SECTION 4. EMPLOYEES OR CONSULTANTS.
4.1 Employees or Consultants. Subject to Section 7.8 hereof, Buyer may, but
-------------------------- -----------
shall not be obligated to, hire or contract with employees of the Business, by
separate agreement or arrangement and on such terms as Buyer may deem advisable.
Seller agrees not to interfere with the resignation of such employee(s) in favor
of a position with Buyer or with any of Seller's employees entering into
consulting arrangements with Buyer; provided such position or consulting
arrangements with Buyer in each case are only effective from and after the
Closing Date. With respect to any of the employees of Seller at the time of the
Closing that are hired by Buyer, the period of employment with Seller shall be
considered as employment with Buyer for purposes of Buyer's benefits
determinations. Notwithstanding anything stated herein to the contrary, nothing
herein shall imply that Buyer and any of Buyer's current or future employees
have anything more than a "employment at will" relationship unless otherwise set
forth in a definitive agreement between such parties.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Buyer that:
5.1 Organization and Standing. Revive is a corporation duly organized, validly
-------------------------
existing and in good standing under the Laws of the State of Delaware, and has
the requisite corporate power and authority to own, operate, and lease the
Assets and to carry on the Business as it is now being conducted. Revive is duly
qualified to do business and is in good standing in each jurisdiction in which
its ownership or use of the Assets requires such qualification.
5.2 Financial Statement. Except as set forth on Schedule 5.2, the 31 December
-------------------- ------------
Balance Sheet sets forth a complete and accurate description of all the Assets
that would be required to be included on a balance prepared in accordance with
GAAP that are owned by Seller and are used or useful in the Business as of the
date of such balance sheet.
5.3 Unbooked Losses. Except as set forth on Schedule 5.3, there are no material
--------------- ------------
Liabilities of the Business that would be required to be included on a balance
sheet prepared in accordance with GAAP that are not fully reflected on the 31
December Balance Sheet or Schedule 5.3 as of the date of such balance sheet.
------------
Except as disclosed on Schedule 5.3, there has not been a material adverse
-------------
change in the Business since December 31, 1998.
5.4 Taxes. Except as set forth on Schedule 5.4, Seller has filed with the
----- -------------
appropriate governmental agencies all Tax returns (foreign, federal, state and
local) required to be filed by it and such returns are true, complete and
correct in all material respects and have been filed in a timely manner. To the
Best of Seller's Knowledge and Belief, all Taxes attributable to Seller that
are, or were, due and payable have been determined and as shown on such Tax
Return paid in full, and except as set forth on Schedule 5.4 attached hereto and
------------
<PAGE>
incorporated herein by reference, there is no claim or assessment pending
against Seller for an alleged deficiency in Taxes and to the Best of Seller's
Knowledge and Belief there is no audit or investigation pending or currently
being conducted that could cause Seller to be found liable for any Taxes.
Furthermore, there are no agreements in effect that extend the period of
limitations for the assessment or collection of any Taxes for which Seller may
be found liable.
5.5 Assets. Schedule 5.5 sets forth a list of all the Assets that are not
------ -------------
otherwise set forth on the other Schedules hereto. Seller has good and valid
title to the Assets free and clear of all Encumbrances. The Assets reflected on
Schedule 5.5 are in good operating condition and repair, subject to normal wear
- ------------
and tear, and are suitable and adequate for the uses for which they are intended
or are being used. With the exception of any cash or accounts receivable and the
Excluded Assets, the Assets reflected on Schedule 5.5 together with those listed
------------
on the other Schedules hereto, represent all of the property of any kind
whatsoever, real or personal, tangible or intangible, contingent or otherwise,
and wherever located, which are used in or are available for use in the Business
or are necessary for the unimpaired continued operation of the Business
consistent with the past operations of the Business, whether or not reflected on
the books of Seller. Except as set forth on Schedule 5.5, there are no
-------------
commitments, plans or arrangements to license or otherwise convey the Assets
except as contemplated by this Agreement and commitments, contracts and licenses
listed on Schedules 5.6, 5.7 or 5.8 hereto. Buyer shall make no claim against
Seller for any particular asset the replacement value of which is less than
Fifty Dollars ($50.00) in the current market.
5.6 Leases. Schedule 5.6 sets forth a list and brief description of all leases
------ ------------
and other agreements under which Seller (a) is a lessee or lessor of any
Asset(s), (b) holds, manages or operates any Asset(s) owned by any third party,
or (c) agreed to permit a third party to hold, manage or operate any Asset(s)
owned by, or under the control of, Seller. Each such lease and other agreement
is in full force and effect and constitutes a legal, valid and binding
obligation of, and is legally enforceable against, Seller. Seller has in all
material respects performed all obligations under the leases required to be
performed by Seller to date. Seller is not in default, and to the Best of
Seller's Knowledge and Belief no other party is in default, in any respect under
any lease or other agreement, and there has not occurred any event (whether with
or without notice, lapse of time or the happening or occurrence of any other
event) which would constitute such a default. All of the Assets subject to the
leases are in good operating condition and repair, subject to normal wear and
tear.
5.7 Contracts.
---------
(a) Schedule 5.7 sets forth a list (including the names of the
-------------
parties thereto and dates thereof), of each contract,
agreement or binding contractual arrangement (including, but
not limited to employment agreements, cooperation agreements
and contracts with agents or suppliers) to which Seller is a
party or by which any of the properties of Seller are bound,
and which is material to the Business or the financial
condition of the Business taken as a whole (all such
contracts, collectively, the "Seller's Contracts").
<PAGE>
(b) All the Seller's Contracts are in full force and effect and
constitute legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective
terms. Seller currently has the capability and resources to
perform its obligations under all of the Seller's contracts.
(c) Seller is not, nor to the Best of Seller's Knowledge and
Belief is any party which Seller has contracted with, in
default under any of the Seller's Contracts, nor do any facts
or circumstances exist which upon the giving of notice or the
passage of time or both would constitute a default by Seller,
or to the Best of Seller's Knowledge and Belief by any party
with which Seller has contracted, in each case which default
would have an adverse effect on the Business.
5.8 Proposals. Schedule 5.8 sets forth a list of all outstanding written
--------- -------------
proposals in connection with the Business. Seller has no reason to believe that
any such proposal, if accepted, would be unprofitable or would otherwise result
in a financial loss.
5.9 Litigation and Disputes. Except as set forth in Schedule 5.9, there are no
------------------------ ------------
actions, suits, claims, litigation, arbitration proceedings or investigations
pending or to the Best of Seller's Knowledge and Belief threatened in writing or
otherwise reasonably anticipated against or involving Seller in connection with
the Assets, the Business or the transactions contemplated by this Agreement, at
law or in equity, or before or by any court, arbitrator or governmental
authority, domestic or foreign. Seller is not operating under, subject to or in
default with respect to any order, writ, injunction, decree or judgment of any
court arbitrator or governmental authority.
5.10 Environmental.
-------------
(a) Except as set forth on Schedule 5.10(a), Seller is in full compliance
-----------------
with all applicable Environmental Laws, compliance includes, but is not
limited to, the possession by Seller of all permits, licenses and other
governmental authorizations required under applicable Environmental
Laws.
(b) Except as set forth on Schedule 5.10(b), Seller has not received any
-----------------
written or verbal communication from a governmental authority, citizens
group, employee or otherwise, that alleges that Seller is not in full
compliance with all applicable Environmental Laws, and there are no
circumstances that would prevent or interfere with such compliance in
the future.
(c) All permits and other governmental authorizations currently held by
Seller pursuant to the Environmental Laws are identified in Schedule
--------
5.10(c).
-------
(d) Except as set forth in Schedule 5.10(d), there is no Environmental
-----------------
Claim pending or threatened against Seller.
(e) Except as set forth on Schedule 5.10(e), to the Best of Seller's
-----------------
Knowledge and Belief there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of
<PAGE>
any Hazardous Material, that would form the basis of any Environmental
Claim against Seller.
(f) Without limiting the generality of the foregoing, all locations where
Seller has stored, disposed of or arranged for the disposal of
Hazardous Materials are specifically identified on Schedule 5.10(f).
----------------
(g) Except as set forth in Schedule 5.10(g), Seller's methods of
------------------
inspection, testing, assessment and remediation are in compliance with
all applicable Laws, statutes and regulations. To the extent
applicable, Seller has employed methods that are approved or accepted
by the United States Environmental Protection Agency, the American
Public Health Association, the American Industrial Hygiene Association,
the Occupational Health and Safety Act and all state and local
regulations of same import.
5.11 Intellectual Property.
---------------------
(a) Schedule 5.11 contains a complete and accurate list of all Intellectual
-------------
Property. Except as set forth on Schedule 5.11, each item of
--------------
Intellectual Property (i) to the Best of Seller's Knowledge and Belief
has been maintained and used in accordance with all applicable Laws,
(ii) may be utilized by Seller without the consent or license of any
third party, is free and clear of all Encumbrances and does not require
the payment of royalties to any third party to use it, (iii) is
assignable to Buyer in accordance with the terms and provisions hereof
and thereof, and (iv) to the Best of Seller's Knowledge and Belief has
not been infringed upon by any other person. None of the patent
applications, applications for trademark or service mark registration,
or applications for copyright registration listed on Schedule 5.11 have
-------------
been abandoned or withdrawn, and all Taxes, annuities, and maintenance
fees required to keep those applications pending at least until one (1)
month after the Closing Date have been paid. All patents, trademark,
service mark, and copyright registrations listed on Schedule 5.11 are
-------------
in force and all Taxes, annuities, and maintenance fees required to
keep them in force at least one (1) month after the Closing Date have
been paid.
(b) Seller is not aware that the use of the Technology or any other item of
Intellectual Property by Seller, or anyone claiming any right from
Seller to use any item of Intellectual Property, infringes the rights
of any third party. Seller has not been notified by any third party
that the use of the Technology or any item of Intellectual Property
infringes upon the rights of any third party.
(c) Except as set forth on Schedule 5.11, all technical information,
--------------
procedures, processes, trade secrets, formulae, methods, practices,
techniques, information, bills of parts, diagrams, drawings,
specifications and data relating to the design, manufacture,
production, inspection and testing of the Technology (collectively,
"Know-How") developed, sold or used by Seller in the Business may be
utilized by Seller without the consent or license of any third party,
is free and clear of all Encumbrances and no payment of royalties to
any third party to use it. Seller has not received any notification of
<PAGE>
infringement or other adverse claim with regard to any Know-How used by
it. Seller is not aware that the use of any Know-How by Seller
infringes upon the rights of any third party.
(d) Each current and former employee and independent contractor of Seller
has assigned to Seller all of such person's rights to, and benefits to
be derived from, each item of Intellectual Property and Know-How
developed by such person. With respect to such assignments of any
intellectual property listed on Schedule 5.11 and except as set forth
-------------
on Schedule 5.11, such assignments have been either (i) recorded before
-------------
the Closing Date in the applicable government patent, trademark, or
copyright office in all applicable countries, or (ii) submitted by
Seller before the Closing Date to the applicable government patent,
trademark, or copyright office in all applicable countries for
recordation.
5.12 Employment Practices/Health Claims. Seller is in compliance with all
------------------------------------
applicable Laws respecting employment and employment practices, terms and
conditions of employment, occupational safety and health, and wages and hours.
5.13 Authorization. Except as set forth on Schedule 5.13, the execution and
------------- --------------
delivery of the Seller Related Documents and the performance of the transactions
contemplated hereby have been duly authorized and approved by all necessary
corporate action of Seller, including, but not limited to, approval by the
directors and shareholders of Seller in accordance with Seller's governing
documents, and do not and will not: (a) conflict with, or violate any provision
of, any Law having applicability to Seller or the Assets, or any provision of
the certificate of incorporation or bylaws or other applicable governing
documents of Seller; (b) conflict with, or result in any breach of, or
constitute a default under any agreement to which Seller is a party or by which
it or any of its Assets, may be bound; or (c) result in or require the creation,
imposition or acceleration of any indebtedness, or of any Encumbrance of any
nature upon, or with respect to, Seller or any Assets.
5.14 Absence of Violation. Seller is not in violation of, or default under, nor
--------------------
has it breached, any term or provision of its organizational documents or any
agreement or restriction to which Seller is a party or by which Seller is bound
or affected, which violation, default or breach would have a material adverse
effect on the Business. Seller is in full compliance with all Laws except where
the absence of compliance will not have a material adverse effect on the
Business and the Assets.
5.15 Binding Obligation. This Agreement constitutes a valid and binding
-------------------
obligation of Seller, enforceable against Seller in accordance with its terms;
and each document to be executed by Seller pursuant hereto, when executed and
delivered in accordance with the provisions hereof, shall be a valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except to the extent in each case that such enforcement may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other Laws of
general application relating to or affecting the enforcement of creditors'
rights as from time to time in effect.
5.16 Books and Records. All financial, business and accounting books and records
-----------------
relating to the Business have been made available to Buyer and its
representatives prior to the Closing. Such books and records have been properly
<PAGE>
and accurately kept and completed in all material respects and there are no
material inaccuracies or discrepancies of any kind contained or reflected
therein.
5.17 Brokers and Consultants. Except for fees owing to Schroeder & Co., Inc.,
------------------------
which fees shall be the obligation of Parent Company, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
will not give rise to any valid Claim against any of the Parties hereto for a
finder's fee, brokerage commission, or other like payment.
5.18 Complete Disclosure. No information furnished to Buyer in this Agreement
--------------------
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein not false or misleading.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller that:
6.1 Organization and Standing. Buyer is a corporation duly organized, validly
-------------------------
existing, and in good standing under the Laws of the Commonwealth of Virginia,
and has the requisite corporate power and authority to own, operate, and lease
its assets and to carry on its business as it is now being conducted. Buyer is
duly qualified to do business and is in good standing in each jurisdiction in
which its ownership or use of its assets requires such qualification, except
where the absence of such qualification or good standing shall not have a
material adverse effect on the business and operations of Buyer.
6.2 Authorization. Except as set forth on Schedule 6.2, the execution and
------------- -------------
delivery of the Buyer Related Documents and the performance of the transactions
contemplated hereby have been duly authorized and approved by the Board of
Directors of Buyer, and do not and will not: (a) conflict with, or violate any
provision of, any Law having applicability to Buyer or any of its assets, or any
provision of the articles of incorporation or bylaws of Buyer; (b) conflict
with, or result in any breach of, or constitute a default under any agreement to
which Buyer is a party or by which it or any of its assets, may be bound; or (c)
result in or require the creation, imposition or acceleration of any
indebtedness, or of any Encumbrance of any nature upon, or with respect to,
Buyer or any of its assets.
6.3 Binding Obligation. Buyer has full corporate power to enter into and perform
------------------
the Buyer Related Documents and the transactions contemplated hereby and thereby
and this Agreement constitutes a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms; and each document to be
executed by Buyer pursuant hereto, when executed and delivered in accordance
with the provisions hereof, shall be a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except to the extent in
each case that such enforcement may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other Laws of general application
relating to or affecting the enforcement of creditors' rights as from time to
time in effect.
<PAGE>
6.4 Brokers and Consultants. Except for fees owing to Schroeder & Co., Inc.,
------------------------
which fees shall be the obligation of Parent Company, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
will not give rise to any valid Claim against any of the Parties hereto for a
finder's fee, brokerage commission, or other like payment.
6.5 Absence of Violation. Buyer is not in violation of, or default under, nor
--------------------
has it breached, any term or provision of its articles of incorporation or
bylaws or any agreement or restriction to which Buyer is a party or by which
Buyer is bound or affected, which violation, default or breach would have a
material adverse effect on Buyer's ability to consummate the transactions
contemplated hereby. Buyer is in compliance in all material respects with all
Laws except where the absence of compliance will not have a material adverse
effect on the business and operations as presently conducted by Buyer or Buyer's
ability to consummate the transactions contemplated hereby.
6.6 Litigation. There are no actions, suits, arbitration or other legal or
----------
administrative proceedings or investigations pending or, to the Best of Buyer's
Knowledge and Belief, threatened in writing, that (a) question the validity of
this Agreement or any other agreements or instruments to be executed by Buyer
pursuant hereto or the right of Buyer to enter in to this Agreement or any other
agreements or instruments to be executed by Buyer pursuant hereto or to
consummate the transactions contemplated hereby or thereby, or (b) if adversely
determined, would be likely to have a material adverse effect on Buyer's ability
to perform its obligations under this Agreement or any other agreement or
instrument to be executed by Buyer pursuant hereto. Buyer is not a party to or
subject to any order, writ, injunction, decree, judgment or other restriction of
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality which has or is reasonably likely to
have a material adverse effect on Buyer's ability to enter into this Agreement
or any other agreement or instrument to be executed by Buyer pursuant hereto, or
to consummate the transactions contemplated hereby or thereby.
SECTION 7. COVENANTS AND FURTHER AGREEMENTS.
7.1 Expenses. Each Party shall pay its own expenses and costs, including without
--------
limitation, legal and accounting fees and Taxes incurred in connection with the
consummation of this Agreement and the transactions contemplated hereby. Any and
all conveyance, excise, stamp, sales, use, recording, transfer or similar Taxes
or fees with respect to the sale of the Assets hereunder shall be paid by Buyer.
None of the expenses and costs of Seller shall be paid out of the Assets.
7.2 Performance of Contracts. In the event and to the extent that the consent to
------------------------
the assignment to Buyer of any of the contracts, current contract backlog,
rights, options, proposals, commitments, leases or agreements listed on
Schedules 5.6, 5.7 or 5.8 has not been obtained as of the Closing Date or a
- ---------------------------
contract or agreement is not able to be assigned pursuant to this Agreement,
such contract, current contract backlog, rights, options, proposals,
commitments, leases or agreements shall not be assigned hereunder at the Closing
and: (i) Seller shall continue to be bound thereunder in accordance with its
terms and (ii) Buyer shall perform and discharge fully all of the obligations of
Seller and its affiliates thereunder from and after the Closing Date, and shall
<PAGE>
indemnify Seller for any and all actions, suits, proceedings, claims, demands,
losses, costs, expenses, obligations, liabilities, judgments, damages,
recoveries and deficiencies, including, without limitation, interest, penalties
and reasonable attorneys' fees (collectively "Damages"), attributable to any
failures on the part of Buyer in connection with such performance; provided,
however, that Seller shall not alter, modify or extend the terms and conditions
of such contracts or agreements or leases without Buyer's prior written consent
and at the request of, the sole expense of, and for the account of, Buyer,
Seller shall take all reasonable actions to protect its rights thereunder for
the benefit of Buyer. Seller shall, without further consideration therefor, pay,
assign and remit to Buyer promptly all monies, rights and other considerations
received or obtained, or which may be received or obtained by Seller in respect
of such performance. Seller shall use its good faith efforts, and the Parties
shall cooperate fully with each other, to obtain all necessary consents;
provided, however, that Seller shall not be obligated to pay any consideration
therefor to the third party from whom such consent is requested. If and when any
such consent shall be obtained or such contract, current contract backlog,
rights, options, proposals, commitments, agreement or lease shall otherwise
become assignable, Seller shall promptly assign all of their rights and
obligations thereunder Buyer and Buyer shall assume such rights. In the event
that there are costs relating to any such assignment imposed by any third party
to facilitate any such assignment, Seller shall obtain Buyer's advance consent
and Buyer shall be solely liable therefor.
7.3 Corporate Name/Trademark. Seller and its affiliates shall have the right for
------------------------
a period of thirty (30) calendar days from and after the Closing Date and an
additional thirty (30) calendar day grace period to continue to use the name
"Revive" alone or in combination with other words. Seller shall take all actions
necessary to change its corporate name to a name not including "Revive
Technologies" or any other name resembling such name so as to reasonably cause
identity confusion, including, but not limited to, filing the necessary
amendments to Revive's Certificate of Incorporation and ceasing the usage of
marketing and advertising materials including such name and/or trademark upon
the expiration of such thirty (30) calendar day period so as to enable Buyer to
use the name "Revive Technologies" or some permutation thereof, if it so chooses
to in its sole and absolute discretion.
7.4 No Publicity. Except as specifically provided herein and except as any
-------------
release or announcement may be required by law or the rules or regulations of
any United States or foreign securities exchange, neither of the Parties will
make any disclosures, verbal or written, regarding the existence or contents of
this Agreement or the transactions contemplated hereby without the prior written
consent of the other Party hereto, which consent shall not be unreasonably
withheld, conditioned or delayed.
7.5 Reliance Upon and Survival of Representations and Warranties.
-------------------------------------------------------------------------
Notwithstanding any investigation at any time conducted by any of the Parties
hereto, each Party shall be entitled to rely on the representations and
warranties of the other Party set forth herein or in any schedule, exhibit, or
other document executed and delivered pursuant hereto. The representations and
warranties of each Party contained herein and in any schedule, exhibit or other
document executed and delivered pursuant hereto shall survive the Closing for
one year, except for the representations and warranties of Seller contained in
Sections 5.1, 5.2, 5.3, 5.6, 5.7, 5.8, 5.10, 5.12, 5.13, 5.15 and 5.17 hereof,
- ------------------------------------------------------------------------
which shall not survive the Closing, and the representations and warranties of
<PAGE>
Buyer contained in Sections 6.1 and 6.4 hereof, which shall not survive the
---------------------
Closing.
7.6 Indemnification.
---------------
(a) Seller covenants and agrees to indemnify and hold harmless
Buyer, and its directors, officers and employees from and
against all losses, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees) arising out of
or relating to any Claims (i) incurred or sustained by Buyer
on account of any misrepresentation or breach of any warranty
except for the representations and warranties contained in
Sections 5.1, 5.2, 5.3, 5.6, 5.7, 5.8, 5.10, 5.12, 5.13, 5.15
--------------------------------------------------------------
and 5.17 hereof, which shall not survive the Closing, or (ii)
--------
incurred or sustained by Buyer on account of any breach of any
covenant or agreement of Seller contained in this Agreement or
the other Seller Related Documents. Without limiting the
generality of the foregoing and except as otherwise expressly
provided herein, Seller shall be liable for all Liabilities
arising out of or based upon the operation of the Business
prior to the Closing Date.
(b) Buyer covenants and agrees to indemnify and hold harmless
Seller, and its directors, officers and employees from and
against all losses, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees) arising out of
or relating to any Claims incurred or sustained by Seller on
account of any misrepresentation or breach of any warranty,
covenant or agreement of Buyer contained in this Agreement or
the other Buyer Related Documents. Without limiting the
generality of the foregoing, Buyer shall be liable for all
Liabilities arising out of or based upon the operation of the
Business from and after the Closing Date.
(c) If any Claim shall be brought or asserted by one Party (the
"Indemnified Party") against the other Party (the
"Indemnifying Party") hereunder in which indemnity may be
sought pursuant to this Section 7.6, the Indemnified Party
-----------
shall give prompt written notice of such action, suit,
investigation or proceeding to the Indemnifying Party, who
shall assume the defense thereof (including the employment of
counsel reasonably satisfactory to the Indemnified Party) and
the payment of all expenses related thereto; provided,
however, that any delay or failure to so notify the
Indemnifying Party shall relieve the Indemnifying Party of its
obligations hereunder only to the extent, if at all, that the
Indemnifying Party is materially prejudiced by reason of such
delay or failure. The Indemnified Party shall have the right
to employ separate counsel in any such action, suit,
investigation or proceeding and to participate in the defense
thereof, but the fees and disbursements of such separate
counsel shall be borne by the Indemnified Party unless both
the Indemnified Party and the Indemnifying Party are named as
parties to the Claim and the Indemnifying Party shall in good
faith determine that representation by the same counsel is
inappropriate (in which latter case the fees and disbursements
of such separate counsel shall be at the expense of the
Indemnifying Party). In the event that the Indemnifying Party,
<PAGE>
within ten (10) days after notice of any such action, suit,
investigation or proceeding fails to assume the defense
thereof, the Indemnified Party shall have the right to
undertake the defense, compromise or settlement of such
action, suit, investigation or proceeding for the account of
the Indemnifying Party, and all costs, fees and expenses
thereof shall be deemed Claims for which the Indemnifying
Party shall be responsible. Notwithstanding anything to the
contrary stated herein: (i) the Indemnifying Party shall not,
without the Indemnified Party's prior written consent which
shall not be unreasonably withheld or delayed, settle or
compromise any action, suit, investigation or proceeding or
consent to the entry of any judgment or order thereunder; and
(ii) no Indemnifying Party shall be required to indemnify an
Indemnified Party for any judgment issued by any judicial,
administrative, arbitral or other body until such judgment
represents a final, unappealable judgment of such body of
competent jurisdiction over the Claim at issue.
(d) The Parties shall have the right to give notice of any and all
Claims under this Agreement in which Indemnity may be sought
pursuant to this Section 7.6 to one another for a period of
------------
one year following the Closing Date. Any Claim for
indemnification hereunder which is not asserted by notice
given as herein provided by the first anniversary of the
Closing Date may not be pursued and is hereby irrevocably
waived after such time. In no event shall Seller's or Parent
Company's aggregate obligation to provide indemnification
hereunder exceed One Million Six Hundred Fifty Thousand
Dollars ($1,650,000). Seller shall not be obligated to
indemnify any Indemnified Party with respect to any Claim for
indemnification hereunder unless and until the aggregate
amount of all such Claims for indemnification exceed
Seventy-Five Thousand Dollars ($75,000), whereupon Seller
shall only be required to provide indemnification hereunder
for the amount by which such aggregate Claims exceed
Seventy-Five Thousand Dollars ($75,000). Buyer shall have the
right, subject to the prior written consent of Seller in each
instance, to be reimbursed for the amount of any and all
Claims for indemnification hereunder by offsetting such
amounts as expended against the balance payable by Buyer to
Seller pursuant to the Note. In the event that Claims received
by Buyer exceed the remaining balance of the Note, Seller
shall provide Buyer with reasonable assurance of, and security
for, payment of expenditures related to any such Claims. The
indemnification afforded by this Section 7.6 will be the sole
-----------
and exclusive remedy against Seller or Parent Company for any
Liabilities or Claims of Buyer and its directors, officers and
employees in respect of matters arising out of this Agreement.
(e) Parent Company hereby guarantees to Buyer the due and punctual
payment of any additional amounts due and owing to Buyer, from
and after the date that the balance of the Note has been
reduced to zero, as a result of Seller's inability to honor
its obligations set forth in this Section 7.6. Notwithstanding
-----------
anything stated to the contrary herein, the obligations and
liabilities of Parent Company under this guaranty shall be
primary, direct and immediate subject to the failure of Seller
to make any payment or to perform any of its obligations under
<PAGE>
this Section 7.6 and the reduction of the balance of the Note
-----------
to zero. This guaranty is a guaranty of payment, not merely of
collection and shall be a continuing, absolute and
unconditional guaranty and shall remain in full force and
effect until all payment obligations under this Section 7.6
-----------
have been paid in full. Other than as expressly stated herein,
Parent Company's obligations hereunder are in all respects
absolute and unconditional and shall not be impaired,
modified, released or limited by the occurrence of any
condition, including, without limitation (i) any release,
non-perfection or invalidity of any direct or indirect
security for any obligation of Seller under this Agreement;
(ii) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting Seller or its assets; (iii) any
invalidity or unenforceability of this Agreement relating to
or against, for any reason, any provision of applicable law or
regulation purporting to prohibit the payment by Seller of any
amounts payable by Seller under this Section 7.6; or (iv) any
-----------
other act or omission of any kind by Seller or any other
corporation which might, but for the provisions of this
Section 7.6 constitute a legal or equitable discharge of
------------
the obligations of Parent Company hereunder.
7.7 Access to Records. Seller hereby specifically agrees to provide Buyer from
-----------------
and after the Closing Date with reasonable access during normal business hours
to all of Seller's business records not otherwise conveyed to Buyer pursuant to
this Agreement and Buyer hereby specifically agrees to provide Seller and
Seller's agents and representatives from and after the Closing with reasonable
access during normal business hours to all of Seller's business records conveyed
to Buyer pursuant to the terms of this Agreement. Furthermore, in the event that
Parent Company plans to: (i) convey or discontinue Seller's operations; or (ii)
dissolve Seller's corporate existence, Seller hereby covenants and agrees to
make appropriate arrangements for Buyer to have reasonable ongoing access during
normal business hours to such business records of Seller for a period of three
years from and after the Closing Date or as required by law, if longer.
7.8 Non-Solicitation. In the event that the transactions contemplated hereby are
----------------
not consummated on or before 16 April 1999 or upon such later date as may be
mutually agreed to in writing by the Parties hereto, Buyer shall not for a
period of one (1) year after 16 April 1999 or such later date as agreed to in
writing, without the prior written consent of either Seller or Parent Company,
directly or indirectly hire or solicit for hire as an employee, independent
contractor, or otherwise contract for the services of any person who is
currently employed (either as an employee or full-time consultant) by Seller.
7.9 Further Assurances. The Parties hereto agree to execute and deliver or cause
------------------
to be executed and delivered at the Closing or at other reasonable times and
places, such additional instruments or documents as the other Party hereto may
reasonably request for the purpose of carrying out the intent of this Agreement.
The Parties hereto further agree to provide assistance to the other to process
and secure any consents, authorizations and approvals of government,
quasi-governmental and private entities or persons that are required to be
obtained in order to consummate the transactions contemplated herein.
<PAGE>
7.10 Bulk Sales Laws. Each of the Parties hereby waives compliance by the other
---------------
with any applicable bulk sales or bulk transfer law in connection with the
transactions contemplated hereby.
7.11 Employment of Christopher Tett. On or prior to the Closing Date, Buyer or
-------------------------------
its affiliate shall have offered employment to Christopher Tett, the sole
employee of Revive Technologies (UK) Ltd., a company organized under the laws of
England and Wales and a subsidiary of Seller ("Revive UK") on terms and
conditions which are at least as favorable to Christopher Tett as those that are
contained in his existing employment agreement with Revive UK.
7.12 Reimbursement Payment. On the first business day following the Closing Date
---------------------
Buyer shall pay to Parent Company in immediately available funds by wire
transfer to an account designated to Buyer in writing prior to the Closing Date,
the sum of One Hundred Eight Thousand Seventy-Four Dollars and Ninety-Eight
Cents ($108,074.98) as reimbursement for Parent's Company's payment on or prior
to the Closing Date of deferred compensation owing through the Closing Date to
the persons named on Schedule 9.5 hereto.
------------
7.13 Certain Tax Returns. Seller shall file by September 30, 1999 the federal
-------------------
and state income tax returns identified as being past due on Schedule 5.4
-------------
hereto.
- ------
SECTION 8. CONDITIONS TO THE OBLIGATIONS OF SELLER.
The obligations of Seller to consummate the transactions herein contemplated are
subject to the satisfaction on or before the Closing Date of the following
conditions:
8.1 Representations and Warranties. The representations and warranties of Buyer
------------------------------
contained in this Agreement and in any exhibit or other document executed and
delivered pursuant hereto shall be true and accurate individually and in the
aggregate in all material respects on, and as of, the Closing Date with the same
effect as though such representations and warranties had been made on, and as
of, such date, except for any changes expressly permitted by this Agreement.
8.2 Performance. Buyer shall have performed and complied individually or in the
-----------
aggregate in all material aspects with all agreements and conditions required by
this Agreement to be performed or complied with by Buyer prior to or at the
Closing Date.
8.3 Documents at Closing. All Buyer Related Documents required to be furnished
--------------------
by Buyer to Seller prior to or at the Closing, as provided in Section 10.2 (b)
----------------
hereof, shall have been so furnished.
8.4 Consents and Approvals. All consents and approvals required by Buyer
------------------------
hereunder shall have been duly obtained and evidence thereof provided to Seller.
8.5 Releases. An executed release of all Claims and the waiver of all rights
--------
from each of the persons listed on Schedule 8.5 relating to their employment
-------------
with Seller or Revive UK, as the case may be, dated as of the Closing Date shall
have been duly obtained.
SECTION 9. CONDITIONS TO THE OBLIGATIONS OF BUYER.
<PAGE>
The obligations of Buyer at the Closing to consummate the transactions herein
contemplated are subject to the fulfillment by Seller at or prior to the Closing
of each of the following conditions:
9.1 Representations and Warranties. The representations and warranties of Seller
------------------------------
contained in this Agreement and in any exhibit, schedule or other document
executed and delivered pursuant hereto shall be true and accurate individually
and in the aggregate in all material respects on, and as of, the Closing Date
with the same effect as though such representations and warranties had been made
on, and as of, such date, except for any changes expressly permitted by this
Agreement.
9.2 Performance. Seller shall have performed and complied individually or in the
-----------
aggregate in all material respects with all agreements and conditions required
by this Agreement to be performed or complied with, prior to or at the Closing
Date.
9.3 Access to Information. Seller shall have provided Buyer with reasonable
----------------------
access to all materials requested by Buyer for Buyer's due diligence review.
9.4 Consents. Subject to Section 7.2 hereof, all consents and approvals required
--------
by Seller hereunder shall have been duly obtained and evidence thereof provided
to Buyer.
9.5 Deferred Compensation. Parent Company shall have provided in the aggregate
----------------------
One Hundred Eight Thousand Seventy-Four Dollars and Ninety-Eight Cents
($108,074.98) to Seller for the payment of deferred compensation owing through
March 31, 1999 to those individuals listed on Schedule 9.5 in the amounts
-------------
specified next to their names.
9.6 Documents at Closing. All Seller Related Documents required to be furnished
--------------------
by Seller to Buyer prior or at the Closing, as provided in Section 10.2(a)
----------------
hereof, shall have been so furnished.
SECTION 10. THE CLOSING.
10.1 In General. The closing of the transactions (the "Closing") contemplated
----------
under this Agreement shall be held on 16 April 1999 at the offices of Akin,
Gump, Strauss, Hauer & Feld, L.L.P., 590 Madison Avenue, New York, New York or
such other date or place as the Parties shall agree upon in writing (the
"Closing Date").
10.2 Deliveries at Closing.
---------------------
(a) In consideration of the Purchase Price, Seller shall deliver, or cause to be
delivered, the following:
(1) a duly executed Bill of Sale for the Assets
substantially in the form attached hereto as Exhibit
-------
D (the "Bill of Sale");
-
(2) completed assignment, novation and/or transfer
agreements for any Assets requiring such agreements,
including but not limited to, contract(s), contract
<PAGE>
option(s), contract right(s), and leases of real or
personal property, substantially in the form attached
hereto as Exhibit E;
---------
(3) subject to Section 7.2 hereof, such other consents
and waivers of third parties as may be necessary to
consummate the transactions contemplated by this
Agreement;
(4) all other documents of title, assignments and other
instruments as, in the reasonable judgment of Buyer,
are necessary to vest in Buyer good and valid title
to the Assets;
(5) the Non-Competition Agreement substantially in the
form attached hereto as Exhibit C duly executed on
---------
behalf of Seller;
(6) certified copies of the Resolutions adopted by the
Board of Directors and the Shareholders of Seller
authorizing the transactions as contemplated by this
Agreement;
(7) a certificate of incumbency and specimen signatures
of the signatory officers of Seller, which shall have
attached thereto a certified copy of Seller's
Certificate of Incorporation and Bylaw or other
organizational documents;
(8) good standing certificates as of a date not more than
twenty five (25) days prior to the Closing, issued by
the Secretary of State of the state of incorporation
of Seller and any U.S. state in that Seller is
qualified to do business as a foreign corporation;
and
(9) satisfactory evidence of the release of all liens
against the Assets, including, but not limited to the
release by Seller's secured lender of any interest in
the Assets and a list of all responses to official
actions that are due within three (3) months after
the Closing Date in connection with the patents,
trademarks or service mark registrations, copyright
registrations, and applications therefor listed on
Schedule 5.11.
(b) At the Closing, Buyer shall deliver to Seller, the following:
(1) the Closing Payment provided for in Section 2.3;
-----------
(2) the Note provided for in Section 2.3;
-----------
(3) the Non-Competition Agreement substantially in the
form attached hereto as Exhibit C duly executed on
behalf of Buyer;
(4) a certified copy of the resolutions adopted by the
Board of Directors of Buyer authorizing the
transactions contemplated by this Agreement;
(5) a certificate of incumbency and specimen signatures
of the signatory officers of Buyer which shall have
attached thereto a certified copy of Buyer's Articles
of Incorporation and Bylaws;
(6) assignment to Buyer of the ManTech International
Corporation's rights in the letter of intent dated 26
February 1999;
(7) Buyer's good standing certificate issued by the
Secretary of State of Virginia; and
(8) duly executed instruments of assumption with respect
to all contracts, contract backlog, options, rights,
proposals, commitments, agreements or leases assigned
<PAGE>
or otherwise transferred to Buyer pursuant to the
terms hereof, substantially in the form attached
hereto as Exhibit E.
---------
(c) At the Closing, each Party shall deliver to the other all
other previously undelivered documents, instruments, and
writings required to be delivered by them at the Closing
pursuant to this Agreement or otherwise required in connection
herewith.
SECTION 11. BENEFIT; NO THIRD PARTY BENEFICIARIES.
11.1 This Agreement shall be binding upon and shall inure to the benefit of the
Parties hereto and their respective successors and permitted assigns. This
Agreement may not be assigned by any Party without the prior written consent of
the other Party hereto. This Agreement is entered into solely for the sole and
exclusive benefit of such Parties. Nothing herein contained will be deemed to
create any third party beneficiaries or confer any benefit or rights on or to
any person not a party hereto, and no person not a party hereto shall be
entitled to enforce any provisions hereof or exercise any rights hereto.
SECTION 12. ADEQUATE REPRESENTATION.
12.1 The Parties acknowledge that they have had the opportunity to obtain the
advice of experienced counsel of their own choosing in connection with the
negotiation and execution of this Agreement and to confer with such counsel with
respect to all matters contained herein and that this Agreement, and any Buyer
Related Documents or Seller Related Documents, will not be construed against any
one Party merely because that Party may have caused it to be prepared.
SECTION 13. NOTICES.
13.1 Any notice or other communication required or permitted hereto shall be in
writing, shall be sent by one of the following means to the addressee and shall
be deemed conclusively to have been given: (a) on the first business day
following the day timely deposited with Federal Express (or equivalent national
overnight carrier) or United States Express Mail, with the cost of delivery
prepaid; (b) on the fifth business day following the day duly sent by certified
or registered United States mail, postage prepaid with return receipt requested;
or (c) when otherwise actually delivered to the addressee, at the following
addresses:
(a) If to Buyer or ManTech International Corporation,addressed to:
c/o ManTech Systems Solutions Corporation
12015 Lee Jackson Highway
Fairfax, Virginia 22033-3300
Attention: Jeffrey S. Brown, Esq.
Phone: (703) 218-6098
Facsimile: (703) 218-8398
<PAGE>
(b) If to Seller, addressed to:
REVIVE Technologies Incorporated
c/o Enterprise Software, Inc.
8415 Explorer Drive
Colorado Springs, Colorado 80920
Attention: Richard Schleufer
Phone: .........(719) 548-1800
Facsimile:........(719) 548-1818
With a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
Attention:........Alan Siegel, Esq.
Phone: .........(212) 872-1029
Facsimile:........(212) 872-1002
(c) If to Parent Company, addressed to:
Enterprise Software, Inc.
8415 Explorer Drive
Colorado Springs, Colorado 80920
Attention: Richard Schleufer
Phone: .........(719) 548-1800
Facsimile:........(719) 548-1818
With a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
Attention:........Alan Siegel, Esq.
Phone: .........(212) 872-1029
Facsimile:........(212) 872-1002
13.2 Either Party may, by notice given in accordance with this Section 13 to the
----------
other Party, designate another address or person for receipt of notices hereto.
Copies may be sent by regular first-class mail, postage prepaid, to such
person(s) as a Party may direct from time to time by notice to the others, but
failure or delay in sending copies shall not affect the validity of any such
notice, request, demand or other communication so given to a Party.
SECTION 14. ENTIRE AGREEMENT.
14.1 This Agreement and other documents executed and delivered pursuant hereto,
constitutes the entire agreement among the Parties hereto with respect to the
transactions contemplated herein, and it supersedes all prior oral or written
<PAGE>
agreements, commitments or understandings with respect to the matters provided
for herein, including, but not limited to, the Letter of Intent. No amendment,
modification or discharge of this Agreement shall be valid or binding unless set
forth in writing and duly executed and delivered by the Party against whom
enforcement of the amendment, modification or discharge is sought.
14.2 The Exhibits and Schedules attached hereto and other documents to be
furnished in connection herewith are an integral part of this Agreement. All
understandings and agreements between the Parties are merged into this Agreement
which fully and completely expresses their agreements and supersedes any prior
agreement or understanding relating to the subject matter, and no Party has made
any representations or warranties, express or implied, not herein expressly set
forth. This Agreement shall not be changed or terminated except by written
amendment signed by the Parties hereto.
SECTION 15. GOVERNING LAW.
15.1 This Agreement and the agreements contemplated hereby shall be governed by
and construed in accordance with the Laws of the Commonwealth of Virginia
(excluding the choice of laws principles thereof).
SECTION 16. WAIVER.
16.1 No delay or failure on the part of any Party hereto in exercising any
right, power or privilege under this Agreement or under any other documents
furnished in connection with or pursuant to this Agreement shall impair any such
right, power or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege,
or the exercise of any other right, power or privilege. No waiver shall be valid
against any Party hereto unless made in writing and signed by the Party against
whom the enforcement of such waiver is sought and then only to the extent
expressly specified therein.
SECTION 17. EXECUTION IN COUNTERPARTS.
17.1 This Agreement may be executed by facsimile signature and in multiple
counterparts, each to be an original and taken together shall constitute one and
the same document.
SECTION 18. SEVERABILITY.
18.1 If any clause, provision or section of this Agreement shall be held illegal
or invalid by any court, the illegality or invalidity of such clause, provision
or section shall not affect the remainder of this Agreement which shall be
construed and enforced as if such illegal or invalid clause, provision or
section had not been contained in this Agreement. If any agreement or obligation
contained in this Agreement is held to be in violation of Law, then such
agreement or obligation shall be deemed to be the agreement or obligation of the
respective Party hereto only to the extent permitted by Law.
<PAGE>
SECTION 19. DESCRIPTIVE HEADINGS.
19.1 The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
SECTION 20. CONSTRUCTION.
20.1 As used in this Agreement, the masculine shall include the feminine and
neuter, the singular shall include the plural and the plural shall include the
singular, as the context may require.
20.2 Any item disclosed on a Schedule pursuant to a representation or warranty
contained herein shall be deemed to be disclosed for purposes of any other
relevant representation or warranty contained herein and incorporated by
reference on any Schedule prepared in connection therewith.
SECTION 21. DEFINITIONS.
For all purposes of this Agreement, capitalized terms shall have the meanings
set forth in this Section 21 unless otherwise expressly provided.
(a) "Agreement" shall mean this Asset Purchase Agreement.
(b) "Asset(s)" means other than the Excluded Assets, property of
all kinds, real and personal, tangible and intangible,
contingent or otherwise, and wherever located, which are
currently used in, or are available for use in, the Business
or are necessary for the unimpaired continued operation of the
Business consistent with the past operations of the Business,
whether or not reflected on the books of Seller, and which
have a value of at least Fifty Dollars ($50.00) in the current
market.
(c) "Best of Seller's Knowledge and Belief" means the actual
knowledge of the Seller after (i) due inquiry of all
directors, officers, shareholders, employees or agents of
Seller who would reasonably be expected to have knowledge of
the subject to which such inquiry relates; and (ii) a due and
reasonable examination of any documents, correspondence or
other items contained in the files of Seller that pertain to
such subject matter.
(d) "Best of Buyer's Knowledge and Belief" means the actual
knowledge of the Buyer after (i) due inquiry of all directors,
officers, shareholders, employees or agents of Buyer who would
reasonably be expected to have knowledge of the subject to
which such inquiry relates; and (ii) a due and reasonable
examination of any documents, correspondence or other items
contained in the files of Buyer that pertain to such subject
matter.
<PAGE>
(e) "Billings in Excess" means cash advances received by Seller in
excess of contract revenue earned.
(f) "Business" has the meaning set forth in the recitals.
(g) "Buyer Related Documents" means this Agreement and all other
agreements or instruments contemplated to be executed and
delivered by Buyer to Seller under this Agreement.
(h) "Claim(s)" means all demands, claims, actions or causes of
action, assessments, losses, damages, Liabilities, costs and
expenses, including, without limitation, interest, penalties
and reasonable attorneys' fees and disbursements.
(i) "Closing" shall have the meaning attributed thereto in Section
10.1 hereof.
(j) "Closing Date" shall have the meaning attributed thereto in
Section 10.1 hereof.
(k) "Closing Payment" shall have the meaning attributed thereto in
Section 2.3 hereof.
(l) "Code" means the Internal Revenue Code of 1986, as amended,
and all Laws promulgated pursuant thereto or in connection
therewith.
(m) "Current Assets" means cash, cash equivalents, short term
deposits, pre-paid expenses, accounts receivable, other
receivables, inventory and all other resources expected to be
realized in cash, sold or consumed within the next year.
(n) "Encumbrance" means any mortgage, lien, pledge, encumbrance,
security interest, deed of trust, option, encroachment,
reservation, order, decree, judgment, condition, restriction,
charge or claim of any kind, other than a Permitted
Encumbrance.
(o) "Environment" shall mean soil, surface waters, groundwaters,
land, stream sediments, surface or subsurface strata, air and
any other environmental medium.
(p) "Environmental Claim(s)" means any claim, action, cause of
action, study, investigation, notice, demand, suit,
proceeding, hearing, losses, damages (including without
limitation, diminution in value), Liabilities, costs and
expenses, including without limitation, interest, penalties
and attorneys' and disbursements (written oral) made by any
person or entity alleging or related to potential or actual
liability (including, without limitation, potential liability
for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal
injuries, or penalties) arising out of, based on or related to
the manufacture, processing, analysis, distribution, use,
treatment, storage, disposal, transport, or handling, or the
emission, discharge, presence, release, or threatened release
in to the Environment, of any Hazardous Material at any
<PAGE>
location, whether or not owned or operated by Seller and any
other circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
(q) "Environmental Law(s)" shall mean any applicable federal,
state or local statute, regulation or ordinance, whether
currently existing or hereinafter promulgated, relating to
Hazardous Materials, drinking water, ground water, landfills,
open dumps, storage tanks, underground storage tanks, solid
waste, waste water, storm water run-off, waste emissions, or
wells. Without limiting the generality of the foregoing, the
term shall encompass each of the following statutes, as
amended as of the date hereof, and all regulations promulgated
thereunder as of the date hereof: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(Superfund or CERCLA) (codified in scattered sections of 26
U.S.C.; 33 U.S.C.; 42 U.S.C. and 42 U.S.C. 9601 et seq.), the
-- ---
Clean Water Act of 1977 (33 U.S.C. 1251 et seq.), the Clean
-- ---
Air Act (42 U.S.C. 7401 et seq.), the Resource Conservation
-- ---
and Recovery Actof 1975 (the Solid Waste Disposal Act or RCRA)
(42 U.S.C. 6901 et seq.), the Safe DrinkingWater Act (21
-- ---
U.S.C. 349; 42 U.S.C. 201 and 300f-j-9), and the Toxic
Materials Control Act (15 U.S.C. 2601 et seq.), and the
-- ---
Hazardous Materials Transportation Act as amended (49 U.S.C.
1801-1812).
(r) "Excluded Assets" means the items listed on Schedule 21 (r)
-----------
hereto.
(s) "GAAP" means the generally accepted/ accounting principles of
the United States consistently applied.
(t) "Hazardous Materials" means all pesticides, pollutants,
contaminants, chemicals, gasoline, petroleum products,
asbestos, radioactive materials (including by-product, source
and/or special nuclear materials), unreaformaldehyde,
flammable explosives, or other hazardous wastes or toxic
materials, that are now or hereafter subject to regulation
under the Environmental Laws.
(u) "Indemnified Party" shall have the meaning attributed thereto
in Section 7.6(c) hereof.
--------------
(v) "Indemnifying Party" shall have the meaning attributed thereto
in Section 7.6(c) hereof.
--------------
(w) "Intellectual Property" means all patents, copyrights,
trademark registrations, service mark registrations or other
intellectual property licensed to or owned by Seller, which
are used or useful in the operation of the Business, including
any Trade Marks and including the right to sue and recover for
past infringement of any such intellectual property.
(x) "Know-How" shall have the meaning attributed thereto in
Section 5.11(c) hereof.
---------------
<PAGE>
(y) "Law" or "Laws" means all applicable foreign, federal, state
and local statutes, laws, ordinances, regulations, rules,
resolutions, orders, determinations, writs, injunctions and
awards.
(z) "Liabilities" means liabilities, debts or other obligations,
whether accrued, absolute, contingent or otherwise, known or
unknown.
(aa) "Non-Competition Agreement" shall have the meaning attributed
thereto in Section 3.1 hereof.
-----------
(bb) "Parent Company" shall have the meaning attributed thereto in
the preamble hereof.
(cc) "Permitted Encumbrance" shall mean the liens and claims held
by Re Work, Inc. with respect to certain equipment located at
Seller's office space at 2990 E. Coliseum Blvd., Suite 150,
Fort Wayne, IN 46805.
(dd) "Purchase Price" shall have the meaning attributed thereto in
Section 2.3 hereof.
-----------
(ee) "REVIVE WORx" means the proprietary software for the
conversion of IDMS/ADSO, Datacom/Ideal and ADABAS/Natural to
COBOL/DB2.
(ff) "Seller's Contracts" shall have the meaning attributed thereto
in Section 5.7 hereof.
-----------
(gg) "Seller Related Document(s)" means this Agreement and all
other agreements or instruments contemplated to be executed
and delivered by Seller to Buyer under this Agreement.
(hh) "Tax(es)" means all federal, state, local and foreign taxes
(including, without limitation, income, profit, franchise,
sales, use, real property, personal property, ad valorem,
excise, employment, social security and wage withholding
taxes) and installments of estimated taxes, assessments,
deficiencies, levies, imports, duties, license fees,
registration fees, withholdings, or other similar charges of
every kind, character or description imposed by any
governmental or quasi-governmental authorities, and any
interest, penalties or additions to tax imposed thereon or in
connection therewith.
(ii) "Technology" has the meaning set forth in the recitals.
(jj) "Trade Marks" means the trademarks or service marks listed in
Schedule 21(jj) attached hereto.
---------------
[INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed by their representative duly authorized officers this 16 day of April
1999.
BY SELLER:
REVIVE TECHNOLOGIES INCORPORATED
By: /s/Joseph J. Porfeli
--------------------
Joseph J. Porfeli
President and Chief Executive Officer
And for the sole purpose of Sections 7.6 and 9.5 hereof
BY PARENT COMPANY:
ENTERPRISE SOFTWARE, INC.
By: /s/Richard Schleufer
--------------------
Richard Schleufer
Chief Executive Officer
BY BUYER:
MANTECH SYSTEMS SOLUTIONS CORPORATION
By: /s/James F. Parks
-----------------
James F. Parks
President
ENTERPRISE SOFTWARE ANNOUNCES STRATEGIC INITIATIVES
TO MAXIMIZE SHAREHOLDER VALUE
-- Company Sells REVIVE Technologies, Cancels SAR Program;
Continues To Pursue Other Strategic Alternatives --
COLORADO SPRINGS, CO, (PR Newswire) April 23, 1999 -- Enterprise Software, Inc.
(NASDAQ:ENSW) today announced strategic initiatives intended to maximize the
Company's value for the benefit of its shareholders. These initiatives include
the sale of its REVIVE Technologies subsidiary, the annulment of the previously
announced stock appreciation rights program, and ongoing discussion of the sale
of the Company's media businesses.
In October 1998, Enterprise Software announced that it had retained the
international investment banking firm of Schroder & Co., Inc. to explore
financial and strategic alternatives to maximize value for shareholders,
including the possibility of a merger or sale of the Company. Since then,
Schroder has thoroughly reviewed the Company's businesses and has had extensive
discussions which are ongoing with an interested party regarding a possible sale
of the Company's media businesses. In addition, the Company has identified other
possible interested buyers and has provided the requisite information to those
parties.
At the same time, the Company decided to sell its REVIVE subsidiary, whose
performance and prospects did not meet corporate objectives, in order to
alleviate the continuing drain on the Company's cash flow-positive media
businesses. The Company sold REVIVE to ManTech International, Inc., for a total
of $1.65 million in cash and short-term notes.
The sale of REVIVE eliminates a fiscal year 2000 estimated cash flow deficit in
excess of $2 million. In connection with this disposition, the Company will
record a loss from discontinued operations in the fiscal year ended March 31,
1999 in the amount of approximately $12.5 million, which represents the
difference between the balance sheet carrying value of REVIVE and the amounts
received upon its sale.
<PAGE>
- 2 -
The Company's Board of Directors believes that it continues to be in the best
interest of shareholders to aggressively seek strategic or other suitable buyers
for the Company's media businesses at a price which, in the opinion of the Board
of Directors, reflects the full value of those businesses. In the interim, the
Board of Directors and management are seeking other means of enhancing
shareholder value and have taken action to reduce corporate overhead by closing
the Livonia, Michigan offices; annulling the Stock Appreciation Program and
Associated Rights granted in October of 1998 to the Company's former chairman,
Andre Blay, all other directors and selected management personnel, which reduces
the amount of fully diluted stock; revising option plans; and introducing
performance incentives. The Company anticipates additional steps to bring
overhead down and increase earnings per share.
Rick Schleufer, chairman and chief executive of Enterprise Software, said: "Our
newly reconstituted Board believes that these strategic initiatives provide the
best means of delivering maximum value to our shareholders. We have found the
most appropriate buyer for REVIVE, which has been negatively impacting our
performance and whose prospects were not in line with our corporate objectives,
and are eager to enhance the performance of the other operating companies while
continuing to explore all other alternatives to maximize shareholder value. We
believe these actions are in the best interest of our shareholders, as well as
our customers and employees."
The Company noted that the asset write-down associated with the disposition of
REVIVE would result in its net worth falling below the standards required by
Nasdaq for listing. However, the Company expects its retained earnings for the
current fiscal year as well as other steps it can take in the interim to enhance
its capital base to enable it to meet the Nasdaq requirements as to which, in
all other respects, the Company is in compliance.
<PAGE>
- 3 -
At such time in the near future as there are additional matters to report, the
Company will hold a shareholder conference call. The information concerning the
time and access to the call will be posted on the Company's web site,
http://www.ensw.com.
Enterprise Software, Inc., a developer of mission critical software for
enterprise management, is the parent company of Enterprise Systems Group, Ltd.
and CCMS, recognized leaders in innovative broadcast management software systems
and integrated media support services for television stations, radio stations,
cable networks, cable systems and other television distributors. Enterprise
Software, Inc. was the parent company of REVIVE Technologies, a global provider
of legacy systems conversion services and technologies.
Included in the release are "forward-looking" statements based upon the
Company's good faith expectations and beliefs which the Company believes are
reasonable but which may differ materially from actual results, depending upon
the circumstances, and there can be no assurance that the statements of
expectation or belief will result or be achieved or accomplished. Taking into
account the foregoing, the actual results could differ materially from those
expressed in such forward-looking statements as a result of such important
factors as the Company's ability to compete with high-technology competitors
which may be larger, offer more services, possess greater resources and other
factors described in the Company's reports on file with the Securities and
Exchange Commission.
# # #
ENTERPRISE SOFTWARE CORRECTS ESTIMATE OF
WRITE-OFF FROM SALE OF REVIVE TECHNOLOGIES
COLORADO SPRINGS, CO, (PR Newswire) April 26, 1999 -- Enterprise Software, Inc.
said today that the Company's press release of April 23, 1999, incorrectly
stated the expected write-off resulting from the sale of its REVIVE Technologies
subsidiary. As reported, the Company sold REVIVE to ManTech International, Inc.,
for a total of $1.65 million in cash and short-term notes. In connection with
this disposition, the Company will record a loss from discontinued operations in
the fiscal year ended March 31, 1999 in the amount of approximately $10.5
million -- not $12.5 million, as erroneously stated in the April 23 release.
Enterprise Software, Inc., a developer of mission critical software for
enterprise management, is the parent company of Enterprise Systems Group, Ltd.
and CCMS, recognized leaders in innovative broadcast management software systems
and integrated media support services for television stations, radio stations,
cable networks, cable systems and other television distributors. Enterprise
Software, Inc. was the parent company of REVIVE Technologies, a global provider
of legacy systems conversion services and technologies.
Included in the release are "forward-looking" statements based upon the
Company's good faith expectations and beliefs which the Company believes are
reasonable but which may differ materially from actual results, depending upon
the circumstances, and there can be no assurance that the statements of
expectation or belief will result or be achieved or accomplished. Taking into
account the foregoing, the actual results could differ materially from those
expressed in such forward-looking statements as a result of such important
factors as the Company's ability to compete with high-technology competitors
which may be larger, offer more services, possess greater resources and other
factors described in the Company's reports on file with the Securities and
Exchange Commission.
