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EXHIBIT 10.1
STOCK PURCHASE AGREEMENT,
DATED AS OF DECEMBER 29, 2000,
AMONG
AFFILIATED COMPUTER SERVICES, INC.,
ACS ENTERPRISE SOLUTIONS, INC.,
TYLER TECHNOLOGIES, INC.,
AND
BUSINESS RESOURCES CORPORATION
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.............................................................................................1
ARTICLE II CLOSING................................................................................................9
2.1 Closing.........................................................................................9
2.2 Proceedings at Closing..........................................................................9
ARTICLE III CONSIDERATION.........................................................................................9
3.1 Amount and Form of Consideration................................................................9
3.2 Payment of Consideration........................................................................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER..............................................................10
4.1 Organization; Power and Authority..............................................................10
4.2 Authorizations; Execution and Validity.........................................................10
4.3 Capitalization.................................................................................10
4.4 Financial Statements...........................................................................11
4.5 Consents.......................................................................................11
4.6 No Defaults or Conflicts.......................................................................11
4.7 Owned Real Property............................................................................12
4.8 Leased Real Property...........................................................................12
4.9 Condition and Sufficiency of Assets............................................................12
4.10 Insurance......................................................................................13
4.11 Contracts......................................................................................13
4.12 Suppliers......................................................................................15
4.13 Litigation; Orders.............................................................................15
4.14 Environmental Laws.............................................................................15
4.15 Patents, Trademarks and Similar Rights.........................................................16
4.16 Employees......................................................................................20
4.17 Employee Benefit Matters.......................................................................21
4.18 Taxes..........................................................................................24
4.19 Title to Shares................................................................................26
4.20 Fees...........................................................................................26
4.21 Absence of Certain Changes or Events...........................................................26
4.22 Permits........................................................................................28
4.23 Accounts Receivable............................................................................28
4.24 Compliance with Laws...........................................................................29
4.25 Transactions with Related Parties..............................................................29
4.26 Undisclosed Liabilities........................................................................29
4.27 Indebtedness...................................................................................29
4.28 Agents.........................................................................................30
4.29 Commission Sales Contracts.....................................................................30
4.30 Customers......................................................................................30
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4.31 Subsidiaries...................................................................................30
4.32 Books and Records..............................................................................30
4.33 Information Furnished..........................................................................30
4.34 Oates Employment and Non-Competition Agreement.................................................31
4.35 Directors and Officers.........................................................................31
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ACS AND BUYER........................................................31
5.1 Organization and Good Standing.................................................................32
5.2 Authorization of Agreement.....................................................................32
5.3 Conflicts, Consents of Third Parties...........................................................32
5.4 Brokers........................................................................................32
ARTICLE VI COVENANTS OF BRC AND SELLER...........................................................................32
6.1 Further Actions................................................................................32
6.2 Use of Proceeds................................................................................33
6.3 Notices to Obligors............................................................................33
6.4 Bank Accounts..................................................................................33
6.5 Payroll and Employee Expenses; Other Pre-Closing Expenses......................................33
6.6 Segregation of Database........................................................................33
6.7 Payoff of ACS Promissory Notes.................................................................34
6.8 Payoff of Vehicle Leases.......................................................................34
6.9 Amended and Restated Non-Disturbance Agreement.................................................34
ARTICLE VII COVENANTS OF ACS AND BUYER...........................................................................34
7.1 Further Actions................................................................................34
7.2 Release of Guarantees..........................................................................34
7.3 Employment.....................................................................................34
7.4 Treatment of Employees under Buyer's Benefit Plans.............................................34
7.5 Limitations....................................................................................37
7.6 Ordinary Course................................................................................37
ARTICLE VIII DELIVERIES AT CLOSING...............................................................................37
8.1 Deliveries by Seller to Buyer..................................................................37
8.2 Deliveries by Buyer to Seller..................................................................39
ARTICLE IX INDEMNIFICATION.......................................................................................40
9.1 Seller Indemnification.........................................................................40
9.2 Buyer Indemnification..........................................................................40
9.3 Indemnification Procedures.....................................................................41
9.4 Limits on Indemnification......................................................................41
9.5 Bexar County Agreement.........................................................................43
ARTICLE X TAXES..................................................................................................43
10.1 Tax Returns and Payments.......................................................................43
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10.2 Refunds........................................................................................45
10.3 Cooperation....................................................................................45
10.4 Buyer's Taxes..................................................................................45
10.5 Miscellaneous..................................................................................46
10.6 Section 338(h)(10) Election....................................................................46
10.7 Sales and Use Taxes; Property Taxes............................................................46
10.8 Tax Audits.....................................................................................46
ARTICLE XI GENERAL...............................................................................................47
11.1 Amendments.....................................................................................47
11.2 Waivers........................................................................................47
11.3 Notices........................................................................................47
11.4 Successors and Assigns; Parties in Interest....................................................48
11.5 Severability...................................................................................49
11.6 Entire Agreement...............................................................................49
11.7 Governing Law..................................................................................49
11.8 Remedies.......................................................................................49
11.9 Disputes.......................................................................................49
11.10 Expenses.......................................................................................51
11.11 Release of Information; Confidentiality........................................................51
11.12 Certain Acknowledgements.......................................................................51
11.13 Certain Construction Rules.....................................................................51
11.14 Counterparts...................................................................................52
11.15 Survival.......................................................................................52
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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Exhibit A Form of Amended and Restated Non-Disturbance
Agreement
Exhibit B Form of Transition Services Agreement
Exhibit C Form of Sublease Agreement
Exhibit D Form of Non-Competition Agreement
Exhibit E Form of Second Amendment to Employment and
Non-Competition Agreement, dated as of October 8,
1997 among Tyler Corporation, a Delaware corporation,
BRC and William D. Oates, as amended
Exhibit F Form of Opinion of H. Lynn Moore, Jr., General
Counsel for Seller and the Company
Exhibit G Form of Releases from Seller's Senior Secured Lenders
to Seller
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INDEX OF SCHEDULE REFERENCES:
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Schedule Page Number
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Schedule 1.1......................................................................................................6
Schedule 1.2......................................................................................................8
Schedule 4.3.....................................................................................................11
Schedule 4.4.....................................................................................................11
Schedule 4.5.....................................................................................................11
Schedule 4.8.....................................................................................................12
Schedule 4.9(b)..................................................................................................12
Schedule 4.10....................................................................................................13
Schedule 4.11(a).................................................................................................13
Schedule 4.12....................................................................................................15
Schedule 4.13....................................................................................................15
Schedule 4.15....................................................................................................16
Schedule 4.15(a).................................................................................................16
Schedule 4.15(b).................................................................................................16
Schedule 4.15(d).................................................................................................17
Schedule 4.15(h).................................................................................................17
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Schedule 4.15(j).................................................................................................18
Schedule 4.15(k).................................................................................................18
Schedule 4.16(a).................................................................................................20
Schedule 4.17(a).................................................................................................21
Schedule 4.17(b).................................................................................................21
Schedule 4.17(c).................................................................................................22
Schedule 4.17(d).................................................................................................22
Schedule 4.17(e).................................................................................................22
Schedule 4.17(g).................................................................................................23
Schedule 4.17(h).................................................................................................23
Schedule 4.17(j).................................................................................................23
Schedule 4.18....................................................................................................24
Schedule 4.21....................................................................................................26
Schedule 4.22....................................................................................................28
Schedule 4.23....................................................................................................28
Schedule 4.25....................................................................................................29
Schedule 4.27....................................................................................................29
Schedule 4.28....................................................................................................30
Schedule 4.30....................................................................................................30
Schedule 4.31....................................................................................................30
Schedule 4.35....................................................................................................31
Schedule 4.37....................................................................................................31
Schedule 6.2.....................................................................................................33
Schedule 6.5.....................................................................................................33
Schedule 7.2.....................................................................................................34
Schedule 7.3.....................................................................................................34
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of December 29, 2000
(this "Agreement"), is entered into by and among ACS Enterprise Solutions, Inc.,
a Delaware corporation ("Buyer"), Affiliated Computer Services, Inc., a Delaware
corporation ("ACS"), Tyler Technologies, Inc., a Delaware corporation ("Seller")
and Business Resources Corporation, a Texas corporation ("BRC").
WHEREAS, Seller is the owner of all of the outstanding shares
of capital stock (the "Shares") of BRC;
WHEREAS, BRC is the owner of all of the outstanding shares of
capital stock of Government Records Services, Inc. ("GRS"), Title Records
Corporation ("TRC"), RTS Holdings, Inc. and PRETS Holdings, Inc.;
WHEREAS, Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, on the terms and subject to the conditions set forth
in this Agreement, all of the Shares; and
WHEREAS, pursuant to Section 338(h)(10) of the Internal
Revenue Code of 1986, as amended, the parties will elect to treat the sale of
the Shares to Buyer as a sale of assets for tax purposes and as a sale of stock
for all other purposes.
NOW, THEREFORE, in consideration of the mutual agreements,
representations and warranties contained herein, and subject to the conditions
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Affiliate" means, as to any Person, (a) any subsidiary of
such Person and (b) any other Person which, directly or indirectly, controls, is
controlled by, or is under common control with, such Person and includes, in the
case of a Person other than an individual, each officer or director or general
partner or member of such Person, and each Person who is the beneficial owner of
10% or more of such Person's outstanding stock having ordinary voting power of
such Person. For the purposes of this definition, "control" means the possession
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
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"Agreement" has the meaning specified in the preamble hereof.
"Basket Amount" has the meaning specified in Section 9.4(a).
"Basket Exclusions" has the meaning specified in Section
9.4(a).
"Benefit Plans" has the meaning specified in Section 4.17(a).
"Bexar County Contract" has the meaning specified in Section
9.5.
"BRC" has the meaning specified in the preamble hereof.
"Buyer" has the meaning specified in the preamble hereof.
"Buyer 401(k) Plan" has the meaning specified in Section
7.4(f)
"Buyer Confidentiality Agreement" means the Confidentiality
Agreement, dated November 3, 2000, between Seller and Buyer.
"Buyer Plans" has the meaning specified in Section 7.4(b).
"Buyer Transaction Agreements" means this Agreement and the
agreements, instruments, documents and certificates to be executed at the
Closing by Buyer pursuant to Section 8.2 of this Agreement.
"Closing" has the meaning specified in Section 2.1.
"Closing Date" has the meaning specified in Section 2.1.
"COBRA" has the meaning specified in Section 7.4(e).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock, par value $.01 per
share, of BRC.
"Company" means BRC and the Subsidiaries, collectively.
"Company Pension Plan" has the meaning specified in Section
4.17(c).
"Company's Knowledge" means the actual knowledge, after due
inquiry, of Seller.
"Confidentiality Contract" has the meaning specified in
Section 4.15(b).
"Continuing Employees" has the meaning specified in Section
7.3.
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"Contract" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, insurance policy, commitment or other legally binding arrangement or
agreement, whether written or oral.
"Copyrights" shall mean all domestic and foreign copyright
interests in any original work of authorship fixed in a tangible medium of
expression, whether registered or unregistered, including but not limited to all
copyright registrations or foreign equivalent, all applications for registration
or foreign equivalent, all moral rights, all common-law rights, and all rights
to register and obtain renewals and extensions of copyright registrations,
together with all other copyright interests accruing by reason of international
copyright convention, and the right to sue for past, present, or future
infringement and to collect and retain all damages and profits therefor.
"Data Updating Agreement" means the Data Updating Agreement,
dated as of the date hereof, among NationsData.com, Inc., Government Records
Services, Inc. and Title Records Corporation.
"Employees" means employees of the Company, including any
person on disability or leave of absence.
"Environmental Claims" means any written complaint, summons,
citation, notice, directive, order or claim, or any litigation, investigation,
judicial or administrative proceeding or judgment, from or by any governmental
agency, department, bureau, office or other authority, or any third party
asserting or finding violations of Environmental Laws or Releases of Hazardous
Materials from (i) any assets, properties or businesses of the Company or any
corporate predecessor in interest for which the Company would be liable; (ii)
adjoining properties or businesses; or (iii) from or onto any facilities which
received Hazardous Materials generated by the Company or any corporate
predecessor in interest for which the Company would be liable.
"Environmental Law" means any Law concerning Releases into any
part of the indoor or outdoor environment, or activities that might result in
damage to the indoor or outdoor environment, or any law that is concerned in
whole or in part with the indoor or outdoor environment or with protecting or
improving the quality of the indoor or outdoor environment, natural resources,
or wildlife or protecting public and employee health and safety and includes,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conversation
and Recovery Act (42 U. S. C. Section 6901 et seq.), the Clean Water Act (33 U.
S. C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.),
the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), and
the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.), as such
laws have been amended or supplemented, and the regulations promulgated pursuant
thereto, and any and all analogous federal, national, state or local statutes,
ordinances and regulations imposing liability or establishing standards of
conduct for the protection of the environment.
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"Environmental Permit" means any Permit, approval, variance or
permission required or waiver or exemption granted under any applicable
Environmental Law and all supporting documents associated therewith.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" has the meaning specified in Section
4.17(a).
"Excluded Employees" means the individuals listed on Schedule
7.3.
"Excluded Representations" has the meaning specified in
Section 9.4(a).
"Final Allocation" has the meaning specified in Section 10.6.
"Financial Statements" has the meaning specified in Section
4.4.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board.
"Governmental Authority" means any federal, state, local or
foreign government or governmental regulatory body and any of their respective
subdivisions, agencies, instrumentalities, authorities or tribunals.
"Guaranty Contracts" has the meaning specified in Section 7.2.
"Hazardous Materials" means (a) any element, compound or
chemical that is defined, listed or otherwise classified as a toxic or hazardous
substance or material, extremely hazardous substance or chemical, hazardous
material, hazardous waste, medical waste, biohazardous or infectious waste, or
special waste, under Environmental Laws; (b) petroleum, petroleum-based or
petroleum-derived products; (c) polychlorinated biphenyls; (d) any substance
exhibiting a hazardous waste characteristic including but not limited to
corrosivity, ignitibility, toxicity or reactivity as well as any radioactive or
explosive materials; and (e) any raw materials, building components (including
but not limited to asbestos-containing materials) and manufactured products
containing Hazardous Materials.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" has the meaning specified in Section
9.3(a).
"Indemnifying Party" has the meaning specified in Section
9.3(a).
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"Independent Accountant" means KPMG LLP or such other
independent accounting firm of international standing jointly selected by Buyer
and Seller.
"Intellectual Property" shall mean and include (a) Patent
Rights, (b) Trademark Rights, (c) Copyrights, (d) Know-how, (e) Trade Secrets
and (f) Internet domain name registrations.
"Intellectual Property Licenses" has the meaning specified in
Section 4.15.
"Inventions" shall mean and include novel devices, processes,
compositions of matter, methods, techniques, observations, discoveries,
apparatuses, designs, expressions, theories and ideas, whether or not
patentable.
"Know-How" shall mean scientific, engineering, mechanical,
electrical, financial, marketing or practical knowledge or experience useful in
the operation of the Company.
"Latest Balance Sheet" has the meaning specified in Section
4.4.
"Law" means any federal, state, local or foreign law, statute,
rule, ordinance, code or regulation.
"Legal Proceeding" means any judicial, administrative or
arbitral action, suit, proceeding (public or private), litigation,
investigation, complaint, claim or governmental proceeding.
"Licensed Intellectual Property" has the meaning specified in
Section 4.15(g).
"Lien" means any lien, pledge, mortgage, deed of trust,
security interest, attachment, right of first refusal, option, claim, easement,
covenant, encroachment, title defect or any other encumbrance whatsoever.
"Losses" has the meaning specified in Section 9.1.
"Material Adverse Effect" means a material adverse effect
(which shall be deemed to include, without limitation, any adverse effect
aggregating $100,000 or more) on the business, operations, affairs, condition
(financial or otherwise), results of operations, properties, assets or
liabilities of the Company.
"Material Contract" has the meaning specified in Section
4.11(a).
"Material Suppliers" has the meaning specified in Section
4.12.
"Modified Allocation" has the meaning specified in Section
10.6.
"Notice" has the meaning specified in Section 11.9(a).
"Officers" has the meaning specified in Section 11.9(a).
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"Official Action" shall mean any domestic or foreign decision,
order, writ, injunction, decree, judgment, award or any determination, both as
presently existing and effective or presently existing and as may become
effective in the future, by any court, administrative body, or other tribunal.
"Order" means any order, judgment, injunction, ruling, writ,
award or decree specifically identified by its terms as applicable to the
Company.
"Owned Intellectual Property" has the meaning specified in
Section 4.15(d).
"Patent Rights" shall mean and include all domestic and
foreign patents (including without limitation certificates of invention and
other patent equivalents), provisional applications, patent applications and
patents issuing therefrom as well as any division, continuation or continuation
in part, reissue, extension, reexamination, certification, revival or renewal of
any patent, all Inventions and subject matter related to such patents, in any
and all forms, and the right to sue for past, present, or future infringement
and to collect and retain all damages and profits therefor.
"Pension Plan" has the meaning specified in Section 4.17(a).
"Permit" means any permit, license, certificate (including a
certificate of occupancy) registration, authorization, application, filing,
notice, qualification, waiver of any of the foregoing or approval of a
Governmental Authority.
"Permitted Liens" means: (a) Liens for Taxes that are not yet
due and payable or that are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been established in
accordance with GAAP, (b) workers', repairmen's, and similar Liens imposed by
Law that have not been recorded and that have been incurred in the ordinary
course of business consistent with past practices relating to obligations as to
which there is no material default on the part of the Company and provided that
such liens do not exceed $20,000 for any one lien and (c) Liens specified in
Schedule 1.1 to this Agreement that are to be released concurrently with or
prior to the Closing.
"Person" means any natural person, corporation, partnership,
limited liability company, trust, unincorporated organization, Governmental
Authority, or other entity.
"Pre-Closing Taxes" has the meaning specified in Section
10.1(c)(i).
"Proposed Election" has the meaning specified in Section 10.6.
"Purchase Price" has the meaning specified in Section 3.1.
"Real Property Leases" has the meaning specified in Section
4.8(a).
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"Related Party" means (i) any Affiliate of Seller, BRC or any
of the Subsidiaries, or (ii) except for any non-natural equity holder of Seller,
any grandparent, parent, brother, sister, child or spouse of any such Affiliate.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching, or
migration into the indoor or outdoor environment, or into or out of any property
owned, operated or leased by the Company including, without limitation, the
movement of any Hazardous Material or other substance through or in the air,
soil, surface water, groundwater or property, but excluding any release,
emission or discharge authorized under any Environmental Permit or provision of
Environmental Law.
"Schedule" means a disclosure schedule provided by Seller to
Buyer pursuant to this Agreement.
"Seller" has the meaning specified in the preamble hereof.
"Seller's 401(k) Plan" has the meaning specified in 7.4(f).
"Seller Refunds" has the meaning specified in Section 10.2.
"Seller's Senior Secured Lenders" means, collectively, Bank of
America, N.A. as agent under Seller's Credit Agreement, dated October 1, 1999,
and itself, Chase Bank of Texas, N.A., Bank One Texas, N.A. and Texas Capital
Bank.
"Seller Transaction Agreements" means this Agreement and the
other agreements, instruments, documents and certificates to be executed at the
Closing by Seller or BRC pursuant to Section 8.1 of this Agreement.
"Shares" has the meaning specified in the preamble hereof.
"Software" means (i) any and all computer software, including
all source and object code, (ii) machine readable databases and compilations,
including any and all data and collections of data, and (iii) all content
contained on the respective Internet site(s).
"Statement" has the meaning specified in Section 10.1(d).
"Straddle Period" has the meaning specified in Section
10.1(c)(ii).
"Subsidiary" means each of Government Records Services, Inc.,
Title Records Corporation, RTS Holdings, Inc. and PRETS Holdings, Inc.
"Tax" or "Taxes" means all income, profits, franchise, gross
receipts, capital, sales, use, withholding, value added, ad valorem, transfer,
employment, social security, disability, occupation, asset, property, severance,
documentary, stamp, excise and other taxes, duties and similar governmental
charges or assessments imposed by or on behalf of any
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Governmental Authority and any interest, fines, penalties or additions relating
to any such tax, duty, charge or assessment.
"Tax Return" means any return, report, information statement,
or similar statement required to be filed with respect to any Taxes (including
any attached schedules), including, without limitation, any information return,
claim for refund, amended return and declaration of estimated Tax.
"Technology Systems" means the electronic data processing,
electronic information, electronic recordkeeping, electronic communications,
electronic telecommunications, and computer systems, computer firmware, computer
hardware (whether general or special purpose), Software and other similar or
related items of automated, computerized, and/or Software system(s) that are
used internally by BRC or the Subsidiaries in the conduct of their business and
are owned by or licensed to BRC or the Subsidiaries or that BRC or the
Subsidiaries otherwise possess a contractual right to use.
"338 Election" has the meaning specified in Section 10.6.
"Title Plants" means the title evidence plants described in
Schedule 1.2 hereto, and includes, without limitation, abstracts, maps, copies,
extracts and documents as well as microfilm, computer disks, compilations of
historical property ownership information, closed guaranty files and other
information related to or covering real property located in Tarrant, Denton,
Collin and Rockwall counties in the State of Texas.
"Trade Secrets" shall mean any formula, design, device or
compilation, or other information which is used or held for use by a business,
which gives the holder thereof an advantage or opportunity for advantage over
competitors which do not have or use the same, and which is not generally known
by the public. Trade Secrets can include, by way of example, formulas, market
surveys, market research studies, information contained on drawings and other
documents, and information relating to research, development or testing.
"Trademark Rights" shall mean and include all domestic and
foreign trademarks, trade dress, service marks, trade names, icons, logos,
slogans, and any other indicia of source or sponsorship of goods and services,
designs and logotypes related to the above, in any and all forms, and all
trademark registrations and applications for registration related to such
trademarks (including, but not limited to intent to use applications), including
the right to sue for past, present, or future infringement and to collect and
retain all damages and profits therefor, and all designs and logotypes related
to such trademarks, in any and all forms, and all trademark registrations and
applications for registration related to such trademarks.
"Welfare Plan" has the meaning specified in Section 4.17(a).
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ARTICLE II
CLOSING
2.1 Closing. The Closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Baker Botts L.L.P. at
10 a.m., Dallas, Texas time, on the date hereof (the "Closing Date").
2.2 Proceedings at Closing. All proceedings to be taken and
all documents to be executed and delivered by all parties at the Closing shall
be deemed to have been taken and executed simultaneously, and no proceedings
shall be deemed taken nor any documents executed or delivered until all have
been taken, executed and delivered.
ARTICLE III
CONSIDERATION
3.1 Amount and Form of Consideration. The purchase price to be
paid by Buyer to Seller in consideration of the Shares is $69,954,962.60 in
United States dollars (the "Purchase Price"). Seller will bear the cost of any
documentary, stamp, sales and excise or other Taxes payable in respect of the
transfer of the Shares.
3.2 Payment of Consideration. At the Closing, Buyer will pay
the Purchase Price to Seller, in the manner provided below in this Section 3.2,
and Seller will deliver to Buyer a certificate or certificates representing all
of the Shares, in appropriate form for transfer to Buyer or accompanied by duly
executed stock powers:
(a) $59,000,000.00 of the Purchase Price shall be paid by Buyer's wire
transfer of immediately available funds to Seller's Secured Senior Lenders (to
the account thereof specified by Seller) in accordance with the instructions of
Seller delivered to Buyer not later than the Closing.
(b) $7,927,813.63 of the Purchase Price shall be paid by Buyer's wire
transfer of immediately available funds to Seller (to the account thereof
specified by Seller) in accordance with the instructions of Seller delivered to
Buyer not later than the Closing.
(c) Of the remaining $3,027,148.97 of the Purchase Price, such amount
will be retained by Buyer in full payment and satisfaction of all outstanding
principal of and accrued and unpaid interest on the three promissory notes
payable by Seller or an affiliate thereof to Buyer or an affiliate thereof
listed on Schedule 6.2. Seller and Buyer agree to account for such payment as if
Buyer had wire transferred immediately available funds in such amount to
Seller's account and Seller had immediately rewired immediately available funds
in such amount to Buyer's account.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer and ACS as
follows:
4.1 Organization; Power and Authority. Each of Seller and BRC
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, in the case of Seller, and Texas, in the case
of BRC, and is qualified and in good standing to transact business in each
jurisdiction in which such qualification is required by Law, except where the
failure to be so qualified would not have a Material Adverse Effect. Each of the
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of its incorporation and is qualified and
in good standing to transact business in each jurisdiction in which such
qualification is required by Law, except where the failure to be so qualified
would not have a Material Adverse Effect. Each of Seller and BRC has all
requisite corporate power and authority to execute, deliver and perform its
obligations under each of the Seller Transaction Agreements and to consummate
the transactions contemplated hereby and thereby to be consummated by it. The
Company has all power needed to own or lease and operate its assets and to carry
on its business as it is now being conducted.
4.2 Authorizations; Execution and Validity. The execution and
delivery of the Seller Transaction Agreements by each of Seller and BRC, the
performance of the Seller Transaction Agreements by each of Seller and BRC and
the consummation by each of Seller and BRC of the transactions contemplated
hereby and thereby to be consummated by it, have been duly authorized by all
necessary corporate action and no other corporate action on the part of Seller
or BRC is necessary with respect thereto. Each of the Seller Transaction
Agreements, when duly and validly executed and delivered, by BRC and Seller, as
applicable, will constitute a valid and binding obligation of BRC and Seller, as
applicable, and is enforceable against Seller and BRC in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws affecting creditors generally and by the
availability of equitable remedies.
4.3 Capitalization. The authorized capital stock of BRC
consists solely of 1,000 shares of Common Stock, par value $.01 per share. There
are an aggregate of 1,000 shares of Common Stock outstanding, all of which
shares are owned of record and beneficially, free and clear of any Liens (other
than the Liens held by Seller's Senior Secured Lenders which Liens shall be
released at Closing), by Seller, and have been duly authorized and validly
issued, and are fully paid and non-assessable. There are no outstanding options,
subscriptions, warrants, calls, commitments or other rights obligating BRC to
issue or sell any shares of its capital stock or any securities convertible into
or exercisable for any shares of its capital stock, or otherwise requiring BRC
to give any Person the right to receive any benefits or rights similar to any
rights enjoyed by or accruing to the holders of shares of capital stock of BRC
or any rights to participate in the equity or net income of BRC. All of the
issued shares of BRC's capital stock were issued, and to the extent purchased by
BRC or transferred, have been so purchased or transferred, in compliance with
all applicable Laws, including federal and state securities laws, and any
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preemptive rights and any other statutory or contractual rights of any
stockholders of BRC. Schedule 4.3 correctly sets forth the authorized, issued
and outstanding capital stock of each Subsidiary and all of the outstanding
shares of capital stock of each Subsidiary are owned, free and clear of any
Liens (other than the Liens held by Seller's Senior Secured Lenders and ACS
which Liens shall be released at Closing), by BRC. All such shares have been
duly authorized and validly issued, and are fully paid and non-assessable. There
are no outstanding options, subscriptions, warrants, calls, commitments or other
rights obligating any Subsidiary to issue or sell any shares of its capital
stock or any securities convertible into or exercisable for any shares of its
capital stock. None of the outstanding shares of capital stock of any Subsidiary
were issued in violation of any preemptive rights. Except for BRC's equity
interest in the Subsidiaries and GRS's equity interest in TRC, neither BRC nor
any Subsidiary owns, directly or indirectly, any capital of or other equity
interest in or has any other investment in or outstanding loans to any
corporation, partnership or other entity or organization. There are not any
stockholders' agreements, voting trusts or other agreements or understandings
between or among stockholders or to which the Company is a party or by which it
is bound with respect to the transfer or voting of any capital stock of the
Company.
4.4 Financial Statements. Attached hereto on Schedule 4.4 are
correct and complete copies of the unaudited consolidated balance sheet of the
Company as of September 30, 2000 (the "Latest Balance Sheet"), December 31, 1999
and December 31, 1998, with the related statements of operations for the periods
ended on such dates (the "Financial Statements"). The Financial Statements have
been prepared from the books and records of the Company, contain figures that
arose out of bona fide licenses, sales and deliveries of goods, performance of
services or other bona fide business transactions, are true, complete and
correct in all material respects and present fairly the financial position of
the Company as of the dates indicated, and the results of its operations for the
periods presented in conformity with GAAP, consistently applied.
4.5 Consents. Neither the execution and delivery by BRC or
Seller of the Seller Transaction Agreements nor consummation or performance by
BRC or Seller of the transactions contemplated by the Seller Transaction
Agreements to be consummated or performed by it will require prior to the
Closing (on the part of BRC, Seller or any Subsidiary) any consent from,
authorization or approval or other action by, notice to or declaration, filing
or a registration with, any Governmental Authority or any other third party,
except to comply with the HSR Act or as specified in Schedule 4.5.
4.6 No Defaults or Conflicts. Neither the execution and
delivery by BRC or Seller of the Seller Transaction Agreements nor the
consummation or performance by BRC or Seller of the transactions contemplated by
the Seller Transaction Agreements to be consummated or performed by it (i)
results or will result in any violation of the certificate of incorporation or
bylaws of Seller or BRC; (ii) results or will result in any violation of the
certificate of incorporation or bylaws of any Subsidiary; or (iii) subject to
obtaining the required consent from Seller's Senior Secured Lenders, violates or
conflicts with, or constitutes a breach of any of the terms or provisions of or
a default under, or results in the creation or imposition of any Lien upon any
property or asset of the Company, the trigger of any charge, payment or
requirement of
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consent, or the acceleration or increase of the maturity of any payment date
under: (A) any Contract or (B) any applicable Law or Order to which Seller or
the Company or any of their respective properties is subject.
4.7 Owned Real Property. The Company does not own any real
property. The operation of the properties and business of the Company in the
manner in which they are now and have been operated does not violate in any
material respect any zoning ordinances, municipal regulations, or other rules,
regulations, or laws. No covenants, easements, rights-of-way, or regulations of
record impair in any material respect the uses of the respective properties of
the Company for the purposes for which they are now operated. The Company made
available to Buyer true and complete copies of all surveys, appraisals and title
insurance policies relating to its leased real properties.
4.8 Leased Real Property.
(a) Schedule 4.8 contains a complete and correct list
of all real property leases and any and all amendments thereto relating
to the leased real property to which the Company is a party or is bound
(the "Real Property Leases"). The Company has made available to Buyer
correct and complete copies of the Real Property Leases. Except as
disclosed in Schedule 4.8, (i) each of the Real Property Leases is in
full force and effect, and, to the Company's Knowledge, is enforceable
against the landlord which is party thereto in accordance with its
terms (except as such enforceability may be limited by bankruptcy,
insolvency, reorganization and similar laws affecting creditors
generally and by the availability of equitable remedies), (ii) there
are no subleases under the Real Property Leases and none of the Real
Property Leases has been assigned (other than collateral assignments to
Seller's Senior Secured Lenders), (iii) no notices of default or
notices of termination have been received by the Company with respect
to the Real Property Leases which have not been withdrawn or canceled
and (iv) the Company is not, and to the Company's Knowledge, no other
party is, in default under any Real Property Lease.
(b) The Company has not received written notice of a
proceeding in eminent domain or other similar proceeding affecting
property listed on Schedule 4.8.
4.9 Condition and Sufficiency of Assets.
(a) The items of tangible personal property owned or
leased by the Company and the improvements and structures (and the
fixtures and appurtenances thereto) located on the real property
subject to the Real Property Leases are (i) generally in good working
order, reasonable wear and tear excepted and (ii) suitable for the uses
for which they are intended.
(b) Except as set forth on Schedule 4.9(b) and the
assets owned by Seller that are used by Seller to provide
administrative services to the Company, the business of the Company, as
currently being conducted, has been conducted solely by BRC and the
Subsidiaries and not through any other subsidiary, Affiliate, joint
venture or
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other Person. The Company owns or has valid leasehold interests in all
of the properties and assets which are used in the business of the
Company, or are necessary to conduct the business of the Company
(including, but not limited to, such assets as are necessary for the
operation of the Company's title plant and land records business), in
substantially the same manner as currently conducted, except for assets
or services used by businesses generally such as the Internet, the
public telephone network, and public utilities. Neither Seller nor any
of its Affiliates other than the Company owns any right, title or
interest in or to the properties or assets used or held for use in
connection with the business or operations of the Company, other than
the real property leased by Government Records Services Inc. at 2800
West Mockingbird Lane, Dallas, Texas 75235 and as contemplated by the
Data Updating Agreement.
4.10 Insurance. Schedule 4.10 contains a true and complete
list of all insurance policies, and formal self-insurance programs, and other
forms of insurance and all fidelity bonds held by or applicable to the Company
and its owned or leased properties, employees or Employee Benefit Plan
fiduciaries. Schedule 4.10 describes (a) whether each insurance policy listed on
Schedule 4.10 is occurrence-based or claims made based and (b) each pending
claim thereunder for more than $20,000 per claim. All insurance policies listed
on Schedule 4.10 have been made available to Buyer and are subject to the
deductibles or retentions referenced on Schedule 4.10. Seller maintains
insurance for the benefit of the Company, in coverages and amounts believed by
Seller to be customary in the industry and which are believed adequate in the
reasonable judgment of Seller. Seller is not in default with respect to any
provision in any current policy maintained by Seller for the benefit of the
Company and all such insurance is in full force and effect. Seller has not
received any notice of cancellation or nonrenewal of any such insurance policy.
Seller has not failed to give any notice or present any claim for more than
$20,000 under any of the policies for the benefit of the Company in due and
timely fashion. Seller has not been refused any insurance with respect to the
assets, properties or businesses of the Company, nor has any such coverage been
materially limited by any insurance carrier to which Seller has applied for any
such insurance or with which Seller or the Company has carried insurance during
the last two years. No further payments of premiums will be due following the
Closing by the Company with respect to insurance coverages prior to the Closing
and no event relating to the Company has occurred which will result in a
retroactive upward adjustment of premiums under any such insurance coverage or
which is likely to result in any prospective upward adjustment in such premiums.
Neither this Agreement, nor any of the transactions contemplated by this
Agreement to occur at the Closing, will adversely affect the Company's coverage
with respect to periods prior to the Closing under the terms of the insurance
policies.
4.11 Contracts.
(a) Material Contracts. Other than (i) Real Property
Leases, (ii) Benefit Plans, (iii) Contracts listed on Schedule 4.16(a)
and (iv) Intellectual Property Licenses, Schedule 4.11(a) lists, as of
the date hereof, all of the following Contracts to which BRC or any of
its Subsidiaries is a party or by which its or their assets are bound
(the "Material Contracts"):
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(1) individual Contracts with customers with
respect to which the Company billed more than $20,000 during
the year 2000;
(2) any individual Contract which is an
exclusive dealing, requirements or take or pay agreement
involving expenditures in excess of $20,000 during the year
2000;
(3) Contracts not listed or required to be
listed pursuant to Section 4.11(a)(2) which provide for
aggregate future annual payments by the Company of more than
$20,000, except for purchase orders or sales orders arising in
the ordinary and usual course of business, in which case they
are listed only if any party thereto is obligated to make
payments pursuant thereto aggregating more than $20,000;
(4) Contracts which establish a partnership,
joint venture, material agency or other similar arrangement;
(5) any Contract which relates to
indebtedness for borrowed money in excess of $20,000 or the
deferred purchase price of property (whether incurred,
assumed, guaranteed or secured by any asset);
(6) any Contract which provides for future
payments that are conditioned on or result from, in whole or
in part, a change of control of the Company or a change of
management of the Company;
(7) any Contract which relates to marketing,
sales or advertising and provides for aggregate future
payments of more than $20,000;
(8) any Contract under which the Company has
guaranteed the obligations of any Person, agreed to indemnify
any Person (other than in the ordinary course of business), or
agreed to share Tax liability with any Person;
(9) any Contract which relates to the
acquisition by the Company of any of the capital stock or
substantially all of the assets of another Person since
February 1998;
(10) any Contract which restricts the right
of the Company to compete in any way with any other Person, or
which contains covenants pursuant to which any non-natural
Person has agreed not to compete, or otherwise restricts a
Person's ability to engage freely, in any part of the
Company's business;
(11) any Contract not disclosed herein or
not otherwise required to be disclosed pursuant to this
Section 4.11(a) which provides for annual payments in excess
of $20,000 which extends more than a year from the date hereof
and is not cancelable by the Company on 30 days' written
notice without penalty;
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(12) any Contract which provides for the
sale or lease after the date hereof of any of the assets of
the Company other than in the ordinary course of business;
(13) any Contract which binds the Company to
make payments to any director or any former director of the
Company; and
(14) any Contracts relating to the leasing
or servicing of a Title Plant or the sale or transfer or any
Title Plant or land records data.
(b) Material Contract Exceptions. All Material
Contracts are valid, binding and in full force and effect, except to
the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
relating to creditors' rights generally and to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law) and except for such failures to be valid, binding
and enforceable which, individually or in the aggregate, would not have
a Material Adverse Effect. Neither the Company nor, to the Company's
Knowledge, any other party to such Material Contracts, is in default
under any Material Contract.
4.12 Suppliers. Set forth on Schedule 4.12 is a list of the
five suppliers that accounted for the largest dollar volume of purchases by the
Company during the fiscal year ending December 31, 1999 and for the nine month
period ending September 30, 2000 (the "Material Suppliers"). No Material
Supplier has canceled or otherwise terminated, or threatened to cancel or
otherwise terminate, its relationship with the Company during the twelve months
immediately preceding the date hereof (or the Closing Date, as of the Closing
Date) or has during such period materially decreased, or threatened to
materially decrease or materially limit, its services, supplies or materials to
the Company. The Company has not received any notice during the twelve months
immediately preceding the date hereof that any Material Supplier intends to
cancel or otherwise materially modify its relationship with the Company or to
materially decrease or materially limit its services, supplies or materials to
the Company.
4.13 Litigation; Orders. Schedule 4.13 lists all Legal
Proceedings pending or, to the Company's Knowledge, threatened in writing
against or affecting the Company or any of its assets. Except as disclosed on
Schedule 4.13, the Company is not subject to any Order. There are no Legal
Proceedings pending against or, to the Company's Knowledge, threatened in
writing against, Seller or the Company that questions the validity or legality
of any of the Seller Transaction Agreements or any action taken or to be taken
by Seller or BRC in connection herewith or therewith.
4.14 Environmental Laws. (i) The Company is in compliance with
all Environmental Laws; (ii) the Company possesses and is in compliance with all
Environmental Permits required to operate the facilities, assets and business of
the Company; (iii) the Company is not subject to any Orders that relate to any
Environmental Law; (iv) the Company is not subject to any Environmental Claims
and, to the Company's Knowledge, no unresolved
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Environmental Claims have been asserted or threatened in writing against the
Company or any predecessor in interest; (v) there has been no Release at any of
the properties currently or formerly owned or operated by the Company (at the
time such properties were owned or operated by the Company) or, to the Company's
Knowledge, a corporate predecessor in interest for which the Company would be
liable, or to the Company's Knowledge, at any disposal or treatment facility
which received Hazardous Materials generated by the Company or any corporate
predecessor in interest for which the Company would be liable; (vi) the Company
has received no written notices and the Company has no knowledge of any
Environmental Claims against any facilities that may have received Hazardous
Materials generated by the Company or any corporate predecessor in interest for
which the Company would be liable; and (vii) Seller has delivered to, or made
available for review by, Buyer true and complete copies of all environmental
reports, studies, investigations or correspondence regarding any environmental
liabilities of the Company or any environmental conditions at any property
operated by the Company or any corporate predecessor in interest for which the
Company would be liable which are in possession of the Company.
4.15 Patents, Trademarks and Similar Rights. BRC and its
Subsidiaries own or are properly licensed to use all Intellectual Property
material to the conduct of the business of BRC and the Subsidiaries as currently
conducted. Neither BRC nor any of its Subsidiaries has any Patent Rights,
Trademark Rights, or Copyrights that are either the subject of a pending
application or are issued or registered. Schedule 4.15 sets forth a true and
complete list and summary description of all (i) material unregistered Trademark
Rights in which BRC and/or its Subsidiaries have an ownership interest, (ii)
Internet domain names in which BRC and/or its Subsidiaries have an ownership
interest, and (iii) all licenses to which BRC and/or its Subsidiaries are
parties which grant licenses to Intellectual Property (including Software) of
any third Person ("Intellectual Property Licenses").
(a) Schedule 4.15(a) sets forth a list of all written
contracts with those officers, employees, consultants, agents and other
individuals associated with BRC or any of its Subsidiaries who have
created any Intellectual Property for BRC or the Subsidiaries that
transfer all of their rights, title and ownership in and to any such
Intellectual Property in their entirety and irrevocably to the Company
or the Subsidiaries.
(b) BRC and the Subsidiaries have diligently taken
reasonable measures to protect for the sole use and benefit of BRC and
the Subsidiaries the confidential and proprietary nature of the Trade
Secrets and all other confidential information material to the business
of BRC and its Subsidiaries. BRC and the Subsidiaries have used their
reasonable best efforts to notify each Person, (including without
limitation employees, agents, consultants, distributors and licensees
of BRC and its Subsidiaries) who has had access to or otherwise been
exposed to any of the Trade Secrets, of the confidential and
proprietary nature of the Trade Secrets. Schedule 4.15(b) sets forth a
list of all written contracts with each agent, consultant, distributor
or licensee of BRC and/or its Subsidiaries ("Confidentiality Contract")
pursuant to which such agent, consultant, distributor or licensee
acknowledges and agrees that (i) the Trade Secrets are and shall remain
the sole and exclusive property of, and may be confidential to, BRC and
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its Subsidiaries, and (ii) the Trade Secrets are not to be used or
disclosed to any Person other than as specifically authorized by BRC
and its Subsidiaries. Each of the Confidentiality Contracts and any
employee contracts relating to the Intellectual Property owned by BRC
and its Subsidiaries was and is in full force and effect, and
constitutes the legal, valid, and binding obligation of BRC and its
Subsidiaries, and, to the knowledge of BRC and its Subsidiaries, each
other Person which is a party thereto, enforceable in accordance with
its terms. BRC and its Subsidiaries have kept all of the Trade Secrets
strictly confidential and secret. The Trade Secrets are not and have
not been a part of the public knowledge or literature. Neither BRC nor
its Subsidiaries have disclosed, divulged, or otherwise provided access
to any of the Trade Secrets other than to Persons which have entered
into written confidentiality Contracts with BRC and its Subsidiaries.
To the knowledge of BRC and/or its Subsidiaries, no Person which is a
party to any Contract with BRC and/or its Subsidiaries concerning the
confidentiality of the Trade Secrets is in violation of, or in default
under, any term or provision of such Contract which relates to the
Trade Secrets.
(c) The entry into this Agreement and the
transactions contemplated hereby will not have any effect on any
Contracts related to Intellectual Property.
(d) BRC and its Subsidiaries, either alone or
collectively, possess all right, title and interest in and to all
Intellectual Property in which BRC or its Subsidiaries have an
ownership interest free and clear of any Lien or other ownership
interest of any third Person. Other than as set forth on Schedule
4.15(d), neither BRC nor any of its Subsidiaries has granted to any
Person or obligated itself to grant to any Person any license, option,
or other right in or with respect to any of the Intellectual Property
in which BRC or any of its Subsidiaries have an ownership interest (the
"Owned Intellectual Property"), whether or not requiring payment to one
or more of BRC and/or its Subsidiaries. No Person has either asserted
any rights in or offered to grant BRC and/or any of its Subsidiaries a
license or any other right of use with respect to the Owned
Intellectual Property. Except as set forth in Schedule 4.15(d), neither
BRC nor its Subsidiaries have any obligation to compensate any Person
for any development, license, use, sale, distribution or modification
of any of the Owned Intellectual Property. None of the Owned
Intellectual Property was developed as part of the performance of any
obligation for any third Person which would require the taking of any
action, whether or not actually taken, in order for all rights to the
Owned Intellectual Property to become vested in, or retained by BRC
and/or its Subsidiaries.
(e) Other than the Owned Intellectual Property and
the Intellectual Property licensed to BRC and/or its Subsidiaries,
there is no other Intellectual Property used or necessary for use for
the conduct of the business of Company and/or its Subsidiaries.
(f) Neither BRC nor its Subsidiaries nor, to the
Company's Knowledge, any other party, is in breach of or default under
any Intellectual Property license or any other Contract or legal
requirement relating to the Owned Intellectual
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Property or any Intellectual Property licensed to BRC and/or its
Subsidiaries. Each license to Intellectual Property to which BRC or any
of its Subsidiaries is a party is valid and in full force and effect.
BRC and its Subsidiaries have obtained from all third party developers
and/or owners of any software programs utilized by any of them in
connection with the operation of their business any licenses that may
be necessary for them to permit any customer, client or other business
relationship thereof to utilize such software programs at a non-Company
site or on a non-Company computer.
(g) The development, license, use, sale,
distribution, modification, and other exploitation of the Owned
Intellectual Property and Intellectual Property licensed to BRC and/or
its Subsidiaries (the "Licensed Intellectual Property") by BRC and/or
its Subsidiaries have not infringed on or otherwise violated the rights
of any other Person or constituted an unlawful disclosure, use, or
misappropriation of the right or rights of any other Person.
(h) Except as set forth on Schedule 4.15(h), there
is: (i) no suit, action, complaint, Legal Proceeding, opposition,
petition to cancel, interference, re-examination or audit pending, or
to the Company's Knowledge threatened, with respect to; and (ii) no
outstanding Official Action concerning; any of the following: (A) the
Owned Intellectual Property and the Licensed Intellectual Property, or
(B) any moral rights or rights of publicity or (C) any right of BRC
and/or its Subsidiaries to develop, license, use, sell, distribute or
modify the Owned Intellectual Property and the Licensed Intellectual
Property.
(i) Neither BRC nor its Subsidiaries have agreed to
indemnify any person against any charge of infringement or other
violation with respect to any Intellectual Property other than
customers, software developers engaged by the Company, and employees,
officers and directors.
(j) Neither BRC nor its Subsidiaries have (a)
infringed, misappropriated, otherwise violated, or (b) contributed to
the infringement, misappropriation or other violation by others, or (c)
induced infringement, misappropriation or other violation by others of
the Intellectual Property rights of a third Person. Except as set forth
in Schedule 4.15(j), neither BRC nor any of its Subsidiaries have
received any assertion, complaint, demand or any notice whatsoever
alleging any such infringement, misappropriation or other violation.
(k) Except as set forth in Schedule 4.15(k), to the
Company's Knowledge, no third party is infringing upon,
misappropriating, or otherwise violating rights to the Owned
Intellectual Property.
(l) No complaint, allegation, charge or any assertion
whatsoever that any Owned Intellectual Property is invalid,
unenforceable, incomplete, or defective in any other way, has been made
by BRC or its Subsidiaries, any representative of the same including
any officer, employee, consultant, agent or attorney, or any third
Person.
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(m) Neither BRC nor any of its Subsidiaries has any
knowledge of any patents, patent applications, inventions, improved
procedures or methods of manufacture that would reasonably be expected
to have a Material Adverse Effect on the validity or enforceability of
the Owned Intellectual Property, the manufacture of products, or the
business of BRC or its Subsidiaries in general.
(n) BRC and its Subsidiaries have the right, which is
non-terminable and not subject to expiration or revocation, to develop,
license, control, regulate the use of, or otherwise exploit the Owned
Intellectual Property and the Licensed Intellectual Property without
any valid legal or equitable claim by, or payment or other obligation
owing to, or consent from, any Person.
(o) All Copyrights comprising a portion of the Owned
Intellectual Property consist exclusively of (i) "works made for hire"
as that term is used in Title 17 of the United States Code and (ii)
works developed by independent contractors or consultants engaged by
BRC and/or its Subsidiaries which have assigned to BRC and/or its
Subsidiaries their entire right, title and interest in and to the work
or works produced, pursuant to a valid and enforceable written
Contract. The Owned Intellectual Property does not include (i) any
Intellectual Property in which any Person other than BRC and/or its
Subsidiaries have or may acquire any right of ownership, control or
compensation, or (ii) any Invention made by (A) any employee of BRC
and/or its Subsidiaries at any time other than during his employment,
(B) any independent contractor or consultant engaged by BRC and/or its
Subsidiaries who is or was not subject to a Contract requiring
assignment of all Intellectual Property to of BRC and/or its
Subsidiaries. None of the Owned Intellectual Property is the product of
a joint invention or authorship where at least one of the inventors or
authors was not an employee of BRC and/or its Subsidiaries and was not
otherwise obligated by a Contract to assign all of his or her rights to
of BRC and/or its Subsidiaries.
(p) None of Seller, BRC nor its Subsidiaries have
knowledge of any Internet domain name registered to a third Person that
is confusingly similar to any Trademark Rights of BRC and/or its
Subsidiaries. None of Seller, BRC nor its Subsidiaries have knowingly
adopted an Internet domain name confusingly similar to any Trademark
Rights of any third Person.
(q) None of Seller, BRC nor its Subsidiaries have
knowledge of any Internet domain name registered to a third Person that
disparages, criticizes or is derogatory in any way towards BRC and/or
its Subsidiaries. None of Seller, BRC nor its Subsidiaries have
knowledge of any World Wide Web site operated by a third Person that
disparages, criticizes or is derogatory in any way towards BRC and/or
its Subsidiaries. Neither BRC nor its Subsidiaries have an ownership
interest in, a license to, or control over an Internet domain name that
has been registered and that disparages, criticizes or is derogatory in
any way towards any third Person. Neither BRC nor its Subsidiaries
operate or control, either directly or indirectly, any World Wide Web
site that disparages, criticizes, or is derogatory in any way towards a
third Person.
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(r) Neither BRC nor its Subsidiaries operate or
control, either directly or indirectly, any World Wide Web site that
uses any Trademark Rights of any third Person, or any confusingly
similar variation thereof, in any part of the World Wide Web site,
including but not limited to in metatags or in hidden text. Neither BRC
nor its Subsidiaries have knowledge of any World Wide Web site of any
third Person that, without authorization, includes any Trademark Rights
of BRC and/or its Subsidiaries in any part of the World Wide Web site,
including but not limited to in metatags or in hidden text.
(s) For purposes of this paragraph, the term
"framing" refers to operating a World Wide Web site that combines data
from the World Wide Web site with data from another World Wide Web site
operated by a third Person, without authorization. For purposes of this
paragraph, the term "deep linking" refers to the operation of a World
Wide Web site that obtains data from another World Wide Web site
operated by a third Person, without authorization, while bypassing the
home page of the World Wide Web site operated by the third Person.
Neither BRC nor its Subsidiaries operate or control, either directly or
indirectly, any World Wide Web site that employs framing or deep
linking. Neither BRC nor its Subsidiaries have knowledge of any World
Wide Web site of any third Person that employs framing or deep linking
with respect to any World Wide Web site owned or controlled, either
directly or indirectly, by BRC and/or its Subsidiaries.
(t) Neither BRC nor its Subsidiaries operate or
control, either directly or indirectly, any World Wide Web site that
contains hyperlinks to any World Wide Web site owned or operated by any
third Person without having obtain proper authorization for such
hyperlinks. Neither BRC nor its Subsidiaries have knowledge of any
World Wide Web site of any third Person that, without authorization,
includes any hyperlinks to any World Wide Web site owned or controlled,
either directly or indirectly, by BRC and/or its Subsidiaries.
(u) Neither BRC nor its Subsidiaries have contracted
with any third Person to provide advertising through any World Wide Web
site that is triggered by data comprising any trademark, service mark,
trade name, company name, business name, or confusingly similar
variations thereof of any third Person. Neither BRC nor its
Subsidiaries have knowledge of any third Person that provides
advertising not authorized by BRC through a World Wide Web site that is
triggered by data comprising any Trademarks Rights of BRC and/or its
Subsidiaries.
4.16 Employees.
(a) Employees. Schedule 4.16(a) sets forth a list, as
of the date hereof, of all individual employment, consulting,
non-compete or severance agreements with Employees or former employees
of the Company that individually provide for annual payments after the
date hereof in excess of $25,000.
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(b) Unions. There is no collective bargaining or
other labor union agreement applicable to any of the Employees of the
Company. No organized work stoppage, labor strike, labor dispute, or
slowdown against the Company is pending or, to the Company's Knowledge,
threatened against or involving the Company. The Company has not
received written notice of any unfair labor practice and no such
complaints are pending before the National Labor Relations Board or
other similar governmental authority. To the Company's Knowledge, the
Company is not engaged in any unfair labor practice. No grievance or
other labor dispute or proceeding or any arbitration proceeding arising
out of or under any collective bargaining or other employee agreement
is pending or, to the Company's Knowledge, threatened against the
Company. Seller is not aware of any other actual or potential labor
problem that could have a Material Adverse Effect.
(c) WARN Act. The Company has not incurred any
material liability or obligation under the Workers Adjustment and
Retraining Notification Act or any similar laws, which remains unpaid
or unsatisfied.
4.17 Employee Benefit Matters.
(a) Benefit Plans. Schedule 4.17(a) contains a list
and brief description of each "employee pension benefit plan" (as
defined in Section 3(2) of ERISA, hereinafter a "Pension Plan"),
"employee welfare benefit plan" (as defined in Section 3(1) of ERISA,
hereinafter a "Welfare Plan"), stock option, stock purchase, stock
appreciation right, incentive, deferred compensation plan or
arrangement, and other employee fringe benefit plan or arrangement
maintained, contributed to or required to be maintained or contributed
to by the Company or any other person or entity that, together with the
Company, is treated as a single employer under Section 414(b), (c), (m)
or (o) of the Code (each an "ERISA Affiliate") for the benefit of any
present or former officers, employees, directors or independent
contractors of the Company (all the foregoing being herein called
"Benefit Plans"). Seller has delivered or made available to Buyer true,
complete and correct copies of (i) each Benefit Plan (or, in the case
of any unwritten Benefit Plans, descriptions thereof), (ii) the most
recent annual report on Form 5500 filed with the Internal Revenue
Service with respect to each Benefit Plan (if any such report was
required by applicable law), (iii) the most recent summary plan
description for each Benefit Plan for which such a summary plan
description is required by applicable law and (4) each trust agreement
and insurance or annuity contract relating to any Benefit Plan.
(b) Benefit Plan Administration. Each Benefit Plan
has been administered in all material respects in accordance with its
terms. The Company and all the Benefit Plans are in compliance in all
material respects with the applicable provisions of ERISA and the Code.
Except as disclosed in Schedule 4.17(b), all reports, returns and
similar documents with respect to the Benefit Plans required to be
filed with any governmental agency or distributed to any Benefit Plan
participant have been duly and timely filed or distributed. Except as
disclosed in Schedule 4.17(b), there are no investigations by any
governmental agency, termination proceedings or other claims
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(except claims for benefits payable in the normal operation of the
Benefit Plans), suits or proceedings against or involving any Benefit
Plan or asserting any rights or claims to benefits under any Benefit
Plan that could give rise to any material liability and to the
knowledge of BRC and the Subsidiaries, none have been threatened or are
being contemplated by a Governmental Authority.
(c) Contributions and Payments. Except as disclosed
in Schedule 4.17(c), (i) all contributions to, and payments from, the
Benefit Plans that may have been required to be made in accordance with
the terms of the Benefit Plans, any applicable collective bargaining
agreement and, when applicable, Section 302 of ERISA or Section 412 of
the Code, have been timely made; (ii) there has been no application for
or waiver of the minimum funding standards imposed by Section 412 of
the Code with respect to any Benefit Plan that is a Pension Plan
(hereinafter a "Company Pension Plan"); and (iii) no Company Pension
Plan had an "accumulated funding deficiency" within the meaning of
Section 412(a) of the Code as of the end of the most recently completed
plan year. All such contributions to, and payments from, the Benefit
Plans, except those payments to be made from a trust qualified under
Section 401(a) of the Code, for any period ending before the Closing
Date that are not yet, but will be required to be made, will be
properly accrued and reflected in the Financial Statements.
(d) Qualification of Company Pension Plans. Except as
disclosed in Schedule 4.17(d), each Company Pension Plan that is
intended to be qualified has been the subject of a determination letter
from the Internal Revenue Service to the effect that such Company
Pension Plan is qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code; no such
determination letter has been revoked, and, to the knowledge of the
Seller, revocation has not been threatened; and such Company Pension
Plan has not been amended since the effective date of its most recent
determination letter in any respect that might adversely affect its
qualification or materially increase its cost. Seller has delivered or
made available to Buyer a copy of the most recent determination letter
received with respect to each Company Pension Plan for which such a
letter has been issued, as well as a copy of any pending application
for a determination letter. Seller has also provided to Purchaser a
list of all Company Pension Plan amendments as to which a favorable
determination letter has not yet been received. No event has occurred
that could subject any Company Pension Plan to tax under Section 511 of
the Code.
(e) Prohibited Transactions. Schedule 4.17(e)
discloses whether: (i) any "prohibited transaction" (as defined in
Section 4975 of the Code or Section 406 of ERISA) has occurred that
involves the assets of any Benefit Plan; (ii) any prohibited
transaction has occurred that could subject the Company or any
employee, or, to the knowledge of Seller, a trustee, administrator or
other fiduciary of any trust created under any Benefit Plan to the tax
or penalty on prohibited transactions imposed by Section 4975 of ERISA
or the sanctions imposed under Title I of ERISA; (iii) any of the
Company Pension Plans has been terminated or has been the subject of a
"reportable event" (as defined in Section 4043 of ERISA and the
regulations thereunder); and (iv) the Company
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or the trustee, administrator or other fiduciary of any Benefit Plan or
any agent of any of the foregoing has engaged in any transaction or
acted in a manner that could, or failed to act so as to, subject the
Company or any trustee, administrator or other fiduciary to any
liability for breach of fiduciary duty under ERISA or any other
applicable law.
(f) No Defined Benefit Pension Plans. None of the
Company Pension Plans is a "defined benefit pension plan" (as defined
in Section 3(35) of ERISA).
(g) Controlled Group Liabilities. Except as disclosed
in Schedule 4.17(g), neither the Company nor any ERISA Affiliate has
incurred any liability to a Pension Plan (other than for contributions
not yet due) or to the Pension Benefit Guaranty Corporation (other than
for the payment of premiums not yet due) that, when aggregated with
other such liabilities, would result in a material liability to the
Company, which liability has not been fully paid as of the date hereof.
(h) Other Benefit Plan Liabilities. Except as
disclosed in Schedule 4.17(h), neither the Company nor any ERISA
Affiliate has (i) engaged in a transaction described in Section 4069 of
ERISA or (ii) acted in a manner that could, or failed to act so as to,
result in fines, penalties, taxes or related charges under Section
502(c), (i) or (l) of ERISA; Section 4071 of ERISA or Chapter 43 of the
Code, that could subject the Company to any material liability at any
time after the date hereof.
(i) No Multiemployer Plans. Neither the Company nor
any ERISA Affiliate has contributed to or been obligated to contribute
to a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA)
during the past five years.
(j) Welfare Plans. The list of Welfare Plans in
Schedule 4.17(j) discloses whether each Welfare Plan is (i) unfunded,
(ii) funded through a "welfare benefit fund", as such term is defined
in Section 419(e) of the Code, or other funding mechanism or (iii)
insured. Each such Welfare Plan may be amended or terminated without
material liability to the Company at any time after the Closing Date.
The Company and the Subsidiaries comply with the applicable
requirements of Section 4980B(f) of the Code with respect to each
Benefit Plan that is a group health plan, as such term is defined in
Section 5000(b)(1) of the Code. Except as disclosed on Schedule
4.17(j), the Company has not incurred any liability under FAS 106 or
FAS 112.
(k) Deal Payments. No employee of the Company or any
Subsidiary will be entitled to any additional benefits or any
acceleration of the time of payment or vesting of any benefits under
any Benefit Plan or other contract as a result of the transactions
contemplated by this Agreement.
(l) Coverage Under Welfare Plans. Neither Seller nor
the Company has made any written or oral representation to an employee,
director or officer of the Company or any Subsidiary or any former
employee, director or officer of the Company or any Subsidiary,
promising or guaranteeing any coverage under any Welfare Plan for any
period of time after the termination of such employee or officer's
employment with
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the Company or any Subsidiary, other than as permitted by the Company
or any Subsidiary under Section 4980B of the Code.
4.18 Taxes. Except as disclosed on Schedule 4.18:
(a) All Tax Returns required to be filed on or before
the Closing Date by or on behalf of, or in which is required to be
reported the income or other items of, the Company have been or will be
filed within the time prescribed by Law (including extensions of time
permitted by Law). Such Tax Returns are or will be accurate, correct,
and complete in all material respects. There are no deferred
intercompany transactions that would impact a Tax Return in the post
closing period
(b) The Company has paid or will pay, on a timely
basis, all Taxes of the Company that are due on or before the Closing
Date (including, but not limited to, Taxes shown to be due on the Tax
Returns described in the preceding paragraph), except those Taxes that
are being disputed in good faith and for which adequate provision has
been made in the Financial Statements.
(c) [Intentionally left blank.]
(d) There are no material Liens for Taxes upon any of
the properties or assets of the Company (except for Permitted Liens).
(e) There are no pending audits, actions,
proceedings, investigations, disputes or claims with respect to any
Taxes payable by or asserted against the Company. The Company has not
received notice from any taxing authority of its intent to examine or
audit any of its Tax Returns.
(f) The Company is not and has not been subject to
tax or done business in any country other than the United States.
(g) No agreements relating to allocation or sharing
of, or liability or indemnification for, Taxes exist between the
Company and any other Person. Any internal tax allocation agreement
shall terminate at closing.
(h) All Taxes required to be withheld, collected or
deposited by the Company (including, but not limited to, amounts
required to be withheld, collected or deposited with respect to amounts
paid or owing to any employee, creditor, independent contractor or
other Person) have been timely withheld, collected or deposited and, to
the extent required, have been timely paid to the relevant taxing
authority. All persons characterized as independent contractors, and
not as employees, were properly so characterized for all purposes under
all applicable laws (including, without limitation), their
characterization as independent contractors for income and employment
tax withholdings and payments.
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(i) No disclosure statement pursuant to Section 6662
of the Code or any comparable disclosure with respect to foreign, state
and/or local tax statutes has been filed with respect to any item
relating to the Company.
(j) The Company has not made any payments, is not
obligated to make any payments, and is not a party to any agreement
that could obligate it to make any payments that will not be deductible
under Section 280G of the Code.
(k) The Company has never been a member of an
affiliated group of corporations (as defined in Section 1504(a) of the
Code), other than the group of which Seller is the common parent.
(l) No material claim has been made against the
Company by any taxing authority in any jurisdiction where the Company
did not file sales, use, value-added, or similar Tax Returns or did not
pay sales, use, value-added, goods and services, or similar Taxes, that
the Company is or may be subject to sales, use, value-added, or similar
Taxation by that jurisdiction.
(m) No material claim has been made against the
Company by any taxing authority in any jurisdiction where the Company
did not file payroll, unemployment, social security or social
insurance, or similar Tax Returns or did not pay payroll, unemployment,
social security or social insurance, or similar Taxes, that the Company
is or may be subject to payroll, unemployment, social security or
social insurance, or similar Taxation by that jurisdiction.
(n) There are no outstanding agreements or waivers
that would extend the statutory period in which a taxing authority may
assess or collect a Tax against the Company.
(o) No closing agreements or settlement agreements
pursuant to any provision of any tax law has been entered into with any
taxing authority by or with respect to the Company which requires the
Company to include any item of income in, or exclude any item of
deduction from, any Tax Return for any taxable period ending after the
Closing Date.
(p) The Company has not agreed to make any adjustment
pursuant to Section 481 of the Code or pursuant to any other provision
of the tax laws of any jurisdiction, which could materially increase
Taxes or taxable income, or materially reduce any tax credits, net
operating losses or capital losses of the Company in any taxable period
ending after the Closing Date. The Company does not have any
application pending with any taxing authority requesting permission for
any changes in any accounting method. No taxing authority has proposed,
in writing, any such adjustment or change in accounting method. The
Company has not failed to comply with all the applicable provisions
related to filing any application for any accounting method change that
would cause the application to be rejected.
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(q) The Company has not engaged in any transactions,
taken any action, or made any elections (other than elections regarding
depreciation methods and lives) prior to the date hereof which will
result in the Company realizing in any period after the date hereof (i)
taxable income and gain that is materially in excess of book income and
gain or (ii) book expenses and losses that are materially in excess of
tax deductions and losses.
4.19 Title to Shares. The delivery by Seller to Buyer at the
Closing of the certificates representing the Shares, duly endorsed in blank or
accompanied by stock powers endorsed in blank will vest Buyer on the Closing
Date with good and marketable title to all of the Shares, free and clear of all
Liens. Seller has the full power, right and authority to vote and transfer the
Shares and, on the Closing Date, Seller will have the full power, right and
authority to vote and transfer the Shares. At the effective time of the transfer
of the Shares to Buyer, BRC will have good and marketable title to all of the
shares of capital stock of each Subsidiary, free and clear of all Liens.
4.20 Fees. Other than Seller's obligation to Banc of America
Securities LLC, neither Seller nor the Company has paid or become obligated to
pay any fee or commission to any broker, finder or intermediary in connection
with the transactions contemplated hereby.
4.21 Absence of Certain Changes or Events. Except as set forth
on Schedule 4.21, since December 31, 1999, there has not been any transaction or
occurrence in which the Company has:
(a) suffered any material adverse change nor has
there been any event which has had or may reasonably be expected to
have a Material Adverse Effect on the Company;
(b) incurred any material obligations or liabilities
of any nature other than items incurred in the regular and ordinary
course of business, or increased (or experienced any change in the
assumptions underlying or the methods of calculating) any bad debt,
contingency, or other reserve, other than in the ordinary course of
business;
(c) paid, discharged, or satisfied any material
claim, lien, encumbrance, obligation or liability (whether absolute,
accrued, contingent, and whether due or to become due), other than the
payment, discharge, or satisfaction in the ordinary course of business
of claims, liens, encumbrances, obligations or liabilities of the type
reflected or reserved against in the Financial Statements or which were
incurred in the ordinary course of business;
(d) permitted, allowed or suffered any of its
properties or assets (real, personal or mixed, tangible or intangible)
to be subject to any Lien, other than Permitted Liens;
(e) written down or written up the value of any
equipment, inventory (including write-downs by reason of shrinkage or
markdowns), determined as collectible
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any accounts receivable or any portion thereof which were previously
considered uncollectible, or written off as uncollectible any accounts
receivable or any portion thereof, except for write-downs, write-ups
and write-offs in the ordinary course of business, none of which is
material in amount;
(f) canceled any debts or waived any claims or rights
in excess of $20,000 individually;
(g) disposed of or permitted to lapse any right to
the use of any patent, trademark, assumed name, service mark, trade
name, Copyright, license or application therefor;
(h) except for commitments for capital expenditures
not exceeding $100,000 in the aggregate made in the ordinary course of
business, committed to make any capital expenditure not paid for or
accrued prior to the Closing Date for additions to property, plant,
equipment, intangible or capital assets or for any other purpose, other
than for emergency repairs or replacement;
(i) other than pursuant to the revolving line of
credit with Seller's Senior Secured Lenders, incurred any indebtedness
for borrowed money;
(j) paid, loaned, distributed, or advanced any
amounts to, sold or transferred any properties or assets (real,
personal or mixed, tangible or intangible) to, purchased, licensed or
otherwise acquired any properties or assets from or entered into any
other agreement or arrangement with any Affiliate of the Company except
for compensation not exceeding the rate of compensation as of December
31, 1999 or as not required to be scheduled pursuant to Section 4.21(p)
and for routine travel advances to officers and employees;
(k) declared, set aside or paid any dividend or other
distribution (whether in stock or property) with respect to any of its
outstanding capital stock, or made any redemption, purchase or other
acquisition of any of its equity securities;
(l) issued, sold, split, combined or reclassified any
of the shares of capital stock or interests in the Subsidiaries, or
issued, committed to issue or authorized any issuance of any options,
warrants or other similar convertible securities;
(m) made any change in its accounting methods,
principles or practices;
(n) entered into any collective bargaining or labor
agreement (oral and legally binding or written), or experienced any
organized slowdown, material work interruption, strike or work
stoppage;
(o) sold, transferred, or otherwise disposed of any
of its material assets except in the ordinary course of business;
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(p) granted or incurred any obligation for any
increase in the compensation of any of its officers or Employees
(including, without limitation, any increase pursuant to any bonus,
pension, profit-sharing, retirement, or other plan or commitment)
except for raises and bonuses to officers or Employees in the ordinary
course of business and consistent with past practice;
(q) suffered any uninsured casualty loss or damage in
excess of $20,000 individually;
(r) made or agreed to make any charitable
contributions or incurred or agreed to incur any non-business expenses
in excess of $20,000;
(s) amended any provisions of its certificate of
incorporation, bylaws or the certificate of incorporation or bylaws of
any of its Subsidiaries or changed any of its authorized capital stock
or interests;
(t) taken any other material action except in the
ordinary course of business; or
(u) agreed, so as to legally bind the Company whether
in writing or otherwise, to take any of the actions set forth in this
Section 4.21 and not otherwise permitted by this Agreement.
4.22 Permits. Attached hereto as Schedule 4.22 is a list of
all material Permits held or applied for by the Company. The Company has all
Permits that are necessary for the conduct of its business. There has occurred
no default under any such Permits. There are no pending Legal Proceedings
relating to the suspension, revocation or modification of any Permit. The
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby, do not and will not result in any
suspension, revocation, cancellation or invalidation of any Permit that is
necessary for the conduct of Company business.
4.23 Accounts Receivable. Except as set forth on Schedule 4.23
attached hereto, all of the accounts, notes, and loans receivable that have been
recorded on the books of the Company are bona fide and represent amounts validly
due and all such accounts receivable (net of reserves set forth on the Company's
balance sheet included in the Financial Statements for such specific account or
accounts) will have been collected in full within 90 days after the Closing
Date. All of such accounts, notes, and loans receivable are free and clear of
any Liens (other than Permitted Liens), or other charges; none of such accounts,
notes, or loans receivable are subject to any offsets or claims of offset; and
none of the obligors of such accounts, notes, or loans receivable have given
notice that they will or may refuse to pay the full amount thereof or any
portion thereof. Except as set forth on Schedule 4.23 attached hereto, since
December 31, 1999, the Company has collected accounts receivable only in
accordance with its regular collection practices and has not granted any
rebates, discounts, advances or allowances to any customers and has not
otherwise sold, discounted or disposed of any accounts receivable.
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4.24 Compliance with Laws. The Company has complied in all
material respects, and is in compliance in all material respects, with all Laws
and Orders applicable to its business and has filed with the proper authorities
all statements and reports required by the Laws and Orders to which the Company
or any of its properties or operations are subject. No claim has been made by
any Governmental Authority (and, to the Company's Knowledge, no such claim is
anticipated) to the effect that the business conducted by the Company fails to
comply, in any respect, with any Law.
4.25 Transactions with Related Parties. Except as set forth on
Schedule 4.25:
(a) No agreement or transaction between the Company
and any Related Party has been entered into which, if not existing,
would have resulted in a Material Adverse Effect or, irrespective of
whether such would result in a Material Adverse Effect, will continue
after the Closing Date;
(b) No Related Party is a director or officer of, or
has any direct or indirect interest in (other than the ownership of not
more than 5% of the publicly traded shares of), any person or entity
which is a customer, supplier, vendor, landlord, sales representative
or competitor of the Company;
(c) No Related Party owns or has any interest in,
directly or indirectly, in whole or in part, any tangible or intangible
property used in the conduct of the business of the Company;
(d) Other than amounts owed to Seller pursuant to any
intercompany debts, or expense advance reimbursements in the ordinary
course of business, no Affiliate of the Company owes any money to, nor
is any such Affiliate owed any money by, the Company; and
(e) The Company has not, directly or indirectly,
guaranteed or assumed any indebtedness for borrowed money or otherwise
for the benefit of any Related Party.
4.26 Undisclosed Liabilities. Except as specifically reflected
in the Latest Balance Sheet, there were as of the date thereof no liabilities,
indebtedness or obligations (whether absolute or contingent, asserted or
unasserted, due or to become due) against, relating to or affecting the Company
that could, individually or in the aggregate, have a Material Adverse Effect.
Since the date of the Latest Balance Sheet, the Company has not incurred any
liabilities, indebtedness or obligations (whether absolute or contingent,
asserted or unasserted, due or to become due) other than liabilities,
indebtedness and obligations incurred after such date in the ordinary course of
business consistent with past practice and which would not, individually or in
the aggregate, have a Material Adverse Effect.
4.27 Indebtedness. As of the Closing, the Company will not be
liable for (i) any indebtedness to Seller's Senior Secured Lenders, any other
financial institution or any third party other than capitalized leases (as
described on Schedule 4.27 , which schedule includes the
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dollar amount outstanding under each scheduled item as of the Closing Date) and
ordinary course of business trade debt; (ii) any intercompany indebtedness owed
to Seller or any Affiliate thereof or (iii) any indebtedness to ACS. To the
extent any amounts were owed by the Company to Seller or any of its Affiliates
prior to the Closing, such indebtedness has been cancelled and contributed to
the capital of the Company by Seller or the applicable Affiliate.
4.28 Agents. Except as set forth on Schedule 4.28, the Company
has not designated or appointed any person or other entity to act for it or on
its behalf pursuant to any power of attorney or any agency which is presently in
effect (other than such of the Company's directors, officers and employees to
whom the Company has given the authority to act for the Company in the ordinary
course of its business).
4.29 Commission Sales Contracts. The Company does not employ
or have any relationship with any individual, corporation, partnership, or other
entity whose compensation from the Company is in whole or in part determined on
a commission basis.
4.30 Customers. Schedule 4.30 lists the names of all customers
of the Company which contributed during the year 2000, more than $20,000 of
orders and use of services from the Company. Except as set forth on Schedule
4.30, no such customer has canceled or otherwise terminated, or, to Company's
Knowledge, threatened in writing to cancel, terminate or materially modify in
any manner, its relationship with the Company.
4.31 Subsidiaries. Except as set forth on Schedule 4.31
attached hereto, BRC does not directly or indirectly have (or possess any
options or other rights to acquire) any subsidiaries or any direct or indirect
ownership interests in any person, business, corporation, partnership,
association, joint venture, trust, or other entity.
4.32 Books and Records. The minute books and records of the
Company contain a true, complete and correct record of all actions taken at all
meetings and by all written consents in lieu of meetings of the Board of
Directors, or any committees thereof, and stockholders of the Company. The stock
ledger and related stock transfer records of the Company contain a true,
complete and correct record of the original issuance, transfer and other
capitalization matters of the capital stock of the Company. The accounting,
financial reporting, tax and business books and records of the Company (i)
accurately and fairly reflect in all material respects the business and
condition of the Company and the transactions and the assets and liabilities of
the Company with respect thereto, and (ii) have been maintained in all material
respects in accordance with good business and bookkeeping practices. Without
limiting the generality of the foregoing, the Company has not engaged in any
transaction with respect to its business or operations, maintained any bank
account therefor or used any funds of the Company in the conduct thereof except
for transactions, bank accounts and funds that have been and are reflected in
the normally maintained Books and Records of the business.
4.33 Information Furnished. Seller and the Company have made
available to Buyer and its directors, officers, employees, counsel,
representatives, financing sources, customers, creditors, accountants and
auditors, true and correct copies of all agreements,
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documents, and other items listed on the schedules to this Agreement and all
Books and Records of the Company. This Agreement, the schedules hereto, and the
information, agreements, or documents delivered to or made available to Buyer or
its officers, attorneys, accountants, and representatives pursuant to this
Agreement, taken together as a whole, do not contain any untrue statement of a
material fact, or omit any material fact necessary to make the statements herein
and therein, taken together as a whole, not misleading.
4.34 Oates Employment and Non-Competition Agreement. The
Employment and Noncompetition Agreement, dated as of October 8, 1997 (the
"Original Agreement") among Tyler Corporation, a Delaware corporation, BRC and
William D. Oates, as amended by that certain First Amendment to Employment and
Noncompetition Agreement, dated as of September 29, 2000 (the "First Amendment")
and by that certain Second Amendment to Employment and Noncompetition Agreement,
dated as of December 29, 2000 (the "Second Amendment" and together with the
First Amendment and the Original Agreement, the "Existing Oates Noncompetition
Agreement"), is in full force and effect, and is enforceable in accordance with
its terms (except as such enforceability may be limited by bankruptcy,
insolvency, reorganization and similar laws affecting creditors generally and by
the availability of equitable remedies) and prohibits William D. Oates and any
of his Affiliates from conducting any Restricted Activity (as defined in the
Second Amendment).
4.35 Directors and Officers. Schedule 4.35 lists all of the
directors and officers of BRC and each Subsidiary.
4.36 Year 2000. The Technology Systems are capable, in all
material respects of (i) recording, storing, processing, and presenting calendar
dates falling on or after January 1, 2000 in the same manner and with
substantially the same functionality as such subject Technology Systems record,
store, process and present calendar dates falling on or before December 31,
1999, (ii) accepting date data from other systems and sources (whether in two
digit or four digit format) and properly recognizing, calculating, sorting,
storing, outputting, sequencing and otherwise processing such data in a manner
that eliminates any century ambiguity and (iii) properly recognizing,
calculating, sorting, storing, outputting, sequencing and otherwise processing
date data for February 29, 2000 and all subsequent leap years.
4.37 Bank Accounts; Lock Boxes. Attached hereto as Schedule
4.37 is a list of all banks or other financial institutions with which the
Company has an account or maintains a lock box or safe deposit box, showing the
type and account number of each such account, lock box and safe deposit box and
the names of the persons authorized as signatories thereon or to act or deal in
connection therewith.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACS AND BUYER
ACS and Buyer hereby represent and warrant to Seller as
follows:
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5.1 Organization and Good Standing. Each of ACS and Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. Each of ACS and Buyer has all requisite corporate
power and authority to execute, deliver and perform its obligations under each
of the Buyer Transaction Agreements and to consummate the transactions
contemplated hereby and thereby to be consummated by it.
5.2 Authorization of Agreement. The execution and delivery of
the Buyer Transaction Agreements by each of ACS and Buyer, as applicable, the
performance of the Buyer Transaction Agreements and the consummation by each of
ACS and Buyer, as applicable, of the transactions contemplated by the Buyer
Transaction Agreements, have been duly authorized by all necessary action and no
other action on the part of either of ACS or Buyer is necessary with respect
thereto. Each of the Buyer Transaction Agreements has been duly and validly
executed and delivered by each of ACS and Buyer, as applicable, constitutes a
valid and binding obligation of each of ACS and Buyer, as applicable, and is
enforceable against each of ACS and Buyer, as applicable, in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws affecting creditors generally and by the
availability of equitable remedies.
5.3 Conflicts, Consents of Third Parties. Neither the
execution and delivery by either of ACS or Buyer of the Buyer Transaction
Agreements nor consummation or performance by either of ACS or Buyer of the
transactions contemplated by the Buyer Transaction Agreements to be consummated
or performed by either of ACS or Buyer will: (a) violate any Law, (b) violate
the certificate of incorporation or bylaws of either of ACS or Buyer, (c)
violate any Order to which either of ACS or Buyer is a party or by which either
of ACS or Buyer is bound or (d) require any consent from, authorization or
approval or other action by, and no notice to or declaration, filing or
registration with any Governmental Authority, except to comply with the HSR Act.
5.4 Brokers. ACS and Buyer have not paid or become obligated
to pay any fee or commission to any broker, finder or intermediary in connection
with the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF BRC AND SELLER
6.1 Further Actions. If at any time after the Closing, Buyer
shall consider or be advised that any further assignments, conveyances,
transfers or assurances in law, or any other actions or things, may be necessary
or appropriate to transfer to Buyer any right, title or interest of Seller, of
record or otherwise, in or to the Shares, Seller, at its sole cost and expense,
shall promptly execute, deliver and record, or cause to be executed, delivered
and recorded, any and all such further instruments of assignment, conveyance and
transfer and take, or cause to be taken, all actions and do, or cause to be
done, all things, as may be reasonably requested by Buyer to transfer to Buyer
all right, title and interest of Sellers, of record and otherwise, in and to the
Shares.
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6.2 Use of Proceeds. At the Closing, Seller shall use such
portion of the Purchase Price received by it as is necessary to repay that
portion of the Company's indebtedness (including the current portion thereof but
excluding capitalized leases) set forth on Schedule 6.2 to the extent necessary
to secure the release of any Liens against the Company's assets and any related
guarantee agreement by the Company in favor of Seller's Senior Secured Lenders
or any other third party. Seller shall deliver to Buyer at the Closing such
documents and instruments as Buyer shall reasonably request to evidence that
Seller has complied with the provisions of this Section 6.2.
6.3 Notices to Obligors. Seller hereby agrees that, upon the
request of Buyer from and after the Closing, it will sign a form of notification
for delivery by Buyer to all obligors of BRC and its Subsidiaries notifying them
of the sale of the Shares and that payment in respect of such obligors'
financial obligations to BRC and/or its Subsidiaries should be made directly to
Buyer at the address set forth in such notification. From and after the Closing,
Seller shall promptly pay to Buyer an amount equal to the monies received by
Seller from and after such date that are attributable to such obligors'
financial obligations to BRC and its Subsidiaries.
6.4 Bank Accounts. Upon the request of Buyer from and after
the Closing, Seller and BRC shall, or BRC shall cause its applicable Subsidiary
to, change the names of the accounts and the names of the respective officers,
employees, agents or other similar representatives of Seller or the Company, as
applicable, authorized to transact business with respect to the accounts, safe
deposit boxes, lock boxes or other relationships with the banks, trust
companies, securities brokers and other financial institutions set forth in
Schedule 4.37, all in accordance with the instructions provided by Buyer to
Seller prior to the Closing Date.
6.5 Payroll and Employee Expenses; Other Pre-Closing Expenses.
(a) Subject to Section 6.5(b), Seller shall be
responsible for all payroll and related costs and expenses of the
Employees including but not limited to gross payroll, tax withholdings,
any benefits for employees, any employment related taxes and charges
and any third party service fees through and including the Closing
Date.
(b) Buyer shall pay accrued bonuses to the
individuals set forth on Schedule 6.5 in an amount not to exceed
$465,300.00 in the aggregate; provided, Seller shall reimburse Buyer
for an amount equal to the product of (i) .5 and (ii) the amount of
such bonuses paid by Buyer within 10 business days after receipt of
written notice from Buyer that such payment has been made.
(c) Seller shall be responsible for the payment of
all checks outstanding as of the Closing Date relating to payments made
by or on behalf of the Company.
6.6 Segregation of Database. After the Closing and no later
than January 20, 2001, Seller shall, at Seller's sole cost and expense,
segregate Seller's computerized records and transaction data for the Company
into a separate database to accurately reflect the financial position and
results of operations of the Company as of January 1, 2001.
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6.7 Payoff of ACS Promissory Notes. At the Closing, Seller
shall deliver to ACS by wire transfer of immediately available funds (to the
account specified by ACS) an aggregate amount sufficient to payoff all
principal, accrued interest, premiums if any and all other amounts due under the
promissory notes listed on Schedule 6.2.
6.8 Payoff of Vehicle Leases. As soon as practicable after
Closing and no later than January 15, 2001, Seller shall payoff all amounts due
under the existing loans on any of the vehicles owned by BRC or its Subsidiaries
and provide evidence to Buyer of the release of any and all liens on any such
vehicles.
6.9 Amended and Restated Non-Disturbance Agreement. As soon as
practicable after Closing and no later than January 15, 2001, Seller shall
deliver to ACS an executed Amended and Restated Non-Disturbance Agreement in the
form attached hereto as Exhibit A, subject to any changes that may be reasonably
requested by Colonial Bank and approved by ACS, whose approval shall not be
unreasonably withheld.
ARTICLE VII
COVENANTS OF ACS AND BUYER
7.1 Further Actions. ACS and Buyer agrees to execute and
deliver such instruments and take such other actions as may reasonably be
required to carry out the intent of this Agreement.
7.2 Release of Guarantees. ACS and Buyer shall from time to
time after the Closing Date provide to Seller and to the Company such
information with respect to ACS and Buyer as may be reasonably requested to
assist the Company and Seller in obtaining a release of all of Seller's
obligations under the Contracts listed on Schedule 7.2 relating to the guarantee
of any obligation or liability of the Company (collectively, the "Guaranty
Contracts"), and will execute and deliver guarantees in substantially the same
form as that heretofore executed by Seller if required in order to obtain the
release of Seller.
7.3 Employment. Effective as of the Closing Date, except for
those Company employees specified on Schedule 7.3 (the "Excluded Employees"),
the Employees of the Company as of the Closing Date (the "Continuing Employees")
shall continue to be employed by the Company, but subject to the standard
policies and procedures generally applicable to the employees of ACS and its
subsidiaries and the provisions of Sections 7.4 and 7.5 below. The Excluded
Employees will resign their positions with the Company effective as of the
Closing Date. Any costs or liabilities of any nature whatsoever associated with
the resignation of and/or termination of any employment agreement with, the
Excluded Employees shall be borne solely by Seller.
7.4 Treatment of Employees under Buyer's Benefit Plans.
(a) In connection with the transactions contemplated by this
Agreement, neither ACS nor Buyer shall assume (i) any of Seller's employee
benefit plans (within the
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meaning of Section 3(3) of ERISA) or other employee benefit programs or fringe
benefit arrangements ("Seller Plans"), or (ii) any of the liabilities under or
arising out of or in connection with such plans, programs or arrangements,
including, but not limited to, any liabilities that may have arisen, or arise,
out of a failure to comply with any contractual or legal requirement pertaining
to such a benefit plan, program or arrangement nor shall any of the Continuing
Employees participate in any Seller Plan after the Closing Date. All Seller
Plans and related liabilities shall remain the sole responsibility of Seller.
Government Record Services, Inc. shall withdraw as a participating employer from
all employee benefit plans sponsored by Seller effective as of the close of
business on the Closing Date.
(b) The Continuing Employees and, where applicable, their
eligible dependents, may elect to be covered on and after the Closing Date under
the benefit plans, programs, and arrangements of Buyer ("Buyer Plans"). If such
Continuing Employees and/or their eligible dependents elect such coverage,
coverage shall commence immediately and be under the terms of Buyer Plans
without the application of any waiting periods so that the Continuing Employees
and their eligible dependents will have no interruption of coverage, except that
participation in the Buyer's 401(k) Plan (as hereinafter defined) will commence
on the first applicable entry date (as defined in the Buyer's 401(k) Plan) that
occurs on or after the Closing Date. Medical and dental benefit coverage under
the applicable plan of Buyer shall be available to the Continuing Employees and
eligible dependents for preexisting conditions to the extent required by Health
Insurance Portability Accountability Act.
(c) Except for severance benefits, if any, Buyer agrees that
the Continuing Employees shall be credited with all service for Seller, any
present or former members of a controlled or affiliated group within the meaning
of Code section 414 of which Seller is or was a member, and any predecessors of
Seller for purposes of eligibility to participate, vesting, eligibility for
benefits, and the amount or accrual of benefits under Buyer Plans. The
Continuing Employees shall commence accruing benefits under Buyer's Plans on the
first applicable entry date (as defined in such plans) that occurs on or after
the Closing Date provided they enroll in such Buyer Plans. Buyer shall be
responsible for all claims arising under Buyer's welfare plans (within the
meaning of ERISA section 3(1)) on and after the Closing Date with respect to the
Continuing Employees and, where applicable, their eligible dependents. Seller
shall be responsible for reimbursement of all covered expenses incurred and
submitted under its welfare plans prior to the Closing Date with respect to the
Continuing Employees and their eligible dependents regardless of when such
claims or costs are reported or paid. In addition, Seller shall be responsible
for all administrative and ancillary costs relating to the claims incurred prior
to the Closing Date regardless of when paid or reported.
(d) Buyer shall not assume any liability to provide benefits
including post-retirement benefits, that arise out of Seller's welfare plans for
any Continuing Employees or any other individuals who have separated from
service or become inactive, or are no longer deemed to be active employees with
the Company or Seller on or prior to the Closing Date. Seller agrees to
indemnify and hold ACS and Buyer harmless, effective at and from the Closing
Date, against and in respect of all losses, liabilities, damages, costs and
expenses (including costs of suit and reasonable attorneys' fees and expenses)
incurred by Buyer in respect of any claims by
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Continuing Employees or any individuals who have separated from service or
become inactive, or are no longer deemed to be active employees with the Company
or Seller on or prior to the Closing Date for benefits, including
post-retirement benefits or post employment benefits, under Seller's welfare
plans. This indemnity shall survive Closing. Any liability or accrued payable
for any post employment benefit provided by Seller is the sole liability of
Seller.
(e) Seller shall be solely responsible for compliance with the
notice requirements and providing benefits as required by Code section 4980B and
ERISA section 601 et seq. ("COBRA") for all Qualifying Events (as defined in
Code section 4980B(f) (3) and ERISA section 603) that occur with respect to the
Continuing Employees and their eligible dependents (including all existing COBRA
participants or individuals potentially eligible for COBRA benefits prior to the
Closing Date) before the Closing Date. Seller shall be solely responsible for
giving notice to individuals whose employment with the Company will not continue
after the Closing Date as provided in Section 7.3 above and for providing
benefits for any such individuals who elect COBRA continuation coverage through
the Seller Plans. Buyer shall be solely responsible for compliance with the
notice requirements and providing benefits to Continuing Employees, as required
by COBRA for all Qualifying Events occurring on or after Closing Date (except
for employees whose employment with the Company will not continue on or after
the Closing Date) with respect to the Continuing Employees and their eligible
dependents.
(f) Within 90 days after the Closing Date, Buyer shall either
identify an already existing or establish a new qualified retirement plan (the
"Buyer's 401(k) Plan"), which is intended to comply with the requirements of
Code sections 401(a) and (k) so as to permit, subject to the satisfaction of the
conditions to such transfer specified below in this paragraph, the direct
rollover of the Continuing Employees' account balances in the Tyler
Technologies, Inc. 401(k) Profit Sharing Plan and Trust ("Seller's 401(k) Plan")
to Buyer's 401(k) Plan. Buyer's 401(k) Plan shall provide service credit to the
Continuing Employees, for purposes of eligibility to participate and vesting,
for their service with Seller, any present or former members of a controlled or
affiliated group within the meaning of Code section 414 of which Seller is or
was a member, and any predecessors of Seller. Seller agrees that it will cause
the trustee for Seller's 401(k) Plan to directly rollover the account balances
of the Continuing Employees who elect a rollover to the trustee for Buyer's
401(k) Plan and Buyer agrees that it will cause the trustee for Buyer's 401(k)
Plan to accept the transfer of such account balances. Not later than six months
after the Closing Date, Seller shall provide to Buyer (i) a copy of the
favorable determination letter issued by the Internal Revenue Service evidencing
that Seller's 401(k) Plan satisfies the requirements of Section 401(a) and (e)
of the Code, and (ii) such copies of records concerning Seller's 401(k) Plan and
the participation of the Continuing Employees in Seller's 401(k) Plan as Buyer
shall reasonably request for purposes of administering Buyer's 401(k) Plan and
submitting such plan to the Internal Revenue Service to request a favorable
determination letter. In the event that Seller does not provide Buyer with such
favorable determination letter by such date, then Seller and Buyer agree that no
direct rollover of Continuing Employees' account balances in Seller's 401(k)
Plan will be permitted. In connection with the foregoing, Seller agrees to fully
vest all of the Continuing Employees under any Seller 401(k) Plan (as
hereinafter defined).
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Seller will take all necessary steps with respect to any Continuing Employees
who have plan loans so as not to cause a default under such loans in connection
with any such rollover.
7.5 Limitations. Buyer's agreement to continue the employment
of the Continuing Employees in accordance with the standard policies and
practices of ACS and to make available the benefits generally discussed above
shall not be deemed and shall in no way constitute Buyer's agreement that the
Company shall employ the Continuing Employees for a particular term or period of
time; it being the intention of Buyer that the Company provide employment to the
Continuing Employees on an employment at will basis. It is Buyer's present
intention to continue to make available the benefits generally described above
based upon the benefits for the ACS division under which the Company will
operate provided to similarly situated employees of such division; provided,
however, that following the Closing Date, Buyer, in the exercise of its business
judgment, will be entitled in its sole discretion to modify the compensation and
benefits provided to the Continuing Employees.
7.6 Ordinary Course. Buyer agrees not to cause the Company to
engage in a transaction on the Closing Date which occurs after the Closing that
is not in the ordinary course of business, other than transactions resulting
from a 338 Election.
ARTICLE VIII
DELIVERIES AT CLOSING
8.1 Deliveries by Seller to Buyer. At the Closing, in addition
to making the payment described in Section 3.2(c), Seller shall deliver, or
shall cause to be delivered, to Buyer the following:
(a) the certificates evidencing the Shares, and such
instruments or documents evidencing the sale, assignment, transfer and
conveyance by Seller to Buyer of the Shares in accordance with the
terms hereof;
(b) the certificates evidencing the issued and
outstanding shares of capital stock of each Subsidiary except
Government Records Services, Inc. and Title Records Corporation, which
certificates are already in the possession of ACS and shall be deemed
delivered by Seller hereunder as of the Closing Date;
(c) a certificate of the Secretary or an Assistant
Secretary of each of Seller and BRC, dated the Closing Date, setting
forth resolutions of the board of directors of each of Seller and BRC
authorizing the consummation of the transactions contemplated hereby,
and certifying that such resolutions were duly adopted and have not
been rescinded or amended as of the Closing Date;
(d) a certificate of the Secretary or an Assistant
Secretary of each of Seller and BRC attesting as to the incumbency and
signature of each officer of Seller or BRC, as applicable, who shall
execute this Agreement and any other Seller Transaction Agreement and
certifying as being complete and correct the copies attached to such
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certificate of the articles of incorporation and bylaws of BRC, the
certificate of incorporation or bylaws of each of the Subsidiaries and
the certificate and incorporation and bylaws of Seller, each as in
effect on such date;
(e) a certificate of existence of BRC from the
Secretary of State of the State of Texas and a certificate of the good
standing of BRC from the Texas Comptroller's Office, and a certificate
of qualification of BRC as a foreign entity authorized to do business
in each state in which they are so qualified, in each case dated as of
a date not earlier than 5 days prior to the Closing Date;
(f) a certificate of good standing of Seller from the
Secretary of State of the State of Delaware, dated as of a date not
earlier than ten (10) days prior to the Closing Date;
(g) a certificate of the good standing of each
Subsidiary from the applicable Governmental Authority of the State of
its incorporation, in each case dated as of a date not earlier than ten
(10) days prior to the Closing Date;
(h) the originals of all minute books, stock transfer
records and corporate and other records of BRC and each of its
Subsidiaries;
(i) satisfactory evidence of the resignation of such
of the present directors and officers of BRC as Buyer may require;
(j) a duly executed copy of the Data Updating
Agreement;
(k) a duly executed copy of the Transition Services
Agreement in the form attached hereto as Exhibit B (the "Transition
Agreement");
(l) a duly executed copy of the Sublease Agreement in
the form attached hereto as Exhibit C (the "Sublease");
(m) a duly executed copy of the Non-competition
Agreement in the form of Exhibits D attached hereto (the
"Non-competition Agreement");
(n) a duly executed copy of Second Amendment in the
form attached hereto as Exhibit E;
(o) all consents or waivers referenced on Schedule
4.5;
(p) evidence satisfactory to Buyer and ACS that BRC's
only direct and indirect Subsidiaries are Government Records Services,
Inc., Title Records Corporation, RTS Holdings, Inc. and PRETS Holdings,
Inc.;
(q) an opinion from H. Lynn Moore, Jr., in house
counsel for Seller and the Company, in substantially the form attached
hereto as Exhibit F;
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(r) copies of any and all releases, termination
statements and other documents and instruments, dated on or within five
days prior to the Closing Date, as are necessary to remove and release
the Liens specified on Schedule 1.1;
(s) a duly executed copy of a letter or other written
instrument from Seller's Senior Secured Lenders to Seller evidencing
(i) Seller's Senior Secured Lenders's consent to certain matters and
(ii) the release of all of BRC's and each Subsidiary's obligations
under Seller's credit facility with Seller's Senior Secured Lenders
relating to the guarantee of any obligation or liability of BRC and the
Subsidiaries, and related liens on Company assets, substantially in the
form of Exhibit G;
(t) a non-disturbance and attornment agreement for
each of the Real Property Leases assigned to Seller's Senior Secured
Lenders;
(u) a pro forma balance sheet of the Company as of
September 30, 2000 setting forth the assets and liabilities being
assumed by Buyer hereunder as if the transaction contemplated by this
Agreement had taken place on that date; and
(v) termination and release agreements for any
Excluded Employee who was a party to a written employment agreement
with BRC or any of its Subsidiaries.
8.2 Deliveries by Buyer to Seller. At the Closing, in addition
to making the payments described in Sections 3.2(a) and (b), Buyer shall deliver
to Seller the following:
(a) [intentionally omitted]
(b) [intentionally omitted]
(c) a certificate of a duly authorized officer of
Buyer, dated the Closing Date, setting forth the resolutions of the
board of directors of Buyer authorizing the execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby, and certifying that such resolutions were duly adopted and have
not been rescinded or amended as of the Closing Date;
(d) a certificate of a duly authorized officer of
ACS, dated the Closing Date, setting forth the resolutions of the
special transaction committee of ACS authorizing the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, and certifying that such resolutions were duly
adopted and have not been rescinded or amended as of the Closing Date;
(e) a certificate of the Secretary or an Assistant
Secretary of Buyer attesting as to the incumbency and signature of each
officer of Buyer who shall execute this Agreement or any other Buyer
Transaction Agreement;
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(f) a certificate of the Secretary or an Assistant
Secretary of ACS attesting as to the incumbency and signature of each
officer of ACS who shall execute this Agreement or any other Buyer
Transaction Agreement;
(g) a duly executed copy of the Transition Services
Agreement;
(h) a duly executed copy of the Sublease Agreement;
(i) a duly executed copy of the Non-competition
Agreement;
(j) a duly executed copy of the guarantee of the
Lease Agreement, dated September 29, 2000, between William D. Oates and
Marilyn Oates and Government Records Services, Inc.; and
(k) a duly executed copy of the Data Updating
Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 Seller Indemnification. Subject to the limitations set
forth in Section 9.4 hereof, Seller hereby agrees to indemnify and hold ACS,
Buyer and each of their Affiliates, and the officers, directors, employees and
agents thereof, harmless from and against any and all claims, judgments, causes
of action, liabilities, obligations, damages, losses, deficiencies, costs,
penalties, interest and expenses, including without limitation, cost of
investigation and defense, and reasonable attorneys' fees and expenses, net of
any collected insurance proceeds (collectively, "Losses"), arising out of, based
upon, attributable to or resulting from any (a) breach of any representation,
warranty, agreement or covenant on the part of either Seller or BRC (excluding,
however, in the case of BRC, any breach of any agreement or covenant occurring
following the Closing Date) contained in or pursuant to this Agreement or any of
the Seller Transaction Agreements, (b) breach of the Existing Oates
Noncompetition Agreement or the Noncompetition Agreement, (c) subject to the
provisions of Article X, Taxes imposed on the Company for (i) any taxable year
or period that ends on or before the Closing Date and, with respect to any
Straddle Period, the portion of such Straddle Period deemed to end on and
including the Closing Date and (ii) any transfer Taxes from the transactions
contemplated hereby, and (d) obligations of the Company to indemnify any Person
pursuant to written agreements entered into by the Company prior to the Closing
arising out of facts or circumstances existing prior to the Closing Date.
9.2 Buyer Indemnification. ACS and Buyer hereby agree to
indemnify and hold Seller harmless from and against any and all Losses arising
out of, based upon, attributable to or resulting from any (a) breach of any
representation, warranty, agreement or covenant on the part of ACS or Buyer
contained in or made pursuant to this Agreement or any of the Buyer Transaction
Agreements, (b) subject to the provisions of Article X, Taxes imposed on the
Seller for any taxable period that begins on or after the Closing Date and, with
respect to any Straddle Period, the portion of such Straddle
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Period deemed to begin after the Closing Date and (c) of the Guaranty Contracts.
9.3 Indemnification Procedures.
(a) If any third party asserts any claim against a
party to this Agreement which, if successful, would entitle the party
to indemnification under this Article IX (the "Indemnified Party"), it
shall give notice of such claim to the party from whom it intends to
seek indemnification (the "Indemnifying Party") and the Indemnifying
Party shall have the right to assume the defense and, subject to
Section 9.3(b), settlement of such claim at its expense by
representatives of its own choosing acceptable to the Indemnified Party
(which acceptance shall not be unreasonably withheld). The failure of
the Indemnified Party to notify the Indemnifying Party of such claim
shall not relieve the Indemnifying Party of any liability that the
Indemnifying Party may have with respect to such claim, except to the
extent that the defense is materially prejudiced by such failure. The
Indemnified Party shall have the right to participate in the defense of
such claim at its expense (which expense shall not be deemed to be a
Loss), in which case the Indemnifying Party shall cooperate in
providing information to and consulting with the Indemnified Party
about the claim. If the Indemnifying Party fails or does not assume the
defense of any such claim within 15 days after written notice of such
claim has been given by the Indemnified Party to the Indemnifying
Party, the Indemnified Party may defend against or, subject to Section
9.3(b), settle such claim with counsel of its own choosing at the
expense (to the extent reasonable under the circumstances) of the
Indemnifying Party.
(b) If the Indemnifying Party does not assume the
defense of a claim involving the asserted liability of the Indemnified
Party under this Article IX, no settlement of such claim shall be made
by the Indemnified Party without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed. If the Indemnifying Party assumes the defense of such a claim,
(i) no settlement thereof may be effected by the Indemnifying Party
without the Indemnified Party's consent unless (A) there is no finding
or admission of any violation of Law or any violation of the rights of
any Person and no effect on any other claim that may be made against
the Indemnified Party, (B) the sole relief provided is monetary damages
that have been paid in full by the Indemnifying Party, and (C) the
settlement includes, as an unconditional term thereof, the giving by
the claimant or the plaintiff to the Indemnified Party of a release in
form and substance reasonably satisfactory to the Indemnified Party,
from all liability in respect of such claim, and (ii) the Indemnified
Party shall have no liability with respect to any compromise or
settlement thereof effected without its consent.
9.4 Limits on Indemnification. Notwithstanding anything to the
contrary contained in this Agreement:
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(a) Seller shall not have any obligation to provide
indemnification for Losses pursuant to Section 9.1 arising out of or
related to breaches of representations and warranties except to the
extent that the aggregate amount of all such Losses exceeds $250,000
(the "Basket Amount"), in which case Seller shall be liable to Buyer
for the full amount of such Losses in excess of the first $250,000
thereof; provided that the foregoing limitation shall not apply to
indemnifiable Loses resulting from (x) any breach of a representation
or warranty contained in any of Sections 4.1, 4.2, 4.3, 4.13, 4.14,
4.15(f), 4.17, 4.18, 4.19, 4.26 or 4.34 (the "Excluded
Representations"), (y) any claim for indemnification pursuant to
Section 9.1(b), (c) or (d), or (z) the breach of any covenant or
agreement of Seller included in this Agreement or any Seller
Transaction Agreement (collectively, the "Basket Exclusions"). Seller
shall be obligated to pay all Losses based on the Basket Exclusions
without regard to the individual or aggregate amounts thereof and
without regard to whether the aggregate of all Losses shall have
exceeded, in the aggregate, the Basket Amount. The maximum obligation
of Seller to provide indemnification pursuant to this Article IX shall
be limited to $10,650,000 in the aggregate; provided, however, that the
foregoing limitation shall not apply to any Losses arising from (i) the
breach of an Excluded Representation, (ii) any claim for
indemnification pursuant to Section 9.1(b), (c) or (d), (iii) arising
out of the breach of any covenant or agreement of Seller included in
this Agreement or any Seller Transaction Agreement or (iv) arising out
of the actual fraud of Seller.
(b) Neither ACS nor Buyer shall have any obligation
to provide indemnification for Losses pursuant to Section 9.2 arising
out of or related to breaches of representations and warranties except
to the extent that the aggregate amount of all such Losses pursuant to
such Section exceeds the Basket Amount in which case Buyer shall be
liable to Seller for the full amount of such Losses in excess of the
first $250,000 thereof; provided that (i) the foregoing limitation
shall not apply to indemnifiable Loses resulting from any claim for
indemnification pursuant to Section 9.2(b) or (c) and (ii) ACS and
Buyer shall be obligated to provide indemnification for all Losses
arising out of or related to the breach of any covenant or agreement of
ACS or Buyer included herein or in any Buyer Transaction Agreement
without regard to the Basket Amount. The maximum obligation of ACS and
Buyer to provide indemnification for Losses arising out of or related
to breaches of representations and warranties (but not for any breach
of any covenant or agreement of ACS and Buyer) pursuant to this Article
IX shall be $10,650,000 in the aggregate.
(c) The representations and warranties of Seller on
the one hand, and ACS and Buyer, on the other, contained in this
Agreement shall survive the Closing until the second anniversary of the
Closing Date; provided, however, that (i) the representations contained
in Sections 4.13, 4.17, and 4.18 shall continue until the expiration of
the applicable statute of limitations relating to the cause of action
giving rise to Losses, (ii) the representations contained in Sections
4.1, 4.2, 4.3, 4.14, and 4.19 shall survive indefinitely and (iii) the
representation contained in Section 4.34 shall survive as long as the
term of the Existing Oates Noncompetition Agreement. The
representations and warranties of BRC shall expire as of the Closing
Date.
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9.5 Bexar County Agreement. For purposes of this Article IX,
if Buyer incurs any Loss for which it is entitled to indemnification under
Section 9.1 as a result of the failure of Seller to obtain a consent prior to
the Closing of Bexar County Commissioner's Court under the Contract Number
BC98-74 Microfilming Services, dated November 28, 1997 between Government
Records Services, Inc. and Bexar County (the "Bexar County Contract"), the value
of the Bexar County Contract shall be deemed to be $1,200,000.
ARTICLE X
TAXES
10.1 Tax Returns and Payments.
(a) Buyer shall, unless otherwise reasonably
requested by Seller, cause the Company to consent to join, for all taxable
periods of the Company ending on or before the Closing Date for which the
Company is eligible to do so, in any unitary, consolidated or combined federal,
state, local or foreign income Tax Returns with Seller (including franchise tax
returns based upon income). Seller shall cause to be prepared and filed all such
unitary, consolidated or combined income Tax Returns. Buyer agrees to cooperate
with Seller in the preparation of the portions of such income Tax Returns
pertaining to the Company, and hereby agrees to take no position inconsistent
with the Company's being a member of the consolidated or combined group of which
Seller is a member for all such periods. Prior to filing any Tax Return which
includes the impact of this transaction, and at least 30 days before the due
date of such return, the Seller shall provide to the Buyer, for its review and
comment, copies of such returns or extracts therefrom sufficient to apprise
Buyer of the proposed treatment of this transaction. The Seller agrees to
consider changes requested by the Buyer and to make any such changes that have
no material adverse effect on Seller and which are otherwise reasonably
acceptable to the Seller. Final copies of such Tax Returns (or extracts
therefrom) shall be provided to the Buyer promptly after the filing of such Tax
Returns. The parties agree that if the Company is permitted, but not required,
under applicable Tax Laws to treat the Closing Date as the last day of a Tax
Period, they will treat the Tax Period as ending on the Closing Date. Seller
shall timely pay all income taxes to which the income Tax Returns described in
this Subsection 10.1(a) relate for all periods covered thereby.
(b) Seller shall cause to be prepared and to be
timely filed all required state, local and foreign Tax Returns of the Company
(other than those caused to be filed by Seller pursuant to Section 10.1(a)) for
any period which ends on or before the Closing Date, for which Tax Returns have
not been filed as of the Closing Date. At least 30 days before the due date of
such return, the Seller shall deliver a copy of such returns to the Buyer for
its review and comment. The Seller agrees to consider any changes requested by
the Buyer and to make any such changes that have no Material Adverse Effect and
which are otherwise reasonably acceptable to the Seller. Final copies of such
Tax Returns shall be provided to the Buyer promptly after the filing of such Tax
Returns. Buyer shall be responsible for preparing and filing all Tax Returns
required to be filed by
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or on behalf of BRC and its Subsidiaries for taxable periods ending after the
Closing Date. All such returns of the Company for periods ending on or prior to,
or which include, the Closing Date shall be prepared on a basis that is
consistent with the manner in which Seller or the Company prepared or filed such
Tax Returns for prior periods.
(c) (i) Seller shall indemnify and hold harmless
Buyer, the Company and their respective Affiliates, successors and
assigns and the employees, directors, officers and agents of each with
respect to any and all Taxes that may be imposed on Buyer, the Company
or in respect of their business or assets (A) with respect to any
taxable period of the Company or any unitary, consolidated or combined
group of which the Company was a member ending on or prior to the
Closing Date or allocated to Seller pursuant to subparagraph (ii) of
this Section 10.1(c) (the "Pre-Closing Taxes"), (B) to the extent such
Taxes arise as a result of a breach or inaccuracy of any representation
contained in Section 4.18, or (C) under Treasury Regulation Section
1.1502-6 or any comparable state, local or foreign tax provision, as a
result of the membership of the Company in any unitary, consolidated or
combined group that included Seller.
(ii) If, for any United States federal,
state, local or foreign tax purposes, the taxable period of the Company
does not terminate on the Closing Date, Taxes, if any, attributable to
any taxable period of the Company that includes (but does not end on)
the Closing Date (each such period, a "Straddle Period") shall be
allocated to (A) Seller for the period up to and including the Closing
Date, and (B) Buyer for the period subsequent to the Closing Date. For
purposes of the preceding sentence, Taxes for the period up to and
including the Closing Date and for the period subsequent to the Closing
Date shall be determined on the basis of an interim closing of the
books as of the close of business on the Closing Date as if such
taxable period consisted of one taxable period ending on and including
the Closing Date followed by a taxable period beginning on the day
following the Closing Date or under such other reasonable method as the
parties may agree. For purposes of this subparagraph (ii), exemptions,
allowances or deductions that are calculated on an annual basis, such
as the deduction for depreciation, and non-income Taxes (such as ad
valorem Taxes) that relate to periods of time, shall be apportioned on
a daily basis. In addition, the Texas franchise tax determined with
respect to capital or income of the Company (i) during 2000 shall be
considered a tax with respect to the period from January 1, 2000, to
December 31, 2000, for purposes of this Agreement, and (ii) during 2001
shall be considered a tax with respect to the period from January 1,
2001, to December 31, 2001, for the purposes of this Agreement.
(d) With respect to any Tax Return required to be
filed by Buyer pursuant to Section 10.1(b) for a Straddle Period, Buyer
shall provide Seller with copies of such completed Tax Return and a
statement setting forth the amount of Tax shown on such Tax Return that
is allocable to Seller pursuant to Section 10.1(c)(ii) (the
"Statement") at least 15 business days prior to the due date for the
filing of such Tax Return. Not later than five days before the due date
for payment of Taxes with respect to such Tax Return, Seller shall pay
to Buyer an amount equal to the Taxes shown on the Statement as being
allocable to Seller. In addition, if the Pre-Closing Taxes with respect
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<PAGE> 51
to a Straddle Period, calculated in accordance with Section 10. 1(c),
are less than the Tax payments made on or before the Closing Date by
or on behalf of the Company with respect to such Straddle Period Buyer
shall cause the Company to pay over to Seller the excess of such Tax
payments over such Pre-Closing Taxes concurrently with the filing of
the Tax Return for the Straddle Period.
10.2 Refunds. Any refunds or credits of federal, state, local
and foreign Taxes (including any interest thereon) received by or credited to
the Company or Seller attributable to periods ending on or prior to the Closing
Date, or attributable to periods which include the Closing Date that were not
borne by Buyer pursuant to Section 10.1(c) (collectively, "Seller Refunds"),
shall be for the benefit of Seller, and Buyer shall use reasonable commercial
efforts to obtain any Seller Refunds and shall cause the Company to pay over to
Seller any Seller Refunds within 15 business days after receipt or credit
thereof; provided, however, that Seller shall reimburse Buyer for reasonable
costs or expenses incurred in connection with obtaining such Seller Refunds.
10.3 Cooperation. The Sellers, the Buyer and the Company will
provide each other with such cooperation and information as any of them
reasonably may request of another in filing any Tax Return, amended Tax Return
or claim for refund, determining a liability for Taxes or a right to a refund of
Taxes or participating in or conducting any audit or other proceeding in respect
of Taxes. Each such party shall make its employees available on a mutually
convenient basis to provide explanations of any documents or information
provided hereunder. Each such party will retain all Tax Returns, schedules and
work papers and all material records or other documents relating to Tax matters
of the Company for the Tax period first ending after the Closing Date and for
all prior Tax periods until the later of (a) the expiration of the statute of
limitations of the Tax periods to which such Tax Returns and other documents
relate, without regard to extensions except to the extent notified by another
party in writing of such extensions for the respective Tax periods or (b) five
years following the due date (without extension) for such Tax Returns. Any
information obtained under this section shall be kept confidential, except as
may be otherwise necessary in connection with the filing of Tax Returns or
claims for refund or in conducting an audit or other proceeding. Buyer shall
prepare and provide to Seller such federal, state, local and foreign Tax
information packages as Seller shall reasonably request for use in preparing any
Tax Return that relates to the Company. Such information packages shall be
completed by Buyer and provided to Seller within 60 days after a request
therefor. Notwithstanding any other provisions hereof, each party shall bear its
own expenses in complying with the foregoing provisions.
10.4 Buyer's Taxes. Buyer shall pay, or cause to be paid, and
Buyer and the Company shall jointly and severally indemnify Seller and its
Affiliates, successors and assigns and the employees, directors, officers and
agents of each against and hold them harmless from any and all liability for
Taxes of Buyer, BRC or its Subsidiaries with respect to any taxable period
ending after the Closing, other than any such Taxes allocable to Seller,
pursuant to Section 10.1(c)(ii).
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10.5 Miscellaneous. For purposes of Sections 10.1(c)(i) and
10.4, the indemnification procedures of Section 9.3 shall be applicable.
10.6 Section 338(h)(10) Election. Seller and Buyer shall join
in an election to have the provisions of Section 338(h)(10) of the Code, the
regulations thereunder and any analogous provision of state or local law (any
such election, a "338 Election") apply to the acquisition of the Shares of BRC.
Buyer may choose to make such election for any one or more of the Subsidiaries,
but shall make such election for Government Records Services, Inc. Seller will
pay any federal Tax imposed on the Company attributable to making the Section
338 Election and any corresponding state Tax in connection with the deemed sale
of the Company's assets as a result of the Section 338 Election and shall
indemnify and hold Buyer and its Affiliates harmless from any tax liability
(including interest and penalties) arising out of the failure of the Seller to
pay such Taxes. The allocation of the Purchase Price (or, if applicable, the
"modified aggregate deemed sale price") among the Company's assets shall be made
in accordance with Section 338 and the Treasury Regulations thereunder and any
comparable provisions of state or local law, as applicable. Such allocation
shall be determined by Buyer and delivered to Seller at least 90 days prior to
the date an IRS Form 8023 is required to be filed in respect of the acquisition
of the Shares (such allocation, the "Proposed Allocation"). Seller shall accept
the Proposed Allocation unless it would be unreasonable to do so. If Seller
believes that the Proposed Allocation is unreasonable, it shall notify Buyer
within 30 days of its receipt of the Proposed Allocation and the manner in which
Seller would modify the Proposed Allocation to make it reasonable (such modified
allocation, the "Modified Allocation"). If Buyer and Seller are unable to
resolve their differences within 15 days, the matter shall be referred the
Independent Accountant. The Independent Accountant shall determine whether the
Proposed Allocation was reasonable. If the Independent Accountant determines
that the Proposed Allocation was reasonable, such allocation shall be the "Final
Allocation." If the Independent Accountant determines that the Proposed
Allocation was not reasonable, the Modified Allocation shall be the "Final
Allocation." Buyer and Seller shall each file Internal Revenue Service Form 8023
(and any applicable forms required under state or local law) in respect of each
338 Election in a timely manner consistent with the Final Allocation and shall
not take any position on any Tax Return that is inconsistent with the Final
Allocation. Seller shall provide evidence to the Buyer that such forms were
filed. Seller agrees to indemnify Buyer against any lost Tax benefits (based on
the present value of such lost benefits, assuming a 15 year reference period and
7% discount factor) resulting from an invalid Section 338 Election caused by the
failure of the Seller to fulfill the foregoing agreements.
10.7 Sales and Use Taxes; Property Taxes. Seller shall be
responsible for the payment of (a) any sales or use Taxes due as a result of the
transactions contemplated in this Agreement and (b) all property Taxes for which
property was held on January 1, 2000, but not paid as of the Closing Date.
10.8 Tax Audits. Buyer shall promptly notify Seller in writing
in the case of an audit or administrative or judicial proceeding of the Company
that relates to periods ending on or before the Closing Date. Seller shall have
the right at its expense to participate in and control the conduct of such audit
or proceeding to the extent that such audit or proceeding relates to a
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<PAGE> 53
potential adjustment for which Seller might be liable. With respect to a
potential adjustment of Taxes of the Company for which both the Seller and Buyer
could be liable, or which involves an issue that recurs in a period ending after
the Closing Date (whether or not the subject of audit at such time), (i) both
Buyer and Seller may participate at their own expense in the audit or
proceeding, and (ii) the audit or proceeding shall be controlled by that party
which would bear the burden of the greater portion of the sum of the adjustment
and any corresponding adjustments that may reasonably be anticipated for a
future Tax period. Neither Buyer nor Seller shall enter into any compromise or
agree to settle any claim pursuant to any Tax audit or proceeding which would
adversely affect the other party for such year or a subsequent year without the
written consent of the other party, which consent may not be unreasonably
withheld.
ARTICLE XI
GENERAL
11.1 Amendments. This Agreement may only be amended by an
instrument in writing executed by Buyer and Seller.
11.2 Waivers. The observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) by the party entitled to enforce such term, but such waiver
shall be effective only if it is in a writing signed by the party entitled to
enforce such term and against which such waiver is to be asserted. Unless
otherwise expressly provided in this Agreement, no delay or omission on the part
of any party in exercising any right or privilege under this Agreement shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any right or privilege under this Agreement operate as a waiver of any other
right or privilege under this Agreement nor shall any single or partial exercise
of any right or privilege preclude any other or further exercise thereof or the
exercise of any other right or privilege under this Agreement.
11.3 Notices. Any notices or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given (and
shall be deemed to have been duly given upon receipt) if sent by overnight mail,
registered mail or certified mail, postage prepaid, or by hand, to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) If to Buyer, to:
ACS Enterprise Solutions, Inc.
2828 North Haskell
Dallas, Texas 75204
Attn: General Counsel
(b) If to ACS, to:
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<PAGE> 54
Affiliated Computer Services, Inc.
2828 North Haskell
Dallas, Texas 75204
Attn: General Counsel
With a copy (which shall not constitute effective notice) to:
Neel Lemon
Baker Botts L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
(c) If to BRC, to:
Business Resources Corporation
2800 West Mockingbird Lane
Dallas, Texas 75235
Attn: General Counsel
(d) If to Seller, to:
Tyler Technologies, Inc.
2800 West Mockingbird Lane
Dallas, Texas 75235
Attn: General Counsel
With a copy (which shall not constitute effective notice) to:
John Sterling
Gardere Wynne Sewell LLP
3000 Thanksgiving Tower
1601 Elm Street
Dallas, Texas 75201-4761
11.4 Successors and Assigns; Parties in Interest. This
Agreement shall be binding upon and shall inure solely to the benefit of the
parties hereto and their respective successors, legal representatives and
permitted assigns. Neither this Agreement nor any rights or obligations
hereunder may be assigned without the written consent of the other parties
except that Buyer may assign any or all of its rights, interest and obligations
hereunder to any of its Affiliates and/or its financing sources (provided that
no such assignment shall discharge Buyer from any such obligations). Nothing in
this Agreement, express or implied, is intended to or shall confer upon any
Person, other than the parties hereto and their respective successors, legal
representatives and permitted assigns, any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement, and no Person shall be
deemed a third party beneficiary under or by reason of this Agreement.
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11.5 Severability. If any provision of this Agreement or the
application of any such provision to any Person or circumstance, shall be
declared judicially to be invalid, unenforceable or void, such decision shall
not have the effect of invalidating or voiding the remainder of this Agreement,
it being the intent and agreement of the parties that this Agreement shall be
deemed amended by modifying such provision to the extent necessary to render it
valid, legal and enforceable while preserving its intent or, if such
modification is not possible, by substituting therefor another provision that is
valid, legal and enforceable and that achieves the same objective.
11.6 Entire Agreement. This Agreement (including the exhibits
and Schedules hereto, and the documents and instruments executed and delivered
in connection herewith) constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, whether written or oral, among
the parties or any of them with respect to the subject matter hereof, and there
are no representations, understandings or agreements relating to the subject
matter hereof that are not fully expressed in this Agreement and the documents
and instruments executed and delivered in connection herewith; provided,
however, that the Buyer Confidentiality Agreement shall remain in full force and
effect according to its terms and shall survive and remain in full force and
effect in the event this Agreement is terminated. All exhibits and Schedules
attached to this Agreement are expressly made a part of, and incorporated by
reference into, this Agreement.
11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to any choice-of-law rules that may require the application of the laws
of another jurisdiction.
11.8 Remedies. Each of the parties hereto acknowledges and
agrees that (i) the provisions of this Agreement are reasonable and necessary to
protect the proper and legitimate interests of the other parties hereto, and
(ii) the other parties hereto would be irreparably damaged in the event any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties hereto shall be entitled to preliminary and permanent injunctive relief
to prevent breaches of the provisions of this Agreement by other parties hereto
without the necessity of proving actual damages or of posting any bond, and to
enforce specifically the terms and provisions hereof and thereof, which rights
shall be cumulative and in addition to any other remedy to which the parties
hereto may be entitled hereunder or at law or equity.
11.9 Disputes. If the parties are unable to resolve any
disagreement, dispute, controversy or claim that may arise out of the
transactions contemplated by this Agreement, including, without limitation, the
failure to agree upon any item requiring a mutual agreement of the parties
hereunder, they shall resolve the disagreement or dispute as follows:
(a) Seller may refer the matter to the Chief Executive Officer
of Seller and Buyer may refer the matter to the Chief Financial Officer
of ACS (the "Officers") by giving the other party written notice (a
"Notice"). Within 30 days after delivery of a
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Notice, the Officers of both parties shall meet at a mutually
acceptable time and place to exchange relevant information and to
attempt to resolve the dispute.
(b) If the matter has not been resolved within 60 days after
delivery of such Notice, or if the Officers fail to meet within 30 days
after delivery of such Notice, either Seller or Buyer may initiate
mediation. All negotiations conducted by the Officers pursuant to this
clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence
and State Rules of Evidence.
(c) In the event a dispute exists between the parties and the
respective Officers are unable to resolve the dispute, the parties
agree to participate in a non-binding mediation procedure as follows:
(i) A mediator will be selected by having counsel for
each party agree on a person to act as mediator. The parties'
counsel as well as the Officers of each party and not more
than two other participants from each party will appear before
the mediator at a time and place determined by the mediator,
but not more than 60 days after delivery of a Notice. The fees
of the mediator and other costs of mediation will be shared
equally by the parties.
(ii) Each party's counsel will have 45 minutes to
present a review of the issue and argument before the
mediator. After each counsel's presentation, the other counsel
may present specific counter-arguments not to exceed 10
minutes. The 45-minute and 10-minute periods will be exclusive
of the time required to answer questions from the mediator or
attendees.
(iii) After both presentations, the Officers may ask
questions of the other side. At the conclusion of both
presentations and the question periods, the Officers and their
counsels will meet together to attempt to resolve the dispute.
The length of the meeting will be as agreed between the
parties. Either party may abandon the procedure at the end of
the presentations and question periods if they feel it is not
productive to go further. This mediation procedure is not
binding on either party.
(iv) The duties of the mediator are to be sure that
the above set-out time periods are adhered to and to ask
questions so as to clarify the issues and understanding of the
parties. The mediator may also offer possible resolutions of
the issue but has no duty to do so.
(d) After applying the mediation procedures set forth above,
or if either Seller or Buyer refuses to take part in the mediation
process, either Seller or Buyer may pursue any remedies available to it
at law or in equity.
(e) The provisions of this Section 11.9 shall not be construed
to prevent either Seller or Buyer from instituting proceedings at law
or in equity earlier (i) to avoid the expiration of any applicable
limitations period; or (ii) where a party makes a good faith
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determination that a temporary restraining order or other immediate
injunctive relief is the only adequate remedy.
(f) The dispute resolution procedures set forth above shall
survive the termination of this Agreement.
11.10 Expenses. Seller and Buyer shall each bear their own
expenses (including, without limitation, fees and disbursements of counsel,
accountants and other experts) incurred by it in connection with the
preparation, negotiation, execution, delivery and performance of this Agreement,
each of the other documents and instruments executed in connection with or
contemplated by this Agreement and the consummation of the transactions
contemplated hereby and thereby it being understood that if the Closing is
consummated, Seller shall bear any transaction expenses incurred by the Company
and Buyer may cause the Company (but not Seller) to bear the transaction costs
incurred by Buyer.
11.11 Release of Information; Confidentiality. The parties
shall cooperate with each other in releasing information concerning this
Agreement and the transactions contemplated hereby. No press releases or other
public announcements concerning the transactions contemplated by this Agreement
shall be made by any party without prior consultation with, and agreement of,
the other parties, except for any legally required communication by any party
and then only with prior consultation and as much advance notice as is
practicable under the circumstances requiring any announcement, together with
copies of all drafts of the proposed text. The provisions of the Buyer
Confidentiality Agreement shall remain in full force and effect.
11.12 Certain Acknowledgements. Buyer and ACS hereby
acknowledge that (i) pursuant to Seller's cash management system, all cash
generated by the Company is swept daily by Seller or its Affiliates and
deposited into a lockbox account maintained by Seller or its Affiliates, (ii) as
a result of Seller's cash management system, no cash is reflected on the balance
sheet of BRC and its Subsidiaries and (iii) prior to Closing, (x) certain
computer equipment accounted for on the books of Government Records Services,
Inc. were indirectly transferred to Seller, (y) the stock of each of NNI
Consulting, Inc., QRS Services, Inc., Automated Records Services, Inc.,
Appraisal Records Services, Inc., Data Processing Services, Inc., ETVS Holdings,
Inc., Central Title Information Services, Inc., Abohsan Corporation, Tyler K,
Inc. and Tyler SD, Inc. was transferred to Seller and (z) the promissory note
from Max Harris in the principal amount of approximately $150,000 was assigned
to Seller.
11.13 Certain Construction Rules. The article and section
headings and the table of contents contained in this Agreement are for
convenience of reference only and shall in no way define, limit, extend or
describe the scope or intent of any provisions of this Agreement. Whenever the
context may require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa. In addition,
as used in this Agreement, unless otherwise provided to the contrary, (a) all
references to days, months or years shall be deemed references to calendar days,
months or years and (b) any reference to a "Section," "Article," or
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<PAGE> 58
"Schedule" shall be deemed to refer to a section or article of this Agreement or
an exhibit or schedule attached to this Agreement. The words "hereof", "herein",
and "hereunder" and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specifically provided for herein, the term "or" shall not be
deemed to be exclusive.
11.14 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one instrument binding on all the parties,
notwithstanding that all the parties are not signatories to the original or the
same counterpart.
11.15 Survival. Except as otherwise set forth in this
Agreement, the representations and warranties made in this Agreement or in any
agreement, certificate or other document executed in connection herewith and the
covenants and agreements contained herein to be performed or complied with prior
to the Closing shall not survive the Closing.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first above written.
BUYER:
ACS ENTERPRISE SOLUTIONS, INC., a
Delaware corporation
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
ACS:
AFFILIATED COMPUTER SERVICES, INC., a
Delaware corporation
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
BRC:
BUSINESS RESOURCES CORPORATION, a
Texas corporation
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
<PAGE> 60
SELLER:
TYLER TECHNOLOGIES, INC., a Delaware
corporation
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
<PAGE> 61
EXHIBIT A
AMENDED AND RESTATED
NON-DISTURBANCE AGREEMENT
DATE: January ____, 2001
TO: Affiliated Computer Services, Inc. and Government Records Services, Inc.
RE: Lease between William Oates and Marilyn Oates ("Landlord") and Government
Records Services, Inc. ("Tenant") dated September 29, 2000 (the "Lease")
covering the property described on Exhibit "A" ("Premises")
Gentlemen:
With reference to Lease of the described Premises, the undersigned covenants as
follows:
1. The Premises secures:
(a) That certain loan in the original principal amount of $1,000,000.00,
evidenced by (i) a promissory note or notes of even date with the
First Deed of Trust (defined below) made by eiStream, Inc. and
payable to the order of the undersigned, and (ii) that certain Deed
of Trust, Security Agreement and Assignment of Rents ("First Deed of
Trust") dated to be effective as of the 26th day of October, 2000, by
Landlord in favor of Mark W, Wells, Trustee(s), as "Trustee"
thereunder, recorded on November 1, 2000, as Document No. 1184581, in
Volume 2000213, Page 01685 of the Real Property Records of Dallas
County, Texas; and
(b) That certain loan in the original principal amount of $5,000,000.00,
evidenced by (i) a promissory note or notes of even date with the
Second Deed of Trust (defined below) made by eiStream, Inc. and
payable to the order of the undersigned, and (ii) that certain Deed
of Trust, Security Agreement and Assignment of Rents ("Second Deed of
Trust") dated to be effective as of the 17th day of November, 2000,
by Landlord in favor of Mark W, Wells, Trustee(s), as "Trustee"
thereunder, recorded on November 28, 2000, as Document No. 1210939,
in Volume 2000230, Page 06179 of the Real Property Records of Dallas
County, Texas.
The loans referenced and described in subparagraphs (a) and (b)
immediately above are together hereinafter referred to as the "Loan" and
the First Deed of Trust and the Second Deed of Trust, together, are
hereinafter referred to as the "Deed of Trust."
2. The Loan is current and to its actual knowledge, it knows of no facts or
circumstances now existing, that the continuation of which would cause a
default.
3. In the event: (i) the undersigned or any other party ("Successor")
succeeds to the interest of Landlord under the Lease through acquisition
of title to or right of possession of the
<PAGE> 62
Premises under the Deed of Trust through foreclosure, or otherwise, and
(ii) Tenant agrees, upon such event, to be bound to the Successor under
all of the terms, covenants and conditions of the Lease, then:
4. The Successor shall be in all respects bound by the Lease as Landlord and
by all of Tenant's rights thereunder and Tenant shall continue occupancy
of the Premises in accordance with all terms and provisions of the Lease,
and so long as Tenant is not in default (beyond any period expressed in
the Lease within which Tenant may cure such default) in the payment of
rent or in the performance or observance of any of the terms, covenants or
conditions of the Lease on Tenant's part to be performed or observed, (i)
Tenant's occupancy of the Premises shall not be disturbed by the Successor
in the exercise of any of its rights under the Deed of Trust during the
term of the Lease or any extension or renewal thereof, and (ii) the
Successor will not join Tenant as a party defendant in any action or
proceeding for the purpose of terminating Tenant's interest and estate
under the Lease provided that there is no default under the Lease.
This Amended and Restated Non-disturbance Agreement shall be effective as of
December 29, 2000, and amends, restates and replaces in its entirety and in all
respects that certain Non-disturbance Agreement (in substantially the same form
and effect as this agreement) dated as of December 28, 2000.
Your very truly,
COLONIAL BANK
By:
---------------------
Scott Fagin
<PAGE> 63
EXHIBIT "A"
DESCRIPTION OF PREMISES
[see attached]
A
<PAGE> 64
EXHIBIT B
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement") is made
and entered into as of December 29, 2000, by and among Affiliated Computer
Services, Inc., a Delaware corporation ("ACSI"), ACS Enterprise Solutions, Inc.,
a Delaware corporation ("Enterprise Solutions" and, together with ACSI, "ACS"),
Tyler Technologies, Inc., a Delaware corporation ("Tyler"), and Business
Resources Corporation, a Texas corporation ("BRC" and, together with ACS,
Enterprise Solutions and Tyler, the "Parties", and each individually a "Party").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to such terms in that certain Stock Purchase
Agreement (the "Purchase Agreement") dated as of even date by and among ACS,
Tyler and BRC.
WHEREAS, ACS, Tyler and BRC are parties to the Purchase
Agreement pursuant to which Enterprise Solutions has agreed to purchase, and
Tyler has agreed to sell, all of the stock of BRC to Enterprise Solutions (the
"Purchase");
WHEREAS, BRC owns, directly or indirectly, all of the capital
stock of Government Records Services, Inc., Title Records Corporation, RTS
Holdings, Inc. and PRETS Holdings, Inc. (the "Subsidiaries" and collectively
with BRC, the "Company");
WHEREAS, Tyler has provided and performed certain Services (as
defined herein) for the Company before the Purchase; and
WHEREAS, in connection with the Purchase, Tyler and ACS have
agreed that Tyler will continue to provide the Services to the Company in order
to allow a transition period of such services from Tyler to ACS until the date
specified herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
ARTICLE I
GENERAL
1.1 Services.
(a) Services. During the term and subject to the
provisions hereof, Tyler shall provide to the Company the accounting and
treasury services specified in Section 3.1 (the "Accounting and Treasury
Services") and the employee services specified in Section 3.2 (the "Employee
Services") (each of the Accounting and Treasury Services and the Employee
Services referred to herein individually as a "Service" and collectively as the
"Services").
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<PAGE> 65
(b) Scope of Services. Tyler shall make available
to the Company the Services described herein, such Services to be of a scope
consistent with the provision of such Services by Tyler to the Company prior to
the Closing Date.
(c) Standard of Services. In providing the Services
hereunder, Tyler shall act (i) as a prudent service provider in the same or
similar circumstances and (ii) in accordance with the policies and procedures of
ACS as may be established from time to time.
(d) Environmental, Health & Safety Standards. In
providing the Services hereunder, Tyler will comply, in all material respects,
with all applicable regulatory laws, rules and regulations, the policies and
procedures of the Company then in effect, and generally accepted good industry
practices, including, without limitation, in each case, those applicable to
environmental, health and safety matters.
1.2 Term; Termination.
(a) This Agreement shall be valid and remain in
effect until June 30, 2001.
(b) Notwithstanding anything in this Agreement to
the contrary:
(i) ACS may: (A) without cause, request the
discontinuation of any or all of the Services being provided to it by giving
Tyler at least ten (10) days prior written notice of the discontinuation
thereof; or (B) immediately terminate this Agreement by written notice to Tyler
(1) in the event of Tyler's voluntary bankruptcy or insolvency, (2) in the event
that Tyler shall make any assignment for the benefit of creditors, (3) in the
event that a petition shall have been filed against Tyler under any bankruptcy
law, corporate reorganization law or any other law for relief of debtors (or
other law similar in purpose or effect), which causes Tyler to have its business
effectively discontinued in its then present form, or (4) Tyler shall have
breached any provision hereof in any material respect (including any breach of
Section 1.1(c)) and shall not have cured such breach within 30 days after ACS
shall have provided written notice of such breach with reasonable specificity
thereof to Tyler; and
(ii) Tyler may immediately terminate this
Agreement by written notice to ACS (A) in the event of ACS's voluntary
bankruptcy or insolvency, (B) in the event that ACS shall make any assignment
for the benefit of creditors, (C) in the event that a petition shall have been
filed against ACS under any bankruptcy law, corporate reorganization law or any
other law for relief of debtors (or other law similar in purpose or effect),
which causes ACS to have its business effectively discontinued in its then
present form, or (D) ACS shall have breached any provision hereof in any
material respect and shall not have cured such breach within 30 days after Tyler
shall have provided written notice of such breach with reasonable specificity
thereof to ACS.
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<PAGE> 66
(c) In the event of any such termination, ACS shall
remain liable for all accrued fees and expenses payable hereunder to Tyler
through the effective date of such termination and any transition period under
Section 1.3.
(d) This Agreement may be terminated in accordance
with this Section 1.2 with respect to all Services or a particular Service. If
terminated only with respect to a particular Service, this Agreement shall
continue in full force and effect with respect to the non-terminated Services.
(e) Subject to Section 1.3, once any Service shall
have been terminated in accordance with this Section 1.2, ACS shall have no
right to cause Tyler to thereafter provide such Service.
1.3 Transition Assistance. In the event this Agreement
or any Service provided pursuant to this Agreement is terminated pursuant to
Section 1.2, Tyler shall (i) provide such assistance as ACS may reasonably
request in order to facilitate ACS's migration of the terminated Service(s) to
an alternative provider and (ii) assist with the migration of non-proprietary or
non-confidential data and systems, and related hardware and software
infrastructure, to ACS's systems, provided that ACS shall pay the fees for
services that continue to be provided in accordance with this Agreement and
reimburse all out-of-pocket costs reasonably incurred by Tyler in providing such
assistance, and provided further that Tyler's obligation under this Section 1.3
shall not continue for more than 30 days following such termination.
1.4 No Ownership Right or License. Except for any such
items that are owned by the Company, ACS acknowledges that it is not acquiring
by virtue of this Agreement any ownership right or license to any item of
equipment or software utilized by Tyler in providing the Services, and that,
subject to Section 1.3, its non-exclusive right to use such equipment and
software shall cease upon the expiration or termination of this Agreement. ACS
further acknowledges that all equipment and software owned or licensed by Tyler
and utilized by Tyler in providing the Services shall at all times remain the
property of Tyler or of the equipment or software owner, whichever is
applicable, and that ACS shall have no right at any time or by any means to
copy, reproduce, or make available to any other party any of the equipment,
software or related documentation utilized by Tyler in providing the Services.
Tyler acknowledges that all data and information related to the Company and
processed by Tyler on such equipment and software shall at all times remain the
property of the Company and that such data and information shall be subject to
the provisions of Section 6.2. Tyler is not acquiring, by virtue of this
Agreement or any of the other Seller Transaction Agreements executed in
connection herewith, any of the right, title and interest of Enterprise
Solutions, BRC, Government Records Services, Inc., Title Records Corporation,
RTS Holdings, Inc., or PRETS Holdings, Inc. in any furniture, fixtures,
equipment or other assets owned by such entities and used by Tyler in providing
the Services under this Agreement.
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<PAGE> 67
1.5 Indemnification.
(a) ACS shall hold harmless and indemnify Tyler and
its affiliates, directors, officers, employees, agents, representatives,
shareholders and owners from and against any and all Losses in any way arising
out of or related to any breach by ACS of this Agreement.
(b) Tyler shall hold harmless and indemnify ACS and
their affiliates, directors, officers, employees, agents, representatives,
shareholders and owners from and against any and all Losses in any way arising
out of or related to (i) any breach by Tyler of this Agreement (including
Section 1.1(c)), and (ii) the acts or omissions of the Loaned Employees (as
hereinafter defined) but only to the extent such act or omission of a Loaned
Employee constitutes gross negligence or intentional misconduct.
(c) The indemnification obligations contained in
this Section 1.5 shall survive the termination of this Agreement for any reason
and continue for a period of one year thereafter.
ARTICLE II
FEES AND EXPENSES
2.1 Fees and Expenses.
(a) The monthly fees payable by ACS to Tyler for
the Accounting and Treasury Services listed in subsection (d) of Schedule 3.1
provided by the Principal Loaned Employees listed on Schedule 3.2, in accordance
with Schedule 3.2, shall be $4,000 dollars per month.
(b) The monthly fees payable by ACS to Tyler for
the Accounting and Treasury Services listed in subsections (b), (c) and (e) of
Schedule 3.1 provided by the Principal Loaned Employees listed on Schedule 3.2,
in accordance with Schedule 3.2, shall be $4,000 dollars per month.
(c) Any monthly fees payable by ACS in connection
with the Services listed in subsection (a) of Schedule 3.1 shall be paid
directly to Greg Apke.
(d) While both this Agreement and the Sublease
Agreement are in effect, the Parties shall be entitled to offset the monthly
payments payable by ACS to Tyler pursuant to Sections 2.1(a), (b) and (f),
dollar for dollar, against the monthly rents payable by Tyler to Government
Records Services, Inc., pursuant to Section 5 of the Sublease Agreement;
however, termination or expiration of the Sublease Agreement shall not affect
the obligations of ACS to make payments hereunder.
(e) All monthly fees payable hereunder shall be
paid within 30 days of receipt of an invoice therefor, subject to the offset
rights specified in Section 2.1(d).
4
<PAGE> 68
(f) In addition to the fees specified in Sections
2.1(a) and (b), and to the extent applicable as hereinafter provided in Section
3.2(b), Tyler shall bill ACS monthly at Tyler's Cost for providing the
Supplemental Employee Services (hereinafter defined) hereunder. For purposes of
this Agreement, "Tyler's Cost" shall mean the sum of (i) the fixed hourly rate
of each Supplemental Employee (hereinafter defined) of Tyler who will perform
Supplemental Employee Services for the Company pursuant to this Agreement (to be
calculated based on that employee's annual salary divided by 2000) times the
number of hours such employee devoted to the Company as evidenced by daily time
sheets completed and submitted by such employee, plus (ii) 30% of the
computation contained in Section 2.1(f)(i) to compensate for the payroll, taxes
and employee benefits of such Supplemental Employee, and (iii) all reasonable
out of pocket costs incurred by such Supplemental Employee in the performance of
duties required by this Agreement.
(g) Audit Rights. From time to time and upon
reasonable notice to Tyler and during normal business hours, ACS shall have the
right to audit Tyler's records with respect to the fees, costs, and expenses
charged to ACS pursuant to this Agreement.
ARTICLE III
SERVICES
3.1 Accounting and Treasury Services. During the term
hereof, Tyler shall provide any or all of the Accounting and Treasury Services
listed on Schedule 3.1 to the Company at ACS's request.
3.2 Employee Services.
(a) During the term hereof, Tyler shall permit the
Company to utilize on a full-time or part-time basis (as indicated on Schedule
3.2) those Tyler employees listed on Schedule 3.2 (the "Principal Loaned
Employees").
(b) Upon the reasonable request of ACS, Tyler shall
supplement the personnel listed on Schedule 3.2 (each additional employee a
"Supplemental Employee", and, together with the Principal Loaned Employees, the
"Loaned Employees") to the extent necessary or appropriate to permit Tyler to
comply with this Agreement or as may be requested by the Company (the
"Supplemental Employee Services"). The costs associated with such Supplemental
Employees shall be billed to ACS in accordance with Section 2.1(f).
(c) All Loaned Employees provided by Tyler to the
Company pursuant to this Agreement that are to devote 100% of their time to the
Company as set forth on Schedule 3.2 shall report directly and exclusively to
ACS, and ACS shall be solely responsible for the direction, supervision, and
management of such Loaned Employees and the Services provided thereby. All
Loaned Employees provided by Tyler to the Company pursuant to this Agreement
that are to devote less than 100% of their time to the Company as set forth on
Schedule 3.2 shall continue to report directly and exclusively to Tyler;
provided, however, that ACS shall maintain the responsibility for the direction,
supervision, and management of such Loaned Employees and the Services provided
thereby while such Loaned Employees are
5
<PAGE> 69
performing services for the Company. ACS may at any time and from time to time
request that Tyler remove a Loaned Employee. Tyler shall promptly comply with
such request and, upon ACS's request, will use all reasonable efforts to find a
suitable replacement for any Loaned Employee.
ARTICLE IV
INSURANCE
(a) Tyler shall carry at all times during the term
of this Agreement directly in Tyler's name, insurance of the type, underwritten
by the carriers and with aggregate coverage limits of not less than, and related
deductible, retention and/or co-payment amounts of not more than those normally
and routinely carried by similarly situated entities providing services of the
type covered by this Agreement and in conformance with normal industry
standards.
(b) All insurance policies shall contain waivers by
the insurers of their rights of subrogation, if any, against ACS and the
Company. All insurance policies shall name ACS and the Company as additional
insureds, and shall include endorsements stating that such policies are primary
to any other insurance coverage available through ACS or the Company. All
policies shall also be endorsed to provide that the insurance may not be
canceled or materially modified without 30 days advance written notice to ACS
and the Company. Tyler shall provide ACS with certificates of insurance
evidencing the coverage required herein and replacement certificates or policies
no less than 30 days prior to the expiration of any policy herein required.
ARTICLE V
MISCELLANEOUS
5.1 Reporting. Tyler will provide ACS a monthly billing
report on the Services being provided pursuant to this Agreement in such form as
ACS shall reasonably request. Tyler shall immediately notify ACS of any
injuries, emergencies, hazardous conditions or other unusual occurrences.
Details of any occurrence related to environmental, health and safety issues
(including details of any injury or accident and details of any occurrence
related to environmental compliance) or other unusual occurrences shall also be
included in the reports specified herein.
5.2 Confidentiality.
(a) Tyler shall and shall cause each of its
officers, directors and employees to hold all information relating to the assets
and liabilities of ACS and the Company confidential, and shall not disclose any
of such information to any party (other than ACS, and their respective
employees, agents and designees) for a period of three years from the
termination or expiration of this Agreement unless legally compelled to disclose
such information; provided, however, that to the extent that any of them may
become so legally
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<PAGE> 70
compelled they may only disclose such information if they shall first have used
reasonable efforts to, and if practicable, shall have afforded ACS the
opportunity to obtain an appropriate protective order, or other satisfactory
assurance of confidential treatment, for the information required to be so
disclosed.
(b) ACS shall and shall cause each of its officers,
directors and employees to hold all information relating to the assets and
liabilities of Tyler and its affiliates confidential, and shall not disclose any
of such information to any party (other than Tyler and its affiliates and their
respective employees, agents and designees) for a period of three years from the
termination or expiration of this Agreement unless legally compelled to disclose
such information; provided, however, that to the extent that any of them may
become so legally compelled they may only disclose such information if they
shall first have used reasonable efforts to, and, if practicable, shall have
afforded Tyler the opportunity to, obtain an appropriate protective order or
other satisfactory assurance of confidential treatment for the information
required to be so disclosed.
(c) Each Party shall ensure that neither it nor its
officers, directors nor employees will advertise, publish or otherwise disclose
the terms of this Agreement without the other Party's prior written approval.
5.3 Notice. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally or by facsimile transmission or mailed (first
class postage prepaid) to the parties at the following addresses:
If to ACS, to:
ACS
2828 North Haskell
Dallas, Texas 75204
Attn: General Counsel
with copy (which shall not constitute effective notice) to:
Neel Lemon
Baker Botts L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
If to Tyler, to:
Tyler Technologies, Inc.
2800 W. Mockingbird Lane
Dallas, Texas 75235
Attn: General Counsel
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<PAGE> 71
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any Party from time to time may change its address, facsimile
number or other information for the purpose of notices to that Party by giving
notice specifying such change to the other Party hereto.
5.4 Entire Agreement. This Agreement supersedes all
prior discussions and agreements between the Parties with respect to the subject
matter hereof and thereof, and contain the sole and entire agreement between the
Parties hereto with respect to the subject matter hereof and thereof.
5.5 Waiver. Any provision of this Agreement may be
waived at any time by the Party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the Party waiving such provision. No waiver by any
Party of any provision of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other provision of this
Agreement on any future occasion. All remedies, either under this Agreement or
by Law or otherwise afforded, will be cumulative and not alternative.
5.6 Amendment. This Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on
behalf of each Party hereto.
5.7 No Third Party Beneficiary. The terms and
provisions of this Agreement are intended solely for the benefit of each Party
hereto and their respective successors or permitted assigns, and it is not the
intention of the Parties to confer third-party beneficiary rights upon any other
Person other than any Person entitled to indemnity under Section 1.5.
5.8 No Assignment; Binding Effect. Neither this
Agreement nor any right, interest or obligation hereunder may be assigned by any
Party hereto without the prior written consent of the other Party hereto and any
attempt to do so will be void. Subject to the preceding sentence, this Agreement
is binding upon, inures to the benefit of and is enforceable by the Parties
hereto and their respective successors and assigns. Upon the transfer or sale of
all or substantially all of the assets or stock of Tyler, at the election of
ACS, Tyler shall cause the obligations of Tyler hereunder to be assumed by the
Person or Person to whom such assets are transferred or sold. Tyler shall have
no right to sub-contract any of their obligations under this Agreement, without
the prior written consent of ACS. In the event of such sub-contract, Tyler shall
remain fully liable for performance of their obligations under this Agreement.
5.9 Headings. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
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<PAGE> 72
5.10 Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future Law, and if the rights or obligations of any Party hereto under this
Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof and (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom.
5.11 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas, without giving
effect to any choice-of-law rules that may require the application of the laws
of another jurisdiction.
5.12 Disputes. If the Parties are unable to resolve any
disagreement, dispute, controversy or claim that may arise out of the
transactions contemplated by this Agreement, including, without limitation, the
failure to agree upon any item requiring a mutual agreement of the Parties
hereunder, they shall resolve the disagreement or dispute as follows:
(a) Any of the Parties may refer the matter to the
Chief Financial Officer of ACS and the Chief Executive Officer of Tyler
(together the "Officers") by giving the other party written notice (a "Notice").
Within 30 days after delivery of a Notice, the Officers shall meet at a mutually
acceptable time and place to exchange relevant information and to attempt to
resolve the dispute.
(b) If the matter has not been resolved within 60
days after delivery of such Notice, or if the Officers fail to meet within 30
days after delivery of such Notice, either of the Parties may initiate
mediation. All negotiations conducted by the Officers pursuant to this clause
are confidential and shall be treated as compromise and settlement negotiations
for purposes of the Federal Rules of Evidence and State Rules of Evidence.
(c) In the event a dispute exists between the
Parties and the respective Officers are unable to resolve the dispute, the
Parties agree to participate in a non-binding mediation procedure as follows:
(i) A mediator will be selected by having
counsel for each Party agree on a person to act as mediator. The Parties'
counsel as well as the Officers of each Party and not more than two other
participants from each Party will appear before the mediator at a time and place
determined by the mediator, but not more than 60 days after delivery of a
Notice. The fees of the mediator and other costs of mediation will be shared
equally by the Parties.
(ii) Each Party's counsel will have 45 minutes
to present a review of the issue and argument before the mediator. After each
counsel's presentation, the other counsel may present specific counter-arguments
not to exceed 10 minutes. The 45-minute and 10-minute periods will be exclusive
of the time required to answer questions from the mediator or attendees.
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<PAGE> 73
(iii) After both presentations, the Officers
may ask questions of the other side. At the conclusion of both presentations and
the question periods, the Officers and their counsels will meet together to
attempt to resolve the dispute. The length of the meeting will be as agreed
between the Parties. Either Party may abandon the procedure at the end of the
presentations and question periods if they feel it is not productive to go
further. This mediation procedure is not binding on either Party.
(iv) The duties of the mediator are to be sure
that the above set-out time periods are adhered to and to ask questions so as to
clarify the issues and understanding of the Parties. The mediator may also offer
possible resolutions of the issue but has no duty to do so.
(d) After applying the mediation procedures set
forth above, or if any of the Parties refuses to take part in the mediation
process, either of the Parties may pursue any remedies available to it at law or
in equity.
(e) The provisions of this Section 5.12 shall not
be construed to prevent either of the Parties from instituting proceedings at
law or in equity earlier (i) to avoid the expiration of any applicable
limitations period, or (ii) where a Party makes a good faith determination that
a temporary restraining order or other immediate injunctive relief is the only
adequate remedy.
(f) The dispute resolution procedures set forth
above shall survive the termination of this Agreement.
5.13 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
5.14 Relationship Between the Parties. The Parties
hereto understand and agree that this Agreement does not make them an agent or
legal representative of each other for any purpose whatsoever. No Party is
granted, by this Agreement, any right or authority to assume or create any
obligation or responsibility, express or implied, on behalf of or in the name of
any other Party, or to bind any other Party in any manner whatsoever. All
Parties expressly acknowledge that the relationship between the Parties
established by this Agreement is that of independent contractors and no Party or
an employee of any Party is an employee, agent, partner, or joint venturer of or
with any Party or any of their Affiliates by virtue of this Agreement.
5.15 Validity of Documents. The Parties hereto shall be
entitled to rely upon the genuineness, validity or truthfulness of any document,
instrument or other writing presented in connection with this Agreement unless
such document, instrument or other writing appears on its face to be fraudulent,
false or forged.
[Signature page follows.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date first above written.
AFFILIATED COMPUTER SERVICES,
INC.
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACS ENTERPRISE SOLUTIONS, INC.
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TYLER TECHNOLOGIES, INC.
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BUSINESS RESOURCES CORPORATION
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
<PAGE> 75
SCHEDULE 3.1
(a) Tax services, including without limitation, general tax
planning and filing of state and federal income tax returns.**
(b) Financial planning and reporting services, including
without limitation, the preparation of periodic balance sheets, income
statements, budgets, forecasts and monthly management reports.
(c) Treasury services, including without limitation, the
management of working capital, daily cash position review, movement of cash
among accounts, monitoring and resolving daily cash management issues, reporting
of balances and cash position to ACS and transition of bank accounts.
(d) Payroll services, including without limitation, the
preparation and distribution of calendar year 2000 W-2's, W-3's, 1099's, 1096's
and 1098s being done by either ADP or BRC.
(e) Accounting services, including without limitation,
customer billing, accounts payable, receivable and collection management,
general ledger accounting and month end closing of books and records of the
Company.
** All tax services are currently being performed by Greg Apke, CPA, an
outside consultant to the Company. ACS may continue to utilize Mr. Apke for
performing such services and will be billed directly by Mr. Apke. Except for
reasonable assistance as may be requested by Mr. Apke from time to time in the
ordinary course of business, Loaned Employees will not be directly responsible
for the performance of any such Tax Services.
<PAGE> 76
SCHEDULE 3.2
<TABLE>
<CAPTION>
Percentage of Time
Allocated to Providing the
Services Under This
Employee Agreement Responsibilities
-------- -------------------------- ----------------
<S> <C> <C>
Pam Schneider** 50% Oversee and provide the services
described in Schedule 3.1 (b), (c)
and (e)
Kim Young 30% Provide the services described in
Schedule 3.1 (e)
Karen Smith 25% Provide the services described in
Schedule 3.1 (e)
Jamie Ellis 50% Provide the services described in
Schedule 3.1 (d)
Other Designated Payroll Person 50% Provide the services described in
Schedule 3.1 (d)
</TABLE>
** Effective January 1, 2001, Donna Allen will be employed 100% of the
time by Eastman Software Company. However, Ms. Allen has agreed to reasonably
assist Pam Schneider in the performance of services required by this Agreement.
<PAGE> 77
EXHIBIT C
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (this "Sublease") is entered into as
of the 29th day of December, 2000, by and between GOVERNMENT RECORD SERVICES
INC., a Texas corporation ("Sublandlord"), and Tyler Technologies, Inc., a
Delaware corporation ("Subtenant").
WITNESSETH:
WHEREAS, Sublandlord is the lessee of approximately 173,167
square feet of land, including all buildings and improvements situated thereon
(the "Premises"), located at 2800 West Mockingbird Lane, Dallas, Texas 75235,
and more particularly described in the Master Lease (defined below), pursuant to
that certain Lease (the "Master Lease") dated as of the 29th day of September,
2000, by and between William D. Oates and Marilyn Oates, as "Landlord" ("Master
Landlord"), and Sublandlord, as "Tenant," which Master Lease is attached hereto
as Exhibit A; and
WHEREAS, Sublandlord is willing to sublet to Subtenant, on the
terms and conditions contained herein, that certain portion of the Premises
utilized by employees of Subtenant as of the Sublease Commencement Date (defined
below) (such portion of the Premises, the "Subleased Premises").
NOW, THEREFORE, for and in consideration of Ten and No/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Sublandlord and Subtenant hereby
agree as follows:
1. DEFINED TERMS. All capitalized terms used herein and not defined
herein shall have the meanings ascribed thereto in the Master Lease.
2. SUBLEASED PREMISES; PARKING; USE. Sublandlord hereby subleases to
Subtenant, and Subtenant hereby subleases from Sublandlord, the Subleased
Premises, on and subject to the terms and conditions contained in this Sublease.
Subtenant shall have the non-exclusive use, in common with other building
tenants, of up to 10% of the parking spaces in the parking lot adjacent to the
Building; provided, that the right to such parking spaces shall be the private
privilege of Subtenant and such parking spaces may be used only by Subtenant's
directors, officers, agents, employees and invitees for purposes directly
related to the use of the Subleased Premises by Subtenant, as described in the
immediately following sentence. Subtenant shall use the Subleased Premises only
for general office purposes consistent with uses of other office buildings in
the immediate vicinity and its use thereof prior to the date of this Sublease,
and for no other purpose. Specifically, but without limitation, in no event
shall
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Subtenant use the Subleased Premises for any use, or in any manner,
prohibited by Section 5 of the Master Lease.
3. TERM. The term of this Sublease (the "Sublease Term") shall commence
on December 29, 2000 (the "Sublease Commencement Date"), and shall expire on
June 30, 2001. The Subleased Premises shall be delivered to Subtenant in an
"as-is" condition.
4. MASTER LEASE.
(a) This Sublease is subject and subordinate to the Master
Lease. Except as may be inconsistent with the terms and provisions hereof or as
otherwise set forth in subparagraph (c)(iii) below, the terms and provisions of
the Master Lease shall be applicable to this Sublease and shall be incorporated
into this Sublease as if Sublandlord was the landlord under the Master Lease and
Subtenant was the tenant under the Master Lease, except to the extent
inconsistent with the agreements and understandings expressed in this Sublease
or to the extent prior to the Sublease Commencement Date or after the expiration
or termination of the Sublease Term. Where reasonably necessary, the terms of
the Master Lease, as incorporated into this Sublease as aforesaid, shall be
construed (i) in light of the fact that Sublandlord (unlike Master Landlord)
does not own a fee interest in the Premises but only a leasehold interest under
the Master Lease, and (ii) in light of the fact that Subtenant shall not occupy
the entire Premises but only the portion of the Premises defined as the
Subleased Premises. Sublandlord and Subtenant anticipate that Master Landlord's
performance in accordance with the Master Lease shall fulfill the equivalent
obligation of Sublandlord hereunder, and in the event of Master Landlord's
default under the Master Lease, Subtenant's rights shall be limited as provided
in the following subparagraph (b) of this Paragraph 4. As between Sublandlord
and Subtenant, if the terms of this Sublease conflict with the terms of the
Master Lease, then the terms of this Sublease shall control. With respect to
this Sublease, Subtenant shall perform and observe all the obligations,
covenants and conditions contained in the Master Lease on Sublandlord's part
that are incorporated hereinabove by reference and to the extent that the
obligations, covenants and conditions apply and accrue from and after the
Sublease Commencement Date (but excluding the payment of Total Monthly Rent (as
defined in the Master Lease), Additional Rent (as defined in the Master Lease),
or any other amounts specified therein; provided that Subtenant shall pay to
Sublandlord as rent for the Sublease and use of the Subleased Premises all
amounts specified in Paragraph 5 below, which amounts shall be paid in
accordance with the terms and provisions thereof). Neither Sublandlord nor
Subtenant will cause or allow to be caused any default under the Master Lease.
Subtenant hereby indemnifies, agrees to defend (with counsel reasonably
satisfactory to Sublandlord) and holds Sublandlord harmless from and against any
claim, loss, damage, expense (including without limitation reasonable attorneys'
fees and costs) or liability arising under the Master Lease, from and after the
Sublease Commencement Date, from or related to Subtenant's failure to perform
Subtenant's obligations under this Sublease, including, without limitation,
those obligations of Sublandlord pursuant to the Master Lease which are
incorporated herein by reference (but excluding the payment of Total Monthly
Rent (as defined in the Master Lease), Additional Rent (as defined in the Master
Lease), or any other amounts specified therein; provided that Subtenant shall
pay to Sublandlord as rent for the Sublease and
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use of the Subleased Premises all amounts specified in Paragraph 5 below, which
amounts shall be paid in accordance with the terms and provisions thereof).
Subtenant acknowledges that it has received and reviewed the Master Lease, in
the form attached hereto as Exhibit A. Sublandlord has made no representations,
warranties or statements to Subtenant regarding the interpretation or
application of the terms of the Master Lease, and Subtenant hereby waives any
claims related to the same.
(b) At Subtenant's written request, Sublandlord will exercise
the rights and remedies Sublandlord has under the Master Lease with respect to
the Subleased Premises, and at law or in equity, so designated by Subtenant in
its request. Such rights and remedies shall be pursued diligently by
Sublandlord; however, Subtenant shall be obligated to reimburse Sublandlord for
all reasonable out-of-pocket costs incurred by Sublandlord in connection with
such exercise, except to the extent such costs are incurred as a result of
Sublandlord's breach of the terms of the Master Lease. Notwithstanding anything
to the contrary contained in this Sublease, Sublandlord shall not be deemed in
default under this Sublease if Master Landlord fails to perform its obligations
under the Master Lease. Subtenant shall indemnify, hold harmless and defend
(with counsel reasonably satisfactory to Sublandlord) Sublandlord from and
against any claim, loss, damage, expense or liability arising from or in
connection with Sublandlord's assertion of rights or pursuit of remedies under
the Master Lease at the request of Subtenant. The foregoing notwithstanding,
Sublandlord shall not be required to do or perform any act which would
constitute a default by Sublandlord under the Master Lease.
(c) Notwithstanding anything to the contrary contained in this
Sublease:
(i) for the purposes of incorporation of the Master
Lease by reference in this Sublease, except as otherwise
expressly provided herein, and except to the extent that they
are inapplicable or modified by the terms and provisions of
this Sublease (a) references in the Master Lease to the
"Premises" or "premises" shall be deemed to refer to the
Subleased Premises, (b) references in the Master Lease to
"Landlord" shall be deemed to refer to Sublandlord under this
Sublease, (c) references in the Master Lease to "Tenant" shall
be deemed to refer to Subtenant under this Sublease, (d)
references in the Master Lease to "this Lease" shall be deemed
to refer to this Sublease, and (e) references in the Master
Lease to the "Term" of the Lease shall be deemed to refer to
the Sublease Term;
(ii) the time limits contained in the Master Lease
for the giving of notices, making of demands or performing any
act, condition or covenant on the part of the Tenant
thereunder, or for the exercise by the Tenant thereunder of
any right, remedy or option, are changed for the purposes of
incorporation herein by reference by shortening the same in
each instance by three (3) days so that in each instance
Subtenant shall have three (3) days less time to observe or
perform hereunder than Sublandlord has as the Tenant under the
Master Lease; this provision shall not be applicable to any
time limit contained in the Master Lease which is less than
five (5) days, but in such event such time limit shall be
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shortened by two (2) days so that in such instances Subtenant
shall have two (2) days less time to observe or perform
hereunder than Sublandlord has as the Tenant under the Master
Lease;
(iii) the following parts, provisions and exhibits of
the Master Lease are not applicable to this Sublease, and are
not incorporated herein by reference:
Sections 2, 3, 6, 11, 12, 13(c), 26, 31 and
32.
(iv) whenever Master Landlord's consent or approval
is required to be obtained under the terms of the Master Lease
as a condition to any action, inaction, condition or event by
Subtenant permitted hereunder, and Sublandlord anticipates
granting its consent thereto, Sublandlord shall cooperate (at
no cost or expense to Sublandlord) with Subtenant and promptly
request such consent from Master Landlord.
5. RENT. Subtenant agrees to pay directly to Sublandlord (at the
address set forth in Paragraph 6 below) as rental for the lease and use of the
Subleased Premises during the Sublease Term the sum of Forty-eight Thousand and
No/100 Dollars ($48,000.00). Commencing on the Sublease Commencement Date and
continuing thereafter throughout the Sublease Term, Subtenant shall be obligated
to pay such sum directly to Sublandlord in six (6) equal monthly installments of
Eight Thousand and No/100 Dollars ($8,000.00) on the first day of each calendar
month during the Sublease Term, without demand, counter claim or abatement.
Notwithstanding the foregoing, while both this Sublease and
that certain Transition Services Agreement ("Services Agreement"), dated as of
even date herewith, by and between Subtenant, Affiliated Computer Services,
Inc., a Delaware corporation ("ACS"), and ACS Enterprise Solutions, Inc., a
Delaware corporation ("ACSI"), are in effect, Subtenant shall be permitted to
offset against the monthly rental payments payable by Subtenant to Sublandlord
pursuant to this Paragraph 5, dollar for dollar, the monthly fee payments
payable by ACS and ACSI to Subtenant pursuant to Sections 2.1(a), (b) and (f) of
the Services Agreement; provided, however, that termination or expiration of the
Services Agreement shall not affect the obligations of Subtenant to make
payments hereunder.
If the Sublease Commencement Date is other than the first day
of a calendar month or if this Sublease expires or terminates on other than the
last day of a calendar month, then the installments of rent for such month or
months shall be prorated and the installment or installments so prorated shall
be paid in advance.
6. NOTICES. Sublandlord shall promptly forward to Master Landlord any
requests or other communications made by Subtenant related to the performance by
Master Landlord of its obligations under the Master Lease, provided that such
requests or communications are not inconsistent with the rights and benefits of
the Subtenant hereunder. Sublandlord shall promptly
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forward to Subtenant any communication received from Master Landlord related to
the Subleased Premises.
Any notice, demand, objection, statement or other
communication which either party is required or desires to give to the other
shall be in writing and shall be delivered either in person, by
nationally-recognized overnight courier, or by United States registered or
certified mail, return receipt requested, with postage thereon fully prepaid,
addressed as follows:
If to Sublandlord: Government Record Services, Inc.
c/o Affiliated Computer Services, Inc.
2828 N. Haskell Ave.
Dallas, Texas 75204
Attn: Mr. David Jarrett
with a copy to: Baker Botts L.L.P.
2001 Ross Avenue
Dallas, Texas 75201-2980
Attn: C. Neel Lemon, III
If to Subtenant: Tyler Technologies, Inc.
2800 W. Mockingbird Lane
Dallas, Texas 75235
Attn: General Counsel
Notices sent by registered or certified mail as required above shall be deemed
received on the third (3rd) Business Day following deposit in the mail; notices
sent by a nationally-recognized overnight courier shall be deemed received on
the Business Day following deposit with the courier; and notice sent by personal
delivery shall be deemed received upon receipt. Either party may change its
address by furnishing fifteen (15) days prior written notice to the other party
of such change.
7. SUBLANDLORD RESTORATION AND REPAIRS. Without limiting the provisions
of this Sublease, as between Sublandlord and Subtenant, Sublandlord shall have
no liability or responsibility for maintenance, repairs, rebuilding or
restoration of the Subleased Premises. No failure of Master Landlord to provide
such maintenance, repairs, rebuilding or restoration shall cause Sublandlord to
be in default under this Sublease nor shall Subtenant be entitled to an
abatement of rent or to terminate this Sublease unless and to the extent that
Sublandlord is entitled to an abatement of rent under the Master Lease or to
terminate the Master Lease.
8. INTERRUPTION OF SERVICES. Without limiting the provisions of
Paragraph 4 above, Sublandlord shall have no liability or responsibility for the
provision of any services to the Subleased Premises. Rather, Master Landlord
will provide such services in accordance with, and only to the extent required
by, the terms of the Master Lease. No failure of Master Landlord
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to provide services, and no interruption in the provision of such services,
shall cause Sublandlord to be in default under this Sublease; nor shall
Subtenant be entitled to an abatement of rent or to terminate this Sublease.
9. PEACEFUL ENJOYMENT. So long as Subtenant is not in default
hereunder, Sublandlord covenants that Subtenant shall have throughout the
Sublease Term, subject to the terms and provisions of this Sublease (and those
provisions of the Master Lease incorporated herein), quiet and peaceful
possession of the Subleased Premises and enjoy all of the rights herein granted
without interference from Sublandlord or anyone acting by, through or under
Sublandlord.
10. CONDITION OF SUBLEASED PREMISES; ALTERATIONS. The Subleased
Premises shall be delivered to Subtenant by Sublandlord in its present condition
existing on the Sublease Commencement Date. Moreover, Subtenant hereby
represents, warrants and agrees that (i) it has made a complete examination and
inspection of the Subleased Premises, including any and all improvements
constructed and/or equipment or facilities existing therein or thereon, and
accepts the same in its current condition, "As-Is", "Where-Is", without recourse
to Sublandlord, and (ii) Sublandlord shall have no obligation to complete any
improvements whatsoever to the Subleased Premises. SUBLANDLORD MAKES NO
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBLEASED
PREMISES OR ANY IMPROVEMENTS, EQUIPMENT, FIXTURES OR FACILITIES CONSTRUCTED OR
LOCATED THEREIN OR THEREON. ALL IMPLIED WARRANTIES WITH RESPECT THERETO,
INCLUDING BUT NOT LIMITED TO THOSE OF MERCHANTABILITY, HABITABILITY AND FITNESS
FOR A PARTICULAR PURPOSE, ARE EXPRESSLY NEGATED AND WAIVED. WITHOUT LIMITATION
OF THE FOREGOING, SUBLANDLORD AND SUBTENANT EXPRESSLY DISCLAIM ANY IMPLIED
WARRANTY THAT THE SUBLEASED PREMISES ARE SUITABLE FOR SUBTENANT'S INTENDED
COMMERCIAL PURPOSE, AND SUBTENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT
DEPENDENT UPON THE CONDITION OF THE SUBLEASED PREMISES OR THE PERFORMANCE BY
SUBLANDLORD OF ITS OBLIGATIONS HEREUNDER, AND EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED HEREIN, SUBTENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT,
SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY SUBLANDLORD OF ITS DUTIES OR
OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED. Subtenant hereby assumes all
risks associated with the Subleased Premises and all improvements, equipment,
fixtures or facilities constructed or located therein or thereon (including the
present physical condition of any of the foregoing), and agrees to indemnify and
hold harmless Sublandlord from and against any claim, loss, damage, expense
(including without limitation reasonable attorneys' fees and costs) or liability
arising out of or based upon any injury or damage to person or property
occurring on the Subleased Premises during the Subtenant's occupancy of the
Subleased Premises under this Sublease.
Subject to Sublandlord's prior written approval, Subtenant
shall have the right, at its sole cost and expense, to make such non-structural
improvements, alterations, additions or
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modifications to the Subleased Premises as may be required by Subtenant for the
purpose of conducting its business therein, provided the same are pursuant to
plans and specifications approved by Master Landlord (if approval is so required
under the Master Lease). Notwithstanding anything to the contrary contained
herein, on or before the termination of this Sublease, if Master Landlord
requires Sublandlord to restore the Subleased Premises to their condition prior
to the making of any improvements, alterations, additions or modifications by
Subtenant, Subtenant shall, at its sole cost and expense, promptly remove
Subtenant's improvements, alterations, additions or modifications from the
Subleased Premises. Notwithstanding anything to the contrary contained herein,
Subtenant hereby agrees to indemnify and hold harmless Sublandlord from and
against any claim, loss, damage, expense (including without limitation
reasonable attorneys' fees and costs) or liability arising out of or based upon
any such improvements, alterations, additions or modifications made or
undertaken by or on behalf of Subtenant.
11. SURRENDER OF SUBLEASED PREMISES. Subtenant shall surrender the
Subleased Premises on the expiration or earlier termination of this Sublease in
the same or better condition as existed on the Sublease Commencement Date,
reasonable, ordinary wear and tear and damage by fire or other casualty not
required to be repaired by Subtenant pursuant to this Sublease excepted.
12. EXCLUDED RIGHTS; ADDITIONAL RIGHTS. Subtenant shall have no right
to, or cause Sublandlord to, renew the Master Lease, modify the Master Lease,
terminate the Master Lease, or expand or, except as expressly provided by
Paragraph 10 above, otherwise alter, modify or make any improvements to the
Subleased Premises or the Premises. Except as expressly provided to the contrary
herein, Sublandlord shall be free to exercise all such rights and remedies
without any consent or approval of Subtenant. During the Sublease Term,
Subtenant shall have the right to continue to use, consistent with past
practices, any of the furniture, fixtures, equipment or other assets owned by
Business Resources Corporation, Government Records Services, Inc., Title Records
Corporation, RTS Holdings, Inc., or PRETS Holdings, Inc. located within or
attached to the Subleased Premises as of the Sublease Commencement Date (the
"Reserved Personal Property") and used by Subtenant prior to the Sublease
Commencement Date. Subtenant shall not acquire, by virtue of this Sublease or
any other agreement executed in connection herewith, any right, title or
interest in the Reserved Personal Property or in any other furniture, fixtures,
equipment or assets of Business Resources Corporation, Government Records
Services, Inc., Title Records Corporation, RTS Holdings, Inc., or PRETS
Holdings, Inc. used by Subtenant during the Sublease Term.
13. INSURANCE. Subtenant shall maintain during the Sublease Term all
insurance required of Sublandlord as Tenant in accordance with and pursuant to
the Master Lease, which insurance shall name both Master Landlord and
Sublandlord as additional insureds or additional loss payees, as appropriate.
14. WAIVER OF SUBROGATION RIGHTS. Anything in this Sublease to the
contrary notwithstanding, Sublandlord and Subtenant each hereby waives any and
all rights of
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recovery, claim, action or cause-of-action, against the other, its agents
(including partners, both general and limited), officers, directors,
shareholders, customers, invitees, or employees, for any loss or damage that may
occur to the Subleased Premises, or any improvements thereto, or any
improvements thereon, or any personal property of such party therein, by reason
of fire, the elements or any other cause which is actually insured against by
Sublandlord or Subtenant or which could be insured against under the coverage of
an "All Risk" insurance policy, regardless of cause or origin, including
negligence of the other party hereto, its agents, partners, shareholders,
officers, directors, customers, invitees or employees, and covenants that no
insurer shall hold any right of subrogation against such other party.
Sublandlord and Subtenant shall advise insurers of the foregoing waiver and the
policies maintained by Sublandlord and Subtenant relating to the Subleased
Premises shall include a waiver of each such insurer's rights of subrogation.
15. INDEMNITIES.
(a) Subject to the provisions of Paragraph 14 above, Subtenant
shall indemnify, defend and hold harmless Sublandlord and its agents
and employees from and against any and all claims, liabilities,
damages, losses or expenses (including reasonable attorneys fees) which
may be imposed upon or incurred by or asserted against Sublandlord
and/or its agents or employees by reason of any negligence or other
wrongful act or omission on the part of Subtenant or any of its agents,
invitees or employees.
(b) Subject to the provisions of Paragraph 14 above,
Sublandlord shall indemnify, defend, and hold harmless Subtenant and
its agents and employees from and against any and all claims,
liabilities, damages, losses or expenses (including reasonable
attorneys fees) which may be imposed upon or incurred by or asserted
against Subtenant and/or its agents or employees by reason of any
negligence or other wrongful act or omission on the part of Sublandlord
or any of its agents, invitees or employees.
16. ASSIGNMENT AND SUBLETTING. Subtenant shall not have any right to
assign this Sublease or to sub-sublease any portion of the Subleased Premises to
a sub-subtenant or assignee unless such sub-sublease or assignment receives the
prior written approval of both Master Landlord and Sublandlord. Section 12 of
the Master Lease shall not apply to Subtenant nor to this Sublease. Any
attempted assignment or sub-sublease by Subtenant in violation of the terms and
covenants of this Paragraph 16 shall be void.
17. SUBTENANT DEFAULTS. In the event that Subtenant shall default in
the performance of any of the terms, covenants and/or conditions (i) of this
Sublease (including those portions of the Master Lease incorporated herein by
reference) beyond any applicable notice and grace period provided for in the
Master Lease and incorporated herein by reference (as shortened by Paragraph
4(c)(ii) hereof), and/or (ii) of the Services Agreement, Sublandlord shall be
entitled to exercise any and all of the rights and remedies to which it is
entitled by law, including, without limitation, the remedy of summary
proceeding, and also any and all of the
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rights and remedies specifically provided for in the Master Lease in the event
of a default thereunder and incorporated herein by reference.
18. SUBLANDLORD DEFAULTS. If Sublandlord should fail to observe,
perform or comply with any term, provision or condition of this Sublease or the
Master Lease to be performed by Sublandlord, and if such failure continues for
thirty (30) days (ten (10) days in the event of a failure to pay money)
following Sublandlord's receipt of notice thereof from Subtenant or Master
Landlord, Sublandlord shall be in default under this Sublease; provided,
however, that if such failure is of such a character as to require more than
thirty (30) days to cure, Sublandlord shall not be in default unless Sublandlord
does not commence such cure within thirty (30) days and thereafter diligently
and continuously proceed curing such failure. Upon the occurrence of an uncured
default by Sublandlord, Subtenant shall have, as its sole and exclusive remedy,
the right to terminate this Sublease.
19. AUTOMATIC TERMINATION. If the Master Lease expires or is terminated
for any reason whatsoever, this Sublease shall terminate automatically, and the
parties hereto shall be relieved of all liabilities and obligations hereunder,
except for those which accrued prior to such termination.
20. TERMINATION.
(a) Subtenant shall have the right to terminate this Sublease
with respect to one of two certain portions of the Subleased Premises
(as described immediately below) at any time upon five (5) days written
notice to Sublandlord ("Termination Notice"). Subtenant's right to
terminate this Sublease with respect to a portion of the Subleased
Premises may only be exercised with respect to either (i) the corporate
offices and conference rooms utilized by employees of Subtenant and its
affiliates or (ii) the computer room that houses computer equipment and
other miscellaneous items for the benefit of NationsData.com, Inc. (but
does not include any corporate office space or conference rooms).
(b) In the event of a termination under subparagraph (a) above
with respect to a portion of the Subleased Premises (i.e., either
(a)(i) or (a)(ii) above), this Sublease shall terminate with respect to
the portion of the Subleased Premises specified in the Termination
Notice and such specified portion of the Subleased Premises shall be
surrendered by Subtenant to Sublandlord in accordance with the terms
and provisions of Paragraph 11 above. In such event, the monthly rent
obligations set forth in Paragraph 5 shall be reduced to $4,000.00 per
month as of five (5) days after the Termination Notice is received by
Sublandlord.
(c) Upon the termination of all of the Subleased Premises
under subparagraph (a) above, the rent under Paragraph 5 above shall
abate as of five (5) days after the Termination Notice is received by
Sublandlord.
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21. SECURITY. Subtenant shall not be required to deposit any security
deposit with Sublandlord, nor shall Subtenant have any right or claim on or
against any security deposit made by Sublandlord to Master Landlord.
22. ATTORNEYS' FEES. In the event Subtenant or Sublandlord places the
enforcement of this Sublease, or any part thereof, in the hands of an attorney,
and files suit upon the same, the non-prevailing party agrees, to the extent
permitted by applicable law, to pay the prevailing party all costs of court and
all reasonable attorneys' fees incurred by the prevailing party in such suit.
23. SUCCESSORS. This Sublease shall be binding upon and inure to the
benefit of Sublandlord, its successors and assigns, and shall be binding upon
and inure to the benefit of Subtenant, its successors and, to the extent
assignment is permitted hereunder, Subtenant's assigns.
24. ENTIRETY. This instrument and any attached addenda or exhibits
signed by the parties hereto constitute the entire agreement between Sublandlord
and Subtenant. No prior or contemporaneous promises, inducements,
representations or agreements, oral or otherwise, between the parties hereto not
embodied herein shall be binding or have any force or effect.
25. AMENDMENTS. This Sublease may not be altered, changed or amended,
except by an instrument in writing, signed by both parties hereto.
26. BROKERS. Subtenant agrees to indemnify and hold harmless
Sublandlord from and with respect to any claims for a brokerage commission,
finder's fee or similar payment with respect to this Sublease that is made by
any party claiming by, through or under Subtenant. Similarly, Sublandlord agrees
to indemnify and hold harmless Subtenant from and with respect to any claims for
a brokerage fee, finder's fee or similar payment with respect to this Sublease
that is made by a party claiming by, through or under Sublandlord.
27. COUNTERPARTS. This Sublease may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one (1)
agreement.
28. MISCELLANEOUS.
(a) This Sublease is declared to be a Texas contract, and all
of the terms hereof shall be construed according to the laws of the
State of Texas.
(b) Time is of the essence in this Sublease.
(c) The terms and provisions of Exhibit A (attached hereto)
are hereby incorporated herein and made a part hereof for all purposes.
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(d) Except to the extent expressly provided to the contrary in
this Sublease, all references to days in this Sublease shall refer to
calendar days. All references to "Business Days" in this Sublease shall
refer to days that national banks are open for business in Dallas,
Texas.
(e) This Sublease shall not be deemed or construed to create
or establish any relationship (other than that of sublandlord and
subtenant) or partnership or joint venture or similar relationship or
agreement between Sublandlord and Subtenant hereunder.
(f) Sublandlord covenants and represents and warrants to
Subtenant that (i) the execution and delivery of this Sublease has been
duly authorized by all necessary corporate action on the part of
Sublandlord, (ii) this Sublease constitutes the valid and binding
obligation of Sublandlord, enforceable in accordance with its terms,
and (iii) any and all consents and/or approvals of third parties
(including, without limitation, that of Marilyn Oates) required for the
execution, delivery and performance of this Sublease have been obtained
and will be evidenced in writing to be delivered to Sublandlord on or
before Friday, January 5, 2001.
[The signature page follows immediately hereafter.]
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EXECUTED effective as of the day and year first above written.
SUBLANDLORD:
GOVERNMENT RECORD SERVICES INC.,
a Texas corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
SUBTENANT:
TYLER TECHNOLOGIES, INC.,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
For purposes of (i) consenting to the provisions, terms and
conditions of this Sublease, and (ii) agreeing to obtain the written consent of
Marilyn Oates to the same for delivery to Sublandlord on or before Friday,
January 5, 2001, William D. Oates, for and as Master Landlord, hereby affixes
his signature to this Sublease as of the day and year first above written.
------------------------------------------
William D. Oates, individually and on
behalf of Marilyn Oates
<PAGE> 89
EXHIBIT A
MASTER LEASE
[attached]
A
<PAGE> 90
EXHIBIT D
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT is dated as of December 29, 2000
(this "Agreement") and is by and among Tyler Technologies, Inc., a Delaware
corporation ("Tyler"), Affiliated Computer Services, Inc., a Delaware
corporation ("ACSI"), ACS Enterprise Solutions, Inc., a Delaware corporation
("ACSES," and together with ACSI referred to herein as "ACS"), and Business
Resources Corporation, a Texas corporation, or any successor thereof ("BRC").
PRELIMINARY STATEMENTS
A. On December 29, 2000, BRC, Tyler and ACS entered into and
consummated that certain Stock Purchase Agreement (the "Purchase Agreement")
pursuant to which Tyler agreed to sell and sold, and ACS agreed to purchase and
purchased, all of the shares of the outstanding capital stock of BRC, which owns
all of the shares of the outstanding capital stock of Government Records
Services, Inc., Title Records Corporation, RTS Holdings, Inc. and PRETS
Holdings, Inc. (all of which, together with BRC, are herein referred to as the
"Corporation").
B. In order to protect ACS' investment in the Corporation and its
business goodwill, Tyler has agreed to enter into this Agreement pursuant to
Section 8.1 of the Purchase Agreement.
C. Pursuant to the Purchase Agreement and as a further inducement to
ACS to consummate the acquisition of the shares of BRC pursuant to the Purchase
Agreement, Tyler is executing this Agreement.
D. All capitalized terms not otherwise defined herein and defined in
the Purchase Agreement shall have the meanings attributed thereto in the
Purchase Agreement. As used herein, the term "Subsidiary" means an entity as to
which a Person owns directly or indirectly 50% or more of the voting power or
other similar interests.
Accordingly, in consideration of the preceding preliminary statements
and the mutual covenants contained in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Tyler, intending to be legally bound, now agrees as follows:
STATEMENT OF AGREEMENT
1. Conditions and Consideration. The obligations of Tyler and the
rights of ACS and the Corporation under this Agreement are contingent on, and
will be effective only upon the occurrence of, the Closing of the Purchase
Agreement. In consideration for the covenants contained in this Agreement, Tyler
acknowledges that its receipt of the Purchase Price is sufficient consideration
for the covenants and agreements of Tyler set forth in this Agreement.
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2. Restricted Activity. Except as otherwise provided in Section 8, for
purposes of this Agreement, the term "Restricted Activity" shall mean any of (a)
the Land Records Business (defined below) and (b) the business of providing
software or information management outsourcing services to the Secretary of
State of Illinois and to the Recorder of Cook County, Illinois. "Land Records
Business" means the business of providing (i) products or services directly or
indirectly related to the recording and maintenance of land records (including
deeds, mortgages, deeds of trust, and other documents affecting title to real
property) to the office of the clerk, recorder or other similar office of county
and local governments, including, but not limited to, information management
outsourcing services relating to land records management, micrographic
reproduction of land records, recreation of land records, and computerized
indexing and imaging of land records maintained by those governmental
authorities and (ii) title plant update services.
3. Restricted Area. Except as otherwise provided in Section 8, for
purposes of this Agreement, the term "Restricted Area" shall mean the United
States of America.
4. Noncompetition Period. For purposes of this Agreement, the term
"Noncompetition Period" shall mean the period commencing on the Closing of the
Purchase Agreement and extending to and including five years after the date
thereof.
5. Agreement Not to Compete. Tyler agrees that, except as otherwise
provided in Section 8, during the Noncompetition Period it shall not, and shall
cause its Subsidiaries not to, directly or indirectly, whether as principal,
agent, officer, director, employee, investor, consultant, stockholder, or
otherwise, alone or in association with any other Person:
(a) carry on, manage, operate, finance, sponsor or become
engaged or concerned in, or otherwise take part in, a Restricted Activity in the
Restricted Area; or
(b) be employed by or render services to, or own, share in the
earnings of, or invest in the stock, bonds or other securities of, or lend money
or extend credit to, or otherwise directly or indirectly assist, any Person
engaged in a Restricted Activity in the Restricted Area.
6. Agreement Not to Solicit. Tyler agrees that, during the
Noncompetition Period, it shall not, and shall cause its Subsidiaries not to,
directly or indirectly, whether as principal, agent, officer, director,
employee, investor, consultant, stockholder, or otherwise, alone or in
association with any other Person:
(a) except as may be a part of activities described in Section
8, call upon, solicit, divert, take away or accept business from any principal,
agent, supplier, client, customer or other business relationship of the
Corporation in connection with a Restricted Activity in the Restricted Area; or
(b) solicit or induce, or in any manner attempt to solicit or
induce, any person employed by, or an agent of, the Corporation to terminate his
or her employment or agency with the Corporation, or to become employed by or
affiliated with, Tyler.
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7. Agreement Not to Interfere. Tyler agrees that during the
Noncompetition Period it shall not, and shall cause its Subsidiaries not to,
directly or indirectly, whether as principal, agent, officer, director,
employee, investor, consultant, stockholder, or otherwise, alone or in
association with any other Person:
(a) divert, or attempt to divert, any person that furnishes
goods or services to, or purchases or accepts goods or services produced by, the
Corporation from doing business with the Corporation, or attempt to induce any
person to cease being or becoming a supplier or customer of the Corporation;
(b) divulge, communicate, use or disclose, or permit others to
use or disclose, any nonpublic information concerning the Corporation or any
business of the Corporation, including, but not limited to, financial data
regarding any business of the Corporation;
(c) use any name or tradename that the Corporation reasonably
determines to be confusingly similar to any of the names or tradenames of the
Corporation, for any reason, whether or not in connection with a Restricted
Activity; or
(d) interfere with the business relationships or disparage the
good name or reputation of the Corporation or any business of the Corporation or
engage in any conduct that brings the Corporation or any of the business of the
Corporation into public ridicule or disrepute.
8. Exceptions. Notwithstanding any other provision of this Agreement,
including Sections 5 and 6, the term "Restricted Activity" does not include:
(a) selling, licensing or providing appraisal or tax products
or services, including outsourcing services, to governmental authorities or
other persons; and
(b) selling, licensing or providing the proprietary land
records software products of Eagle Computer Systems, Inc. or other Subsidiaries
of Tyler, and any modifications, extensions or derivative works thereof, to
county and city governmental authorities outside of the State of Texas and Cook
County, Illinois; provided, that any license for such software expressly (i)
provides that the software may be used solely for the internal business purposes
of such county and city governmental authorities outside the State of Texas and
Cook County, Illinois, and (ii) prohibits the further sublicense by such
governmental authorities to a third party or the use of such software for the
purpose of providing processing services to third parties on a "service bureau"
basis; and
(c) selling, licensing and providing the same products and
services included within the definition of "Land Records Business" to those
governmental customers of Tyler Subsidiaries (other than the Corporation) that
were existing customers for those products and services prior to the Closing
Date; and
(d) the software sold or licensed by Ram Quest Software, Inc.
in any part of the Restricted Area other than the counties included within the
Dallas-Fort Worth Standard Metropolitan Statistical Area; and
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(e) ownership of any Person or group of Persons so long as the
combined gross revenues derived by all such Persons from the Restricted
Activities do not exceed the lesser of (x) $5 million, or (y) 10% of the
combined gross revenues from all lines of business conducted by all such
Persons; and
(f) investing as a passive investor in any publicly-held
entity engaged wholly or in part in a Restricted Activity as long as such
investments in such entity do not, in the aggregate, exceed five percent of such
entity's total ownership.
9. Representations and Warranties.
Tyler hereby represents and warrants to ACS and BRC that (a)
the execution and delivery by Tyler of this Agreement and the performance of its
obligations hereunder have been duly authorized by all necessary corporate
action, and (b) this Agreement, when duly and validly executed and delivered by
Tyler: (i) will constitute a valid and binding obligation of Tyler and its
Subsidiaries enforceable against Tyler and its Subsidiaries in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization and similar laws affecting creditors generally and by
the availability of equitable remedies; and (ii) will not conflict with, result
in any violation or breach of, or constitute a default under, any term or
provision of any license, contract or other agreement to which Tyler or any of
its Subsidiaries is a party or by which any of its or their properties or assets
are or may be bound.
10. Reformation.
(a) The necessity of protection against competition from Tyler
and its Subsidiaries and the nature and scope of such protection has been
carefully considered by the parties to this Agreement based upon the
consultation with and advice from their respective legal counsel. The parties
agree and acknowledge (i) that the duration, scope and geographic areas
applicable to the covenants contained in this Agreement are fair, reasonable and
necessary, and do not impose a greater restraint than is necessary to protect
the goodwill or other business interest of the Corporation and ACS' investment
therein and its business goodwill, (ii) that adequate compensation has been
received by Tyler and its Subsidiaries for such obligations, (iii) that these
obligations do not prevent Tyler or its Subsidiaries from earning a livelihood
or conducting their remaining businesses, and (iv) that this Agreement is
ancillary to the Purchase Agreement.
(b) If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Agreement, in lieu of such illegal, invalid or unenforceable provision,
there shall be added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
(c) If the automatic reformation provision contained in the
preceding subsection for any reason fails or is held to be illegal, invalid or
unenforceable, the parties request that the governmental body making such
determination interpret, alter, amend and
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modify the terms of this Agreement to include as much of the scope, time period
and geographic area specified in this Agreement as may be possible without
rendering any provision of this Agreement illegal, invalid or unenforceable.
(d) If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Agreement, the legality, validity and, enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired.
11. Relief.
(a) Tyler acknowledges and agrees that damages at law would be
insufficient for breach by Tyler or any of its Subsidiaries of any of the
covenants in this Agreement. Accordingly, Tyler agrees that in the event of a
breach by Tyler or any of its Subsidiaries of any provisions of this Agreement,
ACS and the Corporation shall be entitled to equitable relief in the form of an
injunction to prevent irreparable injury without the necessity to post any bond
therefor.
(b) Nothing in this Agreement shall be construed as
prohibiting ACS and the Corporation from pursuing any other remedies, including
damages, for breach or threatened breach of this Agreement. The remedies of ACS
and the Corporation under this Agreement are cumulative, not exclusive, and may
be exercised alternatively, successively or concurrently. The existence of any
claim or cause of action of Tyler or one of its Subsidiaries against ACS and the
Corporation, whether based upon this Agreement, the Purchase Agreement or
otherwise, shall not constitute a defense to the enforcement of the obligations
of Tyler or its Subsidiaries under this Agreement.
12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by recognized
overnight delivery service or facsimile transmission, on the day of such
delivery, or if mailed by registered or certified mail (return receipt
requested), three days after being mailed, to the parties at such addresses as
shall be specified by the parties by like notice from time to time.
13. Covenants Independent. The covenants contained in this Agreement
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to any other covenant shall not avoid the occurrence of a breach if
such action is taken or condition exists.
14. Waiver. The failure of any party to insist, in any one or more
instances, upon performance of any of the terms, covenants or conditions of this
Agreement shall not be construed as a waiver or a relinquishment of any right or
claim granted or arising under this Agreement or of the future performance of
any such term, covenant or condition, and such failure shall in no way affect
the validity of this Agreement or the rights and obligations of the parties to
this Agreement.
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15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to its
conflict of laws rules or choice of laws rules.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument even if all parties are
not signatories to each counterpart.
17. Assignment and Binding Effect. This Agreement shall inure to the
benefit of and be binding upon ACS, the Corporation, Tyler, Tyler's Subsidiaries
and their respective successors and permitted assigns. Tyler, ACS and/or BRC may
assign its rights and obligations under this Agreement to any successor thereof,
including, without limitation, any entity that acquires all or substantially all
of the assets of either of them.
18. Amendments. This Agreement may not be modified, amended or
supplemented except by an agreement in writing signed by ACS, BRC and Tyler.
19. Entire Agreement. This Agreement contains the entire understanding
and agreement between the parties concerning the subject matter discussed in
this Agreement and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the parties with
respect to such subject matter.
20. Successors. Tyler shall not, and shall cause its Subsidiaries not
to, sell, lease, transfer or otherwise assign all, substantially all, or a
majority of its assets, or a majority of its capital stock or other ownership
interests, to any third party unless such third party agrees to be bound by all
of the provisions of this Agreement but only with respect to the business,
company or assets acquired by it and not as to any other business, company or
assets then or thereafter owned or operated by such third party prior to any
such transaction with Tyler or a Subsidiary thereof.
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IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the date first above written.
TYLER TECHNOLOGIES, INC.
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
AFFILIATED COMPUTER SERVICES, INC.
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
BUSINESS RESOURCES CORPORATION
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
ACS ENTERPRISE SOLUTIONS, INC.
By:
-----------------------------
Name:
------------------------
Title:
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<PAGE> 97
EXHIBIT E
SECOND AMENDMENT TO
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Second Amendment to Employment and Noncompetition
Agreement (this "Second Amendment") dated as of December 29, 2000, is by and
between Tyler Technologies, Inc., a Delaware corporation formerly known as Tyler
Corporation ("Tyler"), Business Resources Corporation, a Texas corporation (the
"Company"), and William D. Oates ("Oates").
WHEREAS, Tyler, the Company and Oates entered into that
certain Employment and Noncompetition Agreement, dated as of October 8, 1997
(the "Employment Agreement") in connection with Tyler's acquisition of the
Company from Oates;
WHEREAS, the Employment Agreement included, in Section 6
thereof, provisions prohibiting Oates from conducting any activities in
competition with any "art or business" (as defined therein) of the Company or
any of its affiliates during his employment and for a period of three years
thereafter;
WHEREAS, Tyler, the Company and Oates entered into that
certain First Amendment to Employment and Noncompetition Agreement, dated as of
September 29, 2000 (the "First Amendment");
WHEREAS, the First Amendment added, among other sections,
Section 6A to the Employment Agreement in order to provide that the
nonsolicitation and noncompetition provisions set forth in Sections 5 and 6 of
the Employment Agreement will not be deemed to have been violated by the
acquisition, ownership or operation by Oates or his affiliates of Kofile,
Spectrum or the ESI Business or the employment of Richard McDaniel;
WHEREAS, Tyler and the Company wish to further amend the
Employment Agreement to make clear that such exceptions do not allow Oates,
directly or indirectly, to participate in the activities described below, which
all parties including Oates acknowledge are and have been conducted by the
Company and its subsidiaries during the term of the Employment Agreement and the
First Amendment and since the acquisition of the Company and its subsidiaries
from Oates; and
WHEREAS, Oates is willing to enter into this Second Amendment
to amend and clarify the exceptions set forth in the First Amendment,
conditioned upon and in consideration of the agreement of Tyler and the Company
to more specifically set forth and define the activities that are the subject of
the noncompetition covenants between the parties;
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Second Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
1. Definitions. All capitalized terms used herein that are not
defined herein shall have the same meaning ascribed to them in the Employment
Agreement or the First Amendment.
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2. Consent to McDaniel Hire. Tyler and the Company hereby
consent to the hiring of Richard A. McDaniel by eiSolutions, Inc. d/b/a Eastman
Software Company ("ESI"), an affiliate of Oates.
3. Replacement of Sections 6 and 6A. Section 6 as set forth in
the Employment Agreement and Section 6A as set forth in the First Amendment are
hereby deleted therefrom in their entirety, and a new Section 6 as set forth
below is hereby agreed to and adopted in complete replacement and substitution
thereof:
"6. Noncompetition Agreement. Oates acknowledges and agrees
that the information he has acquired while an employee and a
shareholder of Tyler and the Company regarding the Proprietary
Information of the Company and the Company Subsidiaries will enable him
to injure the Company and the Company Subsidiaries and diminish the
value of the investment by Tyler in the Company and the Company
Subsidiaries if he should engage in any business that is competitive
with the business conducted by the Company and the Company
Subsidiaries. Therefore, Oates hereby agrees to the following:
"(a) Restricted Activity. Except as otherwise
provided in subsection 6(e), for purposes of this Agreement, the term
"Restricted Activity" shall mean any of (i) the Land Records Business
(defined below) and (ii) the business of providing software or
information management outsourcing services to the Secretary of State
of Illinois and to the Recorder of Cook County, Illinois. "Land Records
Business" means the business of providing (A) products or services
directly or indirectly related to the recording and maintenance of land
records (including deeds, mortgages, deeds of trust, and other
documents affecting title to real property) to the office of the clerk,
recorder or other similar office of county and local governments,
including, but not limited to, information management outsourcing
services relating to land records management, micrographic reproduction
of land records, recreation of land records, and computerized indexing
and imaging of land records maintained by those governmental
authorities and (B) title plant update services.
"(b) Restricted Area. Except as otherwise provided in
subsection 6(e), for purposes of this Agreement, the term "Restricted
Area" shall mean the United States of America.
"(c) Noncompetition Period. For purposes of this
Agreement, the term "Noncompetition Period" shall mean the period
commencing on the date of this Second Amendment and extending to and
including three years after the date hereof.
"(d) Agreement Not to Compete. Oates agrees that,
except as otherwise provided in subsection 6(e), during the
Noncompetition Period he shall not directly or indirectly, through any
affiliate thereof, including without limitation Kofile, Inc., Spectrum
Data, Inc., ESI, or otherwise and whether as principal, agent, officer,
director, employee, investor, consultant, stockholder, or otherwise,
alone or in
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association with any other Person: (i) carry on, manage, operate,
finance, sponsor or become engaged or concerned in, or otherwise take
part in, a Restricted Activity in the Restricted Area; or (ii) be
employed by or render services to, or own, share in the earnings of, or
invest in the stock, bonds or other securities of, or lend money or
extend credit to, or otherwise directly or indirectly assist, any
person engaged in a Restricted Activity in the Restricted Area.
"(e) Exceptions. Notwithstanding any other provision
of this Agreement, including subsection 6(d), the term "Restricted
Activity" does not include: (i) selling, licensing and providing the
same products and services included within the definition of "Land
Records Business" to those governmental customers of Kofile, Inc.,
Spectrum Data, Inc. and ESI that were existing customers for those
products and services prior to the Closing Date; (ii) ownership of any
person or group of persons so long as the combined gross revenues
derived by all such persons from the Restricted Activities do not
exceed the lesser of (A) $2.5 million, or (B) 5% of the combined gross
revenues from all lines of business conducted by all such persons; and
(iii) investing as a passive investor in any publicly-held entity
engaged wholly or in part in a Restricted Activity as long as such
investments in such entity do not, in the aggregate, exceed five
percent of such entity's total ownership."
3. Full Force and Effect. Except as clarified hereby, the
Employment Agreement and the First Amendment shall remain in full force and
effect. All provisions of the Employment Agreement and the First Amendment shall
apply to this Second Amendment as if they were set forth in full herein.
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IN WITNESS WHEREOF, this Second Amendment has been executed by
the parties hereto to be effective as of the date first above written.
TYLER TECHNOLOGIES, INC.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
BUSINESS RESOURCES CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
-------------------------------
WILLIAM D. OATES, Individually
