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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 31, 1995
CONTROL DATA SYSTEMS, INC.
(Exact name of Registrant as Specified in Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-20252 41-1718075
(Commission File Number) (I.R.S. Employer Identification Number)
4201 Lexington Avenue North
Arden Hills, Minnesota 55126-6198
(Address of principal executive offices) (Zip Code)
(612) 482-2100
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. Acquisition or Disposition of Assets.
On August 31, 1995, the Registrant and certain of its
subsidiaries ("Seller") sold to AmeriData Technologies, Inc. and its
subsidiaries ("Buyer") Seller's product integration and maintenance
operations located in Austria, Canada, Mexico, Norway, and the United
Kingdom. The transaction was effected through the transfer to Buyer
of the respective assets and liabilities or capital stock of the
applicable international subsidiary. The purchase price for the
transaction is $5.6 million plus the amount by which the book value of
the assets exceeds the liabilities of these operations as of August
31, 1995. Approximately $14 million was paid by Buyer to Seller at
the August 31, 1995 closing, which amount is subject to adjustment, if
needed, when the August 31, 1995 book value of the applicable assets
and liabilities is calculated by the parties following the closing.
ITEM 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired:
Not applicable.
(b) Pro forma financial information:
(i) It is impracticable to provide the required pro forma
financial information at this time. Such information will be
filed as soon as practicable, but not later than 60 days after
the due date of this Current Report.
(c) Exhibits:
2.1 Amended and Restated Purchase Agreement, dated
August 31, 1995, among the Registrant,
AmeriData Technologies, Inc. and ADA Global,
Inc.*
* A listing of exhibits and schedules to the Purchase Agreement
that are not filed herewith is included in such Purchase Agreement.
The Registrant will furnish supplementally a copy of any such omitted
schedule or exhibit to the Commission upon request.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CONTROL DATA SYSTEMS, INC.
Registrant
Date: September 13, 1995 /s/ James E. Ousley
James E. Ousley
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBITS FILED AS ITEM 7 TO THE FORM 8-K REPORT OF CONTROL DATA
SYSTEMS, INC. ON FORM 8-K DATED AUGUST 31, 1995.
2.1 Amended and Restated Purchase Agreement, dated August 31, 1995,
among the Registrant, AmeriData Technologies, Inc. and ADA
Global, Inc.*
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Exhibit 2.1
AMENDED AND RESTATED
PURCHASE AGREEMENT
dated August 31, 1995
among
ADA Global, Inc.,
as Buyer
AmeriData Technologies, Inc.,
as Parent
and
Control Data System, Inc.,
as Seller
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions 1
ARTICLE II
Purchase and Sale of the Business 1
Section 2.01 Transfer of Assets; Assumption of
Assumed Liabilities 1
ARTICLE III
Purchase Price 6
Section 3.01 Purchase Price; Form of Payment 6
Section 3.02 Purchase Price Calculation 6
ARTICLE IV
Closing 8
Section 4.01 The Closing Date 8
Section 4.02 Certificates, Instruments of Transfer, Etc. 8
Section 4.03 Escrow Arrangement. 9
ARTICLE V
Representations and Warranties 9
Section 5.01 Representations and Warranties of Seller 9
(a) Organization; Good Standing 9
(b) Corporate Authorization 9
(c) Capital Stock of Subsidiaries 10
(d) Purchased Assets; Business 10
(e) Litigation 12
(f) No Conflict 13
(g) Financial Statements; Books and Records; No
Material Adverse Change 13
(h) Taxes 14
(I) No Brokers 14
(j) Environmental Matters 14
(k) Employee Benefit Information 15
(l) Labor Disagreements 16
(m) Insurance 17
(n) Intellectual Property 17
(o) Employees 17
(p) Customer List; Product Suppliers 18
(q) Absence of Certain Changes or Events 18
(r) Compliance with Laws 19
(s) Transactions with Certain Persons 20
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(t) Disclosure 20
(u) Undisclosed Liabilities 20
(v) Questionable Payments 20
(w) No Sales In or Into the United States 21
(x) Independent Accountants 21
Section 5.02 Representations and Warranties of Buyer 21
(a) Organization; Good Standing 21
(b) Corporate Authorization 21
(c) No Conflict 21
(d) No Brokers 22
(e) Financial Capability 22
(f) Independent Accountants 22
ARTICLE VI
Conditions Precedent to Obligations
of Buyer and Seller 22
Section 6.01 Conditions Precedent to Obligations of Buyer 22
(a) Compliance with Covenants 22
(b) Representations and Warranties 22
(c) Delivery of Closing Documents 22
(d) Opinion of Counsel for Seller 23
(e) Opinion of Special Delaware Counsel 24
(f) Opinion of Counsel in Each OUS Jurisdiction 24
(g) Litigation 25
(h) No Material Adverse Effect 25
(I) Retained Businesses 25
(j) Approvals and Consents 25
(k) License Agreements 25
(l) OUS Statutes 26
(m) Release from Confidentiality and
Noncompetition Agreements 26
(n) Transition Services; Supply of Spare Parts 26
(o) 338 Elections 26
(p) Tax Matters Agreement 26
(q) Retained Business Employees 26
(r) Leases or Subleases 27
(s) Sublease Option Agreement. 27
(t) Distributor Agreement 27
Section 6.02 Conditions Precedent to Obligations of Seller 27
(a) Compliance with Covenants 27
(b) Representations and Warranties 27
(c) Delivery of Closing Documents 27
(d) Opinion of Counsel for Buyer 27
(e) Opinion of Counsel in Each OUS Jurisdiction 28
(f) Consideration 29
(g) Litigation 29
(h) No Change in Law 29
(I) OUS Statutes 29
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(j) Seller Guarantees 29
ARTICLE VII
Documents to be Delivered on Closing Date 30
Section 7.01 Documents To Be Delivered by Seller 30
(a) Conditions Precedent 30
(b) Officer's Certificates 30
(c) Bills of Sale 30
(d) Assignment and Assumption Agreement 30
(e) Escrow Agreement 30
(f) Further Instruments 30
Section 7.02 Documents To Be Delivered by Buyer on
Closing Date 30
(a) Conditions Precedent 30
(b) Officer's Certificate 30
(c) Assignment and Assumption Agreement 30
(d) Escrow Agreement 30
(e) Further Instruments 31
ARTICLE VIII
Further Covenants and Agreements
of Seller and Buyer 31
Section 8.01 Further Covenants and Agreements of Seller
and Buyer 31
(a) Conduct of Business Pending Closing 31
(b) Retained Businesses 32
(c) Non-Competition; Non-Solicitation 32
(d) Certain Information; Access to Businesses 33
(e) Changes in Representations and Warranties 33
(f) Audited Financial Statements 33
(g) No Shop 33
(h) Payment or Vesting of Certain Amounts to Employees 33
(i) Taxes 34
(j) Confidentiality and Noncompetition Agreements 34
(k) Telephone and Facsimile Numbers 34
(l) Availability of Documents for Audit 34
(m) Transition Services and Other 34
(n) Retained Business Employees 34
(o) Tax Matters Agreement 34
(p) Intellectual Property 35
(q) Leases or Subleases 35
(r) Seller Vendor Contracts 35
(s) Removal of Certain Encumbrances 35
(t) Reimbursement for Antares Lease 35
(u) Sublease Option Agreement 35
(v) Merger, Sale or Consolidation of Seller 35
(w) Distributor Agreement 36
(x) Continued Existence of Certain Subsidiaries 36
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(y) Credit Cards 36
Section 8.02 Consents to Assignments; Permits 36
Section 8.03 Mutual Covenants 37
(a) Commercially Reasonable Efforts To Meet
Closing Conditions 37
(b) Announcements; Confidentiality 37
(c) Employment Procedures 37
(d) OUS Fair Trade Filings 39
(e) Leased Space 39
(f) Shared Assets 39
(g) Further Assurances 40
Section 8.04 Survival of Representations and Warranties;
Indemnities 41
Section 8.05 Allocations of Purchase Price 43
Section 8.06 Resolution of Disputes 44
ARTICLE IX
Termination 44
Section 9.01 Termination 44
Section 9.02 Effect of Termination; Termination Fee 45
ARTICLE X
Miscellaneous 46
Section 10.01 Expenses 46
Section 10.02 Benefit; Assignment 46
Section 10.03 Governing Law 46
Section 10.04 Notices 46
Section 10.05 Headings 47
Section 10.06 Counterparts 47
Section 10.07 Entire Agreement 47
Section 10.08 Waiver; Amendment; Modification 48
Section 10.09 Severability 48
Section 10.10 Guarantee of Buyer's Parent 48
Section 10.11 Guarantee of Seller 48
Section 10.12 Buyer's Knowledge of Business 48
Section 10.13 Jurisdiction 48
Section 10.14 Applicability 49
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APPENDIX A - Definitions
Exhibit A - Trademark and Tradename Agreement
Exhibit B - Ernst & Young LLP Adjustments
Exhibit C - Escrow Agreement
Exhibit D - License Agreement
Exhibit E - Administrative Services Agreement
Exhibit F - MIS Services Agreement
Exhibit G - Central Support and Spare Parts Supply
Agreement
Exhibit H - Tax Matters Agreement
Exhibit I - Sublease Option Agreement
Exhibit J - Distributor Agreement
Exhibit K - Proposed Canadian Defined Contribution Plan
Schedule 2.01(b) - Excluded Real Property Leases
Schedule 5.01(c) - Capital Stock of Subsidiaries
Schedule 5.01(d)(1)(i) - Certain Agreements
Schedule 5.01(d)(1)(ii) - Leases
Schedule 5.01(d)(3)(i) - Existing Defaults Under Operating Agreements
Schedule 5.01(d)(3)(ii) - Restrictions on Assigned Agreements and
Enforceability
Schedule 5.01(d)(3)(iii) - Encumbrances
Schedule 5.01(d)(3)(iv) - Backlog Report
Schedule 5.01(d)(4)(i) - Real Property Leases
Schedule 5.01(d)(4)(ii) - Enforceability of Real Property Leases
Schedule 5.01(d)(4)(iii) - Permitted Encumbrances
Schedule 5.01(d)(7) - Other Assets Necessary for Operation of
Business
Schedule 5.01(e)(i) - Litigation
Schedule 5.01(e)(ii) - Litigation Defaults
Schedule 5.01(f) - Conflicts
Schedule 5.01(j) - Environmental Permits
Schedule 5.01(k)(i) - Employee Benefit Plans
Schedule 5.01(k)(iii) - Severance
Schedule 5.01(l) - Labor Disagreements
Schedule 5.01(m) - Insurance Policies
Schedule 5.01(n)(i) - Intellectual Property
Schedule 5.01(n)(ii) - Judgments, Licenses, Etc.
Schedule 5.01(n)(iii) - Claims Against Intellectual Property
Infringements; Violations
Schedule 5.01(o)(i) - Certain Employees
Schedule 5.01(o)(ii) - Consultants and Independent Contractors
Schedule 5.01(o)(iii) - Employment Contracts and Non-Competition
Agreements
Schedule 5.01(o)(iv) - Retained Business Employees
Schedule 5.01(p) - Customer Lists By OUS Jurisdiction
Schedule 5.01(s) - Transactions with Certain Persons
Schedule 6.02(j) - Seller Guarantees
Schedule 8.05 - Purchase Price Allocation
Schedule 10.12(a) - Certain Officers of Buyer
Schedule 10.12(b) - Certain Officers of Seller
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AMENDED AND RESTATED PURCHASE AGREEMENT dated August 31, 1995,
among ADA Global, Inc. (formerly InterData Inc.), a Delaware corporation
("Buyer"), AmeriData Technologies, Inc., a Delaware corporation ("Parent")
and Control Data Systems, Inc., a Delaware corporation ("Seller").
WHEREAS, Seller and certain of its Subsidiaries agree to sell to
Buyer and certain of its subsidiaries and Buyer and certain of its
subsidiaries agree to purchase from Seller and certain of its
Subsidiaries, certain properties, rights and assets of Seller and certain
of its Subsidiaries, and Buyer and certain of its subsidiaries agree to
assume certain liabilities of Seller and certain of its Subsidiaries, each
as described herein.
WHEREAS, Buyer, Seller and Parent entered in a Purchase
Agreement, dated April 12, 1995, and hereby agree to amend and restate the
terms of such agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
Definitions
For the purposes hereof, capitalized terms used herein shall have
the respective meanings assigned to them in Appendix A hereto or elsewhere
herein. References in this Agreement to articles, sections, paragraphs,
clauses and exhibits are to articles, sections, paragraphs, clauses and
exhibits in or to this Agreement unless otherwise indicated.
ARTICLE II
Purchase and Sale of the Business
Section 2.01 Transfer of Assets; Assumption of Assumed
Liabilities. (a) In exchange for the payment of the Purchase Price and in
reliance upon the representations, warranties and agreements contained
herein and subject to the terms and conditions hereof, on the Closing Date
(as hereinafter defined), Seller will, and will cause each of the
Subsidiaries (other than the Purchased Subsidiaries (as hereinafter
defined) with respect to which the issued and outstanding capital stock is
being sold by Seller to Buyer as part of the Purchased Assets (as defined
below)) to, sell, convey, transfer, assign and deliver, or cause to be
delivered, to Buyer, and Buyer will purchase on a going concern basis and
acquire from Seller and each Subsidiary that is not a Purchased Subsidiary,
the Purchased Assets. The "Purchased Assets" shall include all the
properties and assets, real, personal, tangible and intangible existing on
the Closing Date, used or owned by Seller or such Subsidiaries in the
conduct of the Business, except for the Excluded Assets (as hereinafter
defined) and shall include, without limitation:
(i) those assets of the Business reflected on the Closing Balance
Sheet;
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(ii) subject to the provisions of Section 8.02 hereof, all of the
Assigned Agreements;
(iii) all of the right, title and interest of Seller and its
Subsidiaries in, and the going concern value of, the Intellectual Property
listed on Schedule 5.01(n)(i) and licenses to use all of the Intellectual
Property listed on Schedule 5.01(n)(ii), including in each OUS Jurisdiction
a limited license to use the name "Control Data" which license shall be
evidenced by and subject to the terms of a Trademark and Tradename License
Agreement in the form of Exhibit A attached hereto (the "Trademark and
Tradename Agreement");
(iv) all of the Intangibles relating to the Business;
(v) all of the issued and outstanding capital stock of Control Data
Gesellschaft mbH (Austria), Control Data AS (Norway), Control Data Systems
Plc (United Kingdom) (collectively the "Purchased Subsidiaries");
(vi) subject to the provisions of Section 8.03(c) hereof, all assets
of the defined benefit pension plans of the Business reflected on the
Financial Statements of the Control Data de Mexico S.A. de C.V. ("Control
Data Mexico") and Control Data AS (Norway) and the defined contribution
plans of Control Data Gesellschaft mbH (Austria) and Control Data Systems
Plc; and
(vii) Subject to the provisions of Section 2.01(d)(vii), the
Compromise Agreement Pursuant to Section 140 of the Employment Protection
Consolidation Act 1978 dated August 22, 1995 between Control Data Systems
Plc and Michael Guist Roberts and the Compromise Agreement Pursuant to
Section 140 of the Employment Protection Consolidation Act 1978 dated
August 22, 1995 between Control Data Systems Plc and Christine Pamela
Roberts. The two compromise agreements described in the immediately
preceding sentence shall hereinafter collectively be referred to as the
"Roberts Termination Agreements."
(b) Except as otherwise expressly agreed to by Seller and Buyer in
writing, the Purchased Assets and the net book value of the Business
reflected on the Closing Balance Sheet shall not include the items set
forth in the following clauses (i) - (xii) which shall be referred to
herein collectively as the "Excluded Assets": (i) any prepaid Taxes, Tax
refunds or deferred Taxes of the Subsidiaries that are not Purchased
Subsidiaries, (ii) subject to the provisions of Section 8.03(c) hereof, the
defined benefit pension plan assets of the Business reflected on the
Financial Statements of the Control Data Systems Canada, Ltd. and Control
Data Limited (U.K.), (iii) the Real Property owned by Control Data Mexico,
(iv) any assets used by Seller or its Subsidiaries exclusively in the
conduct of the Retained Businesses or not used in connection with the
Business by Seller or any other subsidiaries of Seller, (v) all Receivables
of Control Data Mexico existing on the Closing Date (the "Mexican
Receivables") which Mexican Receivables shall be set forth on a list
delivered by Seller to Buyer pursuant to the provisions of Section 4.02(d)
hereof, (vi) any Shared Assets unless mutually agreed to be transferred to
Buyer in accordance with Section 8.03(f), (vii) the Real Property Lease
entered into by Control Data Mexico for property located in the city of
Saltillo, Mexico and all of the equipment and property stored therein,
including, without limitation, the fixtures thereto, (viii) Control Data
Mexico's or Seller's interest in CIATSA,
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(ix) the Real Property Lease entered into by Control Data Systems, Plc for
the real property known as Kendall House, (x) the Real Property Leases set
forth on Schedule 2.01(b) which Real Property Leases pertain to vacant
property or property not used in the Business, (xi) any intercompany
Receivables of Seller or any of the Subsidiaries and (xii) the former
Antares Receivable due from the City of Montreal.
(c) Buyer and Seller agree that the Purchase Price set forth in
Section 3.01 hereof shall include $5.5 million in respect of Seller's
goodwill in the Business which shall be allocated as follows: (i)
$5,250,000 for goodwill of the Business attributable to the United States
and (ii) $250,000 for goodwill of the Business attributable to the OUS
Jurisdictions. The Purchase Price shall also include $100,000 for Seller's
covenant not to compete with Buyer for two years from the Closing Date as
set forth in Section 8.01(c) hereof, provided, however, that this
allocation of a portion of the Purchase Price is in no way intended to
limit Seller's liability for a breach of such covenant.
(d) On the Closing Date Buyer shall assume and agree to pay, perform
and discharge when due only the following liabilities and obligations of
Seller and its Subsidiaries, as applicable:
(i) all liabilities arising out of or related to the Assigned
Agreements, but (x) only to the extent that the same have not been paid,
performed or discharged prior to the Closing Date and (y) not including any
liability with respect to breach prior to the Closing Date of any Assigned
Agreement;
(ii) all liabilities reflected or reserved for on the Closing
Balance Sheet to the extent, but only to the extent, of the amounts
reflected or reserved thereon;
(iii) any other liabilities or obligations assumed by Buyer
elsewhere in this Agreement, the Schedules, the Supplemental Agreements or
in writing.
The liabilities described in clauses (i) through (iii) above are
hereinafter collectively referred to as the "Assumed Liabilities."
Except as expressly provided or referenced in this subsection
(d), Buyer is not assuming any liabilities or obligations of Seller or its
Subsidiaries. In particular (but without limitation), except as provided
or referenced in this subsection (d), Buyer is not assuming any liabilities
or obligations with respect to or arising out of (i) the Excluded Assets,
(ii) subject to the provisions of Section 8.03(c) hereof, the defined
benefit pension plans of the Business reflected on the Financial Statements
of Control Data Systems Canada, Ltd and Control Data Limited (U.K.) or
Employee Related Liabilities, except those expressly assumed by Buyer
hereunder, (iii) any liabilities in respect of environmental matters,
(iv) other than as provided in Section 4.02(b) herein, any liabilities in
respect of any Taxes of Seller or any Subsidiary that is not a Purchased
Subsidiary for any and all periods through the period ending on the Closing
Date including, without limitation, any Tax liability of Seller, any
Subsidiary, Ceridian Corporation ("Ceridian") or any of their respective
affiliates, or any Taxes relating to, or arising out of or in connection
with the spin-off by Ceridian of Seller in July 1992, (v) any liabilities
not set forth on the Closing Balance Sheet, (vi) any intercompany payables
of Seller or any of the Subsidiaries and (vii) all liabilities and
obligations under the Roberts Termination Agreements, including, without
limitation, the obligation to make payments
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thereunder and (viii) any litigation, action, suit, proceeding or
investigation to which a Subsidiary other than a Purchased Subsidiary is a
party, pending or threatened, known or unknown and any liabilities related
thereto or arising therefrom on or prior to the Closing Date (collectively,
the "Excluded Liabilities").
(e)(i) It is the intention of Buyer and Seller that a closing
with respect to the Business conducted by the Subsidiary in Portugal shall
occur on September 29, 1995 or such other date as is mutually agreed to by
the parties. However, Buyer and Seller agree that Buyer has not completed
its due diligence review of the Business in Portugal and Buyer shall not be
obligated to consummate the acquisition of the Purchased Assets in Portugal
if in the course of completing its due diligence review, facts or
circumstances are revealed to Buyer which facts or circumstances have or
are reasonably likely to have a Material Adverse Effect (for purposes of
this subsection, clause (B) of the definition of Material Adverse Effect is
amended by changing "$650,000" to "$250,000"). Notwithstanding the
foregoing, Buyer agrees to issue a joint press release with Seller within a
reasonable period of time after the Closing Date in a form mutually
agreeable to both parties to the effect that the parties intend for closing
with respect to Portugal to occur prior to the end of the year subject to
the completion of Buyer's due diligence review. On the date such closing
occurs, in consideration of the transfer of the Purchased Assets and the
assumption of the Assumed Liabilities located in Portugal subject to the
terms and conditions of this Agreement, Buyer or any of its subsidiaries
shall pay to Seller by wire transfer of immediately available funds to
Seller's account at a bank specified by Seller, the Purchase Price Down
Payment for the Purchased Assets located in Portugal which amount shall be
the net asset value of the Purchased Assets in Portugal as of the month end
immediately preceding the Closing Date and which shall be mutually agreed
to by Buyer or Seller prior to the date of such Closing.
(ii) The calculation of the Purchase Price for the Purchased
Assets located in Portugal and the method of payment for such Purchase
Price shall be calculated in accordance with the provisions of Section 3.02
hereof provided, however, that the period of time in which Seller must
calculate the Closing Date Net Asset Amount and the period of time in which
Buyer must complete its review of Seller's calculation shall each be thirty
(30) days, and there shall be no Escrow Amount and no Purchase Price Down
Payment. If pursuant to the provisions of Section 3.02(a), Buyer and
Seller agree to submit the determination of the Closing Date Net Asset
Amount for the Purchased Assets located in Portugal to Arthur Andersen &
Company, the parties hereby agree to combine the submission of such dispute
to Arthur Andersen & Company with the submission to Arthur Andersen &
Company of the dispute, if any, over the Closing Date Net Asset Amount for
the Purchased Assets set forth on the August 31, 1995 Closing Balance Sheet
which dispute unless resolved would otherwise have been submitted to Arthur
Andersen & Company as an independent matter.
(f)(i) It is the intention of Buyer and Seller that a closing
with respect to the Business conducted by the Subsidiary in Greece shall
occur as soon as practicable and both parties shall use their best efforts
to cause such closing to occur on or before November 30, 1995. However,
Buyer and Seller agree that Buyer has not completed its due diligence
review of the Business in Greece and Buyer shall not be obligated to
consummate the acquisition of the Purchased Assets in Greece if in the
course of completing its due diligence review, facts or circumstances are
revealed to Buyer which facts or circumstances have or are reasonably
likely to have a Material Adverse Effect (for purposes of this subsection,
clause (B) of the definition of Material Adverse Effect is amended by
changing "$650,000" to
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"$250,000"). Notwithstanding the foregoing, Buyer agrees to issue a joint
press release with Seller within a reasonable period of time after the
Closing Date in a form mutually agreeable to both parties to the effect
that the parties intend for closing with respect to Greece to occur prior
to the end of the year subject to the completion of Buyer's due diligence
review. On the date such closing occurs, in consideration of the transfer
of the Purchased Assets and the assumption of the Assumed Liabilities
located in Greece subject to the terms and conditions of this Agreement,
Buyer or any of its subsidiaries shall pay to Seller by wire transfer of
immediately available funds to Seller's account at a bank specified by
Seller, the Purchase Price Down Payment for the Purchased Assets located in
Greece which amount shall be the net asset value of the Purchased Assets in
Greece as of the month end immediately preceding the Closing Date and which
shall be mutually agreed to by Buyer or Seller prior to the date of such
Closing.
(ii) The calculation of the Purchase Price for the Purchased
Assets located in Greece and the method of payment for such Purchase Price
shall be calculated in accordance with the provisions of Section 3.02
hereof provided, however, that there shall be no Escrow Amount, no Purchase
Price Down Payment and that Buyer and Seller agree that if a Closing with
respect to the Purchased Assets located in Greece occurs prior to the
submission to Arthur Andersen & Company pursuant to Section 3.02 hereof of
any dispute over a Closing Date Net Asset Amount, both Buyer and Seller
shall use their best efforts to complete the calculation of the Closing
Date Net Asset Amount for the Purchase Assets located in Greece and the
review of such calculation, respectively, in order that a dispute, if any,
over such calculation may be combined with any other disputes to be
submitted to Arthur Andersen & Company which disputes unless resolved would
otherwise have been submitted to Arthur Andersen & Company as an
independent matter.
(g) Buyer and Seller agree that Buyer has the option to purchase
the Business conducted by Seller in each of the Peoples Republic of China,
Korea, Malaysia, Singapore and Thailand (collectively, the "Additional OUS
Jurisdictions"). Buyer and Seller agree that Buyer may exercise such
option with respect to all or any combination of the Additional OUS
Jurisdictions. Within ten (10) business days after Buyer's completion of
its due diligence review of the Business (as described more fully in the
third succeeding paragraph of this subsection (g)) Buyer shall notify
Seller of its decision to purchase either the Purchased Assets owned by, or
all of the outstanding capital stock of, the Subsidiary located in the
relevant Additional OUS Jurisdictions which decision shall be binding on
Seller.
If Buyer decides to purchase the Business as conducted in any of
the Additional OUS Jurisdictions, Buyer and Seller shall enter into an
agreement in form and substance substantially identical to this Agreement
with respect to such acquisition provided, however, that the dollar amounts
for the baskets and caps on indemnification as set forth in Section 8.04
herein, the dollar thresholds contained in the definition of Material
Adverse Effect as set forth in Appendix I hereto and any other dollar
amount used herein to determine materiality with respect to the operation
of the Business shall be mutually agreed to by Buyer and Seller it being
herein agreed that such amounts shall reflect the relative size of the
Purchase Price for the Additional OUS Jurisdictions as compared to the
Purchase Price herein.
The Purchase Price for the Business in the Additional OUS
Jurisdictions shall be $1 million plus the Closing Date Net Asset Amount
reflected on a balance sheet prepared
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as of the closing date for such transaction, which balance sheet shall be
prepared on a basis consistent with the preparation of the Closing Balance
Sheet herein. It is the intention of Buyer and Seller that a closing with
respect to any such acquisition shall occur on December 31, 1995 or such
other date as is mutually agreed to by the parties.
In connection with Buyer's exercise of the aforementioned option,
Buyer and Seller agree that Buyer shall have a full opportunity to complete
its due diligence review of the Business as currently conducted in the
Additional OUS Jurisdictions including (i) a review of all documents,
records and other information which Buyer in its opinion shall have deemed
relevant and (ii) visits to or inspections of any location where the
Business is conducted. Buyer and Seller agree that such review shall
commence no sooner than September 1, 1995, and Buyer shall use its best
efforts to complete such review by November 30, 1995. From September 1,
1995 until the date on which Buyer has completed its due diligence review,
Seller will, and will cause its Subsidiaries in the Additional OUS
Jurisdictions to, give authorized representatives of Buyer during normal
business hours, in such a manner as not to unduly disrupt normal business
activities, access to any and all premises, properties, contracts, books,
records and affairs of the Business and will cause the officers of its
affiliates to furnish any and all financial, technical and operating data
and other information pertaining to the Business as Buyer shall from time
to time reasonably require. Buyer will hold in confidence all information
obtained as a result of such access or previously furnished by Seller or
its Subsidiaries, and will use such information only for the purpose of
considering the transactions contemplated hereby.
ARTICLE III
Purchase Price
Section 3.01 Purchase Price; Form of Payment. The purchase price
for the Purchased Assets shall be the sum of (i) the amount of the
Purchased Assets in each OUS Jurisdiction less the amount of the Assumed
Liabilities in each OUS Jurisdiction as of the close of business on the
Closing Date (collectively, the "Closing Date Net Asset Amount") except
that for purposes of calculating the Closing Date Net Asset Amount, the
value of any defined benefit pension plan assets included in the Purchased
Assets and the value of any liabilities related thereto included in the
Assumed liabilities shall be deemed to be zero, and (ii) $5,600,000 which
shall be allocated as set forth in Section 2.01(c) hereof (such sum, is
herein called the "Purchase Price"). In consideration of the transfer of
the Purchased Assets subject to the terms and conditions of this Agreement,
on the Closing Date Buyer or any of its subsidiaries shall pay to Seller in
cash in U.S. dollars by wire transfer(s) of immediately available funds to
Seller's account(s) at a bank(s) specified by Seller the Purchase Price
Down Payment less the Escrow Amount.
Section 3.02 Purchase Price Calculation. (a) Not more than
forty-five (45) days after the Closing Date Seller shall deliver to Buyer
the Closing Balance Sheet reflecting the Closing Date Net Asset Amount.
Such Closing Balance Sheet and the calculation reflected therein of the
Closing Date Net Asset Amount shall be prepared in accordance with GAAP and
shall incorporate those accounting adjustments to Seller's Financial
Statements which were recommended to Buyer by Ernst & Young LLP and agreed
to by Seller and Buyer at or prior to the date hereof. A schedule of such
Ernst & Young LLP adjustments
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(which the parties agree are adjustments to be made to or procedures to be
applied to the preparation of the Closing Balance Sheet) is attached hereto
as Exhibit B. Buyer and Seller agree that the adjustments contained on
Exhibit B set forth either an accounting principle or an agreed upon amount
as the case may be to be used in connection with the preparation of the
Closing Balance Sheet, the appropriate Financial Statements and the
Purchase Price Calculation prescribed in this Article III. The Closing
Balance Sheet shall include appropriate reserves in accordance with GAAP
for contracts in default. Buyer (and its advisors) shall be entitled to
review the work papers, schedules, memoranda and other documents used by
Seller and its advisors, in the preparation of the calculation of the
Closing Date Net Asset Amount. If Buyer shall in good faith disagree with
Seller's calculation of the Closing Date Net Asset Amount, it shall deliver
a notice to Seller within forty five (45) days after delivery to Buyer of
such calculation setting forth Buyer's disagreement with such calculation
and the basis for such disagreement and setting forth Buyer's calculation
of such amount. Any such notice of disagreement shall specify, to the
extent practicable, those items or amounts as to which Buyer disagrees, and
Buyer and Seller shall be deemed to have agreed with all other items and
amounts contained in the calculation of the Closing Date Net Asset Amount.
A failure to give such notice within such period shall be deemed to
constitute Buyer's acceptance of such calculation. If Buyer gives such
notice, Buyer and Seller shall, during the thirty (30) days after delivery
to Seller of such notice, negotiate in good faith to resolve the
disagreement. If at the end of such 30-day period no resolution is
reached, either party may request that the disagreement be resolved within
30 days therefrom by a firm of independent public accountants of national
recognition agreed upon by Seller and Buyer, provided, however, that if
such firm requires more than 30 days to resolve the disagreement, it shall
specify the amount of time it requires in writing to Buyer and Seller (it
being agreed that, in the absence of a further agreement, the firm of
Arthur Andersen & Company will be mutually agreeable to Seller and Buyer).
The determination shall be made by such firm in accordance with the
foregoing provisions of this Section 3.02(a) and when so made shall be
conclusive, and shall be binding on, and nonappealable by, the parties.
The fees and disbursements of such firm shall be borne equally by Seller
and Buyer.
(b) Within two business days after the date on which the parties
agree on the amount of the Closing Date Net Asset Amount or the Closing
Date Net Asset Amount is otherwise determined pursuant to the provisions of
subsection (a) of this Section 3.02, (i) Buyer or one of its subsidiaries
shall pay to Seller the amount, if any, by which the Purchase Price exceeds
the Purchase Price Down Payment (the "Positive Differential") or (ii)
Seller shall pay to Buyer the amount, if any, by which the Purchase Price
Down Payment exceeds the Purchase Price (the "Negative Differential"). Any
amounts due Buyer or Seller as a result of the calculation of the Positive
Differential or the Negative Differential, as applicable, in accordance
with the provisions of the immediately preceding sentence shall be paid to
Buyer or Seller, as applicable, in U.S. dollars in immediately available
funds by wire transfer to an account designated by Buyer or Seller, as
applicable, to which such funds are to be paid, provided, however, that for
purposes of the immediately preceding sentence, delivery of a certificate
to the Escrow Agent in accordance with the provisions of Section 4 of the
Escrow Agreement instructing the Escrow Agent to release to Buyer all or a
portion of the Escrow Amount, as applicable, shall constitute payment by
Seller to Buyer of all or a portion, as applicable, of the Negative
Differential.
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ARTICLE IV
Closing
Section 4.01 The Closing Date. The purchase and sale provided
for in this Agreement (the "Closing") shall take place at the offices of
Dewey Ballantine, 1301 Avenue of the Americas, New York, New York 10019
effective on August 31, 1995, or such other time, date or place as Seller
and Buyer may mutually agree (the "Closing Date").
Section 4.02 Certificates, Instruments of Transfer, Etc. (a)
Seller agrees that the sale and transfer of the Purchased Assets shall be
made by the bills of sale, assignments and other instruments of transfer
referred to in Section 7.01.
(b) Buyer and Seller agree to use reasonable efforts to minimize
sales, use, transfer and similar transaction Taxes, if any, payable in
connection with the transactions contemplated by this Agreement, provided
that such efforts shall not expose any of such parties to any additional
cost or risk. Seller agrees to pay the first $100,000 of any such Taxes
and Buyer and Seller agree to share equally the cost of any such Taxes in
excess of $100,000.
(c) From and after the Closing Date Buyer shall have the right
and the authority to collect for its own account, all Receivables included
in the Purchased Assets which shall be transferred to Buyer as provided
herein and to endorse with the name of the Seller or its Subsidiaries, as
applicable, any checks received on account of the Receivables. From and
after the Closing Date Seller and each of its Subsidiaries will, promptly
following receipt thereof, transfer and deliver to Buyer any cash or other
property that it may receive in respect of such Receivables and until so
transferred and delivered the same shall be deemed to be held in trust for
Buyer. From and after the Closing Date Buyer shall, in accordance with the
terms and provisions of this Agreement, also have the right to compromise,
settle and obtain the release of all claims and liabilities related to the
Assumed Liabilities and to open all mail and packages and receive all
communications and deliveries addressed to Seller or any Subsidiary unless
Buyer has actual knowledge that the contents of any mail, package,
communication or delivery is not related to the Business.
(d) For two years following the Closing Date, Buyer shall use
commercially reasonable efforts to collect, on behalf of Seller, all
Mexican Receivables. Seller shall provide Buyer with a list of all such
Receivables within fifteen (15) days after the Closing. On December 1,
1995, Buyer shall remit to Seller, by wire transfer to an account
designated by Seller the greater of (i) fifty percent (50%) of the Mexican
Receivables or (ii) the amount of Mexican Receivables collected by Buyer
from September 1, 1995 through October 31, 1995. From November 1, 1995,
through August 31, 1997 Buyer shall continue to use commercially reasonable
efforts to collect all remaining Mexican Receivables. For all payments
received after October 31, 1995, Buyer shall within thirty days after the
end of each calendar month remit to Seller all amounts collected during the
preceding calendar month, provided, however, that Buyer shall not be
obligated to remit any amounts to Seller after December 1, 1995 until the
amount actually collected by Buyer exceeds the amount remitted to Seller on
December 1, 1995 and then Buyer shall only be obligated to remit to Seller
the amount of such excess. For purposes of determining the amount of
collections received in respect of the Mexican Receivables, Buyer agrees to
apply all undesignated collections and
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receipts received against the oldest Mexican Receivables first, however,
Buyer and Seller agree that all collections or receipts that are designated
to a particular invoice or receivable shall be so applied. All remittances
pursuant to this Section 4.02(d) shall be in United States dollars
calculated at the exchange rate published in the Wall Street Journal,
Eastern edition on the Closing Date. On August 31, 1997 or as soon
thereafter as reasonably practicable, Buyer shall reassign to Seller the
right to collect all Mexican Receivables which remain uncollected at August
31, 1997.
(e) Seller shall provide Buyer with a list of all Receivables due
from the City of Montreal within fifteen (15) days after the Closing. For
two years following the Closing Date, Buyer shall use commercially
reasonable efforts to collect, on behalf of Seller, all such Receivables
due from the City of Montreal and shall, within thirty days after the end
of each calendar month, remit to Seller all amounts collected in respect of
such Receivable during the preceding calendar month; provided, however,
that Buyer shall not be obligated to commence or continue any litigation,
collection or other proceedings with respect to such Receivables.
Section 4.03 Escrow Arrangement. The Escrow Amount shall be held
and delivered pursuant to an Escrow Agreement in the form of Exhibit C
hereto with respect to the formation and administration of an escrow
account (the "Escrow Agreement").
ARTICLE V
Representations and Warranties
Section 5.01 Representations and Warranties of Seller. Seller
hereby represents and warrants, on its own behalf and on behalf of each of
its Subsidiaries, to Buyer as follows:
(a) Organization; Good Standing. Seller and each Subsidiary is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to own or lease its properties and to conduct its business as
currently conducted, and is qualified and in good standing as a foreign
corporation authorized to do business in all jurisdictions where failure to
qualify would have a Material Adverse Effect.
(b) Corporate Authorization (1) The execution, delivery and
performance by Seller of this Agreement and the Supplemental Agreements to
which it is a party have been authorized and approved by all requisite
corporate action on the part of Seller, and no other corporate approval or
authorization is required on the part of Seller, any trustee, or any other
person by law or otherwise in order to make this Agreement and the
Supplemental Agreements the valid, binding and enforceable obligations of
Seller (subject to the receipt of required consents to assignments of the
Assigned Agreements) enforceable against Seller in accordance with their
respective terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, or other similar laws affecting the enforcement of
creditors' rights in general or by general principles of equity.
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(2) Each Subsidiary has taken or shall by the Closing Date have
taken all necessary corporate action to authorize it to execute and deliver
the Supplemental Agreements to which it is a party.
(c) Capital Stock of Subsidiaries. The authorized capital stock
of each Subsidiary is as set forth in Schedule 5.01(c). Except as set
forth on Schedule 5.01(c), all of the shares of capital stock of each
Subsidiary are duly authorized, validly issued, fully paid and
nonassessable, and owned by Seller or another Subsidiary free of any
Encumbrances, and no class of any capital stock of any Subsidiary is
entitled to preemptive rights. Except as set forth in Schedule 5.01(c),
there are outstanding on the date hereof no options, warrants or other
rights to acquire the capital stock of any Subsidiary.
(d) Purchased Assets; Business. (1) Set forth in Schedule
5.01(d)(1)(i) is an accurate list of (i) all Subsidiary vendor contracts
for resales; (ii) all contracts used in the operation of the Business
which obligate Seller or any Subsidiary to purchase goods or services with
a total contract value in excess of $10,000 per year or which has a term in
excess of one year; (iii) all contracts used in the Business which obligate
Seller or any Subsidiary to provide goods or services over a one year
period at a cost in excess of $100,000 per year or which has a term in
excess of one year; (iv) all collective bargaining agreements involving
Employees; (v) all loan agreements or other borrowing arrangements entered
into by Seller or any Subsidiary in connection with the Business; (vi) all
Employment Contracts; (vii) all other contracts entered into by Seller or
any Subsidiary in connection with the Business and not in the ordinary
course consistent with past practice; and (viii) all other contracts
material to the conduct of the Business and not involving sales to
customers.
(2)(i) All of the agreements set forth on Schedule 5.01(d)(1)(i)
along with the Leases and all other agreements (including maintenance
agreements) with each customer, client or other similar entity to whom
products or services are provided in connection with or related to the
Business and each agreement pursuant to which products or services are
provided to Seller and its Subsidiaries in connection with the Business and
all other agreements in connection with the Business which would be
required to be included in Schedule 5.01(d)(1)(i) but for the time or
dollar limitations set forth in the immediately preceding paragraph, (ii)
any agreements reflected on the Balance Sheet or the Closing Balance Sheet
or made available at the Subsidiaries' locations in due diligence, and
which are not otherwise required to be included in Schedule 5.01(d)(1)(i)
pursuant to the first paragraph of this Section 5.01(d) and (iii) any other
agreement not knowingly omitted by Seller from Schedule 5.01(d)(1)(i), the
performance of which would not have a Material Adverse Effect on the
Business, are hereinafter collectively referred to as the "Operating
Agreements". Set forth in Schedule 5.01(d)(1)(ii) is an accurate list of
all Leases pursuant to which products are leased to Seller and its
Subsidiaries with a total contract value in excess of $10,000 per year or
with a term in excess of one year. True and complete copies of the
agreements set forth on Schedules 5.01(d)(1)(i) and 5.01(d)(1)(ii)
(including any side agreements, letters or other instruments constituting
amendments or modifications thereof) have been or will be furnished to
Buyer or will be made available for inspection by Buyer on or prior to the
Closing Date.
(3) Except as set forth in Schedule 5.01(d)(3)(i), neither
Seller nor any of its Subsidiaries is in default (and, to Seller's
knowledge, there is as of the date of this Agreement no other default and
no event which, with notice or lapse of time or both, would constitute a
default) under any of the Operating Agreements. Each Operating Agreement
is
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in full force and effect, and is valid, binding and enforceable in
accordance with its respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and similar
laws affecting the enforcement of creditors' rights or remedies generally,
and subject to general principles of equity (whether in a proceeding in
equity or at law). Except as set forth on Schedule 5.01(d)(3)(ii) and
except with respect to approvals and consents required to be obtained
pursuant to Section 6.01(j), neither the validity nor the enforceability of
any such Operating Agreement will be affected by the sale of the Purchased
Assets as contemplated herein in a way that would have a Material Adverse
Effect. Seller and each of the Subsidiaries, as applicable, has the right
to assign the Operating Agreements to which it is a party, subject to
restrictions on assignment contained in the Operating Agreements listed in
Schedule 5.01(d)(3)(ii). Except for the lien of Taxes not yet due and
Encumbrances set forth on Schedule 5.01(d)(3)(iii) or those which will be
removed by or caused to be removed by Seller on or prior to the Closing
Date, neither Seller nor any Subsidiary has otherwise assigned, pledged or
encumbered its interest in the Operating Agreements to which it is a party.
None of the Operating Agreements was entered into by Seller or any
Subsidiary other than in the ordinary course of business consistent with
past practice. Schedule 5.01(d)(3)(iv) also sets forth a backlog report
for the Business as currently conducted in the United Kingdom, Canada and
Mexico.
(4) The Real Property Leases listed in Schedule 5.01(d)(4)(i)
hereto constitute all of the Real Property Leases to which Seller or any of
the Subsidiaries is a party and which are used in the conduct of the
Business as presently conducted. True and complete copies of such Real
Property Leases and all amendments thereto and modifications thereof have
been or will be furnished to or made available for inspection by Buyer on
or prior to the Closing Date. All buildings, structures, improvements,
fixtures, and appurtenances (i) are in good physical and operating
condition, ordinary wear and tear excepted, (ii) are adequate and suitable
for the purposes for which they are presently being used and (iii) conform
in all material respects to all applicable laws, ordinances, and
regulations. Each such Real Property Lease is in full force and effect,
and is valid, binding and enforceable in accordance with its respective
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and similar laws affecting the
enforcement of creditors' rights or remedies generally, and subject to
general principles of equity (whether in a proceeding in equity or at law).
Except as set forth on Schedule 5.01(d)(4)(ii) neither the validity nor the
enforceability of any such Real Property Lease will in any way be affected
by the sale of the Purchased Assets as contemplated herein. Except as set
forth in Schedule 6.01(j) hereto, no third-party consent or approval is
required for the assignment of any such Real Property Lease to Buyer, or
for the consummation of the transactions contemplated herein.
There are no material Encumbrances, easements, rights of way,
building or use restrictions, exceptions, reservations or limitations,
other than the Permitted Encumbrances listed in Schedule 5.01(d)(4)(iii),
that interfere with or impair the present and continued use thereof in the
usual and normal conduct of the Business. Except with respect to
environmental matters as set forth in Section 5.01(j), neither Seller nor
any of its Subsidiaries is in violation of any applicable zoning
regulation, ordinance or other law, order, regulation or requirement
relating to the operations of such leased properties except for such
violations which would not result in a Material Adverse Effect. Neither
Seller nor any
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of the Subsidiaries have received notice of any pending or threatened
condemnation proceedings relating to any of the properties that are the
subject of the Real Property Leases and, so far as known to Seller, there
are no such pending or threatened proceedings. Neither Seller nor any of
the Subsidiaries is in default in any material respect under any Real
Property Lease. No party to any Real Property Lease has asserted any
defense, set-off or counterclaim thereunder. No waiver, indulgence, or
postponement of any obligations under any Real Property Lease has been
granted by Seller or any Subsidiary. No notice of default or termination
has been given or received and, to the knowledge of Seller, no condition
exists and no event has occurred that, with the giving of notice, the lapse
of time, or the happening of any further event would become a default or
permit early termination under any Real Property Lease.
On the Closing Date, all accrued and currently payable rents and
other payments required by each Real Property Lease to be paid to Seller or
any Subsidiary shall have been paid or the liability therefor shall have
been accrued on the Closing Balance Sheet consistent with past practice and
the requirements of GAAP. Seller and each of the Subsidiaries has complied
in all material respects with all covenants and provisions of each Real
Property Lease to which it is a party.
(5) The Purchased Assets do not include any Real Property other
than Real Property Leases.
(6) Seller and the Subsidiaries have good and marketable title
to all of the Inventory, Receivables, Intangibles, and Other Property free
and clear of all Encumbrances, subject to the rights of personal property
lessors and software licensors. Each of the Receivables arose in the
ordinary course of the Business and constitutes a valid right to payment in
accordance with GAAP for goods sold or leased or services rendered and
creates a valid claim in accordance with GAAP against the account debtor
with respect thereto. Neither Seller nor any of the Subsidiaries has
provided any extended or unusual terms outside of the ordinary course of
business in the applicable OUS Jurisdiction with respect to any
Receivables. To Seller's knowledge, there are no defenses or rights to set-
off available to any account debtor with respect to any Receivable. To
Seller's knowledge, no account debtor with respect to any Receivable
intends to return any product that is the subject of a Receivable.
(7) Except for the assets used in rendering the services to be
provided by the Supplemental Agreements (other than the Bills of Sale and
Assignment and Assumption Agreements) or other arrangements for transition
services, or as indicated in Schedule 5.01(d)(7), the Purchased Assets
constitute all of the assets and business of Seller and the Subsidiaries
used by Seller and the Subsidiaries in the Business (subject to Section
8.02).
(e) Litigation. Except as set forth in Schedule 5.01(e)(i),
there is no litigation, action, suit, tax audit, proceeding or
investigation pending or, to Seller's knowledge, threatened with respect to
the Business, any of the Purchased Assets or any of the transactions
contemplated hereby before or by any federal, state, local or foreign court
or governmental department, commission, board, bureau, agency or
instrumentality, or any other entity. Except as set forth in Schedule
5.01(e)(ii), neither Seller nor any of the Subsidiaries is in default with
respect to any order, writ, injunction or decree of any federal, state,
local or foreign court or governmental department, commission, board,
bureau, agency or instrumentality or any other entity with respect to the
Business, any of the Purchased Assets or any of the transactions
contemplated hereby which, if not cured, would have a Material Adverse
Effect.
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(f) No Conflict. Except as set forth in Schedule 5.01(f), the
execution, delivery and performance by Seller and its Subsidiaries of this
Agreement and the Supplemental Agreements and compliance by Seller and its
Subsidiaries with the provisions of this Agreement and the Supplemental
Agreements, the consummation by Seller and its Subsidiaries of the
transactions contemplated hereby and thereby, and the execution, delivery
and performance by each of Seller and its Subsidiaries of the bills of
sale, assignments and other instruments of transfer referred to in this
Agreement to which each is a party, (i) will not violate in any material
respect any provision of applicable law to which Seller or any of its
Subsidiaries, as applicable, is subject, (ii) will not conflict with any
provision of the Certificate of Incorporation or By-laws or other
organizational documents of Seller or its Subsidiaries or conflict with or
constitute a default (or, to Seller's knowledge, are not events which, with
notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by any
of the terms, conditions or provisions of any material contract, agreement
or other instrument binding on Seller or any of its Subsidiaries, (iii)
will not result in the creation of any Encumbrance upon any of the
Purchased Assets, (iv) do not require the consent or approval of, or
registration, declaration or filing with, any federal, state, local or
foreign court, administrative agency or commission or other governmental
authority or instrumentality, except for compliance with the requirements
of any applicable OUS statutes substantially equivalent to the HSR Act and
any filings under laws required in connection with the conveyance of the
vehicles, and (v) do not violate any order, writ, injunction, decree,
arbitral award, statute, rule or regulation applicable to Seller or any of
its Subsidiaries, to any of the Purchased Assets or to the Business, the
violation of which could have a Material Adverse Effect.
(g) Financial Statements; Books and Records; No Material Adverse
Change. Seller has delivered to Buyer (or in the case of (iii) below will
deliver to Buyer as soon as possible but in no event later than September
30, 1995) or will make available to Buyer on site with respect to any
Subsidiary copies of each of the following: (i) audited consolidated
Financial Statements of Seller as of and for the fiscal year ends for the
years 1993 and 1994; (ii) Financial Statements of each Subsidiary, as of
and for the fiscal year ends for the years 1993 and 1994, prepared in
accordance with local standards and with local generally accepted
accounting principles, adjusted to GAAP and translated to United States
dollars, all as part of Seller's regular and customary consolidation of
Subsidiary Financial Statements; (iii) audited Financial Statements as of
and for the fiscal year ends for the years 1993 and 1994 that are required
for purposes of filing a Current Report on Form 8-K by Parent with respect
to the transactions contemplated hereby; (iv) for the period from December
31, 1994 to the Closing Date unaudited monthly year-to-date profit and loss
statements for each Subsidiary before and after exclusion of the Retained
Business and the period end balance sheet, including the Retained Business
but excluding those items identified thereon as excluded from such balance
sheet; (v) the Financial Statements of Seller as at and for the period
ending June 30, 1995 and the Ernst & Young LLP adjustments thereto which
are attached hereto as Exhibit B, respectively; (vi) detailed analyses of
any reserves related to the Purchased Assets as such reserves are reflected
on the books of account of Seller and its Subsidiaries as of the fiscal
year end for the years 1993 and 1994; and (vii) with respect to the
Financial Statements delivered pursuant to clauses (i) through (iv) above,
Seller has delivered or made available on site with respect to any
Subsidiary any reports or management letters concerning the Business
received by Seller from, or delivered by Seller or any Subsidiary to, any
auditor or accounting firm responsible for preparing such Financial
Statements. The Financial Statements have been prepared from the books and
records of the Business consistent with
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Seller's normal accounting practices for the Business in accordance with
applicable generally accepted accounting principles consistently applied
throughout the periods involved and as modified by the Ernst & Young LLP
adjustments set forth in Exhibit B hereto, except (i) the unaudited
Financial Statements do not contain some or all of the footnotes required
by applicable generally accepted accounting principles and (ii) the interim
Financial Statements do not contain all accruals and adjustments generally
made at year end. The Financial Statements fairly present, in all material
respects the financial condition of Seller or the Business, as applicable,
as at said dates and for the periods then ended. The Financial Statements
are accurate in all material respects and fairly reflect profits, losses,
cash flows and the financial position of Seller or the Business, as
applicable, as at said dates and for the periods then ended. The books of
account of Seller and its Subsidiaries with respect to the Business fairly
reflect in all material respects all transactions of Seller and its
Subsidiaries and other matters required to be reflected therein consistent
with the Financial Statements referred to above. If, on or prior to the
Closing Date Buyer provides Seller with written notice of its need for (i)
any or all of the Financial Statements described in this Section 5.01(g) as
of and for the fiscal year end for the year 1992 or (ii) other Financial
Statements described in such notice, for purposes of filing a Current
Report on Form 8-K by Parent with respect to the transactions contemplated
hereby, Seller shall, as soon as practicable, but in no event later than
fifty days after the Closing Date, provide Buyer with copies of the
requested Financial Statements audited by KPMG Peat Marwick LLP or other
auditors and prepared in accordance with GAAP.
(h) Taxes. With respect to any Subsidiary for which Buyer has
elected to purchase the outstanding capital stock, or otherwise with
respect to the Business, Seller and each of its Subsidiaries has: (i)
correctly prepared and timely filed all returns, declarations, reports,
estimates, information returns and statements ("Returns") required to be
filed or sent by or with respect to them in respect of any Taxes; (ii)
timely and properly paid all Taxes that are due and payable; (iii)
established on their books and records reserves that are adequate for the
payment of all Taxes not yet due and payable; and (iv) complied in all
material respects with all applicable laws, rules and regulations relating
to the payment and withholding of Taxes and have timely and properly
withheld from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over under all
applicable laws. There are no liens for Taxes upon the Purchased Assets,
except liens for Taxes not yet due. Except for the agreement between
Ceridian and Seller dated as of July 31, 1992 and except as set forth on
Schedule 5.01(h), neither Seller nor any of its Subsidiaries is a party to
any agreement providing for the allocation, sharing or indemnification of
Taxes.
(i) No Brokers. Seller has not made contact or had any dealings
with or entered into, and will not enter into, any agreement, arrangement
or understanding with any broker, leasing agent, finder or similar person
or entity with respect to this Agreement and the transactions contemplated
hereby which will result in the obligation of Buyer to pay any finder's
fee, brokerage commission or similar payment in connection with the
transactions contemplated hereby.
(j) Environmental Matters. (i) Except as set forth in Schedule
5.01(j), Seller and each of the Subsidiaries has obtained all
environmental, health and safety permits, licenses and other authorizations
required under the Environmental Laws as defined below, (such permits
collectively, the "Permits"), for the operation of the Business at each
site where property subject to a Real Property Lease is located (the
"Sites"), all such Permits are in good
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standing, and Seller and its Subsidiaries, as applicable, are currently in
compliance with all terms and conditions of the Permits.
(ii) Seller and each of the Subsidiaries are, and at all times
have been, in compliance in all material respects with all requirements
arising under any applicable common law, statute, regulation, ordinance,
order or decree relating to health, safety or the environment (all as
amended, hereinafter "Environmental Laws"). Neither Seller nor any of the
Subsidiaries has been notified that it is in violation, or alleged to be in
violation, of any judgment, decree, order, law, license, rule or regulation
pertaining to the Permits or other environmental, health or safety matters
arising under the Environmental Laws.
(iii) Neither Seller nor any Subsidiary has received written
notice from any third party, including without limitation any foreign
governmental authority, (a) that there has been a release, spill, leak,
pumpage, pouring, emission, emptying, discharge, injection, escape,
disposal or dumping ("Release") into the environment of any hazardous
waste, any hazardous substances, any pollutant or contaminant and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which Seller
or any Subsidiary has generated, transported or disposed of; or (b) that
Seller or any Subsidiary is or shall be a named party to any claim, action,
cause of action, complaint, or legal or administrative proceeding (in each
case, contingent or otherwise) arising out of any third party's incurrence
of costs, expenses, losses or damages of any kind whatsoever in connection
with the Release of Hazardous Substances.
(iv) No portion of any Site has been used for the handling,
processing, treatment, storage or disposal of Hazardous Substances except
in accordance with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous Substances is located
on any portion of any of the Sites. In the course of any activities
conducted by Seller or any Subsidiary or any operator of Seller's or any
Subsidiary's Sites, no Hazardous Substances have been generated or are
being used on such Site except in accordance with applicable Environmental
Laws. There have been no Releases of, and are no threatened releases of,
Hazardous Substances on, upon, into or from any of the Sites. Any
hazardous wastes that have been generated on any of the Sites have been
treated or disposed of or transported only by treatment or disposal
facilities maintaining valid permits as required under applicable
Environmental Laws, and which facilities have been and are, to the best of
Seller's knowledge, operating in material compliance with such permits and
applicable Environmental Laws.
(v) There is not constructed, placed, deposited, stored,
disposed of, released, leaking or located on or at any of the Sites any (a)
asbestos which has become or threatens to become friable, (b)
polychlorinated biphenyls ("PCBs") or transformers, capacitors, ballasts or
other equipment containing dielectric fluid which contains PCBs, or (c) any
insulating material containing urea formaldehydes.
(k) Employee Benefit. (i) Except as set forth in Schedule
5.01(k)(i), otherwise made available for inspection by Buyer on or prior to
the Closing Date or reflected on the Closing Balance Sheet, neither Seller
nor any of the Subsidiaries maintains, nor is it required to contribute to
or has liabilities with respect to, any Employee Benefit Plan and no
Company Personnel or dependent of such Company Personnel is entitled to any
benefits except as provided for by the provisions of such Employee Benefit
Plans.
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(ii) Seller has provided or will provide to or make available
for inspection by Buyer on or prior to the Closing Date (x) copies of all
Employee Benefit Plans or in the case of an unwritten plan, a written
description thereof, (y) copies of any annual, financial or actuarial
reports and taxing authority determination letters relating to such
Employee Benefit Plans and (z) copies of the most recent summary plan
descriptions (whether or not required to be furnished under any foreign
equivalent of ERISA) and all material employee communications relating to
such Employee Benefit Plans and distributed to Company Personnel.
(iii) Except as set forth in Schedule 5.01(k)(iii), the events
contemplated by this Agreement (either alone or together with any other
event occurring on or prior to the Closing Date) will not (w) entitle any
Company Personnel to severance pay, unemployment compensation, or other
similar payments under any Employee Benefit Plan, (x) accelerate the time
of payment or vesting or increase the amount of benefits due under any
Employee Benefit Plan or compensation to any Company Personnel, (y) result
in any payments (including parachute payments) under any Employee Benefit
Plan becoming due to any Company Personnel, or (z) terminate or modify or
give a third party a right to terminate or modify the provisions or terms
of any Employee Benefit Plan.
(iv) Seller and each of the Subsidiaries has, in the conduct of
the affairs of the Business, complied in all material respects with all
applicable laws, rules, and regulations relating to the employment of
labor, including those relating to wages, hours, terms and conditions of
employment, collective bargaining and the payment of social security and
similar Taxes.
(v) Seller and each Subsidiary has or shall by the Closing Date
have taken all necessary actions under any foreign equivalent of the Worker
Adjustment and Retraining Notification Act and Seller will provide Buyer,
upon request, with such information as shall be necessary for Buyer to
comply fully with all such laws, regulations and other legal requirements.
(vi) None of the Employee Benefit Plans is subject to ERISA.
(l) Labor Disagreements. In connection with the operation of
the Business, except as set forth on Schedule 5.01(l), (i) neither Seller
nor any of the Subsidiaries is engaged in any material unfair labor
practice; (ii) neither Seller nor any Subsidiary has been notified of any
unfair labor practice charge or complaint against Seller or any Subsidiary
pending and, to the knowledge of Seller, no such charge or complaint is
threatened before any equivalent governmental body in any OUS Jurisdiction
to the National Labor Relations Board, any labor relations board or any
court or tribunal; (iii) neither Seller nor any Subsidiary has been
notified of any charge or claim filed at or with any equivalent
governmental body to the Equal Employment Opportunity Commission, any
agency having similar jurisdiction or any court or tribunal, actually
pending and, to the knowledge of Seller, no such charge or claim is
threatened against Seller or any Subsidiary in connection with the
operation of the Business; (iv) there is no labor strike, dispute, request
for representation, slowdown or stoppage actually pending against or
affecting Seller or any Subsidiary and, to the knowledge of Seller, none is
or has been threatened; (v) neither Seller nor any Subsidiary has been
notified of any grievance that would have a Material Adverse Effect; and
(vi) neither Seller nor any
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Subsidiary has any labor contracts or collective bargaining agreements with
respect to any Company Personnel.
(m) Insurance. Seller and its Subsidiaries maintain and have in
full force and effect the insurance policies covering the Purchased Assets
and the Business that are set forth in Schedule 5.01(m). Copies of the
insurance policies covering the Purchased Assets and the Business have been
or will be provided to or made available for inspection by Buyer on or
prior to the Closing Date.
(n) Intellectual Property. Schedules 5.01(n)(i) and 5.01(n)(ii)
(each containing the items contemplated by Section 2.01(a)(iii)) together
with any Intellectual Property included in the Shared Assets, contain a
complete list of all Intellectual Property used in the Business. Schedule
5.01(n)(iii) contains a complete and correct list and a brief description
of all of the judgments, covenants not to sue, permits, grants, franchises,
licenses and other agreements relating to the Intellectual Property, which
bind, obligate or otherwise restrict Seller or any Subsidiary. Except as
otherwise set forth in Schedule 5.01(n)(iii), Seller or one of its
Subsidiaries is the sole and exclusive beneficial owner of all right, title
and interest in and to the Intellectual Property listed in Schedules
5.01(n)(i) and 5.01(n)(ii) (with no breaks in the chain of title thereof),
free and clear of any Encumbrance of any kind whatsoever. All of the
rights associated with the Intellectual Property listed in Schedules
5.01(n)(i) and 5.01(n)(ii) are in full force and effect and have not been
used or enforced, or failed to be used or enforced, in a manner that would
result in the abandonment, cancellation or unenforceability of such rights.
With respect to the Intellectual Property not owned by Seller or any of its
Subsidiaries, no such Intellectual Property is used by Seller or any
Subsidiary other than by the consent of or licenses from the rightful owner
thereof. Except as set forth in Schedule 5.01(n)(iii), neither Seller nor
any Subsidiary (i) has knowledge of any claim of adverse ownership,
invalidity or other opposition to or conflict with any Intellectual
Property; (ii) is engaged, or any product it manufactures, uses or sells,
or any process, method, packaging, advertising, part or material it employs
in the manufacture, marketing or sale of any of such product, or the
manufacture, marketing, use or sale of any such product, process, method,
packaging, advertising, part or material, or the use of any Intellectual
Property, breaches, violates or infringes any rights of anyone else or
requires payment for the use of any patent, trade name, trade secret,
trademark, copyright or other right of another; or (iii) is a licensee of,
or is making payments or is obligated to make payments for the use of, any
trademark, trade name, copyright, patent, trade secret or other proprietary
right of another person or entity material to the Business. Schedule
5.01(n)(iii) also sets forth all infringements or violations of the
Intellectual Property rights of which Seller or any Subsidiaries are aware.
(o) Employees. (i) Schedule 5.01(o)(i) (1) sets forth the
name, location, title, date of employment, salaries, bonuses (and any
changes in salaries or bonuses since January 1, 1994) of each Employee at
the level of manager or higher. Schedule 5.01(o)(ii) sets forth the name
and a summary of the terms of all contracts, agreements or other
arrangements pursuant to which consultants, independent contractors or
other non-Employee persons received compensation in excess of $50,000
during the 1994 calendar year. Except as described in Schedule
5.01(o)(iii), on the date of this Agreement no individual is a party to an
Employment Contract pertaining to the Business, and no Employee is a party
to a confidentiality agreement or non-competition agreement with Seller or
any of the Subsidiaries. No Employee has provided notice to Seller or any
Subsidiary of his or her intention to
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terminate his or her relationship with Seller or any Subsidiary. Seller
has no knowledge of any plan of any Employee to do so. Schedule
5.01(o)(iii) also sets forth for each Employment Contract, if applicable,
any nonperformance related compensation to be paid pursuant to such
Employment Contract, including, without limitation, any bonus related to
any acquisitions consummated by Seller or any other transactions to which
Seller was a party not in the ordinary course of business.
(ii) The transfer on or prior to the Closing Date of the
Employees listed in Schedule 5.01(o)(iv) (the "Retained Business
Employees"), from Seller's Subsidiaries to one or more other affiliates of
Seller, whose capital stock is not being purchased by Buyer pursuant
hereto, will not interfere with or inhibit the ability of Buyer to conduct
the Business after the Closing Date in a manner substantially similar to
the manner in which is currently being conducted.
(p) Customer List; Product Suppliers. Schedule 5.01(p) sets
forth true, complete and accurate lists of the customers that accounted for
at least 65% of the net revenues, and the ten largest suppliers of product,
during the calendar year ending on December 31, 1994, in each OUS
Jurisdiction. No client, customer or supplier of Seller or any Subsidiary,
has provided notice to Seller or any Subsidiary of its intention to
terminate its relationship with Seller or any Subsidiary or to
substantially reduce the amount of business it provides to Seller or any
Subsidiary. Seller has no knowledge of any plan of any client to do so.
To the best knowledge of Seller, no customer is in default in any material
respect under any contract with Seller or any Subsidiary other than
defaults with respect to the failure to make payments in a timely manner
under such contract.
(q) Absence of Certain Changes or Events. Except as disclosed
pursuant to this Agreement, in the Schedules or in Seller's filings under
the Securities and Exchange Act of 1934, as amended, (the "Exchange Act")
delivered to Buyer prior to the Closing Date, since December 31, 1994 until
the date hereof, there has not been any:
(i) Material Adverse Effect;
(ii) (A) increase in the compensation payable or to become
payable to any of the Company Personnel, (B) any bonus, incentive
compensation, service award or other like benefit, granted, made or
accrued, contingently or otherwise, to or to the credit of Company
Personnel, or (C) payment or arrangement made or agreed to with respect to
Company Personnel, except in the ordinary course of business consistent
with past practice pursuant to the existing Employee Benefit Plans
described in Schedule 5.01(k)(i) hereto;
(iii) material labor trouble, or any material controversies or
material unsettled grievances threatened between Seller or any Subsidiary,
on the one hand, and any Company Personnel or a collective bargaining
organization representing or seeking to represent Company Personnel, on the
other hand;
(iv) addition to or modification or amendment of the Employee
Benefit Plans other than (A) contributions made for the fiscal years ending
on or after December 31, 1994 in accordance with the normal practices of
Seller and the Subsidiaries or
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(B) the extension of coverage to other Company Personnel who became
eligible after December 31, 1994;
(v) mortgage, pledge or subjection to any Encumbrance of any of
the Purchased Assets, except the lien of Taxes not yet due and payable;
(vi) sale, assignment or transfer of any assets of Seller or any
Subsidiary that are material, singly or in the aggregate, to the Business;
(vii) waiver of any rights of substantial value to Seller or any
Subsidiary with respect to the operation of the Business whether or not in
the ordinary course of business;
(viii) cancellation or termination by Seller or any Subsidiary
of any material contract, agreement or other instrument used in the
operation of the Business to which Seller or such Subsidiary is or was a
party;
(ix) liability incurred by Seller or any Subsidiary with respect
to the operation of the Business except liabilities incurred in the
ordinary course of business;
(x) capital expenditure or the execution of any Lease or Real
Property Lease with respect to any aspect of the Business or any incurring
of liability therefor not in the ordinary course of business consistent
with past practice;
(xi) borrowing of money or guaranteeing of any indebtedness of
others with respect to the Business by Seller or any Subsidiary not in the
ordinary course of business consistent with past practice;
(xii) lending of any money or otherwise pledging the credit of
Seller or any Subsidiary with respect to the Business;
(xiii) failure to conduct the Business in the ordinary course
consistent with the past practice of Seller and its Subsidiaries;
(xiv) change in the method of accounting or accounting practice
of Seller;
(xv) loss of services of any Company Personnel that is or are
material, individually or in the aggregate, to the conduct of the Business;
(xvi) material cancellation by any supplier, customer or
contractor with respect to the Business;
(xvii) extraordinary item of loss; or
(xviii) agreement by Seller or any Subsidiary to do any of the
foregoing.
(r) Compliance with Laws. Seller and each of the Subsidiaries
has complied in the operation of the Business in all material respects with
all applicable statutes, regulations, orders, ordinances and other laws of
the United States of America and all states
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and localities and of each OUS Jurisdiction, as well as all federal, state,
local or foreign governmental bodies and authorities, and agencies of any
of the foregoing relating to the Business to which it is subject and any
undertakings of Seller and each of its Subsidiaries to any of the
foregoing. Neither Seller nor any Subsidiary has received any notice to
the effect that, or otherwise been advised that in the operation of the
Business, it is not in compliance with any of such statutes, regulations
and orders, ordinances, other laws or undertakings, and Seller has no
knowledge of any presently existing circumstances are likely to result in
violations of any such regulations which could, in any one case or in the
aggregate, cause a material loss to the Business or otherwise have a
Material Adverse Effect. To the best of Seller's knowledge, there is not
presently pending any proceeding, hearing or investigation with respect to
the adoption of amendments or modifications to existing laws or ordinances,
regulations or restrictions which, if adopted, would have a Material
Adverse Effect.
(s) Transactions with Certain Persons. Except as disclosed in
Schedule 5.01(s) hereto, no stockholder, officer, director of Seller, or to
Seller's knowledge, no employee of Seller or any Subsidiary or member of
his immediate family is presently a party to any transaction with Seller or
any Subsidiary relating to the Business, including, without limitation, any
contract, agreement or other arrangement (i) providing for the furnishing
of services by, (ii) providing for the rental of real or personal property
from, or (iii) otherwise requiring payments to (other than services as
officers, directors or employees) any such person or corporation,
partnership, trust or other entity in which any such person has a
substantial interest as a shareholder, officer, director, trustee or
partner.
(t) Disclosure. As of the date of this Agreement, the
representations of Seller in this Agreement or in any schedule, exhibit, or
other documents (as limited by any knowledge qualifier contained therein)
delivered or made available for inspection pursuant hereto (taken together)
do not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements included therein or
herein, in the light of the circumstances in which they are made, not
misleading. Seller's Specified Exchange Act Filings did not, as of the
time of their respective filings, include an untrue statement of a material
fact, or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances in which they were made,
not misleading; in all cases, however, solely with respect to statements or
omissions concerning the Business.
(u) Undisclosed Liabilities. Except as and to the extent
specifically reflected or reserved against in the Closing Balance Sheet, or
in any Schedule hereto, the Business has no liabilities or obligations of
any nature, whether absolute, accrued, contingent or otherwise, and whether
due or to become due (including, without limitation, any liabilities for
taxes and interest, penalties and other charges payable with respect to any
such liability or obligation) which would have a Material Adverse Effect.
(v) Questionable Payments. Neither Seller nor any Subsidiary
has made, and to the knowledge of Seller no officer, director, employee,
agent or other representative of Seller or any Subsidiary or any person
acting on behalf of Seller or any Subsidiary has made, directly or
indirectly, any bribes, kickbacks, illegal political contributions with
corporate funds, payments from corporate funds not recorded in records of
Seller or such Subsidiary, payments from corporate funds that were falsely
recorded on such books and records, illegal payments from corporate funds
to governmental officials in their individual capacities, or
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illegal payments from corporate funds to obtain or retain business either
within the United States or abroad.
(w) No Sales In or Into the United States. During the year
ended December 31, 1994, sales attributable to the Purchased Assets and
sales of the Purchased Subsidiaries "in" or "into" the United States within
the meaning of paragraph 802.50 of the rules and regulations under the HSR
Act, totaled less than $25 million.
(x) Independent Accountants. Arthur Andersen & Company is an
independent public accountant with respect to Seller.
Section 5.02 Representations and Warranties of Buyer. Buyer
hereby represents and warrants to Seller as follows:
(a) Organization; Good Standing. Buyer, Parent and each of the
Buyer Subsidiaries are corporations duly organized, validly existing and in
good standing under the laws of its State or country of organization and
each has the corporate power and authority to own or lease its properties
and to conduct its business as currently conducted.
(b) Corporate Authorization. The execution, delivery and
performance by Buyer, Parent and the Buyer Subsidiaries of this Agreement
and the Supplemental Agreements to which each is a party has been
authorized and approved by all requisite corporate action, and no other
corporate approval or authorization is required on the part of Buyer,
Parent or any of the Buyer Subsidiaries in order to make this Agreement and
the Supplemental Agreement, as applicable, the valid and binding
obligations of Buyer, Parent or any of the Buyer Subsidiaries, as
applicable, (subject to the receipt of required consents to assignments of
the Assigned Agreements) enforceable against Buyer, Parent or any of the
Buyer Subsidiaries, as applicable, in accordance with their respective
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforcement of creditors'
rights in general or by general principles of equity.
(c) No Conflict. The execution by Buyer, Parent and the Buyer
Subsidiaries of this Agreement and the Supplemental Agreements to which
each is a party, compliance by Buyer, Parent and the Buyer Subsidiaries
with the provisions of this Agreement and the Supplemental Agreements to
which each is a party and the consummation by Buyer, Parent and the Buyer
Subsidiaries of the transactions contemplated hereby and thereby (i) will
not conflict with any provision of the Certificate of Incorporation or
By-laws or conflict with or constitute a default (or, to its knowledge, an
event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the
performance required by any of the terms, conditions or provisions of any
contract, agreement or other instrument binding on Buyer, Parent or any of
the Buyer Subsidiaries, as appropriate, which conflict, default,
termination or acceleration would have a material adverse effect on Buyer,
Parent or any of the Buyer Subsidiaries, (ii) except for compliance with
the requirements of any applicable OUS statutes substantially equivalent to
the HSR Act, does not require the consent or approval of, or registration,
declaration or filing with, any federal, state, local or foreign court,
administrative agency or commission or other governmental authority or
instrumentality, and (iii) does not violate any order, writ, injunction,
decree, arbitral award, statute, rule or regulation applicable to Buyer,
Parent or any of the Buyer Subsidiaries, as appropriate, violation of which
would have a material adverse effect on
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Buyer, Parent or any of the Buyer Subsidiaries. The parties hereto
acknowledge that the representation contained in clause (ii) of the
immediately preceding sentence of this Section 5.02(c) (insofar as it
relates to the filing requirements under the HSR Act is made by Buyer and
Parent solely in reliance upon Seller's representation in Section 5.01(w)
hereof and Seller's acknowledgement to Buyer and Parent that no filing
pursuant to the HSR Act is necessary due to the volume of sales
attributable to the Purchased Assets "in" or "into" the United States.
(d) No Brokers. Buyer has not made contact or had any dealings
with or entered into, and will not enter into, any agreement, arrangement
or understanding with any broker, leasing agent, finder or similar person
or entity with respect to this Agreement and the transactions contemplated
hereby which will result in the obligation of Seller to pay any finder's
fee, brokerage commission or similar payment in connection with the
transactions contemplated hereby.
(e) Financial Capability. Buyer will have available on the
Closing Date sufficient funds and financial capability to enable it to
consummate the transactions contemplated by this Agreement and will, from
time to time, provide assurances and information to Seller as shall
reasonably be requested by Seller that it will have such financial
capability on the Closing Date.
(f) Independent Accountants. Arthur Andersen & Company is an
independent public accountant with respect to Buyer and Parent, as
applicable.
ARTICLE VI
Conditions Precedent to Obligations
of Buyer and Seller
Section 6.01 Conditions Precedent to Obligations of Buyer. The
obligations of Buyer to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, or the waiver by Buyer, on
or prior to the Closing Date of the conditions set forth below.
(a) Compliance with Covenants. All the terms, covenants,
agreements and conditions of this Agreement to be complied with and
performed by Seller on or prior to the Closing Date shall have been duly
complied with and performed in all material respects.
(b) Representations and Warranties. The representations and
warranties of Seller contained in this Agreement, as updated based on any
information contained in any Schedule hereto delivered on or prior to the
date of this Agreement shall be deemed to have been made again on and as of
the Closing Date and shall then be true and correct in all material
respects, and on the Closing Date Seller shall have delivered to Buyer a
certificate to such effect.
(c) Delivery of Closing Documents. Seller shall have delivered
to Buyer on or prior to the Closing Date all the documents required to be
delivered pursuant to Section
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7.01. The Escrow Agent (as defined in the Escrow Agreement) shall have
executed and delivered the Escrow Agreement.
(d) Opinion of Counsel for Seller. Buyer shall have received an
opinion or opinions of one or more outside counsel for Seller reasonably
acceptable to Buyer, each dated the Closing Date and addressed to Buyer, in
form and substance satisfactory to Buyer, together, to the effect that:
(i) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware, and has
corporate power to carry on its business as it is currently being
conducted;
(ii) Seller has full corporate power and authority to enter into
this Agreement and the Supplemental Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby, and
all corporate proceedings required to be taken by or on the part of
Seller to authorize it to enter into this Agreement and the
Supplemental Agreements and to consummate the transactions
contemplated hereby and thereby have been duly and properly taken;
(iii) This Agreement and the Supplemental Agreements to which Seller
is a party have been duly executed and delivered by Seller and each
constitutes a legal, valid and binding obligation of Seller, as the
case may be, enforceable in accordance with its respective terms;
(iv) The execution, delivery and performance by Seller of the
agreements and instruments referred to in paragraph (iii) above to
which it is a party, (A) will not conflict with or violate any
provision of any applicable law, rule or regulation or any order,
writ, injunction or decree known to such counsel, (B) will not
conflict with any provision of the Certificate of Incorporation or By-
laws of Seller and, to the knowledge of such counsel, will not
conflict with or result in the breach of any term or provision of, or
constitute a default under, or result in the creation of any
encumbrance upon any of the Purchased Assets pursuant to, any
indenture, mortgage, lease, agreement or other instrument to which
Seller is a party or by which it is bound (except as otherwise
disclosed herein) and (C) do not require the consent or approval of,
or registration, declaration or filing with, any United States federal
or Minnesota court, administrative agency or commission or other
governmental authority or instrumentality (except for such as have
been complied with); and
(v) To the knowledge of such counsel, there is no action, suit or
proceeding pending or threatened in any federal, state, local or
foreign court, or governmental body seeking to restrain or prohibit
the consummation of the transactions contemplated hereby, except as
described in such opinion;
and as to such other matters as Buyer may reasonably request. Such
opinions may be limited by their terms to the laws of the United States of
America, the State of Minnesota and the General Corporation Law of the
State of Delaware and may be given subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforceability of creditors' rights generally and be limited to the extent
that enforcement may
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be affected by the availability of equitable remedies or the applicability
of principles of equity. Each such opinion may assume the matters covered
by the other such opinion.
(e) Opinion of Special Delaware. Buyer shall have received an
opinion of special Delaware counsel for Seller reasonably acceptable to
Buyer, dated the Closing Date and addressed to Buyer, in form and substance
satisfactory to Buyer, to the effect that:
(i) Pursuant to the provisions of the General Corporation Law of
the State of Delaware, neither the execution of this Agreement by Seller
nor Seller's consummation of the transactions contemplated hereby,
requires any approval of the stockholders of Seller.
(f) Opinion of Counsel in Each OUS Jurisdiction. Buyer shall
have received an opinion or opinions of one or more outside counsel in each
OUS Jurisdiction reasonably acceptable to Buyer, each dated the Closing
Date and addressed to Buyer:
(i) with respect to each Purchased Subsidiary:
(1) The Purchased Subsidiary located in such OUS Jurisdiction is
a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and
has corporate power to carry on its business as it is currently
being conducted;
(2) The Purchased Subsidiary located in such OUS Jurisdiction
has full corporate power and authority to enter into the
Supplemental Agreements to which it is a party and to consummate
the transactions contemplated by this Agreement and by the
Supplemental Agreements, and all corporate and other proceedings
required to be taken by or on the part of such Purchased
Subsidiary to authorize it to enter into the Supplemental
Agreements and to consummate the transactions contemplated by
this Agreement and by the Supplemental Agreements have been duly
and properly taken;
(3) The Supplemental Agreements to which such Purchased
Subsidiary is a party have been duly authorized, executed and
delivered by such Purchased Subsidiary.
(4) All of the shares of capital stock of such Subsidiary are
duly authorized, validly issued, fully paid and nonassessable,
and owned by Seller or another Subsidiary free of any
Encumbrances, and no class of any capital stock of any such
Purchased Subsidiary is entitled to preemptive rights. Except as
set forth in Schedule 5.01(c) to this Agreement, to the knowledge
of such counsel there are outstanding on the date hereof no
options, warrants or other rights to acquire the capital stock of
any such Purchased Subsidiary.
(ii) with respect to each Subsidiary that is not a
Purchased Subsidiary:
(1) the Bills of Sale, Assignment and Assumption Agreements and
the other documents of transfer contemplated by Section 7.01 and
the
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Supplemental Agreements will, when executed and delivered by the
applicable Subsidiary, fully and effectively transfer title as
contemplated by this Agreement to the Purchased Assets to Buyer.
(2) Such Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation and has corporate power to carry on its business
as it is currently being conducted;
(3) Such Subsidiary has full corporate power and authority to
enter into the Supplemental Agreements to which it is a party and
to consummate the transactions contemplated by this Agreement and
by the Supplemental Agreements, and all corporate and other
proceedings required to be taken by or on the part of such
Subsidiary to authorize it to enter into the Supplemental
Agreements and to consummate the transactions contemplated by
this Agreement and by the Supplemental Agreements have been duly
and properly taken;
(4) The Supplemental Agreements to which such Subsidiary is a
party have been duly authorized, executed and delivered by such
Subsidiary.
(g) Litigation. As of the Closing Date there shall not be in
effect any judgment, order, injunction or decree of any federal, state,
local or foreign court of competent jurisdiction, the effect of which is to
prohibit or restrain the consummation of the transactions contemplated by
this Agreement.
(h) No Material Adverse. Except as disclosed in Seller's
filings pursuant to the Exchange Act or in the Schedules, there shall not
have been any Material Adverse Effect, and Seller does not know of any
fact, circumstance, event, occurrence, contingency or condition which would
reasonably be expected to result in a Material Adverse Effect since
December 31, 1994. Other than in the ordinary course of business and at
prices and on terms consistent with the past practice of Seller and its
Subsidiaries, neither Seller nor any the Subsidiaries has made any
disposition of any portion of the Purchased Assets. The Business has been
operated since December 31, 1994 in all material respects only in the
ordinary course of business and consistent with the past practice of Seller
and its Subsidiaries.
(i) Retained Businesses. To the extent that any of the
Purchased Subsidiaries conduct any of the Retained Businesses, Seller shall
have, at its sole cost and expense, transferred the Retained Businesses
conducted by such Purchased Subsidiaries, including all liabilities
associated therewith, out of such Purchased Subsidiaries and into an entity
not being purchased by Buyer.
(j) Approvals and Consents. On or prior to the Closing Date,
Seller or its Subsidiaries, as applicable shall have obtained consents to
the assignment of each Assigned Agreement which in any OUS Jurisdiction
accounts for ten percent (10%) or more of the revenue in such OUS
Jurisdiction.
(k) License Agreements. Buyer shall have received the Trademark
and Tradename Agreement with respect to the use of the name "Control Data"
in the form of Exhibit A hereto. Buyer shall have received a license
agreement, in the form of Exhibit D
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hereto, with respect to all of the Intellectual Property listed on Schedule
5.01(n)(ii) (the "License Agreement").
(l) OUS Statutes. Any applicable waiting period or clearance
under any applicable OUS statutes substantially equivalent to the HSR Act
shall have expired, been terminated or granted other than the waiting
period under Norwegian law in connection with the filing with the Ministry
of Trade and Energy. Buyer and Seller will cooperate to provide any
further information or filings requested by such Ministry.
(m) Release from Confidentiality and Noncompetition Agreements.
Seller and each of the Subsidiaries which are not Purchased Subsidiaries
shall have released and hereby do release all Company Personnel that are to
become employees of Buyer after the Closing Date from any and all
confidentiality and noncompetition agreements between such Personnel and
Seller or any such Subsidiary, as applicable to the extent necessary to
allow them to work for Buyer in the Business, or if such release is not
necessary Seller or each Subsidiary that is not a Purchased Subsidiary
shall have assigned and hereby do assign such agreements to Buyer including
the benefit of any noncompetition and confidentiality provisions contained
therein. With respect to confidentiality and noncompetition agreements
between Company Personnel and any Purchased Subsidiary or Seller on behalf
of any Purchased Subsidiary, Seller agrees that neither it nor any
Purchased Subsidiary has nor will terminate such confidentiality and
noncompetition agreements on or prior to the Closing Date.
(n) Transition Services; Supply of Spare Parts. (i) Seller and
each of its Subsidiaries, as applicable, shall have executed and delivered
to Buyer an agreement in the form of Exhibit E hereto with respect to human
resources, general and other administrative services to be provided by
Seller to Buyer after the Closing Date (the "Administrative Services
Agreement").
(ii) Seller and each of its Subsidiaries, as applicable, shall
have executed and delivered to Buyer an agreement in the form of Exhibit F
hereto with respect to MIS support services to be provided by Seller to
Buyer after the Closing Date (the "MIS Support Services Agreement").
(iii) Seller and each of its Subsidiaries, as applicable, shall
have executed and delivered to Buyer an agreement in the form of Exhibit G
hereto with respect to central support services and spare parts to be
provided by Seller to Buyer after the Closing Date (the "Central Support
Services and Spare Parts Supply Agreement").
(o) 338 Elections. Buyer shall have the right to make an
effective, irrevocable election under Section 338 of the Code.
(p) Tax Matters Agreement. Seller shall have executed and
delivered to Buyer a tax matters agreement in the form of Exhibit H hereto
with respect to the allocation of responsibility and liability for tax
matters related to the operation of the Purchased Subsidiaries (the "Tax
Matters Agreement").
(q) Retained Business Employees. Schedule 5.01(o)(iv) sets
forth the names of all the Retained Business Employees. On or prior to the
Closing Date Seller and its Subsidiaries, as applicable, shall have
transferred the Retained Business Employees to
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affiliates of Seller other than any Subsidiary whose capital stock is being
purchased by Buyer pursuant hereto, and will not become Transferred
Employees of Buyer. All assets and liabilities associated with the
Retained Business Employees with respect to any Employee Benefit Plan,
severance plan or any other arrangement covering such Retained Business
Employees shall remain with the Seller.
(r) Leases or Subleases. On or prior to the Closing Date Seller
or its Subsidiary, as applicable, shall have executed and delivered to
Buyer leases or subleases in forms reasonably satisfactory to Buyer and
customary for the relevant OUS Jurisdiction and at then applicable market
rates for each location, which rates and terms are mutually agreeable to
Buyer and Seller, for the properties located at the facilities located in
Mexico City and Monterrey in Mexico and Stockley Park in the United
Kingdom. The form and substance of such leases or subleases shall have
been agreed to by Buyer and Seller as promptly as practicable but in no
event later than the Closing Date.
(s) Sublease Option Agreement. On or prior to the Closing Date,
Seller shall have executed and delivered to Buyer a sublease option
agreement in the form of Exhibit I hereto with respect to the sublease by
Seller of the premises located at Michael House, Burgess-Hill, West Sussex,
England (the "Sublease Option Agreement").
(t) Distributor Agreement. On or prior to the Closing Date,
Seller shall have executed and delivered to Buyer a distributor agreement
in the form of Exhibit J hereto along with a Letter Agreement setting forth
those amendments to be made by mutual agreement of the parties to such
distribution agreement within thirty days (30) after the Closing Date
(collectively, the "Distributor Agreement") with respect to Buyer's right
to distribute Seller's ICEM products in the Territory as defined in the
Distributor Agreement.
Section 6.02 Conditions Precedent to Obligations of Seller. The
obligations of Seller to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, or waiver by Seller, on or
prior to the Closing Date of the following conditions:
(a) Compliance with Covenants. All the terms, covenants,
agreements and conditions of this Agreement to be complied with and
performed by Buyer on or prior to the Closing Date shall have been duly
complied with and performed in all material respects.
(b) Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be deemed to have
been made again on and as of the Closing Date and shall then be true and
correct in all material respects, and on the Closing Date Buyer shall have
delivered to Seller a certificate to such effect.
(c) Delivery of Closing. Buyer shall have delivered to Seller
on or prior to the Closing Date all the documents required to be delivered
pursuant to Section 7.02. The Escrow Agent (as defined in the Escrow
Agreement) shall have executed and delivered the Escrow Agreement.
(d) Opinion of Counsel for Buyer. Seller shall have received
opinions of Dewey Ballantine, special counsel for Buyer and Buyer's in-
house counsel, dated the Closing
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Date and addressed to Seller, in form and substance satisfactory to Seller,
together to the effect that:
(i) Each of Buyer and Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(ii) Buyer and Parent each have full corporate power and authority to
enter into each of this Agreement and the Supplemental Agreements, if
any, to which it is a party and to consummate the transactions
contemplated hereby and thereby, and all corporate and other
proceedings required to be taken by or on the part of each of Buyer
and Parent to authorize it to enter into each of this Agreement and
the Supplemental Agreements, if any, to which it is a party and to
consummate the transactions contemplated hereby and thereby have been
duly and properly taken;
(iii) Each of this Agreement and the Supplemental Agreements have
been duly executed and delivered by Buyer and Parent, as applicable;
and
(iv) The execution, delivery and performance by Buyer and Parent of
this Agreement and the Supplemental Agreements to which it is a party,
(A) will not conflict with or violate any provision of any applicable
law, rule or regulation or any order, writ, injunction or decree known
to such counsel, (B) will not conflict with any provision of the
Certificate of Incorporation or By-laws of Buyer or Parent and, to the
knowledge of such counsel, will not conflict with or result in a
breach of any term or provision of, or constitute a default under, any
indenture, mortgage, lease, agreement or other instrument to which
Buyer or Parent is a party or by which it is bound (except as
otherwise disclosed), and (C) do not require the consent or approval
of, or registration, declaration or filing with, any federal, state,
local or foreign court, administrative agency or commission or other
governmental authority or instrumentality (except for compliance with
applicable OUS statutes substantially equivalent to the HSR Act), it
being acknowledged that the opinion contemplated by this clause (iv)
paragraph (d) (insofar as it relates to the filing requirements under
the HSR Act) will be rendered solely based upon the acknowledgements
contained in the Seller's representation contained in Section 5.01(w)
hereof and in the last sentence of Section 5.02(c) hereof.
and as to such other matters as and Seller may reasonably request. Such
opinions may be limited by their terms to the laws of the United States of
America and the State of New York and the General Corporation Law of the
State of Delaware and may be given subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforceability of creditors, rights generally and be limited to the extent
that enforcement may be affected by the availability of equitable remedies
or the applicability of principles of equity.
(e) Opinion of Counsel in Each OUS Jurisdiction. Seller shall
have received an opinion or opinions of one or more outside counsel in each
OUS Jurisdiction reasonably acceptable to Seller, each dated the Closing
Date and addressed to Seller:
(i) with respect to each Buyer Subsidiary:
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(1) The Buyer Subsidiary located in such OUS Jurisdiction is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has
corporate power to carry on its business as it is currently being
conducted;
(2) The Buyer Subsidiary located in such OUS Jurisdiction has
full corporate power and authority to enter into the Supplemental
Agreements to which it is a party and to consummate the
transactions contemplated by this Agreement and by the
Supplemental Agreements, and all corporate and other proceedings
required to be taken by or on the part of such Purchased
Subsidiary to authorize it to enter into the Supplemental
Agreements and to consummate the transactions contemplated by
this Agreement and by the Supplemental Agreements have been duly
and properly taken; and
(3) The Supplemental Agreements to which such Purchased
Subsidiary is a party have been duly authorized, executed and
delivered by such Purchased Subsidiary.
(f) Consideration. The Purchase Price shall have been paid to
Seller in accordance with Section 3.01.
(g) Litigation. As of the Closing Date there shall not be in
effect any judgment, order, injunction or decree of any federal, state,
local or foreign court of competent jurisdiction, the effect of which is to
prohibit or restrain the consummation of the transactions contemplated by
this Agreement.
(h) No Change in Law. There shall not have been any action, or
any statute enacted, by any government or agency thereof which would render
the parties unable to consummate the transactions contemplated herein or
make the transactions contemplated herein illegal, prohibit or restrict the
consummation of the transactions contemplated herein.
(i) OUS Statutes. Any applicable waiting period of clearance
under any applicable OUS statutes substantially equivalent to the HSR Act
shall have expired, been terminated or granted other than the waiting
period under Norwegian law in connection with the filing with the Ministry
of Trade and Energy. Buyer and Seller will cooperate to provide any
further information or filings requested by such Ministry.
(j) Seller Guarantees. With respect to any existing credit
lines used in connection with the operation of the Business pursuant to
which Seller is a guarantor of the obligations thereunder, which credit
lines are set forth on Schedule 6.02(j), either (i) Seller shall have been
released as guarantor under such credit lines or (ii) in the event Seller
shall not have been able to obtain a release, Buyer shall (A) have repaid
all existing indebtedness under such credit lines if such repayment would
result in the release of Seller as guarantor thereunder or (B) if repayment
of existing indebtedness under such credit lines would not result in the
release of Seller as guarantor, have indemnified and held harmless Seller
for any Losses (as hereinafter defined) arising out of or related to
Seller's inability to obtain a release from its obligation as guarantor
under the credit lines set forth on Schedule 6.02(j). With respect to any
credit line for which Buyer will indemnify Seller pursuant to clause
(ii)(B) of the immediately preceding sentence, Buyer agrees not to renew or
extend the term of any such credit line. Any prepayment penalties, early
termination fees or other costs, fees or expenses arising out of the terms
and conditions of any agreement set forth on Schedule
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6.02(j) and associated with obtaining the release of Seller as guarantor
from the credit lines contained in Schedule 6.02(j) shall be paid by
Seller.
ARTICLE VII
Documents to be Delivered on Closing Date
Section 7.01 Documents To Be Delivered by. On the Closing Date
Seller shall deliver to Buyer, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Conditions Precedent. The payments, documents, agreements
and instruments referred to in Section 6.01 as conditions precedent to the
obligations of Buyer.
(b) Officer's Certificates. Certificates signed by the
President of Seller to the effect set forth in Sections 6.01(a) and (b) and
stating that the conditions set forth in Section 6.01 have been satisfied.
(c) Bills of Sale. Bills of Sale duly executed by the Seller or
its Subsidiary, as applicable.
(d) Assignment and Assumption Agreement. Assignment and
Assumption Agreements duly executed by the Seller or its Subsidiary, as
applicable.
(e) Escrow Agreement. The Escrow Agreement duly executed by
Seller.
(f) Further Instruments. Such further instruments of
assignment, conveyance or transfer or other instruments covering the
Purchased Assets or any part thereof, and such further instruments with
respect to the transactions contemplated hereby, as Buyer may reasonably
request, including, without limitation, stock powers executed in blank and
stock certificates representing all of the capital stock of each Purchased
Subsidiary.
Section 7.02 Documents To Be Delivered by Buyer on Closing Date.
On the Closing Date Buyer shall deliver to Seller, in form and substance
reasonably satisfactory to Seller:
(a) Conditions Precedent. The payments, documents, agreements
and instruments referred to in Section 6.02 as conditions precedent to the
obligations of Seller.
(b) Officer's Certificate. A certificate by the President of
Buyer to the effect set forth in Sections 6.02(a) and (b) and stating that
the conditions set forth in Section 6.02 have been satisfied.
(c) Assignment and Assumption Agreement. The Assignment and
Assumption Agreement duly executed by Buyer.
(d) Escrow Agreement. The Escrow Agreement duly executed by
Buyer.
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(e) Further Instruments. Such further instruments with respect
to the transactions contemplated hereby, including instruments of
assumption, as Seller may reasonably request.
ARTICLE VIII
Further Covenants and Agreements
of Seller and Buyer
Section 8.01 Further Covenants and Agreements of Seller and
Buyer. Seller or Buyer, as appropriate, agree as indicated below that:
(a) Conduct of Business Pending Closing. From and after the
date of this Agreement to and including the Closing Date Seller shall, and
shall cause each of its Subsidiaries to:
(i) maintain the Purchased Assets;
(ii) perform in all material respects, its obligations under the
Assigned Agreements;
(iii) conduct the Business only in the ordinary course consistent
with the past practice of Seller and its Subsidiaries;
(iv) not (A) fail to comply in any material respect with any laws,
ordinances, regulations or other governmental restrictions applicable
in any respect to the Business or any of the Purchased Assets or (B)
cancel or terminate any contract, agreement or other instrument
material to the Business, other than contracts, agreements and other
instruments that are not Purchased Assets unless Seller or its
Subsidiary is otherwise obligated to maintain them in effect or (C)
renew any Real Property Lease for a term in excess of one year;
(v) from and after the date hereof to and including the Closing Date
(A) use its best efforts to preserve the organization of the Business
intact and continue its operations at its present levels, to keep
available to Buyer the services of Company Personnel and to preserve
the relationships with the suppliers, customers, creditors and others
having business relations with Seller and its Subsidiaries in
connection with the Business, (B) maintain in full force and effect
the insurance policies set forth on Schedule 5.01(m) (or policies
providing substantially the same coverage, copies of which will be
delivered to Buyer as soon as practicable) and (C) promptly advise
Buyer of any Material Adverse Effect ; and
(vi) terminate any Employee other than in the ordinary course of
the conduct of the Business consistent with past practice; provided,
however, that neither Seller nor any Subsidiary may terminate any
Employee at the level of "manager" or above, without the express
written consent of Buyer.
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(b) Retained Businesses. Seller shall, on or prior to the
Closing Date at its sole cost and expense, transfer the Retained Businesses
conducted by any Purchased Subsidiary, including all liabilities associated
therewith, out of such Purchased Subsidiary and into an entity not being
purchased by Buyer.
(c) Non-Competition; Non-Solicitation. (i) From and after the
Closing Date to and including the date two years following the Closing
Date, Seller shall not, and shall not permit any affiliate (x) to, engage
in any capacity in any OUS Jurisdiction in a business that is substantially
similar to the Business; provided, however, that Seller and its affiliates
may conduct the Retained Businesses in any jurisdiction worldwide including
the OUS Jurisdictions or any product fulfillment and maintenance business
that is an integral part of the Retained Business where, if acceptable to
the customer, Buyer has been given a right of first refusal to provide such
product fulfillment and maintenance business and declined the opportunity
to provide such business, (y) to the extent permitted by law, sell,
contract to sell or otherwise supply spare parts used in the operation of
the Business to any third party that operates a business unit which is in
direct or indirect competition with the Business in any OUS Jurisdiction if
Seller knows or has reason to know that such spare parts will be used by
such business unit or (z) license the name, Control Data, to any company,
person, entity, association, organization or the like operating a
maintenance business in any OUS Jurisdiction.
(ii) From and after the Closing Date to and including the later
of (a) the date which is two years following the Closing Date or (b) the
expiration date of any contract between any customer included in the
Customer Base (as hereinafter defined) and Seller or any Subsidiary,
neither Seller nor any affiliate will, unless acting with the express
written consent of Buyer, directly or indirectly, solicit or interfere
with, or endeavor to entice away any person or entity who was a customer or
client of any Subsidiary as of December 31, 1994 or the Closing Date (the
"Customer Base"); provided, however, that after the Closing Date, Seller
and its affiliates may solicit customers from the 1994 Customer Base solely
in connection with the operation of any business other than the Business.
(iii) From and after the Closing Date to and including the date
two years following the Closing Date, Buyer shall not, and shall not permit
any affiliate to, unless acting with the express written consent of Seller,
directly or indirectly interfere with or endeavor to entice away any person
or entity who is at the time a customer or client of Seller or any
affiliate of Seller in any jurisdiction other than the OUS Jurisdictions
with respect to the conduct by Buyer of product fulfillment or maintenance
operations in such jurisdictions (the "Seller Customer Base").
(iv) To the extent that a customer or client is both included in
the 1994 Customer Base and the Seller Customer Base, Seller and Buyer agree
to contract with each other in order to provide services to such client or
customer that either Buyer or Seller is prohibited from providing itself
pursuant to this Section 8.01(c).
(v) From and after the Closing Date to and including the date
three years following the Closing Date, neither Seller nor any Subsidiary
will, unless acting with the express written consent of Buyer, directly or
indirectly, solicit or interfere with, or endeavor to entice away any
Transferred Employee who was employed by Buyer at any time on or after the
Closing Date.
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(d) Certain Information; Access to Businesses. Seller will, and
will cause its Subsidiaries to, make available to Buyer prior to the
Closing Date upon reasonable notice, any Qualified Documents and all files,
books, records, customer data, personnel files and such other information
as Buyer shall reasonably request, provided that such information (i)
relates to the Business and (ii) is reasonably available to Seller. Seller
shall, and shall cause each of its Subsidiaries to, from the date hereof up
to and including the Closing Date, permit Buyer and Buyer's attorneys,
accountants, agents and representatives full access to the books, records,
business and assets of Seller and any of its Subsidiaries (as such relate
to the Business) at any reasonable time and in any reasonable manner on
reasonable advance notice and in a manner that does not interrupt their
respective businesses. Buyer shall have the right to meet with customers
and suppliers of Seller and any of its Subsidiaries and Seller will give
Buyer full cooperation with respect thereto.
(e) Changes in Representations and Warranties. Between the date
of this Agreement and the Closing Date, Seller shall not knowingly, and
shall not knowingly permit any Subsidiary to, enter into any transaction or
take or omit to take any action to intentionally breach any of the
representations and warranties of Seller herein contained as of the Closing
Date.
(f) Audited Financial. If not already delivered pursuant to
Section 5.01(g), Seller shall deliver prior to the Closing Date the
Financial Statements specified in Sections 5.01(g)(i), (ii) and (iv) and
shall deliver to Buyer as soon as possible but in no event later than
September 30, 1995, the Financial Statements specified in Section
5.01(g)(iii). If on or prior to the Closing Date Buyer provides Seller
with written notice of its need (i) for any or all of the Financial
Statements described in this Section 8.01(f) as of and for the fiscal year
end for the year 1992 or (ii) other financial statements described in such
notice for purposes of filing a Current Report on Form 8-K by Parent with
respect to the transactions contemplated hereby, Seller shall, as soon as
practicable but in no event later than fifty (50) days after the Closing
Date, provide Buyer with copies of the requested Financial Statements
audited by KPMG Peat Marwick LLP or other auditors and prepared in
accordance with GAAP.
(g) No Shop. Until the earlier of the consummation of the
transactions contemplated by the Agreement or the termination date provided
in Section 9.01, Seller will not, and will not permit any Subsidiary to,
directly or indirectly, encourage or solicit any inquiries or proposals or
enter into any discussions, negotiations or agreements relating to the sale
or exchange of the Business or Purchased Assets other than in connection
with the sale of all or substantially all of the assets of Seller or a
change of control of Seller, to or from any person other than Buyer or its
affiliates or provide any assistance or any information to or otherwise
cooperate with any person in connection with any such inquiry, proposal or
transaction.
(h) Payment or Vesting of Certain Amounts to Employees. Subject
to the provisions of Section 8.03(c) hereof, Seller shall pay or accrue on
the Closing Balance Sheet in accordance with GAAP, or shall cause to be
paid or accrued on the Closing Balance Sheet, all accrued salaries,
bonuses, vacation amounts and other employee benefits to all Company
Personnel that are to become employees of Buyer on or after the Closing
Date ("Transferred Employees") with respect to periods prior to the Closing
Date with the Seller. Subject to the
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provisions of Section 8.03(c) hereof, Seller shall or shall cause its
Subsidiaries to fully vest, as of the Closing Date Transferred Employees in
their account balances and accrued benefits under any defined benefit
pension, profit-sharing or savings plan which is not being acquired
hereunder by Buyer as part of the Purchased Assets.
(i) Taxes. Seller shall, and shall cause each Subsidiary to,
take all actions and shall file all estimates or reports related to Tax
requirements of any OUS Jurisdiction to whose jurisdiction Seller and each
Subsidiary are subject to insure that Buyer (i) shall not be liable (except
to the extent contemplated by Section 4.02(b) of this Agreement regarding
transfer and similar transaction taxes) under the laws of such OUS
Jurisdiction for the payment of any Taxes as a result of the consummation
of the transactions contemplated by this Agreement and (ii) to the extent
possible, will not be required to withhold any portion of the Purchase
Price.
(j) Confidentiality and Noncompetition Agreements. Prior to the
Closing Date Seller and each of its Subsidiaries shall take all actions
necessary to release all Company Personnel that are to become employees of
Buyer after such closing date from any and all confidentiality and
noncompetition agreements between such Company Personnel and Seller or any
of its Subsidiary, as applicable, to the extent necessary to allow them to
work for Buyer in the Business, or if mutually agreed to by Seller and
Buyer, to assign such agreements to Buyer.
(k) Telephone and Facsimile Numbers. Seller shall deliver to
Buyer letters from Seller and each of its Subsidiaries, as applicable,
addressed to the telephone companies providing services to the Business
instructing such companies to transfer to Buyer the telephone and fax
numbers relating to the Business.
(l) Availability of Documents for Audit. Seller agrees to make
available to Buyer, upon written request of Buyer and at Seller's expense,
all financial and accounting books, work papers and records and to make
customary representations and assurances to the auditors, in each case
relating to the Purchased Assets and the Business necessary for the
preparation of audited financial statements with respect to the Business
for the annual periods ended December 31, 1992, 1993 and 1994 by an
independent certified public accountant selected by Buyer.
(m) Transition Services and Other. (i) Seller and each of its
Subsidiaries, as applicable, shall execute and deliver to Buyer the Central
Support Services and Spare Parts Supply Agreement, the Administrative
Services Agreement and the MIS Support Services Agreements.
(n) Retained Business Employees. On or prior to the Closing
Date Seller and its Subsidiaries, as applicable, shall transfer the
Retained Business Employees to affiliates of Seller other than any
Purchased Subsidiary, and will not become Transferred Employees of Buyer.
All assets and liabilities associated with the Retained Business Employees
with respect to any Employee Benefit Plan, severance plan or any other
arrangement covering such Retained Business Employees shall remain with the
Seller.
(o) Tax Matters Agreement. Seller shall execute and deliver to
Buyer the Tax Matters Agreement.
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(p) Intellectual Property. Seller and its Subsidiaries will
maintain or cause to be maintained the rights associated with the
Intellectual Property in full force and effect through the Closing Date
and, without limiting the foregoing, has renewed or has made or will make
within any applicable renewal period ending on or prior to the Closing Date
application for renewal of all the Intellectual Property subject to
expiration on or prior to the Closing Date.
(q) Leases or Subleases. On or prior to the Closing Date Seller
or its Subsidiary, as applicable, shall execute and deliver to Buyer leases
or subleases in forms reasonably satisfactory to Buyer and customary for
the relevant OUS Jurisdiction and at then applicable market rates for each
location, which rates and terms are mutually agreeable to Buyer and Seller,
for the properties located at the facilities located in Mexico City and
Monterrey in Mexico and Stockley Park in the United Kingdom. The form and
terms of such leases or subleases shall be agreed to as promptly as
practicable but in no event later than the Closing Date and shall specify
that the Buyer shall be entitled to use and enjoy the fixtures, property
and equipment contained in such facilities for the full term of such lease.
(r) Seller Vendor Contracts. Seller shall, with respect to any
contracts with vendors used in the operation of the Business ("Seller
Vendor Contracts"), use commercially reasonable efforts to help Buyer
establish a direct relationship with each such vendor. Seller shall, prior
to the time that Buyer enters into contractual arrangements with such
vendors, provide to Buyer at Seller's cost any products or services covered
by such Seller Vendor Contracts, unless the terms of such Seller Vendor
Contract prohibits such resale.
(s) Removal of Certain Encumbrances. Buyer shall identify to
Seller in writing no later ten business days prior to the Closing Date
those Encumbrances other than trade accounts payable and other than those
Encumbrances included on Schedule 6.02(i) which Buyer believes inhibit or
are reasonably likely to inhibit Buyer's ability to obtain financing after
the Closing Date with respect to the Business or the Purchased Assets.
Seller will use the Purchase Price received on the Closing Date or received
at any previously held Closing pursuant to this Agreement to remove on or
prior to the Closing Date any Encumbrance identified in the notice
delivered by Buyer to Seller pursuant to first sentence of this Section
8.01(u). Any Encumbrance eliminated by Seller pursuant to the immediately
preceding sentence shall not be included on the Closing Balance Sheet or in
the calculation of the Closing Date Net Asset Amount.
(t) Reimbursement for Antares Lease. Buyer and Seller agree
that the Closing Balance Sheet will contain a credit in the amount of three
hundred twenty-five thousand dollars (U.S. $325,000) in favor of the Buyer
in connection with Buyer's obligation to make lease payments under the
Antares lease for eighteen months following the Closing Date.
(u) Sublease Option Agreement. Seller shall execute and deliver
to Buyer the Sublease Option Agreement.
(v) Merger, Sale or Consolidation of Seller. After the Closing
Date but prior to the expiration of the term of all agreements pursuant to
which Seller is obligated to provide services to Buyer or pursuant to which
Seller has an obligation to Buyer pursuant to this Agreement, any
Supplemental Agreement, or any agreement or arrangement contemplated
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hereby or thereby, Seller shall, as a condition to the consummation of any
transaction pursuant to which Seller merges into, or consolidates with,
another company or sells, transfers or leases all or substantially all of
its properties and assets, use its best efforts to require the surviving
company or acquiror, transferee or lessee to expressly assume in writing
Seller's obligations hereunder and under any Supplemental Agreement or
other agreement or arrangement contemplated hereby or thereby, including,
without limitation, the Sublease Option Agreement. If the acquiror,
transferee or lessee does not assume in writing Seller's obligations
hereunder, Seller shall remain fully liable and responsible in all respects
and for all purposes hereunder.
(w) Distributor Agreement. Seller shall execute and deliver to
Buyer the Distributor Agreement.
(x) Continued Existence of Certain Subsidiaries. After the
Closing, for so long as any bids for contracts are pending by Control Data
Mexico, Control Data Limited or Control Data Systems Canada, Ltd., Seller
shall maintain the corporate existence of Control Data Mexico, Control Data
Limited (U.K.) or Control Data Systems Canada, Ltd., as applicable and if
any contract is awarded to such Subsidiary pursuant to such bids, it shall
use its best efforts to assign such contract to Buyer.
(y) Credit Cards. Buyer shall indemnify and hold harmless
Seller for any Losses (as hereinafter defined) arising out of or related to
any Employee's use on or after the Closing of any Seller or Subsidiary
"company credit cards" in connection with the operation of the Business.
Seller shall indemnify and hold harmless Buyer for any Losses arising out
of or related to any Employee's use (whether before or after the Closing
Date) of any "company credit cards" not in connection with the operation of
the Business except for such improper use after the Closing Date by
Employees who became Transferred Employees of the Purchased Subsidiaries.
For purposes of such indemnification, the $500,000 Loss requirement of
Section 8.04(c) shall not apply.
Section 8.02 Consents to Assignments; Permits. (a) Anything in
this Agreement or the bills of sale notwithstanding, to the extent that any
Assigned Agreement to be sold, assigned, transferred or conveyed to Buyer,
or any claim, right or benefit arising thereunder or resulting therefrom
(the "Interests"), is not capable of being sold, assigned, transferred or
conveyed without the approval, consent or waiver of the other party
thereto, or any third person (including a government or governmental unit),
or if such sale, assignment, transfer or conveyance or attempted
assignment, transfer or conveyance would constitute a breach thereof or a
violation of any law, decree, order, regulation or other governmental
edict, except as expressly otherwise provided herein, this Agreement shall
not constitute a sale, assignment, transfer or conveyance thereof, or an
attempted assignment, transfer or conveyance thereof. After the Closing,
until any Interest has been validly and effectively assigned to Buyer, (i)
Seller shall hold such Interest in trust for the benefit of Buyer and Buyer
shall be entitled to receive all benefits under such Interest and shall be
responsible for the obligations under such Interest to the extent relating
to the benefits received, and (ii) any such Interest shall, notwithstanding
the failure to receive any approval, consent or waiver (but so long as the
same shall not constitute a violation of law), be deemed to be assigned,
transferred or conveyed to Buyer if (x) written notice of such assignment,
transfer or conveyance is given to the other party to such Interest on or
before the Closing Date and (y) the other party to such Interest does not,
within three months after the Closing, object to
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such assignment, transfer or conveyance or acts in a manner inconsistent
with such assignment, transfer or conveyance.
(b) Except as provided in Section 8.02(a)(ii), neither Seller
nor any of its Subsidiaries is obligated to sell, assign, transfer or
convey to Buyer any of its rights and obligations in and to any of the
Interests without first obtaining all necessary approvals, consents or
waivers. Seller, its Subsidiaries and Buyer shall use commercially
reasonable efforts to cooperate to obtain all necessary approvals,
authorizations, orders, consents or waivers, or to resolve any
impracticalities of transfer referred to in this Section necessary to
convey to Buyer each such Interest as soon as practicable; provided,
however, that neither Seller nor Buyer shall be obligated to pay any
consideration therefor to the third party from whom such approval, consent
or waiver is requested or waive or compromise any rights against such third
party or commence any litigation or other proceeding against any third
party.
(c) Seller and Buyer shall cooperate to obtain as of the Closing
Date or as promptly thereafter as practicable all permits and licenses
required to be obtained on the part of Buyer from any governmental agency
with respect to the operation by Buyer of the Purchased Assets or the
Business (including, without limitation, environmental and other operating
permits). Seller shall, and shall cause its Subsidiaries to, assign,
transfer or convey to Buyer at the Closing those permits and licenses which
can be assigned without having to obtain the consent of any third party
with respect thereto, and Seller and Buyer will use commercially reasonable
efforts to cooperate in obtaining any third party consents necessary to the
assignment or transfer of any other permits and licenses which are not so
assignable or transferable. Subsequent to the Closing, to the extent
permitted by law, Seller and its Subsidiaries shall have the right to
cancel any permits or licenses or any bonds, guarantees or undertakings by
Seller and its Subsidiaries that do not constitute Purchased Assets or
Assumed Liabilities.
Section 8.03 Mutual Covenants. Seller and Buyer each agree
that:
(a) Commercially Reasonable Efforts To Meet Closing Conditions.
Seller and Buyer shall use their commercially reasonable efforts to cause
the conditions precedent set forth in Article VI to be satisfied.
(b) Announcements;. Except as otherwise required by law, the
rules of any national stock exchange or order or decree of any federal,
state, local or foreign court of competent jurisdiction or governmental
authority, (i) neither Seller nor Buyer shall issue any press releases or
make any announcement to the public of the transactions contemplated hereby
other than jointly or as otherwise agreed by them in writing and (ii) Buyer
and Seller will keep confidential any information not otherwise publicly
available which is derived from access, investigation or information
furnished by Buyer and Seller in connection with this Agreement, including
the negotiations conducted in connection herewith and all drafts and
executed copies of this Agreement and the contents hereof.
(c) Employment Procedures. (i) Buyer agrees to offer to employ
as of the Closing Date all Employees other than Retained Employees who are
employed by Seller or its Subsidiaries on the Closing Date, subject to the
terms and conditions specified in this Agreement.
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(ii) During the period prior to the Closing Date all Employees
will be under the supervision of Seller or the Subsidiary by whom such
Employee is employed and subject to Seller's or such Subsidiary's policies
and practices.
(iii) All severance and other payments to which an Employee
shall become entitled in respect of such Employee's termination prior to
the Closing Date shall be for the account of, and shall be made by, Seller.
All severance and other payments to which an Employee who becomes a
Transferred Employee shall become entitled in respect of such Transferred
Employee's termination on or after the Closing Date shall be for the
account of, and shall be made by, Buyer. In addition, Seller agrees (i) to
pay all termination, severance and other costs arising out of or related to
the terminations of any Employees of Control Data Portuguesa, S.A. or
Control Data Greece, Incorporated, which terminations are mutually agreed
to by Buyer and Seller regardless of when such terminations occur and (ii)
to indemnify Buyer for any and all Losses (as hereinafter defined) related
to such terminations.
(iv) For those Employees who become employees of Buyer on the
Closing Date (except for those Employees subject to Employment Contracts
included on Schedule 5.01(o)(ii) for whom the terms of employment with
Buyer shall be as set forth in such Employment Contracts), Buyer agrees for
a period of six months after the Closing Date to maintain employee
compensation and benefit plans and arrangements for the benefit of such
employees that are reasonably similar to the Employee Benefit Plans in
which such employees participated as Employees of Seller or a Subsidiary.
Buyer agrees to assume any liability or obligation of Seller or any
Subsidiary arising out of or related to Buyer's failure to provide
substantially comparable Employee Benefit Plans as provided by this Section
8.03(c)(iv), provided, however, that Buyer shall not assume any obligation
of Seller or any Subsidiary arising out of or related to actions taken or
to be taken by Buyer with respect to the provision of Employee Benefit
Plans if Seller had written notice of such action or intended action prior
to the Closing Date.
(v) Buyer and Seller agree that the understanding of the parties
with respect to (i) the transfer to Buyer or retention by Seller of any
existing defined benefit pension plan of any Subsidiary in any OUS
Jurisdiction and (ii) the extent of Buyer's obligation with respect to
completing the implementing of a profit sharing plan for Employees of the
Business in Canada which implementation was commenced by Seller prior to
the date hereof is as set forth below:
(1) With respect to the defined benefit pension plans operated by
Control Data Systems Canada, Ltd. and Seller shall retain
responsibility for such plans, including, without limitation, all
accounts, account balances and benefits accrued under such plans as of
the Closing Date with respect to all Employees that become Employees
of Buyer, and shall vest all Transferred Employees in their benefits
accrued under thereunder as of the Closing Date;
(2) In respect of each Transferred Employee who is a member of the
Final Pay Pension Scheme of Control Data Limited (each a "U.K.
Transferred Employee") who exercises his right under Chapter IV of
Part IV of the 1993 Pensions Act to take a transfer of the cash
equivalent of the benefits the U.K. Transferred Employee has accrued
under the Control Data Limited 1991 Pension Plan ("the Seller's Plan")
the Seller undertakes to ensure that the Trustees of the Seller's Plan
give effect to such
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election in accordance with the terms of the Pension Schemes Act 1993.
The Seller also agrees to ensure that the amount transferred to each
such electing U.K. Employee is the individual's cash equivalent
(disregarding any reductions on account of underfunding) (the
"Transferred Amount"). Seller shall indemnify and hold harmless Buyer
for any action, suit or proceeding commenced by a Transferred Employee
in respect of any deficiency in the Transferred Amount;
(3) With respect to the defined benefit pension plans operated by
Control Data Mexico S.A. de C.V. and Control Data AS and the defined
contribution plans operated by Control Data Gesellschaft mbH and
Control Data Systems Plc (collectively, the "Acquired Plans"), Buyer
shall assume such plans, including, without limitation, responsibility
for all accounts, account balances and benefits accrued under such
plans as of the Closing Date with respect to all Transferred
Employees. Seller has not, as of the date of this Agreement and
hereby agrees that it will not remove any assets from the Acquired
Plans; and
(4) Buyer will use its best efforts to have in effect as soon as
practicable after the Closing Date a profit-sharing plan with a cash
or deferred arrangement that covers all Employees of Control Data
Systems Canada, Ltd that become Employees of Buyer. Such plan shall
have terms substantially similar to those contained in Seller's
presentation to its Employees (a copy of which is attached hereto as
Exhibit K) regarding the proposed implementation of such plan.
(vi) Buyer and Seller agree that the Employees are not third-
party beneficiaries of this Agreement.
(d) OUS Fair Trade Filings. As promptly as practicable Buyer
and Seller shall make any filing required pursuant to any applicable OUS
statutes substantially equivalent to the HSR Act. Buyer and Seller shall
promptly and diligently provide any additional information required or
reasonably requested in order to comply with the requirements of such OUS
statutes. All filing fees applicable to compliance with such OUS statutes
in connection with this Agreement shall be shared equally by Buyer and
Seller. Seller hereby agrees to indemnify Buyer for any Losses incurred by
Buyer arising out of or related to Seller's failure to comply with the
requirements of Norwegian law and the Norwegian Ministry in connection with
the approval of the transactions contemplated by this Agreement as
described in Section 6.01(l).
(e) Leased Space. With respect to the Real Property Leases set
forth in Schedule 5.01(d)(3)(i), at the written request of Seller, Buyer
shall use commercially reasonable efforts to make available to Seller, upon
the same terms and conditions pursuant to which Buyer is a lessee under
such Real Property Leases, sufficient space for the Seller to conduct its
business as currently being conducted at the sites covered by the Real
Property Leases.
(f) Shared Assets. Buyer and Seller or any Subsidiary, as
applicable, shall negotiate in good faith to allocate equitably the costs
associated with the use and maintenance of any Shared Assets and title
thereto.
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(g) Further Assurances. Seller and Buyer will cooperate fully
in connection with the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, from and after the
Closing Date, from time to time, at a party's request and without further
consideration, the other party will execute and deliver such other
instruments, including powers of attorney, and take such other action as
the requesting party may reasonably request to more effectively put Buyer
in possession and operating control of all or any part of the Purchased
Assets.
(i) Buyer and Seller agree that Roland Weinhardt, the Controller
of Control Data AS, shall be a Retained Employee, provided, however, that
Buyer shall have exclusive use of his services for a period of three months
from the Closing Date. Within ten days after the end of each calendar
month, Seller shall notify Buyer of all salary and living expenses paid to
Roland Weinhardt by Seller during the previous calendar month. Buyer shall
reimburse Seller for such amount, other than amounts disputed in good
faith, within ten days after receipt by Buyer from Seller of such notice.
(ii) Seller agrees to use its commercially reasonable efforts to
retain Richard Powers in its employ for at least three months after the
Closing Date and during such time shall use commercially reasonable efforts
to cause Mr. Powers to allocate two weeks out of each month to servicing
the needs of Buyer in Portugal. Seller agrees to pay Mr. Powers salary and
the cost of all benefits to which he is entitled. Buyer agrees to pay any
direct costs other than salary and benefits incurred by Seller in
connection with Mr. Powers work for or on behalf of Buyer in Portugal.
(iii) Buyer and Seller agree that Thomas Kirsten who is
currently employed by Control Data GmbH and works full time for Control
Data Gesellschaft mbh (Austria) on assignment in Moscow, shall be a
Retained Employee, provided, however, that Buyer shall have exclusive use
of his services for so long as he remains employed by Control Data GmbH.
Seller agrees that it will not change Thomas Kirsten's salary, benefits or
other payments currently being made to Thomas Kirsten nor will Seller
terminate Thomas Kirsten unless it receives written instructions from Buyer
to take such action. Buyer agrees to pay all severance and other costs
related to such termination pursuant to the terms of his employment
contract if such exists or as prescribed by German Law in the absence of
such contract. For so long as Thomas Kirsten remains employed by Seller,
Seller shall send Buyer a monthly statement detailing all direct expenses
incurred in connection with Thomas Kirsten's employment with Control Data
GmbH, including salary and benefits. Buyer agrees to remit such amount to
Seller within ten days after receipt of such statement provided Buyer does
not have a good faith reason to dispute any amount contained thereon. If
Thomas Kirsten is employed pursuant to an employment contract, Seller will
cause Control Data GmbH to assign its benefits under such contract to Buyer
or a designated subsidiary of Buyer.
(iv) Buyer and Seller agree that George Zyzanski who is
currently employed by Control Data Systems Canada, Ltd. shall be a
Transferred Employee and shall as of the Closing Date become an employee of
AmeriData Global Canada, Ltd. Seller shall have use of Mr. Zyzanski's
services for so long as he remains employed by AmeriData Global Canada,
Ltd. Buyer agrees that it will not change George Zyzanski's salary,
benefits or other payments currently being made to George Zyzanski nor will
Buyer terminate George Zyzanski unless it receives written instructions
from Seller to take such action. Seller agrees to pay all severance and
other costs related to such termination pursuant to the terms of his
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employment contract if such exists or as prescribed by Canadian Law in the
absence of such contract. For so long as George Zyzanski remains employed
by Buyer, Buyer shall send Seller a monthly statement detailing all direct
expenses incurred in connection with George Zyzanski's employment with
AmeriData Global Canada, Ltd., including salary and benefits. Seller
agrees to remit such amount to Buyer within ten days after receipt of such
statement provided Seller does not have a good faith reason to dispute any
amount contained thereon. If George Zyzanski is employed pursuant to an
employment contract, Buyer will cause AmeriData Global Canada, Ltd. to
assign its benefits under such contract to Seller or a designated
subsidiary of Seller.
Section 8.04 Survival of Representations and Warranties;
Indemnities. (a) All covenants and agreements of the parties made in this
Agreement or provided herein shall survive the Closing Date as provided
herein; provided, however, that if any party has actual knowledge (based
solely on written documentary evidence received by such party on or prior
to two business days prior to the Closing Date) of the breach of a covenant
contained herein by another party hereto, and such party nonetheless
consummates the transactions contemplated by this Agreement, such party
shall be deemed to have waived its rights (including the right to seek
damages) with respect to such breach of covenant. All representations and
warranties of the parties made in this Agreement or as provided herein
shall survive the Closing Date and continue thereafter until April 30, 1997
notwithstanding any investigation at any time made by or on behalf of the
other party; provided, however, that the representations and warranties
relating to any Tax and any environmental matter shall survive until the
applicable statute of limitations (or any extension thereof) has expired
(as the case may be, the applicable "Survival Period"); and provided,
further, that, any representation or warranty which is the subject of a
claim or dispute asserted prior to the expiration of the Survival Period
shall survive with respect to such claim or dispute until final resolution
thereof.
(b) Seller hereby agrees to indemnify and hold Buyer and its
shareholders, affiliates, employees officers and directors harmless from
and against any and all claims, liabilities, losses, damages or injuries,
together with costs and expenses, including reasonable legal fees
("Losses"), arising out of or resulting from (i) any and all liability
whatsoever, and however imposed (including any claim asserted against or
deficiency assessed against or collected from or paid by Buyer, Seller or
any affiliates thereof) for any misrepresentation or breach of warranty in
Section 5.01(h) hereof, (ii) except as set forth in Section 8.03(c) and
except for any Assumed Liabilities, any and all liability whatsoever, and
however imposed, in respect of Employee Related Liabilities, Employee
Benefit Plans or defined benefit pension plans described in this Agreement,
(iii) any and all liability, whatsoever, and however imposed (except to the
extent such liability constitutes an Assumed Liability), in connection with
(x) any misrepresentation or breach of warranty in Section 5.01(j) hereof
and (y) any noncompliance with Environmental Laws requiring cleanup or
remediation under any of the Environmental Laws in connection with the
operation of the Business, (iv) any and all liability whatsoever, and
however imposed, in connection with accounts payable or other liabilities
not recorded on the Closing Balance Sheet, (v) any failure by Buyer or
Seller to comply with the bulk sales laws or equivalent laws in each of the
OUS Jurisdictions, unless the Loss is caused by Buyer's failure to pay any
amount due and owing to a creditor, (vi) any litigation, action, suit,
proceeding or investigation pending or threatened, known or unknown to
which any Subsidiary is a party and any liabilities related thereto or
arising therefrom on or prior to the Closing Date, except to the extent of
the amounts reflected or reserved therefor on the
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Closing Balance Sheet, (vii) any breach of the representations and
warranties made by Seller in this Agreement (except representations and
warranties contained in Sections 5.01(h) and 5.01(j)), (viii) any breach in
any material respect by Seller, unless deemed to be waived pursuant to
Section 8.04(a) hereof, of any covenant or agreement of Seller contained in
or arising out of this Agreement, (ix) any Excluded Liabilities or (x) any
and all actions, suits, proceedings, claims, demands, assessments and
judgments incidental to the foregoing or the enforcement of such
indemnification.
Notwithstanding the foregoing, Seller shall not have any
liability under this Section 8.04(b) in respect of any claim for
indemnification pursuant to clauses (vii) through (ix) and clause (x)
(solely as its relates to clauses (vii) through (ix) of this Section
8.04(b)), where the amount of Loss otherwise subject to indemnification is
less than $500,000; provided, however, to the extent such Losses exceed
$500,000, Seller shall be liable for the first $3.5 million in excess of
$500,000. In addition to any liability pursuant to the immediately
preceding sentence, to the extent such Losses exceed $4 million, Seller
shall be liable for 50% of any Losses in excess of $4 million, but in no
event shall Seller's aggregate liability on a cumulative basis under this
Section 8.04(b) exceed $20 million. Seller's obligation to indemnify Buyer
other than with respect to clauses (i) and (ii) of Section 8.04(b) and
other than with respect to the breach of any covenant contained herein
shall terminate on April 30, 1997.
(c) Buyer agrees to defend, indemnify and hold Seller, its
shareholders and affiliates and their respective officers and directors
harmless from and against any and all Losses, arising out of or resulting
from (i) any incorrectness or incompleteness in the representations and
warranties made by Buyer in this Agreement, (ii) any breach in any material
respect by Buyer, unless waived, of any covenant or agreement of Buyer con
tained in this Agreement and (iii) the business conducted by Buyer, or
otherwise in connection with the Purchased Assets after the Closing Date.
Notwithstanding the foregoing, Buyer shall not have any liability under
this Section 8.04(c) in respect of any claim for indemnification where the
amount of Loss claimed or actually incurred is less than $500,000;
provided, however, to the extent such Losses exceed $500,000, Buyer shall
be liable for the full amount of such Loss in excess of $500,000. Buyer's
obligation to indemnify Seller shall terminate on April 30, 1997 other than
with respect to the breach of any covenant contained herein.
(d) Each party shall retain its own counsel and defend itself,
subject to being reimbursed by the Indemnifying Party (as defined below)
for reasonable attorneys' fees and expenses pursuant to this Section 8.04.
Promptly after the receipt by any party hereto of notice of any claim,
action, suit or proceeding of any third party which is subject to
indemnification hereunder, such party (the "Indemnified Party") shall give
written notice of such claim to the party obligated to provide
indemnification hereunder (the "Indemnifying Party") as promptly as
practicable after receipt of notice thereof, stating the nature and basis
of such claim and the amount thereof, to the extent known; provided,
however, that failure to give such notice shall not affect the right to
indemnity hereunder except to the extent of any actual Loss caused by the
failure to so notify. The Indemnifying Party shall be entitled to
participate in the defense or settlement of such matter and the parties
agree to cooperate in any such defense or settlement and to give each other
full access to all information relevant thereto. The Indemnifying Party
shall not be obligated to indemnify the other party hereunder for any
settlement entered into without the Indemnifying Party's prior written
consent, which consent shall not be unreasonably withheld. If the
Indemnified Party does not assume the
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defense of any such claim or litigation contemplated hereby, the
Indemnifying Party may defend against such claim or litigation in such
manner as it may deem appropriate, including settling such claim or
litigation, after giving reasonable notice of the same to the Indemnified
Party (which reasonable notice shall not be less than 5 days) on such terms
as the Indemnifying Party may reasonably deem appropriate; provided,
however, that the Indemnifying Party may not settle any such claim or
litigation other than by payment of damages without the prior written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld or delayed. With respect to any issue involved in any such claim,
as to which the Indemnifying Party shall have acknowledged in writing the
obligation to indemnify the Indemnified Party hereunder, the Indemnifying
Party shall have the sole right to defend, settle or otherwise dispose of
such claim, on such terms as the Indemnifying Party, in its sole
discretion, shall deem appropriate; provided that such terms do not result
in any expense to the Indemnified Party.
(e) The amount of any Losses for which indemnification is
provided under this Section 8.04 shall be reduced to take account of any
net Tax benefit actually realized and which resulted in the receipt of cash
by the Indemnified Party, and shall be increased to take account of any net
Tax detriment which resulted in an out-of-pocket cash expenditure by the
Indemnified Party arising from the incurrence or payment of any such Losses
or from the receipt of any such indemnification payment and shall be
reduced by the insurance proceeds received and any other amount, if any,
recovered from third parties by the Indemnified Party (or its affiliated
entities) with respect to any Losses. If an Indemnified Party is entitled
to a Tax benefit and it is customary with respect to each such Indemnified
Party's normal business practice to receive such Tax benefit in cash, the
Indemnified Party will not make an election to receive such benefit in a
form other than cash. If any Indemnified Party (or its affiliated
entities) shall have received any payment pursuant to this Section 8.04
with respect to any Loss and shall subsequently have received insurance
proceeds or Tax benefit as contemplated in the second preceding sentence,
or with respect to such Loss, then such Indemnified Party (or its
affiliated entities) shall promptly pay over to the Indemnifying Party the
amount so recovered (after deducting the amount of the expenses incurred by
it in procuring such recovery), but not in excess of the amount previously
so paid by the Indemnifying Party.
(f) Seller acknowledges that irreparable damage would result if
the provisions of Sections 8.01(d) and 8.03(b) were not complied with in
accordance with their respective specific terms. Accordingly, Seller
agrees that Buyer, subject to Section 9.02(b), shall have the right, in
addition to any other rights or remedies it may have, to injunctive relief,
in respect of any failure on the part of Seller to comply with provisions
of Sections 8.01(d) and 8.03(b). Other than injunctive relief, the
indemnification provided by this Section 8.04 shall be Buyer's exclusive
remedy for all matters arising out of the transactions contemplated hereby.
Section 8.05 Allocations of Purchase Price. Buyer and Seller
agree for tax and accounting purposes, to allocate Purchase Price among
Seller and its Subsidiaries as set forth in Schedule 8.05 and Section
2.01(c) hereof. Following the Closing, if Buyer is required by statute to
prepare IRS Form 8594, Buyer shall provide to Seller copies of such IRS
Form 8594 and any required exhibits thereto with Buyer's proposed
allocation of the purchase price among the Purchased Assets. Such
allocation shall be based on the fair market value of each Purchased Asset
at Closing and otherwise in a manner consistent with Section 1060 of the
Code and the regulations thereunder and this Section 8.05. Within 30 days
after
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the receipt of such Form 8594, Seller shall propose to Buyer any changes to
such Form 8594 or shall indicate its concurrence therewith. The failure by
Seller to propose any changes within such 30 days shall be deemed to be an
indication of Seller's concurrence with such form as proposed by Buyer.
Buyer and Seller shall endeavor in good faith to resolve any differences
with respect to the items on Form 8594. Notwithstanding the foregoing, if
Buyer and Seller are unable to resolve such differences, then such
differences shall be resolved in accordance with Section 8.06. Seller and
Buyer hereby covenant and agree that it will not take, and will cause each
of its subsidiaries not to take, a position on any foreign, federal, state
or local tax return that is in any way inconsistent with the allocation
made pursuant to this Section 8.05, unless advised by counsel that it may
not take such position without violating applicable law or without
incurring penalties.
Section 8.06 Resolution of Disputes. Buyer and Seller shall
promptly seek to resolve any dispute arising under Section 8.05 of this
Agreement. If Buyer and Seller are unable to resolve any such dispute,
Buyer and Seller will select an accounting firm (if the dispute is
financial in nature) and/or an independent appraisal firm (if the dispute
is one of valuation) mutually acceptable to them to resolve any remaining
disputes. If Buyer and Seller are unable to agree on the choice of an
accounting firm and/or an appraisal firm, they will select a nationally
recognized accounting firm or appraisal firm by lot (after excluding their
respective regular outside accounting firms and/or appraisal firms). Buyer
and Seller will share equally the fees and expenses of the accounting firm
and/or appraisal firm designated to resolve outstanding disputes. Buyer
and Seller shall be bound by the determinations of such accounting firm
and/or appraisal firm.
ARTICLE IX
Termination
Section 9.01 Termination. Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated and
abandoned at any time prior to the Closing Date:
(a) by the mutual written consent of Buyer and Seller;
(b) by Buyer or Seller if the Closing shall not have occurred on
or before November 15, 1995 (provided that the right to terminate this
Agreement under this clause (b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause
of or resulted in the failure of the Closing to occur on or before such
date);
(c) by Buyer or Seller if the conditions to such party's
obligations shall not have been met, and it is reasonably likely that such
conditions will not be met on or prior to November 15, 1995 (provided that
the right to terminate this Agreement under this clause (c) shall not be
available to any party who is directly or indirectly responsible for the
other party's failure to satisfy the conditions to Closing under this
Agreement);
(d) by Buyer or Seller if any court of competent jurisdiction in
the United States of America or any OUS Jurisdiction or any federal, state,
local or foreign governmental
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body shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase by Buyer of
the Purchased Assets and such order, decree, ruling or other action shall
have become final and non-appealable; provided, however, that if any court
in any OUS Jurisdiction or any foreign governmental body restrains, enjoins
or otherwise prohibits Buyer from purchasing the Purchased Assets located
in one or more OUS Jurisdictions, Buyer may, in its sole discretion, elect
to terminate its obligations pursuant to this Agreement with respect to the
Purchased Assets located in such OUS Jurisdictions. In the event Buyer
makes such an election, the Purchase Price shall be reduced by the amount
of the Purchase Price allocated to such OUS Jurisdictions as set forth on
Schedule 3.01(a).
(e) by Buyer or Seller if there shall have been a material
breach by the other party of any of its representations, warranties,
covenants or agreements contained in this Agreement or in any certificate,
Schedule or other document furnished by such party pursuant to this
Agreement and such breach shall not have been cured within 30 days after
notice thereof shall have been received by the party alleged to be in
breach; and
(f) by Seller upon the consummation of a change in control (as
defined for purposes of Item I of the Current Report on Form 8-K) of Seller
or a sale of all or substantially all of the assets of Seller.
Section 9.02 Effect of Termination; Termination Fee. (a) Upon
termination of this Agreement pursuant to Subsections (a)-(d) (and in the
case of a non-intentional breach of the representations, warranties and
covenants contained herein pursuant to Subsection (e)) of Section 9.01
hereof, no party shall have any liability or obligations under this
Agreement (except to observe the confidentiality provisions contained in
Section 8.03(b) hereof), and each party shall bear the expenses incurred by
it.
(b) Upon termination of this Agreement pursuant to Subsection
(e) of Section 9.01 hereof (in the case of an intentional misrepresentation
or intentional breach or warranty or an intentional default), the breaching
or misrepresenting party shall (i) pay to the other party by wire transfer
in immediately available funds a fee of $1,000,000 and (ii) shall reimburse
the other party up to a maximum of $500,000 for the actual costs and
expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby (including, without limitation, legal,
investment banking, accounting and other out-of-pocket expenses).
(c) Upon termination of this Agreement pursuant to Subsection
(f) of Section 9.01 hereof, Seller shall pay to Buyer by wire transfer in
immediately available funds a fee of $1,000,000 and (ii) shall reimburse
Buyer up to a maximum of $2,000,000 for the actual costs and expenses
incurred by Buyer in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, legal, investment
banking, accounting and other out-of-pocket expenses).
(d) Upon any termination of this Agreement other than as
provided in subsections (a), (b) and (c) of this Section 9.02, the
terminating party shall pay to the other party by wire transfer in
immediately available funds a fee of $1,000,000 and (ii) shall reimburse
the other party up to a maximum of $500,000 for the actual costs and
expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby
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(including, without limitation, legal, investment banking, accounting and
other out-of-pocket expenses).
(e) Buyer and Seller agree that if a termination fee becomes
payable pursuant to Subsections (b), (c) or (d) of Section 9.02 such
termination fee shall be the sole and exclusive remedy under this Agreement
for the non-terminating or non-breaching party and that the terminating or
breaching party shall have no further liability for damages, monetary or
otherwise, to the other party in connection with this Agreement and the
transactions contemplated hereby.
ARTICLE X
Miscellaneous
Section 10.01 Expenses. Except as set forth in Article IX, each
of the parties hereto shall bear the fees and expenses relating to its
compliance with the various provisions of this Agreement and its covenants
to be performed hereunder, and each party shall pay all expenses (including
legal fees and expenses) incurred by it in connection with this Agreement
and the transactions contemplated hereby.
Section 10.02 Benefit; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and not to any other person, except that
all Indemnified Persons are deemed to be third-party beneficiaries of this
Agreement. This Agreement shall not be assigned by any party hereto
without the written consent of the other party hereto, except that (a) the
rights and obligations of Buyer may be assigned in whole or in part to
Parent or any subsidiary of Parent.
Section 10.03 Governing Law. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the State of
Minnesota.
Section 10.04 Notices. Except as otherwise specifically
provided in this Agreement, all notices and other communications hereunder
shall be in writing and deemed to have been duly given when delivered by
hand, five business days after post-marked when mailed by registered or
certified mail, postage prepaid, return receipt requested, when given by
prepaid courier delivery services such as Federal Express, DHL or other
similar services on the day following the date that such notice is
delivered to such courier, or when given by facsimile transmission upon
receipt by sender of confirmed answer-back, as follows:
(a) if to Buyer, at
ADA Global, Inc.
700 Canal Street
Stamford, Connecticut 06902
Attention: Gwen Higgins, Esq.
Facsimile: (203) 357-1531
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<PAGE>
with copies to:
AmeriData Technologies, Inc.
700 Canal Street
Stamford, Connecticut 06902
Attention: Gwen Higgins, Esq.
Facsimile: (203) 357-1531
and
Dewey Ballantine
1301 Avenue of the Americas
New York, N.Y. 10019
Attention: E. Ann Gill, Esq.
Facsimile: (212) 259-6333
(b) if to Seller, at
Control Data Systems, Inc.
4201 Lexington Avenue North
Arden Hills, Minnesota 55126-6198
Attention: General Counsel
Facsimile: (612) 482-4757
with a copy to:
Fredrikson & Byron, P.A.
1100 International Centre
900 Second Avenue South
Minneapolis, Minnesota 55402-3397
Attention: Keith Libbey, Esq.
Facsimile: (612) 347-7077
or at such other address as either such party shall request in writing.
Section 10.05 Headings. The headings of the articles, sections
and paragraphs contained in this Agreement are for convenience of reference
only and do not form a part hereof and in no way modify the meanings of
such articles, sections and paragraphs.
Section 10.06 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
This Agreement shall become effective when one or more counterparts have
been signed by each of the parties hereto and delivered to the other
parties.
Section 10.07 Entire Agreement. This Agreement including the
exhibits hereto and the documents referred to herein contains all the terms
agreed upon by the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, arrangements or understandings between
such parties as to the subject matter hereof. All
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<PAGE>
"side letters" executed in conjunction with the transactions contemplated
by this Agreement shall be governed by and subject to the terms and
provisions of this Agreement except to the extent expressly stated to the
contrary in such side letters.
Section 10.08 Waiver; Amendment;. The parties may, by written
agreement (a) extend the time for the performance of any of the obligations
or other acts of the parties hereto or (b) waive any inaccuracies or
breaches in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement. This Agreement
may be amended or modified only by a written agreement executed by the
parties hereto or by their successors and assigns.
Section 10.09 Severability. To the extent that any provision of
this Agreement shall be invalid or unenforceable, it shall be considered
deleted herefrom and the remainder of such provision and of this Agreement
shall be unaffected and shall continue in full force and effect. In
furtherance and not in limitation of the foregoing, if the duration or
geographic extent of, or business activity covered by, any provision of
this Agreement shall be in excess of that which is enforceable under
applicable law, then such provision shall be construed to cover only that
duration, extent or activities which may be validly and enforceable
covered.
Section 10.10 Guarantee of Buyer's Parent. Parent hereby agrees
to be responsible for and guarantee the prompt performance, subject to the
terms and conditions applicable to Buyer under this Agreement, the
Schedules and Exhibits hereto and the Supplemental Agreements, of all of
the agreements, covenants and obligations of Buyer under this Agreement,
the Schedules and Exhibits, the Supplemental Agreements and any other
agreements entered into in connection with the transactions contemplated
hereby and thereby. Parent agrees that Seller shall, in seeking
enforcement hereof, not be required first to proceed against Buyer or first
to realize upon or exhaust any or all rights of enforcement Seller may have
against Buyer.
Section 10.11 Guarantee of Seller. Seller hereby agrees to be
responsible for and guarantee the prompt performance, subject to the terms
and conditions applicable to the Subsidiaries under the Schedules and
Exhibits hereto and the Supplemental Agreements, of all of the agreements,
covenants and obligations of the Subsidiaries under the Supplemental
Agreements and any other agreements entered into in connection with the
transactions contemplated thereby. Seller agrees that Buyer shall, in
seeking enforcement hereof, not be required first to proceed against any of
the Subsidiaries or first to realize upon or exhaust any or all rights of
enforcement Buyer may have against any of the Subsidiaries.
Section 10.12 Buyer's Knowledge of. Buyer hereby agrees that,
to the extent any representation or warranty of Seller made herein or
pursuant hereto, is, to the actual knowledge of those officers of Buyer set
forth in the definition of Knowledge contained in Appendix A hereto (based
solely on written documentary evidence made available or delivered to any
such officer no less than two business days prior to the Closing Date),
untrue or incorrect, if Buyer elects to consummate the transactions
contemplated hereby: (a) Buyer shall have no rights under this Agreement
or otherwise by reason of such untruth or inaccuracy, and (b) any such
representation or warranty by Seller shall be deemed to be amended to the
extent necessary to render it consistent with such knowledge of Buyer.
Section 10.13 Jurisdiction. Buyer and Seller hereby agree that
if, in accordance with its rights and remedies hereunder such party
commences any suit, action or
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proceeding naming the other party as a defendant thereto, it shall, in the
case of Buyer, commence such suit, action or proceeding in a Minnesota
state or court or tribunal (or federal court located in such state) and, in
the case of Seller, commence such suit, action or proceeding in a New York
state court or tribunal (or federal court located in such state).
Section 10.14 Applicability. Buyer and Seller agree that the
terms, covenants and agreements contained herein shall not be applicable
to the parties hereto with respect to any OUS Jurisdiction in which a
Closing does not occur.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the day and year first above written.
CONTROL DATA SYSTEMS, INC.
By:/s/ Joseph Killoran
Joseph Killoran
Chief Financial Officer
ADA GLOBAL, INC.
By:/s/ Leonard J. Fassler
Leonard J. Fassler
Chairman
AMERIDATA TECHNOLOGIES, INC.
By:/s/ Leonard J. Fassler
Leonard J. Fassler
Co-Chairman
By:/s/ Gwen M. Higgins
Gwen M. Higgins
Secretary
<PAGE>
APPENDIX A
DEFINITIONS
The following terms shall have the following meanings for all purposes of
this Agreement and such meanings are equally applicable both to the
singular and plural forms of the terms defined.
"Customer Base" shall have the meaning provided in Section
8.01(c)(ii).
"Additional OUS Jurisdictions" shall have the meaning provided in
Section 2.01(d).
"Assigned Agreements" shall mean the Operating Agreements and the
Real Property Leases.
"Assignment and Assumption Agreements" shall mean assignment and
assumption agreements in form and substance customary for each OUS
Jurisdiction as shall have been prepared by counsel in each OUS
Jurisdiction conveying the Assumed Liabilities at the Closing Date.
"Assumed Liabilities" shall have the meaning provided in Section
2.01(d).
"Bills of Sale" shall mean bills of sale in form and substance
customary for each OUS Jurisdiction as shall have been prepared by counsel
in each OUS Jurisdiction conveying the Purchased Assets at the Closing
Date.
"Business" shall mean the product fulfillment and maintenance
business conducted by the Subsidiaries and the product fulfillment and
maintenance business conducted by Seller in each of the OUS Jurisdictions
prior to the Closing Date excluding the Retained Businesses.
"Buyer Subsidiaries" shall mean AmeriData Global de Mexico, S.A.
de C.V., AmeriData Global Canada, Ltd. and AmeriData U.K., Ltd.
"Ceridian" shall have the meaning provided in Section 2.01(d).
"Closing" shall have the meaning provided in Section 4.01.
"Closing Balance Sheet" shall mean a combined balance sheet of
the Business reflecting the Purchased Assets and Assumed Liabilities of the
Business as of the close of business on the Closing Date which shall be
prepared in accordance with Section 3.02 hereunder.
"Closing Date" shall have the meaning provided in Section 4.01.
"Closing Date Net Asset Amount" shall have the meaning provided
in Section 3.01.
APPENDIX A-1-1
<PAGE>
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company Personnel" shall mean current or former employees,
officers, directors or consultants of Seller or any Subsidiary with respect
to the Business.
"Employee Benefit Plans" shall mean all pension, annuity,
retirement, stock option, stock purchase, savings, profit sharing or
deferred compensation plans or agreements, and any retainer, consultant,
bonus, group insurance, welfare, health and disability plan, fringe benefit
or other incentive or benefit contract, plan, or commitment or arrangement
applicable to Company Personnel.
"Employees" shall mean all full and part-time employees of Seller
or any Subsidiary working in the Business.
"Employee Related Liabilities" shall mean any and all liabilities
arising out of or related to the employment by Seller or any Subsidiary of
any Employee or Company Personnel on or prior to the Closing Date
including, without limitation, liability for, related to or arising out of
salary, benefits or other compensation of any Employee or Company
Personnel, the terms and conditions of the employment of the Employees or
any termination or deemed termination of any Employee (including, without
limitation any actual or alleged discrimination, harassment or similar
treatment), prior to the Closing Date.
"Employment Contracts" shall mean all employment contracts,
consulting agreements, and collective bargaining agreements or labor
agreements with respect to employees of the Business except such employment
contracts or agreements which arise by operation of law.
"Encumbrance" shall mean any mortgage, claim, lien, pledge,
option, charge, security interest or other similar interest.
"Environmental Laws" shall have the meaning provided in Section
5.01(j)(ii) of the Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agreement" shall have the meaning provided in Section
4.03.
"Escrow Amount" shall mean $1,500,000.
"Exchange Act" shall have the meaning provided in Section
5.01(q).
"Excluded Assets" shall have the meaning provided in Section
2.01(b).
"Excluded Liabilities" shall have the meaning provided in Section
2.01(d).
"Financial Statements" shall mean collectively, a statement of
income, a statement of stockholders' equity, a statement of cash flow and a
balance sheet.
APPENDIX A-1-2
<PAGE>
"Furnishings" shall mean the commercial vehicles, fixtures,
equipment (including computer equipment used in the operation of the
Business), leasehold improvements, security systems, telephone systems,
display stands, furniture and similar furnishings used in the operation of
the Business but shall not include any Excluded Assets.
"GAAP" shall mean generally accepted accounting principles in
effect in the United States of America.
"Hazardous Substances" shall have the meaning provided in Section
5.01(j)(iii) of the Agreement.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
"Indemnified Party" shall have the meaning provided in Section
8.04(d) of the Agreement.
"Indemnifying Party" shall have the meaning provided in Section
8.04(d) of the Agreement.
"Intangibles" shall mean all intangibles of Seller and its
Subsidiaries used in the Business but shall not include any Intellectual
Properties or Excluded Assets.
"Intellectual Property" shall mean all patents of any description
and pending applications therefore, all registrations of trademarks and of
other marks, all registrations of trade names, assumed names, service
marks, logos, labels or other trade rights, all pending applications for
any such registrations, all copyright registrations and pending
applications therefor, all other copyrights, trademarks and other marks,
trade names assumed names, service marks, logos, jingles, program rights,
non-governmental licenses, computer programs and slogans, and all other
inventions and designs, whether or not patentable, all to the extent that
the foregoing items are used in the Business as of the date of this
Agreement, but shall not include any Excluded Assets.
"Interests" shall have the meaning provided in Section 8.02(a).
"Inventory" shall mean products held for sale in the ordinary
course of business in Seller's or any Subsidiary's inventory used in the
operation of the Business. Inventory shall be valued in Seller's and its
Subsidiaries' inventory records in accordance with GAAP at the lower of
cost or market. Inventory shall not include property, products, fixtures
and equipment used in the day-to-day operation of the Business or any of
the Other Property.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" of a party or "Known" means, with respect to Seller
or its Subsidiaries, the actual knowledge of Joseph F. Killoran and with
respect to Buyer, the actual knowledge of Leonard J. Fassler.
"Leases" shall mean all leases for personal property to which
Seller or a Subsidiary is a party as lessor or lessee which is used in the
operating of the Business.
APPENDIX A-1-3
<PAGE>
"Loss" shall have the meaning provided in Section 8.04(b).
"Management Systems" shall mean the hardware and software systems
used by Seller or any Subsidiary to process financial, inventory and other
information in connection with the Business, including any data files used
thereon and computer software thereof.
"Material" or "Materiality" shall mean that which is material to
the Business taken as a whole; provided, however, Seller, at its option may
include in the Schedules or other disclosures to this Agreement items which
are not "material" within the meaning of the immediately preceding sentence
and such inclusion shall not be deemed to be an acknowledgement by Seller
that such items are "material" or otherwise used to interpret the meaning
of such term for purposes of this Agreement.
"Material Adverse Effect" shall mean an event, circumstance, fact
or condition which (i) would reasonably be expected to result in (A) a
decrease in the revenues generated by the operation of the Business equal
to or in excess of $5 million, (B) a decrease in the operating profit of
the Business equal to or in excess of $650,000 or (C) a decrease in the net
assets used in the operation of the Business equal to or in excess of
$650,000 or (ii) individually or in the aggregate materially adversely
affect (A) the ability of Seller and its Subsidiaries to perform their
obligations hereunder and under the Supplemental Agreements or (B) the
ability of Buyer to conduct the Business following the Closing Date in a
manner substantially similar to the manner in which it is currently
conducted.
"Mexican Receivables" shall have the meaning provided in Section
2.01(b).
"Negative Differential" shall have the meaning provided in
Section 3.02(a).
"Operating Agreements" shall have the meaning provided in Section
5.01(d)(1).
"Other Property" shall mean the Furnishings and Management
Systems.
"OUS Jurisdiction" shall mean each of Austria, Canada, Greece,
Mexico, Norway, Portugal and the United Kingdom
"PCB" shall have the meaning provided in Section 5.01(j)(v).
"Permits" shall have the meaning provided in Section 5.01(j)(i).
"Permitted Encumbrances" shall mean such easements, licenses,
rights of way, restrictions of record, and other rights and privileges in
the nature of the foregoing with respect to the Real Property Leases and
Real Property: (1) as in each case are of record or otherwise disclosed to
Buyer in writing on or prior to the date hereof, (2) as may be a statutory
lien for Taxes not yet due and payable, if any.
"Positive Differential" shall have the meaning provided in
Section 3.02(a).
"Purchase Price" shall have the meaning provided in Section 3.01.
APPENDIX A-1-4
<PAGE>
"Purchase Price Down Payment" shall mean $14,000,000.
"Purchased Assets" shall have the meaning provided in Section
2.01.
"Purchased Subsidiary" shall have the meaning provided in Section
2.01(a)(v).
"Qualified Documents" shall mean all documents pertaining to
Purchased Assets, including financial and operating records, manuals,
certificates of occupancy, surveys, construction drawings and personnel
records.
"Real Property" shall mean any right, title and interest of
Seller and any of its Subsidiaries in and to the real property, interests
in real property and buildings, structures and other improvements used in
connection with the operation of the Business.
"Real Property Leases" shall mean the leases described in
Schedule 5.01(d)(3)(i), as in effect on the date of execution of this
Agreement, pursuant to which Seller or any Subsidiary is a party as lessor
or lessee.
"Receivables" shall mean all of Seller's or any Subsidiary's
outstanding accounts receivable arising from the lease or sale of goods or
for services rendered in the Business, and other receivables, including,
but not limited to, receivables relating to contra-payable balances in the
payable accounts of Seller or any Subsidiary and receivables attributable
to manufacturers' and other vendors' reimbursement policies.
"Release" shall have the meaning provided in Section
5.01(j)(iii).
"Retained Businesses" shall mean all of the ICEM, Product Data
Management and Electronic Commerce operations of Seller and its
Subsidiaries as conducted on the Closing Date other than the ICEM
operations in the Territory as defined in the Distribution Agreement.
"Retained Business Employees" shall have the meaning provided in
Section 5.01(o)(ii).
"Returns" shall have the meaning provided in Section 5.01(h).
"Roberts Termination Agreements" shall have the meaning provided
in Section 2.01(a).
"Seller Customer Base" shall have the meaning provided in Section
8.01(c)((iii).
"Services Agreements" shall have the meaning provided in Section
2.01(a).
"Shared Assets" shall mean assets that as of the Closing Date are
used in the operation of both the Business and the Retained Business or in
both the Business and any other business of Seller or any subsidiary of
Seller.
"Sites" shall have the meaning provided in Section 5.01(j)(i).
APPENDIX A-1-5
<PAGE>
"Specified Exchange Act Filings" means, with respect to the
Seller or AmeriData Technologies, Inc., as appropriate, (i) the most recent
Annual Report on Form 10-K filed with the Securities and Exchange
Commission (the "Specified 10-K") by such entity, (ii) each Quarterly
Report on Form 10-Q and Current Report on Form 8-K filed with the
Securities and Exchange Commission since the filing of the Specified 10-K
by such entity, and (iii) proxy statements filed with the Securities and
Exchange Commission since the filing of the Specified 10-K by such entity.
"Subsidiaries" shall mean the subsidiaries (whether or not wholly-
owned) of Seller set forth in Schedule 5.01(c).
"Supplemental Agreements" shall mean the Escrow Agreement, Tax
Matters Agreement, the MIS Services Agreement, the Central Support
Agreement, the Administrative Services Agreement, the Spare Parts
Agreement, the License Agreement, the Assignment and Assumption Agreements
and the Bills of Sale.
"Survival Period" shall have the meaning provided in Section
8.04(a).
"Tax" or "Taxes" shall mean all taxes, charges, fees, levies or
other assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, severance,
stamp, occupation, property or other taxes, customs, duties, fees,
assessments or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax or additional amounts imposed by any
taxing authority (domestic or foreign) upon Seller or any of its
Subsidiaries.
"Transferred Employees" shall have the meaning provided in
Section 8.01(h).
"U.K. Transferred Employee" shall have the meaning provided in
Section 8.03(c)(v).
APPENDIX A-1-6
