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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
VALTECH S.A.
AND
OBJECTSPACE, INC.
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TABLE OF CONTENTS
Section Page
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1. PURCHASE AND SALE OF SHARES.........................................................1
(a) Purchase and Sale...............................................................1
(b) Purchase Price..................................................................1
2. CLOSING.............................................................................2
(a) Location and Time...............................................................2
(b) Costs...........................................................................2
(c) Closing Deliveries by Seller....................................................2
(d) Closing Deliveries by Purchaser.................................................3
3. Labor and Employment Matters........................................................4
(a) Employment......................................................................4
(b) Construction....................................................................4
(c) Additional Covenants............................................................4
4. REPRESENTATIONS AND WARRANTIES OF SELLER............................................5
(a) Organization....................................................................5
(b) Capitalization..................................................................5
(c) Authorization of Agreement......................................................5
(d) Tax Matters.....................................................................6
(e) Actions, Suits, Proceedings.....................................................7
(f) Compliance with Applicable Laws and Other Instruments...........................7
(g) Contributor of Assets to NewCo..................................................7
(h) Title to the Operating Assets...................................................8
(i) Intellectual Property Rights....................................................8
(j) Contracts, Leases, Commitments and Agreements...................................9
(k) Composition and Condition of Operating Assets...................................9
(l) Major Suppliers and Customers...................................................9
(m) Financial Statements............................................................9
(n) Business Changes................................................................9
(o) Employee Benefit Matters; ERISA................................................11
(1) Pension Plans.............................................................11
(2) Multiemployer Plans.......................................................11
(3) Welfare Plans.............................................................12
(4) Benefit Arrangements......................................................12
(5) Fiduciary Duties and Prohibited Transactions..............................12
(6) Litigation................................................................12
(7) Unpaid Contributions......................................................13
(8) Change of Control Payments and Compensation Deduction Limitations.........13
(9) Copies of Documentation...................................................13
(p) Labor Matters..................................................................14
(q) Government License and Regulation..............................................15
(r) Liabilities of Newco...........................................................15
(s) Location of Operating Assets...................................................15
(t) Year 2000......................................................................15
(u) Employee Matters...............................................................15
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER........................................15
(a) Corporate Organization.........................................................15
(b) Corporate Authority............................................................16
(c) Litigation and Other Proceedings...............................................16
(d) Investment Intent..............................................................16
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6. COVENANT NOT TO COMPETE............................................................16
7. INDEMNIFICATION....................................................................17
(a) Survival of Representations and Warranties.....................................17
(b) Indemnification by Seller......................................................17
(c) Indemnification by Purchaser...................................................18
(d) Procedures for Indemnification.................................................19
(e) Sole Remedy....................................................................20
8. DISPUTE RESOLUTION.................................................................20
(a) Negotiation....................................................................20
(b) Arbitration....................................................................20
(c) Scope..........................................................................20
(d) Discovery......................................................................21
(e) Court Proceedings..............................................................21
(f) Rulings........................................................................21
(g) Findings of Fact...............................................................21
(h) Authority......................................................................22
(i) Equitable Remedies.............................................................22
(j) Selection of Arbitrator........................................................22
(k) Other Arbitration Provisions...................................................22
9. ADDITIONAL AGREEMENTS..............................................................23
(a) Confidential Information.......................................................23
(b) Continuing Support.............................................................23
(c) Employee List..................................................................24
(d) Governmental Filings...........................................................24
(e) Further Assurances.............................................................24
10. DEFINITION OF CERTAIN TERMS........................................................25
11. MISCELLANEOUS......................................................................35
(a) Further Assurances.............................................................35
(b) Amendments and Waiver..........................................................35
(c) Governing Law..................................................................35
(d) Notices........................................................................35
(e) Benefit........................................................................36
(f) Entire Agreement...............................................................36
(g) Brokers........................................................................37
(h) Disclosure Schedule............................................................37
(i) Counterparts...................................................................37
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LIST OF EXHIBITS AND SCHEDULES
Schedule
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3(a)(i) Newco Employees
3(a)(ii) Terms and Conditions of Employment
4(h) Permitted Encumbrances
4(i) Intellectual Property Rights
4(j) Contracts, Leases, Commitments and Agreements
4(l) Major Suppliers and Customers
4(m) Financial Statements
4(o)(9) ObjectSpace Employee Plans
4(q) Licenses
10(g) Courses
10(o) Intellectual Property
10(v)(1) Personal Property
10(v)(5) Prepaid Assets
10(v)(8) Licenses and Permits
10(v)(9) Logistics Support System
10(w) Contracts
10(aa)(1) Voyager and Catalyst Product Lines
10(aa)(10) Enterprise-wide Licensed Software
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of this 23rd day of September, 1999 by and between VALTECH S.A., a
French SOCIETE ANONYME ("PURCHASER"), and OBJECTSPACE, INC., a Delaware
corporation ("SELLER").
RECITALS
A. Seller has previously directly engaged in, among other things, the business
of providing instructor-led training services dedicated to preparing companies
and their information technology staffs for the development of advanced
technology, other than Seller-owned technology currently existing or developed
in the future (the "BUSINESS").
B. Seller has formed VT Educational Services Corporation, a Delaware corporation
("NEWCO") in order to conduct the Business and, in connection with the formation
of Newco, Seller has contributed substantially all of the assets of Seller
associated with the Business to Newco.
C. Seller owns all of the issued and outstanding common stock of Newco, par
value $0.01 per share (the "COMMON STOCK").
D. Seller desires to sell to Purchaser and Purchaser desires to purchase and
acquire from Seller the Shares upon the terms and conditions set forth herein,
as a result of which Newco will become a wholly-owned subsidiary of Purchaser.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements contained herein, the parties agree as follows:
1. PURCHASE AND SALE OF SHARES
(a) PURCHASE AND SALE. On the terms and subject to the conditions
of this sells, assigns, transfers and delivers to Purchaser, and
Purchaser hereby purchases, one thousand (1,000) shares of Common Stock
(the "SHARES"), free and clear of any and all Liens.
(b) PURCHASE PRICE. The aggregate purchase price for the Shares
shall be Two Million Nine Hundred Thirty-One Thousand Dollars
($2,931,000) (the "PURCHASE PRICE"). All references to "$" and
"dollars" herein shall mean United States dollars. Purchaser hereby
delivers the Purchase Price to Seller concurrent with the execution
hereof as part of the Closing (as hereinafter defined) by wire
transfer of immediately available funds to an account specified by
Seller.
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2. CLOSING.
(a) LOCATION AND TIME. The closing of the transactions
contemplated by this Agreement (the "CLOSING") shall take place at the
offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, simultaneously with the
execution of this Agreement (the "CLOSING DATE").
(b) COSTS. Purchaser and Seller shall each bear their respective
expenses, costs and fees (including attorneys and accountants fees and
expenses) in connection with the transactions contemplated hereby,
including the negotiation, preparation, execution and delivery of this
Agreement and compliance herewith.
(c) CLOSING DELIVERIES BY SELLER. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser:
(1) all documents, certificates and agreement necessary to
transfer to Purchaser title to the Shares, including without
limitation, a certificate or certificates representing the Shares, duly
endorsed for transfer;
(2) duly certified copies of the resolutions adopted by
Seller's board of directors authorizing the execution, delivery and due
performance of this Agreement and all transactions contemplated hereby;
(3) a copy of the Consulting and Training Teaming Agreement,
between Seller and Valtech Technologies, duly executed by Seller (the
"TEAMING AGREEMENT");
(4) a copy of the ▇▇▇▇ of sale, assignment and assumption
agreement between Seller and Newco whereby Seller contributed the
Operating Assets to Newco, duly executed by Seller and Newco;
(5) copies of all assignments from Seller to Newco of all
intangibles constituting a part of the Operating Assets and the
Operating Contracts, licenses, appurtenances and rights relating to the
Business;
(6) duly executed UCC-3 termination (or partial termination,
if appropriate) statements showing termination (or partial termination)
of all UCC-1 financing statements and any other security interests
filed against the Operating Assets;
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(7) evidence that all Liens encumbering the Operating Assets
(other than the Permitted Encumbrances) have been paid as of the
Closing;
(8) copies of all consents and agreements (duly executed by
Seller and Newco) necessary to effect (i) the contribution of the
Operating Assets from Seller to Newco, including, without limitation,
the assignment to Newco of the Operating Contracts, (ii) the assumption
of the Assumed Liabilities by Newco and (iii) the sale of the Shares to
Purchaser;
(9) copies of tax statements from all taxing authorities
showing taxes due for 1998 (and 1999, if available) against or with
respect to the Operating Assets;
(10) an amendment to Seller's Lease, duly executed by Seller
and executed by the Landlord, evidencing the exclusion of the Training
Facility from Seller's Lease;
(11) good standing or similar certificates from the
Secretaries of State and the appropriate taxing authorities of the
States of Delaware and Texas with respect to Seller and Newco;
(12) duly executed resignations of the officers and directors
of Newco, effective immediately following the Closing, from all
positions held by such persons with Newco;
(13) the Certificate of Incorporation, Bylaws and original
minutes of Newco and all other documents relating to the organization,
maintenance and existence of Newco as a corporation; and
(14) such other documents, certificates, instruments or
agreements which Seller is required to deliver to Purchaser or the
Newco Employees pursuant to this Agreement.
(d) CLOSING DELIVERIES BY PURCHASER. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller:
(1) payment of the Purchase Price as provided in Section 1(b);
(2) duly certified copies of the resolutions adopted by
Purchaser's board of directors or similar governing body authorizing
the execution, delivery, and due performance of this Agreement and all
transactions contemplated hereby and all documents to be executed and
delivered hereunder;
(3) a copy of the Teaming Agreement duly executed by Valtech
Technologies; and
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(4) such other documents, certificates, instruments or
agreements which Purchaser is required to deliver to Seller pursuant to
this Agreement.
3. LABOR AND EMPLOYMENT MATTERS.
(a) EMPLOYMENT. Attached hereto as SCHEDULE 3(a)(i) is a list of
all active employees of Newco on the payroll and available for duty on
the Closing Date (the "NEWCO EMPLOYEES"). Such Newco Employees were
previously employed by the Seller in connection with the Business and
ceased to be employed by Seller on the Contribution Date. Effective
from the Closing, Purchaser shall cause Newco (or an affiliate thereof)
to continue the employment of the Newco Employees upon the terms and
conditions for such Newco Employees described on SCHEDULE 3(a)(ii).
(b) CONSTRUCTION. Section 3(a) above is solely for the purpose of
defining the obligations between Purchaser and Seller concerning the
Newco Employees and shall in no way be construed as creating any
employment contract or other contract between Purchaser, Newco, Seller
and/or any employee.
(c) ADDITIONAL COVENANTS. Seller shall:
(1) enter into an amendment to each Newco Employee's existing
option agreements which provide for the purchase of equity securities
of Seller to provide that (i) no such options will terminate as a
result of the Newco Employee's continued employment with Newco
following the Closing, and (ii) any unvested options held by such Newco
Employee shall vest on the earlier of (x) one year anniversary date of
the Closing Date (the "ANNIVERSARY DATE") if such Newco Employee does
not terminate his or her employment with Newco or an affiliate or
successor of Newco on or prior to the Anniversary Date, or (y) the date
on which such Newco Employee ceases to be an employee of Newco, or an
affiliate or successor of Newco, by reason of such Newco Employee's
employment being terminated by Newco or an affiliate or successor of
Newco for any reason other than Cause; and
(2) pay to each such Newco Employee, within thirty days
following December 31, 1999, a "stay in place bonus" in an amount equal
to 25% of such Newco Employee's annual base salary, excluding bonus and
commissions, if any, prior to the Closing if such Newco Employee is
continuously employed by Newco, or an affiliate or successor of Newco,
between the Closing and December 31, 1999; and
(3) on the Closing Date, or as soon as practicable thereafter,
pay each Newco Employee all accrued wage, salary, bonus and commission
for all periods prior to and including the Closing Date to which such
person is entitled; and
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(4) pay or provide for all other employee benefits maintained
by Seller for all periods prior to and including the Closing Date, all
in accordance with applicable law; and
(5) as soon as possible after the Closing Date, but in no
event later than thirty (30) days after the Closing Date, deliver to
Newco copies of amendments to the employment agreements between Seller
and the Newco Employees which evidence certain modifications to the
employment agreements between Seller and the Newco Employees (as former
employees of Seller).
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents
and warrants to Purchaser as follows, each such representation and warranty
being qualified in its entirety by the disclosures set forth on the disclosure
schedule of Seller attached hereto (the "DISCLOSURE SCHEDULE"):
(a) ORGANIZATION. Each of Seller and Newco are
corporations duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of Seller and Newco
has the requisite corporate power and authority to own its property
and assets and to carry on its business as now being conducted.
Each of Seller and Newco is duly qualified, registered or licensed
to do business as a foreign corporation in each other jurisdiction
wherein the nature of its activities or of its properties owned or
leased makes such qualification necessary and failure to be so
qualified, registered or licensed would have a material adverse
effect upon the Business. Except as contemplated by this Agreement,
no stockholder, officer, director or employee of Seller or Newco or
any affiliated entity is currently a party to any transaction with
Seller or Newco relating to any aspect of the Business.
(b) CAPITALIZATION. Newco's entire authorized capital
stock consists of 1,000 shares of Common Stock, of which 1,000
shares are issued and outstanding. All of the Shares have been duly
authorized and are validly issued, fully paid and nonassessable and
have not been issued in violation of any pre-emptive rights. There
are no outstanding or authorized options, rights, warrants, calls,
convertible securities, rights to subscribe, conversion rights or
other agreements or commitments to which Newco or Seller is a party
or which are binding upon Newco providing for the issuance or
transfer by Newco of additional shares of its capital stock, nor
are there any outstanding stock option rights, phantom equity or
similar rights with respect to Newco. There are no voting trusts or
any other agreements or understandings with respect to the voting
of Newco's capital stock. Upon consummation of the transactions
contemplated by this Agreement, Purchaser will own a one hundred
percent (100% ) equity interest in Newco. Seller owns all of the
Shares free and clear of all Liens.
(c) AUTHORIZATION OF AGREEMENT. Seller has the requisite
corporate power and authority to execute and deliver this Agreement
and each of Seller and Newco has the
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requisite power and authority to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement
by Seller and the performance by Seller of its obligations
hereunder have been duly authorized by all necessary action on the
part of Seller. The execution and delivery of this Agreement by
Seller and the consummation of the transactions contemplated hereby
do not and will not conflict with, or result in a breach of, or
constitute a default under, the terms or conditions of the
Certificate of Incorporation or Bylaws of Seller, any court or
administrative order, judgment or decree, any agreement or
instrument to which Seller or Newco is a party or by which Seller,
Newco or any of their assets are bound or, to the knowledge of
Seller, any statute or regulation of any governmental agency. The
execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated hereby do not require
the consent of any third party. This Agreement and all other
instruments required hereby to be executed and delivered by Seller
are, or when delivered will be, valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms,
except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally and except
that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which
any proceedings therefor may be brought.
(d) TAX MATTERS.
(1) Seller does not have any liabilities for Taxes.
(2) Seller has duly and timely filed all Tax Returns
with the appropriate governmental or taxing authority and
has duly completed and correctly reported all income and
all other amounts and information required to be reported
thereon.
(3) Seller has duly and timely paid, accrued or
properly provided for all Taxes, including all
installments on account of Taxes for the current year,
that are due and payable or collectible by Seller.
(4) Neither Seller nor any member of any
affiliated group (within the meaning of Section 1504 of
the Code), combined group, consolidated or unitary group
(any such affiliated, combined, consolidated or unitary
group hereinafter referred to as an "AFFILIATED GROUP")
of which Seller is or was a member has received notice of
any deficiency or assessment from any federal, state,
local or foreign governmental authority with respect to
any liability for Taxes attributable to the Business,
Newco or the Operating Assets. No administrative,
judicial or other proceeding is presently pending with
respect to any Taxes or Tax Returns of Seller or any
member of an Affiliated Group of which Seller is or was a
member or otherwise with respect to the Business, Newco
or the Operating Assets.
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(5) There are no actions, suits, proceedings,
investigations, audits or claims now pending or, to the
knowledge of Seller, threatened against Seller or Newco
in respect of any Taxes and there are no matters under
discussion, audit or appeal with any governmental
authority relating to Taxes.
(6) There are no liens for Taxes upon the assets
of Seller or Newco, including, but not limited to the
Operating Assets, except for liens for Taxes not yet due.
(7) None of the Operating Assets is property
that is or will be required to be treated as being owned
by another person pursuant to the provisions of Section
168(f) of the Code (as in effect prior to the amendment
by the Tax Reform Act of 1986) or is "tax-exempt use
property" within the meaning of Section 168 of the Code.
(8) Seller has timely deducted and withheld and
will deduct and withhold from any amount paid or credited
or deemed paid or credited up to and including the
Closing Date by it to or for the account or benefit of
any person, including, without limitation, any of its
employees, officers or directors, the amount of all Taxes
and other deductions required by any applicable law to be
deducted or withheld from any such amount and has duly
and timely collected and remitted and will collect and
remit the same to the appropriate governmental authority.
(e) ACTIONS, SUITS, PROCEEDINGS. There is no litigation
action, suit, investigation or proceeding (including, without
limitation, condemnation proceedings and actions, suits or
proceedings in respect of product liability claims) pending or, to
the knowledge of Seller, threatened against Seller or any of its
properties or business in any court or before any federal, state,
municipal, foreign or other governmental agency relating to Newco,
the Operating Assets or the Business or the consummation of the
transactions contemplated hereby. Neither Seller, Newco, the
Business nor the Operating Assets are subject to any order, writ,
injunction or decree of any court or governmental agency relating
to Newco, the Business or the Operating Assets.
(f) COMPLIANCE WITH APPLICABLE LAWS AND OTHER INSTRUMENTS.
Prior to the Contribution Date, Seller conducted the Business in
all material respects in compliance with all applicable laws, rules
or regulations of all governmental authorities. Subsequent to the
Contribution Date, Newco has conducted and is conducting the
Business in all material respects in compliance with all applicable
laws, rules or regulations of all governmental authorities. Neither
Seller nor Newco is in violation of their respective Certificates
of Incorporation or Bylaws.
(g) CONTRIBUTION OF ASSETS TO NEWCO. In connection with
the formation of Newco, Seller contributed all of Seller's right,
title and interest in and to the Operating
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Assets to Newco, free and clear of any Liens, other than the Permitted
Encumbrances (as defined below).
(h) TITLE TO THE OPERATING ASSETS. Newco has good and
marketable title to all of the Operating Assets, free and clear of
all Liens that will continue after the Closing Date, except
encumbrances listed and described in SCHEDULE 4(h) hereto (the
"PERMITTED ENCUMBRANCES"). To the extent that any Permitted
Encumbrances contain covenants or obligations by which Newco is
bound, Newco is not in default under such covenants or obligations
and has no knowledge of any material default on the part of any
other party to such Permitted Encumbrances.
(i) INTELLECTUAL PROPERTY RIGHTS. SCHEDULE 4(i) hereto
contains a complete and accurate list of (1) all patents,
registered or material trademarks, trade names, registered or
material service marks and registered copyrights (and all
applications therefor) used in the conduct of the Business
(indicating whether or not such patent, trademark, trade name,
service ▇▇▇▇ or registered copyright is owned by Newco), (2) all
computer programs, software, and software licenses used primarily
in the conduct of the Business, and (3) all agreements relating to
technology, know-how or processes which Newco is licensed or
authorized to use by others in the conduct of the Business. Newco
(i) owns or has the right to use all patents, registered or
material trademarks, trade names, registered or material service
marks and registered copyrights (and all applications therefor) and
all trade secrets, inventions, know-how, ideas, designs, processes,
specifications and formulas included in the Operating Assets and
embodied in or related to the Business, subject to the provisions
of any license agreement by which Newco has received rights in
connection with such intellectual property, and (ii) to the
knowledge of Seller, Newco is not using any confidential
information or trade secrets of others in the operation of the
Business. Neither Seller nor Newco is a party to any agreement or
contract which obligates Seller or Newco to pay royalties, fees or
other payments to any owner of, licensor of, or other claimant to,
any Intellectual Property included in the Operating Assets. Neither
Seller nor Newco has transferred or conveyed any rights to others
in the Intellectual Property included in the Operating Assets other
than rights to use that are incidental to sales of products
included within the Business. To the knowledge of Seller, no claims
have been asserted by any person to the use in the conduct of the
Business of any Intellectual Property included in the Operating
Assets challenging or questioning the validity or effectiveness of
any such Intellectual Property included in the Operating Assets
and, to the knowledge of Seller, there exists no valid basis for
any such claim, except for such claims an adverse determination of
which, in the aggregate, would not have a material adverse effect
on the Business; and, to the knowledge of Seller, the use of the
Intellectual Property included in the Operating Assets in the
conduct of the Business does not infringe on the rights of any
person. Newco owns, or is otherwise licensed or has the right to
use, all Intellectual Property included in the Operating Assets
used in or necessary for the conduct of the Business and, subject
to obtaining necessary consents, the consummation of the
transactions contemplated by this Agreement will not alter or
impair any such rights.
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(j) CONTRACTS, LEASES, COMMITMENTS AND AGREEMENTS.
SCHEDULE 4(j) hereto sets forth and describes all material
contracts, leases, agreements and commitments (i.e., a contract,
lease, agreement or commitment providing for payment or receipt of
$5,000 or more over the life of the contract or which may not be
terminated without penalty with notice of 30 days or less) to which
Seller or Newco is a party or by which either of them is bound with
respect to the Business or the Operating Assets. Seller, Newco and
each other party thereto have in all respects substantially
performed all obligations required to be performed by them to date,
and are not in default under any of the Operating Contracts. Each
of the Operating Contracts is in full force and effect, and neither
Seller nor Newco have assigned to any other person any of their
rights thereunder, other than the assignment of the Operating
Contracts from Seller to Newco.
(k) COMPOSITION AND CONDITION OF OPERATING ASSETS. The
Operating Assets comprise all material property and assets employed
by Seller immediately prior to the Contribution Date and currently
employed by Newco in the Business, except for the Retained Assets.
All tangible personal property included in the Operating Assets is
mechanically sound with no known material defects (ordinary wear
and tear excepted) and are in good and normal operating condition
and repair.
(l) MAJOR SUPPLIERS AND CUSTOMERS. Attached hereto as
SCHEDULE 4(l) is a comprehensive listing of each supplier of goods
and services to the Business to whom Seller paid in excess of
$3,000 in the aggregate, and each customer of the Business to whom
Seller billed in excess of $5,000 in the aggregate, during the 12
month period ending December 31, 1998; provided, however, that
SCHEDULE 4(l) may list suppliers or customers that have not been
paid or billed in excess of such amounts. To the knowledge of
Seller, no material supplier or customer has any intention to
change its relationship or the terms upon which it conducts
business with respect to the Business as a result of the
transactions contemplated by this Agreement.
(m) FINANCIAL STATEMENTS. Attached to this Agreement as
SCHEDULE 4(m) are net income statements of Seller relating to the
Business for the year ended December 31, 1998 and the interim
period ended June 30, 1999. Such net income statements (1) were
prepared from the books and records of Seller; (2) present fairly
the financial condition of the Business at the dates indicated in
all respects; and (3) have, in all material respects, been prepared
in accordance with generally accepted accounting principles applied
on a basis consistent with Seller's financial statements for the
year ended December 31, 1998 and the interim period ended June 30,
1999, subject, in the case of the net income statements for the
interim period, to normal recurring year end adjustments.
(n) BUSINESS CHANGES. Except for the transactions
contemplated by this Agreement and the ▇▇▇▇ of Sale, Assignment and
Assumption between Seller and Newco (the "▇▇▇▇ OF SALE"), since
June 30, 1999, there has not been:
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(1) any material adverse change in the business,
financial condition, operations or results of operations
of the Business, or material damage, destruction or loss
(whether or not covered by insurance) affecting the
Business or the Operating Assets;
(2) any sale, lease, abandonment or other
disposition of any material equipment or other operating
property associated with the Business except for
dispositions in the ordinary course of business;
(3) any material transfer or other disposition
or purchase or other acquisition of any properties or
assets used in the Business (real, personal or mixed,
tangible or intangible), except in the ordinary course of
business and consistent with past practice;
(4) any deviation from the ordinary and usual
course by Seller in the conduct of the Business,
including, without limitation, any payment to any
stockholder, former stockholder, officer, director or
affiliated party other than regular compensation paid in
the ordinary course of business, or any increase in
compensation of any officer, director or employee
(including, without limitation, any increase pursuant to
any bonus, pension, profit sharing or other plan or
commitment) or the adoption of any new benefit program,
plan or other arrangement for officers, directors or
employees;
(5) any change in accounting methods or
practices followed by Seller in connection with the
Business;
(6) any increase in any obligations or
liabilities (whether absolute, accrued, contingent or
otherwise and whether due or to become due), except items
incurred in the ordinary course of business, in excess of
$5,000 individually or $20,000 in the aggregate;
(7) except for Permitted Encumbrances, any
Operating Asset which has been subjected to any Lien of
any kind, except for liens for current taxes not yet due;
(8) any disposition of or lapse of any rights to
the use of the Intellectual Property included in the
Operating Assets or disclosure to any person other than
representatives of Newco of any material trade secret,
formula, process or know-how included in the Operating
Assets not theretofore a matter of public knowledge; or
(9) any agreement in writing to take any action
described in clauses (1) through (8) of this Section 4(n).
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(o) EMPLOYEE BENEFIT MATTERS; ERISA. Except as
specifically set forth in the schedules numbered to correspond to
the applicable representation or warranty and attached hereto,
Seller represents and warrants as follows:
(1) PENSION PLANS.
(i) No Employee Plan is a Pension Plan which is
subject to Title IV of ERISA or the minimum funding
requirements of the Code.
(ii) No Pension Plan is "top heavy" within the
meaning of Section 416 of the Code.
(iii) Each Pension Plan and each related trust
agreement, annuity contract or other funding instrument which
is intended to be qualified and tax exempt under the
provisions of Code Sections 401(a) and 501(a), as applicable,
has received from the Internal Revenue Service a favorable
determination letter considering the Tax Reform Act of 1986,
as amended, or application for such determination has been
made within the applicable remedial amendment period and is
currently pending.
(iv) Each Pension Plan, related trust agreement,
annuity contract or other funding instrument, for which
Purchaser or ▇▇▇▇▇▇ could reasonably be expected to have any
liability, is in material compliance with its terms and, both
as to form and in operation, with the requirements prescribed
by any and all Laws which are applicable to such Pension Plan,
including without limitation ERISA and the Code.
(2) MULTIEMPLOYER PLANS. There are no Multiemployer Plans, and
neither Seller nor any ERISA Affiliate has ever maintained, contributed
to, or participated or agreed to participate in any Multiemployer Plan.
Neither Seller nor any ERISA Affiliate has ever withdrawn, partially or
completely, or instituted steps to withdraw, whether partially or
completely, from any Multiemployer Plan, nor has any event occurred
which could enable a Multiemployer Plan to give notice of and demand
payment of any withdrawal liability with respect to any of Seller or
any ERISA Affiliate.
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(3) WELFARE PLANS.
(i) Each Welfare Plan for which Purchaser or Newco
could reasonably be expected to have any liability is in
material compliance with its terms and, both as to form and
operation, with the requirements prescribed by any and all
Laws which are applicable to such Welfare Plan, including
without limitation ERISA and the Code. No Welfare Plan
provides for retiree medical or life insurance.
(ii) Each Welfare Plan which is a "group health
plan," as defined in Section 607(1) of ERISA, has been
operated in material compliance with provisions of Part 6 and
7 of Title I, Subtitle B of ERISA and Sections 4980B,
9801-9803, 9811, 9812, and 9831-9833 of the Code at all times.
(iii) No Welfare Plans are self-insured "multiple
employer welfare arrangements" as such term is defined in
Section 3(40) of ERISA.
(4) BENEFIT ARRANGEMENTS. Each Benefit Arrangement is in
material compliance with its terms and with the requirements prescribed
by any and all Laws which are applicable to such Benefit Arrangement,
including without limitation the Code, for which Purchase or Newco
could reasonably be expected to be liable.
(5) FIDUCIARY DUTIES AND PROHIBITED TRANSACTIONS. To the
knowledge of Seller, neither Seller nor any ERISA Affiliate has any
liability with respect to any transaction which relates to any Pension
Plan or any Welfare Plan and which is in violation of Sections 404 or
406 of ERISA or constitutes a "prohibited transaction," as defined in
Section 4975(c)(1) of the Code, and for which no exemption exists under
Section 408 of ERISA or Section 4975(c)(2) or (d) of the Code for which
Purchase or Newco could reasonably be expected to be liable. To the
knowledge of Seller, neither Seller nor any ERISA Affiliate has
participated in a violation of Part 4 of Title I, Subtitle B of ERISA
by any plan fiduciary of any Welfare Plan or Pension Plan or has any
unpaid civil penalty under Section 502(1) of ERISA for which Purchase
or Newco could reasonably be expected to be liable.
(6) LITIGATION. There is no material action, order, writ,
injunction, judgment or decree outstanding or claim, suit, litigation,
proceeding, arbitral action, governmental audit or investigation
(including, without limitation, any such audit or investigation by the
Internal Revenue Service, Department of Labor,
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or PBGC) relating to or seeking benefits under any Employee Plan
that is pending or, to the knowledge of Seller, threatened or
anticipated against any of Seller or any ERISA Affiliate other than
routine claims for benefits. To the best knowledge of Seller, no
Newco Employee has any material claim against Seller (whether under
federal or state law, any employment agreement, or otherwise) on
account of or for (i) overtime pay, other than overtime pay for the
current payroll period; (ii) wages or salary for any period other
than the current payroll period; (iii) vacation, time off, sick
time or pay in lieu of any of the foregoing, other than that earned
in respect of the current fiscal year of the Seller; or (iv) any
violation of any statute, ordinance or regulation relating to
minimum wages or maximum hours of work. To the best knowledge of
Seller, no Newco Employee has any material claim, or basis for any
material action or proceeding against Seller, arising under any
statute, ordinance or regulation relating to discrimination in
employment or employment practices, occupational safety and health
standards or workers' compensation for which Purchase or Newco
could reasonably be expected to be liable.
(7) UNPAID CONTRIBUTIONS. Neither Seller nor any ERISA
Affiliate has any material liability for unpaid contributions required
to be made pursuant to the plan's terms with respect to any Employee
Plan for which Purchase or Newco could reasonably be expected to be
liable.
(8) CHANGE OF CONTROL PAYMENTS AND COMPENSATION DEDUCTION
LIMITATIONS. Except in accordance with the terms of the applicable
Employee Plan or as disclosed on SCHEDULE 4(o)(8), the execution of
this Agreement and the consummation of the transactions contemplated
hereby will not result in any payment (whether of separation pay or
otherwise), cancellation of indebtedness, or other obligation becoming
due from any of Seller or any ERISA Affiliate to any current or former
employee, director, or consultant, or result in the vesting,
acceleration of payment or increase in the amount of any benefit
payable to or in respect of any such current or former employee,
director, or consultant of any of Seller or any ERISA Affiliate. There
is no contract, agreement, plan or arrangement covering any current or
former employee, director, or consultant of Seller or any ERISA
Affiliate that, individually or collectively, could give rise to the
payment of any amount that would not be deductible pursuant to the
terms of Sections 162(a)(1), 162(m), and/or 280G of the Code or would
require the payment of an excise tax imposed by Section 4999 of the
Code or of any "gross up" of any such excise tax for which Purchase or
Newco could reasonably be expected to be liable.
(9) COPIES OF DOCUMENTATION. SCHEDULE 4(o)(9) sets forth a
true and complete list of all Employee Plans of Seller and/or Newco.
Seller has delivered to Purchaser pursuant to this Agreement, or shall
provide to Purchaser within ten (10) business days after the date
hereof, a true and complete set of copies of (i) all
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Employee Plans and related trust agreements, annuity contracts or
other funding instruments as in effect immediately prior to the
Closing Date, together with all amendments thereto which shall
become effective at a later date; (ii) the latest Internal Revenue
Service determination letter obtained with respect to any such
Employee Plan qualified or exempt under Section 401 or 501 of the
Code; (iii) annual reports (Form 5500 series or the alternative
filing, if applicable, under ERISA Regulation Section 2520.104-23)
and certified financial statements for the most recently completed
three fiscal years for each Employee Plan required to file such
form, together with the most recent actuarial report, if any,
prepared by the Employee Plan's enrolled actuary; (iv) all summary
plan descriptions for each Employee Plan required to prepare, file
and distribute summary plan descriptions; (v) copies of all
documentation relating to the correction of Pension Plan defects
under the IRS Employee Plans Compliance Resolution System or any
predecessor or similar IRS program; (vi) all summaries furnished or
made available to employees, officers and directors of any of
Seller or their ERISA Affiliates of all incentive compensation,
other plans and fringe benefits for which a summary plan
description is not required; (vii) the names of all salaried
employees involved in the Business, together with a statement as to
the full amount paid or payable to each such employee for services
rendered during the last or current fiscal year and the current
aggregate base salary rate for each such person; (viii) the names
of all Newco Employees; (ix) amounts of current and deferred
compensation due the Newco Employees (including vacation pay,
holiday pay, sick pay and similar compensation earned by and/or
accrued to the Newco Employees); (x) FICA, unemployment and other
payroll taxes payable with respect to the Newco Employees; and (xi)
the seniority and current compensation levels of all Newco
Employees, vendors, agents and independent contractors as of the
Closing Date.
(p) LABOR MATTERS.
(1) Neither Seller nor Newco is a party to any
collective bargaining agreement (the "LABOR AGREEMENTS"), and
no union or association of employees has been certified or
recognized as the collective bargaining representative of any
of Seller's or Newco's employees or has attempted to engage in
negotiations with Seller or Newco regarding terms and
conditions of employment.
(2) Seller and Newco are in compliance in all
material respects with all requirements of applicable federal,
state and local laws and regulations governing employee
relations, including but not limited to anti-discrimination
laws, wage/hour laws, labor relations laws and occupational
safety and health laws, and no suits, charges or
administrative proceedings relating to any such law or
regulation are pending, and, to the knowledge of Seller, no
suit, charge or administrative investigation alleging a
violation of any such law or regulation has been threatened.
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(q) GOVERNMENT LICENSE AND REGULATION. Set forth on
SCHEDULE 4(q) is a list of all material domestic and foreign
governmental and third party licenses, permits, certificates,
consents, approvals, waivers, authorizations, and registrations
(collectively, "APPROVALS") which Seller obtained and transferred
to Newco which, to Seller's knowledge, are all of the Approvals
necessary to conduct the Business as presently conducted and to own
and use the Operating Assets, and such Approvals are in full force
and effect. No proceeding is pending or threatened regarding the
revocation or limitation of any such Approvals and there is no
basis or grounds for any such revocation or limitation.
(r) LIABILITIES OF NEWCO. Newco has no responsibility for
any liabilities other than the Assumed Liabilities. Other than the
Assumed Liabilities, Newco did not assume and has not assumed, and
is not responsible for, any liabilities or obligations of Seller,
including without limitation the Excluded Liabilities, and Seller
remains liable for and will discharge the Excluded Liabilities.
(s) LOCATION OF OPERATING ASSETS. All of the tangible
personal property included in the Operating Assets is located at
the Training Facility.
(t) YEAR 2000. All computer software, hardware, programs
and technical systems ("TECHNOLOGY") included within the Operating
Assets is "Year 2000 compliant," which means that each all such
Technology will (i) not fail to function and operate prior to,
during and after the calendar Year 2000 in accordance with its
specifications as a result of the use of a valid date; (ii) will
provide the output specified in such Technology's specifications
without experiencing abnormal ending dates and/or invalid or
incorrect years, and (iii) will incorporate century recognition
date data, calculations that use same century and multi-century
formulas and date values that reflect the current century in all
transactions.
(u) EMPLOYEE MATTERS. On or prior to the Closing Date,
Seller has furnished or shall furnish to the Newco Employees, their
representatives and appropriate governmental authorities such
notices as may be required of Seller by and in accordance with
applicable laws and regulations, including, without limitation, any
mass lay-off laws. Seller has complied with all legal obligations,
if any, it may have to bargain with the collective bargaining
representatives of the Newco Employees concerning the decision to
contribute the Operating Assets to Newco and the effects thereof.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller as follows:
(a) CORPORATE ORGANIZATION. Purchaser is a SOCIETE ANONYME
duly organized and validly existing under the laws of France. Purchaser
has the power and authority to own its property and assets and to carry
on its business as now conducted.
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(b) CORPORATE AUTHORITY. Purchaser has the requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and performance by Purchaser of its obligations hereunder
have been duly authorized by all necessary action on the part of
Purchaser. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby do not and will
not conflict with, or result in a breach of, or constitute a default
under, the terms and conditions of Purchaser's organizational
documents, any court or administrative order or process, any agreement
or instrument to which Purchaser is a party or by which it or any of
its assets is bound or, to the knowledge of Purchaser, any statute or
regulation of any governmental agency. The execution and delivery of
this Agreement by Purchaser and the consummation of the transactions
contemplated hereby by Purchaser do not require the consent of any
third party. This Agreement and all other instruments required hereby
to be executed and delivered by Purchaser are, or when delivered will
be, valid and binding obligations of Purchaser enforceable against
Purchaser in accordance with their terms, except to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of
creditors' rights generally and except that the availability of
equitable remedies, including specific performance, is subject to the
discretion of the court before which any proceedings therefor may be
brought.
(c) LITIGATION AND OTHER PROCEEDINGS. There is no litigation,
action, suit, investigation or proceeding pending or, to Purchaser's
knowledge, threatened against or affecting Purchaser's business before
any court, agency or other governmental body that would result in any
material adverse effect upon Purchaser's ability to perform its
obligations under this Agreement.
(d) INVESTMENT INTENT. Purchaser is acquiring the Shares for
its own account and not with a view to their distribution within the
meaning of Section 2(11) of the Securities Act of 1933, as amended.
6. COVENANT NOT TO COMPETE. In consideration of the payment by
Purchaser of the Purchase Price, Seller hereby agrees that, for a period of
three years from the Closing Date, it shall not directly or indirectly,
through any person controlling, controlled by or under common control with
Seller, alone or in association with any other person, firm, corporation,
partnership or other business organization, except as expressly provided for
herein:
(a) Engage in, or own or acquire any controlling interest in
any business which is engaged in, advanced software technology training
(a "COMPETITIVE BUSINESS"). For purposes of this Section 6(a), there
shall be disregarded any interest which arises solely from the
ownership of less than a 10% equity interest in a corporation whose
stock is regularly traded on any national securities exchange or in the
over-the-counter market. Notwithstanding the foregoing, Purchaser and
Seller agree Seller may provide training
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services (1) solely for internal purposes, and (2) to third parties
in connection with Seller-owned technology whether now existing or
developed in the future.
(b) In any way, directly or indirectly, for the purpose of
conducting or engaging in any Competitive Business, (1) call upon,
solicit, advise or otherwise do, or attempt to do, business relating to
the Competitive Business with any former customers of Seller or Newco
or (2) take away or interfere or attempt to interfere with any former
customer, trade, business or patronage of Seller or Newco relating to
the Competitive Business.
(c) Seller acknowledges that the failure or threatened failure
to comply with the provisions of this Section 6 will result in
irreparable and continuing damage to Purchaser for which there will be
no adequate remedy at law and that, notwithstanding any other provision
of this Agreement, in the event of such failure or threatened failure,
Purchaser and its successors and assigns shall be entitled to
injunctive relief and to such other and further relief as may be proper
and necessary to ensure compliance with the provisions of this
Section 6.
7. INDEMNIFICATION.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made herein by Purchaser or Seller shall
survive the execution and delivery of this Agreement and, other than
the representations and warranties contained in Section 4(d), which
shall survive for the period of the applicable statutes of limitation,
shall remain in full force and effect for a period of twelve months
following the Closing Date, and shall be deemed to have been relied
upon by each other party hereto, notwithstanding any investigation made
by or on behalf of such party. Actions for a breach of a representation
or warranty may be commenced only during the period in which such
representation or warranty survives.
(b) INDEMNIFICATION BY SELLER. Seller shall indemnify and hold
harmless Purchaser, Newco and their affiliates and each of their
directors, officers, employees, advisors, agents and stockholders at
all times from and after the Closing Date against and with respect to
any and all claims, demands, lawsuits, proceedings, losses,
assessments, taxes, fines, penalties, administrative orders,
obligations, costs, expenses, liabilities and damages, interest,
reasonable attorneys' fees and costs of investigation (all of the
foregoing hereinafter referred to collectively as "CLAIMS") which arise
or result from and to the extent they are attributable to:
(1) the Excluded Liabilities and/or the Retained
Assets;
(2) the untruth or breach of any representation or
warranty made by Seller pursuant to this Agreement or any
other agreement or document executed and delivered by Seller
in connection with the transactions contemplated hereby;
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(3) the breach of, or failure to perform, any of the
covenants, commitments, obligations or agreements on the part
of Seller under this Agreement or any other agreement or
document executed and delivered by Seller in connection with
the transactions contemplated hereby;
(4) the operation by Seller and/or Newco of the
Business prior to the Closing (except with respect to Assumed
Liabilities relating to such pre-Closing operation); and
(5) any and all demands, claims, actions, suits,
proceedings, assessments, judgments, costs and legal and other
expenses incident to any of the foregoing.
Seller shall have no liability with respect to the matters described in
Section 7(b)(2) until the aggregate of all claims for which an
indemnity would otherwise be payable by Seller exceeds $50,000 in the
aggregate (the "BASKET"), and in such event, Seller shall be
responsible only for the amount in excess of the Basket, but in no case
shall the liability of Seller (i) with respect to the matters described
in Section 7(b)(2) (other than matters arising in respect of Sections
4(d), (e), (g), (h) and (i)) or the ▇▇▇▇ of Sale and, to the extent
they apply to claims under Section 7(b)(2), the matters described in
Section 7(b)(5), exceed $850,000, and (ii) with respect to the matters
described in Section 7(b)(2) arising in respect of Sections 4(d), (e),
(g), (h) and (i) or with respect to any breach of any of the Seller's
representations and warranties of which the Seller had Knowledge at any
time prior to the date on which such representation and warranty is
made or any breach by Seller of any covenant or obligation pursuant to
this Agreement or any other agreement or document executed and
delivered by Seller in connection with the transactions contemplated
hereby, exceed the Purchase Price (collectively, the "CAP").
(c) INDEMNIFICATION BY PURCHASER. Purchaser shall indemnify
and hold harmless Seller and its directors, officers, employees,
advisors, affiliates, agents and stockholders at all times from and
after the Closing Date against and with respect to any and all Claims
which arise or result from and to the extent that are attributable to:
(1) the Assumed Liabilities and the Operating
Contracts;
(2) the untruth or breach of any representation or
warranty made by Purchaser pursuant to this Agreement or any
other agreement or document executed and delivered by
Purchaser in connection with the transactions contemplated
hereby;
(3) the breach of, or failure to perform, any of the
covenants, commitments, obligations or agreements on the part
of Purchaser under this
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Agreement or any other agreement or document executed and
delivered by Purchaser in connection with the transactions
contemplated hereby;
(4) the operation by Purchaser and/or Newco of the
Business after the Closing;
(5) any material difference between the tax liability
of Seller if the Operating Assets had been purchased directly
by Purchaser in an asset purchase and the tax liability Seller
will incur as a result of the consummation of the transactions
as structured in this Agreement; provided, however, that
Purchaser shall have no liability with respect to the matters
set forth in this SECTION 15(C)(5) unless and until such
liability exceeds $500; and
(6) any and all demands, claims, actions, suits or
proceedings, assessments, judgments, costs and legal and other
expenses incident to any of the foregoing:
(d) PROCEDURES FOR INDEMNIFICATION. Promptly after receipt by
an indemnified party pursuant to the provisions of Sections (b) or (c)
of this Section 7 of notice of a third party claim or the commencement
of any third party action pursuant to the provisions of such Sections
7(b) or (c), such indemnified party shall promptly notify such
indemnifying party of the commencement thereof; but the omission to so
notify such indemnifying party will not relieve it from any liability
which it may have to the indemnified party otherwise than hereunder
unless the indemnified party is materially prejudiced thereby. In case
such action is brought against an indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
shall have the right to participate in, and, to the extent that it may
wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, if the
defendants in any action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it which are
different from or additional to those available to the indemnifying
party, or if there is a conflict of interest which would prevent
counsel for the indemnifying party from also representing the
indemnified party, the indemnified party shall have the right to select
separate counsel to participate in the defense of such action on behalf
of such indemnified party. After notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to the indemnified
party pursuant to the provisions of such Sections 7(b) or (c) for any
legal or other expense subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation, unless (1) the indemnified party shall have promptly
employed counsel in accordance with the proviso of the preceding
sentence, (2) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice of the
commencement of the action, or (3) the indemnifying party has
authorized the employment of counsel for
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the indemnified party at the expense of the indemnifying party. No
indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of each indemnified party (such
consent not to be unreasonably withheld), consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the release from all liability in
respect to such claim or litigation.
(e) SOLE REMEDY. This Section 7 is intended to set forth the
exclusive and entire remedy of Seller and Purchaser against each other
in respect of any losses that are in the nature of the losses subject
to indemnification under this Section 7; the limitations on survival
and commencement of actions in Section 7(a), the limitations on
Seller's liability through the Cap and the Basket, and the other
provisions of this Section 7, are intended to apply to all claims,
actions and losses covered in substance by this Section or related to
the ▇▇▇▇ of Sale, regardless of form, whether based on contract, tort,
statute or any other theory or basis of liability, and whether of a
legal, equitable or other nature.
8. DISPUTE RESOLUTION.
(a) NEGOTIATION. The parties acknowledge and agree that, in
connection with any and all actions, claims, controversies or disputes
of any kind (e.g. whether in contract or in tort, statutory or common
law) ("DISPUTES"), they shall first negotiate in good faith to resolve
any such Dispute for a minimum period of thirty (30) days following
receipt by a party of written notification of a Dispute. Any Dispute
which cannot be resolved by negotiation within such thirty (30) day
period shall be resolved according to the arbitration procedure set
forth in Sections 8(b) through 8(k).
(b) ARBITRATION. Except as expressly set forth in Section
8(a), the parties agree that (except as expressly set forth herein) all
Disputes between them relating, directly or indirectly, to this
Agreement or the transactions contemplated hereby, whether now existing
or hereafter arising, are to be resolved by arbitration as provided in
this Agreement. This agreement to arbitrate will survive the
termination of this Agreement. All arbitration will be conducted
pursuant to and in accordance with the following order of priority (1)
the terms of this Agreement, (2) the Commercial Arbitration Rules of
the American Arbitration Association, (3) the Federal Arbitration Act
and (4) to the extent the foregoing are inapplicable, unenforceable or
invalid, the laws of the State of Texas. The arbitrator used will be
selected from impartial arbitrators designated by the American
Arbitration Association who are familiar with the nature of the subject
matter of the Dispute. Any hearing regarding arbitration will be held
in Dallas, Texas, or at another location mutually acceptable to Newco
and Seller. The arbitrator will use his/her best efforts to conduct the
arbitration hearing no later than three (3) months from the date of the
arbitrator's appointment and will use best efforts to render a decision
within four (4) months from such date.
(c) SCOPE. Notwithstanding any other provision of this Section
8 no dispute regarding the ownership of intellectual property will be
subject to the dispute resolution
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provisions of this Section 8. Any such Dispute will be resolved by
negotiation or if the parties are unable to agree, by any court of
competent jurisdiction.
(d) DISCOVERY. Each party may submit in writing to the other
party, and the other party shall respond to a maximum of any
combination of thirty-five (35) (none of which may be subparts) of the
following: interrogatories, demands to produce documents and requests
for admissions. Each party is also entitled to take the oral deposition
of no more than five (5) individuals. Additional discovery may be
permitted upon mutual agreement of the parties. The arbitrator will
resolve any discovery disputes by such pre-hearing conferences as may
be needed. All parties agree that the arbitrator will have the power of
subpoena process as provided by law. Disputes concerning the scope of
depositions or document production, its reasonableness and enforcement
of discovery requests will be subject to agreement by the parties or
will be resolved by the arbitrator. All discovery requests will be
subject to the proprietary rights and rights of privilege and other
protections granted by applicable law to the parties and the arbitrator
will adopt procedures to protect such rights. With respect to any
Dispute, each party agrees that all discovery activities will be
expressly limited to matters directly relevant to the Dispute and the
arbitrator will be required to fully enforce this requirement.
(e) COURT PROCEEDINGS. Except for proceedings seeking
equitable remedies and issues regarding the ownership of intellectual
property, an arbitration proceeding commenced pursuant to this Section
8 is a condition precedent to and is a complete defense to the
commencement of any suit, action or proceeding in any court or before
any tribunal with respect to any Dispute. Either party may bring an
action in court to compel arbitration. Any party who fails or refuses
to submit to binding arbitration following demand by the other party
shall, if the dispute is within the scope of this Section 8, bear all
costs and expenses incurred by the opposing party in compelling
arbitration.
(f) RULINGS. The arbitrator is empowered to resolve Disputes
by summary rulings substantially similar to summary judgments and
motions to dismiss. The arbitrator will resolve all Disputes in
accordance with the applicable substantive law. The arbitrator may
grant any remedy or relief deemed just and equitable and within the
scope of this Agreement and may also grant such ancillary relief as is
necessary to make effective any award.
(g) FINDINGS OF FACT. The arbitrator will be required to make
specific, written findings of fact and conclusions of law, and the
parties will have the right to appeal or seek vacation or modification
of an award only (1) if that award is based in whole, or in part, upon
fraud or a failure to follow the procedures set forth in this Section 8
or (2) to the extent otherwise allowed by applicable law. Subject to
the foregoing, the determination of the arbitrator shall be binding on
all parties and shall not be subject to further review or appeal. Any
judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. The decision of the arbitrator
will be enforceable in any court of competent jurisdiction. To the
extent permitted by applicable
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law, the arbitrator will have the power to award recovery of all
costs and fees (including attorneys' fees, administrative fees, and
arbitrators' fees) to the prevailing party.
(h) AUTHORITY. The arbitrator will be limited to interpreting
the applicable provisions of this Agreement and will not have the
authority or power to alter, amend, modify, revoke or suspend any
condition or provision of this Agreement or to create, draft or form a
new agreement between the parties, or to render an award which, by its
terms, has the effect of altering or modifying any condition or
provision of this Agreement. The arbitrator will have the sole
authority to resolve issues regarding whether Disputes are subject to
arbitration, including the applicability of any statute of limitations.
(i) EQUITABLE REMEDIES. No provision of, nor the exercise of
any rights under, this Agreement will limit the right of any party,
during any Dispute, to seek, use, and employ ancillary or provisional
equitable remedies. Such rights may be exercised at any time except to
the extent such action is contrary to an award or decision of the
arbitrator. The pursuit of provisional or ancillary equitable remedies
will not constitute a waiver of the right of any party, including the
plaintiff, to submit a Dispute to arbitration, nor render inapplicable
the compulsory arbitration provisions of this Section 8.
(j) SELECTION OF ARBITRATOR. The arbitrator will be chosen by
mutual agreement of Newco and Seller. If they cannot agree within 30
days upon the selection of the arbitrator, the arbitrator will be
selected by the Dallas, Texas office of the American Arbitration
Association in accordance with its rules and procedures. Subject to the
provisions of Section 7 and any other indemnification obligation set
forth in this Agreement, (1) each party will be responsible for
one-half of the expenses and fees of the arbitrator and (2) each party
will bear its own attorney's and expert's fees.
(k) OTHER ARBITRATION PROVISIONS.
(1) All arbitration proceedings will be conducted in
the English language and all monetary awards will be
denominated in and will be payable in United States Dollars.
(2) The statute of limitations applicable to any
Dispute shall be tolled upon the initiation of arbitration
under this Agreement and shall remain tolled until the
arbitration process is completed.
(3) Except to the extent necessary to enforce the
rights of the parties or as required by law, the parties agree
to keep confidential the existence, content and results of any
arbitration proceeding conducted pursuant to this Section 8.
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9. ADDITIONAL AGREEMENTS.
(a) CONFIDENTIAL INFORMATION. From and after the date
of this Agreement, neither Seller nor Purchaser shall (and each
shall take all reasonably necessary steps to ensure that their
respective officers, directors, employees, agents and other
representatives do not), without the prior written consent of the
other party, use, disclose, publish, copy, distribute or furnish to
any person or entity any list, summary, schedule, description,
record, document or data storage device, describing, containing, or
relating to, or any information about, any Confidential Information
(as defined below) of the other party.
(1) As used herein, "CONFIDENTIAL INFORMATION" shall
mean, with respect to information owned by Purchaser or Newco,
the various trade secrets and other proprietary and
confidential information (except as such pertain to the
Retained Assets) of the Business which is of a special and
unique nature and value relating to such matters as, but not
limited to, the Business' prior business operations, financial
affairs, programs, software, systems, procedures, Courses,
Courseware, manuals, confidential reports and marketing
methods which consist of compilations of information, records
and specifications that have been assigned to Newco, including
without limitation, all contracts, agreements, financial
books, records, files, documents, customer and supplier lists,
memoranda, data, tapes, letters, research, drawings,
specifications, equipment and similar items relating to the
Business and included in the Operating Assets. As used herein,
"CONFIDENTIAL INFORMATION" shall mean, with respect to
information owned by Seller, any non-public information
concerning Seller which was obtained by Purchaser in
connection with the transactions contemplated by this
Agreement, other than information pertaining to the Operating
Assets or the acquisition of the Shares.
(2) A party's obligations under this Section 9(a)
with respect to any portion of the Confidential Information
will terminate if such party can document that such
Confidential Information was in the public domain as of the
date hereof, such Confidential Information entered the public
domain subsequent to the date hereof (but prior to the use or
public disclosure of such Confidential Information by the
disclosing party) through no fault of the disclosing party, or
the communication of such Confidential Information is in
response to a valid order by a court or other governmental
body or was otherwise required by law (but only to the extent
of such order or requirement).
(3) Either party may disclose the terms of this
Agreement to those employees who have a need to know such
information.
(b) CONTINUING SUPPORT. For a period of twelve months
following the Closing Date, Seller shall use its best efforts to
provide reasonable access to all of Seller's
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employees, other than the Newco Employees, who provided services to
the Business or in connection with the Business at any time during
the eighteen months prior to the Closing Date. Such access shall be
for the purpose of assisting Purchaser in the integration of Newco
and the Operating Assets into Purchaser's business. In no event
will Seller be obligated to provide access to such employees of
Seller if such access would result in occupation of greater than
one week of each such employee's time.
(c) EMPLOYEE LIST. On the Closing Date, Seller shall
provide Purchaser with a list of former employees of Seller who
provided services to the Business or in connection with the
Business at any time during the twenty-four months prior to the
Closing Date. Purchaser and Seller expressly acknowledge and agree
that Purchaser, Newco or an affiliate thereof may solicit such
persons for employment, notwithstanding any other agreement between
the parties.
(d) GOVERNMENTAL FILINGS. Seller and Purchaser shall
cooperate with respect to, and diligently pursue completion of, all
filings with or approvals of governmental agencies required in
connection with the transactions contemplated by this Agreement, if
any.
(e) FURTHER ASSURANCES. Seller and Purchaser agree
that, at and after the Closing Date:
(1) at the request of Purchaser or Newco, Seller
shall execute and deliver such further instruments of transfer
and assumption as may be necessary or appropriate, and shall
take all commercially reasonable action as may be necessary or
appropriate (A) to vest in Newco good and marketable title to
the Operating Assets, (B) to transfer to Newco all licenses,
agreements and permits necessary for the operation of the
Business, (C) to aid and assist Newco in collecting and
reducing to possession any or all of the Operating Assets, and
(D) to vest in Purchaser good and marketable title to the
Shares;
(2) each will at any time and from time to time after
the Closing Date, upon the request of the other, execute,
acknowledge, deliver, and perform, or cause to be executed,
acknowledged, delivered, and performed, all such further acts,
deeds, assignments, transfers, conveyances, powers of
attorney, assumption agreements, and assurances as may
reasonably be required in connection with the transactions
contemplated by this Agreement; and
(3) Seller will use its commercially reasonable
efforts to facilitate and secure the transfer of the software
licenses described in SECTION 10(aa)(16) from Seller to Newco;
provided, however, that in no event will Seller be required to
expend its own funds for such purposes.
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(f) 401(k) AMOUNTS. The parties hereto acknowledge
that, subsequent to the Closing Date, the parties may agree to
transfer the account balances of the Newco Employees in the
ObjectSpace, Inc. 401(k) Profit Sharing Plan to a
tax-qualified 401(k) plan sponsored by Purchaser or a
subsidiary of Purchaser within a reasonable period of time
after the Closing and in accordance with the Code, upon
receipt of evidence reasonably satisfactory to each party that
each such 401(k) plan is tax qualified. From and after the
date of the transfer of such accounts (the "TRANSFER DATE"),
Seller shall have no responsibility or liability with respect
to any claims or liabilities regarding the transferred
accounts which are attributable to the period following the
Transfer Date. Purchaser shall indemnify Seller with respect
to any claims or liabilities associated with the transferred
accounts which are attributable to the period prior to and
including the Transfer Date. These indemnities are in addition
to any other indemnity provided in this Agreement.
10. DEFINITION OF CERTAIN TERMS. Capitalized terms used in this
Agreement but not otherwise defined in the text of this Agreement shall have
the respective meanings indicated below for all purposes of this Agreement.
All financial terms used in this Agreement and not otherwise defined shall be
defined in accordance with generally accepted accounting principles. All
references herein to a Section, Article or Schedule are to a Section, Article
or Schedule of or to this Agreement, unless otherwise indicated.
(a) ASSUMED LIABILITIES shall mean (1) the obligations of
Seller assumed by Newco under the Operating Contracts, (2) the
pro-rated portion of all utility bills for utilities provided to the
Training Facility after the Closing Date, if any, and (3) the pro-rated
portion of all personal property taxes levied or assessed against any
of the Operating Assets for the current tax year as of the Closing
Date.
(b) BENEFIT ARRANGEMENT shall mean any employment, consulting,
severance or other similar contract, arrangement or policy and each
plan, arrangement, program, agreement or commitment providing for
insurance coverage (including without limitation any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits, life,
health, disability or accident benefits (including without limitation
any "voluntary employees' beneficiary association" as defined in
Section 501(c)(9) of the Code providing for the same or other benefits)
or for deferred compensation, profit-sharing bonuses, stock options,
restricted stock, phantom stock, stock appreciation rights, stock
purchases or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not a Welfare Plan,
Pension Plan or Multiemployer Plan, (ii) is entered into, maintained,
contributed to or required to be contributed to, as the case may be, by
any of Seller or any ERISA Affiliate, and (iii) covers any current or
former employee, director, or consultant of any of Seller or any ERISA
Affiliate (with respect to their relationship with such entities).
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(c) CAUSE shall mean with respect to each Newco Employee (1)
acts of fraud or dishonesty in the course of his or her employment with
or service to Newco or any of its affiliates, (2) substance abuse
causing harm to Newco or any of its affiliates or impairing the Newco
Employee's performance of his or her regular duties, (3) conviction of
a felony involving moral turpitude, (4) insubordination, dereliction of
duties, habitual absenteeism, materially deficient performance after
(solely in the case of this clause (4)) notice to the Newco Employee
and the Newco Employee's failure to correct same within the time period
specified in the notice, which shall be not less than 10 business days,
or (5) any event described as "cause" (or in any other term or phrase
having similar import) in any written employment agreement between the
Newco Employee and Newco or any affiliate.
(d) COBRA shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and the Regulations promulgated
thereunder.
(e) CODE shall mean the Internal Revenue Code of 1986, as
amended and the Regulations promulgated thereunder.
(f) CONTRIBUTION DATE shall mean the date on which the
Operating Assets were contributed by Seller to Newco.
(g) COURSES shall mean all training courses owned by Seller in
existence or under development as of the Contribution Date, including,
without limitation, the Courses described on SCHEDULE 10(G) hereto;
provided, however, the term Courses does not include any courses or
courseware which are described in Section 10(aa)(1).
(h) COURSEWARE shall mean all course materials, training
manuals, course templates, programs, documentation, computer software,
books, process documentation or other similar courseware owned by
Seller and related to the Courses.
(i) COURT shall mean any court, tribunal, or other judicial or
arbitral panel of the United States, any foreign country, or any
domestic or foreign state, and any political subdivision or agency
thereof.
(j) EMPLOYEE PLANS shall mean all Benefit Arrangements,
Multiemployer Plans, Pension Plans and Welfare Plans.
(k) ERISA shall mean the Employee Retirement Income Security
Act of 1974, as amended and the Regulations promulgated thereunder.
(l) ERISA AFFILIATE shall mean any entity which is (or at any
relevant time was) a member of a "controlled group of corporations"
with, under "common control" with, or a member of an "affiliated
service group" with Seller as such terms are defined in Section 414(b),
(c), (m) or (o) of the Code.
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(m) EXCLUDED LIABILITIES shall mean all liabilities of
Seller associated with the Business prior to the Contribution Date
including, without limitation, the following:
(1) Any liability or claim with respect to accidents
or occurrences arising on or before the Contribution Date.
(2) Any claim by a third party for personal injury,
injury or damage to property or economic loss, whether
sounding in tort, breach of warranty or any other theory of
recovery, seeking compensatory, special, exemplary, punitive
or consequential damages, or any other relief, relating,
directly or indirectly, to an alleged defective or unsuitable
product arising on or before the Contribution Date.
(3) Any liabilities and obligations to any officer,
director or stockholder of Seller or to any person affiliated
with an officer, director or stockholder of Seller or to any
company affiliated with Seller.
(4) Any claims (including severance claims) relating
to the termination by Seller of the employment of any of its
employees (including any such termination deemed to have
occurred upon the transfer of any such employee from Seller to
Newco).
(5) Any claim made by any employee or former employee
of Seller (which claim arises out of such employment) who is
not employed on or after the Closing Date by Newco or an
affiliate of Newco.
(6) The following claims relating to employees or
former employees of Seller or Newco:
(i) all liabilities incurred on or prior to
the Closing Date (including medical expenses)
resulting from workers' compensation claims brought
by employees or former employees of Seller, whether
or not such employee or former employee is later
employed by Newco;
(ii) all liabilities incurred on or prior to
the Closing Date to pay hospitalization, medical or
dental expenses of employees or former employees of
Seller for medical or dental services performed on or
prior to the Closing Date (whether or not such
employee or former employee is later employed by
Newco);
(iii) all liabilities relating to life
insurance claims for deaths on or prior to the
Closing Date;
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(iv) all liabilities and obligations of
Seller existing as of the Closing Date relating to
employee compensation (whether or not an employee or
former employee is later employed by Newco);
(v) all liabilities resulting from
employment-related claims brought by employees or
former employees of Seller (whether or not such
employee or former employee is later employed by
Newco) if such employment-related claims arise from
occurrences or omissions transpiring on or prior to
the Closing Date, including, without limitation,
claims alleging violations of the following: (a)
employment discrimination law; (b) labor law; (c)
affirmative action, government contract or contract
compliance law; (d) occupational safety or health,
safe work place or employee right-to-know law; (e)
unemployment compensation law; (f) workers'
compensation law; (g) laws (including statutory and
case law) prohibiting wrongful discharge of
employees, whether based on express or implied
contracts, public policy, bad faith, tort, illegal
retaliation or other theories; (h) laws governing
wage and hour matters; (i) immigration law; (j)
common law employment-related tort claims, including,
without limitation, defamation, invasion of privacy,
intentional infliction of emotional distress, fraud
and misrepresentation and negligent hiring; (k) plant
closing and mass lay-off laws; (l) laws relating to
an employee's right to continued coverage under a
group health insurance plan; (m) the Labor
Agreements; and (n) any employee benefit plan
maintained by Seller that is subject to ERISA;
(vi) post-retirement benefits arising out of
their employment by Seller on or before the Closing
Date; and
(vii) all liabilities of Seller existing as
of the Closing Date relating to unemployment
compensation taxes.
(7) Any unpaid liability for Taxes (as hereinafter
defined) incurred prior to the Closing Date, including without
limitation the following: any and all liabilities and
obligations, direct or indirect, fixed or contingent, for
Taxes (i) of Seller or any member of any affiliated group
(within the meaning of Section 1504(a) of the Code) or any
combined, consolidated or unitary group for state or other tax
purposes of which Seller is or has been a member, whenever
incurred; (ii) except as expressly set forth herein,
attributable to or incurred in connection with the Business or
the Operating Assets prior to or on the Closing Date,
including, without limitation, any AD VALOREM, real or
personal or intangible property, sales or other Taxes which
are not due or assessed until after the Closing Date but which
are attributable to any period (or portion thereof) ending on
the
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Closing Date and (iii) attributable to interest, fines,
additions to tax or penalties relating to Taxes.
(8) Any cause of action or judicial or administrative
action, suit, proceeding or investigation relating to periods
prior to the Closing Date.
(9) Any governmental compliance, enforcement or
regulatory action, suit or claim or any claim by any person or
entity based upon an actual or alleged failure of Seller to
comply on or prior to the Closing Date with, or an actual or
alleged violation by Seller on or prior to the Closing Date
of, any law, rule, regulation, statute, ordinance, permit,
permit requirement, judgment, injunction, order, decree,
license or other governmental authorization or approval
applicable to Seller or the Operating Assets.
(10) Any infringement of the rights of any other
person or entity arising out of the use of any of the
Operating Assets on or prior to the Closing Date.
(11) Any liability under any employee benefit plan
maintained or contributed to by Seller or any ERISA Affiliate
(as hereinafter defined).
(12) Any liabilities with respect to contracts of
Seller (other than the operating Contracts) and Excluded
Liabilities.
(13) Any liabilities or obligations of Seller
relating to casualty or liability claims attributable to the
period prior to the Contribution Date.
(14) Bank overdrafts and other liabilities of Seller
to banks for money borrowed.
(15) Any accounts payable of Seller.
(16) Any liabilities and obligations with respect to
Seller's Lease other than as may be contemplated by Section
10(a).
(17) Any and all other liabilities and/or obligations
not specifically included in the Assumed Liabilities.
(n) [Reserved].
(o) INTELLECTUAL PROPERTY shall mean all domestic and
foreign patents, licenses, registered and unregistered trademarks,
trade names, service marks, copyrights, proprietary computer software,
all third-party (or "off-the-shelf") computer programs, software or
licenses owned and held by Seller on the Contribution Date and used
primarily in connection with the Business (and applications for any of
the foregoing),
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including, without limitation, those items set forth on SCHEDULE 10(o)
hereto, and all designs, patterns, drawings, technology, technical
know-how, trade secrets, inventions, processes, formulas, ideas,
work product, work in process, confidential information and
other similar intangible assets, owned and held by Seller and used
primarily in connection with the Business and the intangible assets and
related limitations, if any, including, without limitation, those items
set forth on SCHEDULE 10(o) hereto, and the goodwill associated with
all of the foregoing.
(p) KNOWLEDGE shall mean the qualification of a statement made
in this Agreement by the phrase "to the knowledge of Seller" or a
similar phrase shall indicate that no information that would give any
officer or director of Seller actual knowledge of the inaccuracy of
such statement has come to the attention of any such person, but that
such persons have not undertaken any independent investigation to
determine the accuracy of such statement.
(q) LANDLORD shall mean CarrAmerica Realty L.P.
(r) LAWS shall mean all laws, statutes, ordinances, rulings
and Regulations of the United States, any foreign country, or any
domestic or foreign state, and any political subdivision or agency
thereof, including all decisions of Courts having the effect of law in
each such jurisdiction.
(s) LIENS shall mean any mortgage, liability, pledge,
hypothecation, right, claim, security interest, encumbrance, lease,
sublease, license, adverse claim or interest, covenant not to compete,
voting agreement, voting trust, option, lien, right of first refusal or
other restrictions or limitations of any nature whatsoever, including
but not limited to such as may arise under any contracts of Seller or
Newco.
(t) MULTIEMPLOYER PLAN shall mean any "multiemployer plan," as
defined in Sections 3(37) or 4001(a)(3) of ERISA, which (i) is (or was
within the six-year period ending on the Closing Date) entered into,
maintained, administered, contributed to or required to be contributed
to, as the case may be, by any of Seller or any ERISA Affiliate and
(ii) covers or covered any employee or former employee of any of Seller
or any ERISA Affiliate (with respect to their relationship with such
entities).
(u) NEWCO EMPLOYEES shall mean the employees of Newco
available for duty on the Closing Date.
(v) OPERATING ASSETS shall mean all of Seller's rights,
property and assets of every kind, character and description, whether
tangible or intangible, whether real, personal or mixed, whether
accrued, contingent or otherwise which were owned by Seller at the
Contribution Date and used or held for use primarily in connection with
the Business prior to the Contribution Date, wherever located and
whether or not reflected in
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Seller's books and records, other than the Retained Assets; including,
without limitation, the following:
(1) All machinery, equipment, records, inventories,
computer hardware, cabling, data viewers, improvements, tools,
fixtures, furniture, furnishings and other personal property,
including, without limitation, the material items of personal
property listed on SCHEDULE 10(v)(1) hereto, and such
additional personal property which was, at the Contribution
Date (i) owned by Seller and used or held for use primarily in
connection with the Business or subject to leases to which
Seller was a lessee, subject (in the case of leases) to
obtaining any required consents in connection with the
assignment and assumption of any leases or agreements to and
by Newco, with respect to or for use in connection with the
operation of the Business, and (ii) located in the Training
Facility or issued to the Newco Employees.
(2) The Courses and Courseware.
(3) Except as described in Section 10(aa), all
Intellectual Property of Seller related to the Business.
(4) All rights of Seller under the Operating
Contracts.
(5) All deposits, prepaid tuition, or other prepaid
items, including without limitation, courseware maintenance
fees, relating to training services conducted in the Business
which were accepted by Seller prior to the Contribution Date
but to be delivered on or subsequent to the Closing Date,
including without limitation those items set forth on SCHEDULE
10(v)(5) hereto.
(6) All customer lists, vendor or supplier lists,
prospect lists, database information, documents, records or
other information, whether in electronic form or otherwise,
owned and held by Seller and relating to existing or planned
sales or marketing operations of the Business as of the
Contribution Date.
(7) All copies of records, computer software and
documents, books, work orders, drawings, electronic art,
database information, program and process documentation owned
by Seller and related to the Business.
(8) All of Seller's rights in all government
licenses, permits and authorizations (and applications for any
of the foregoing) necessary for the operation of the Business,
to the extent such are transferable, including but not limited
to the licenses, permits and authorizations listed on SCHEDULE
10(v)(8) hereto.
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(9) Except for those software licenses or customized
software included in the Retained Assets, all of Seller's
rights in all software licenses or customized software which
are used directly for Seller's training logistics support
conducted in the Business, including, but not limited to, the
licenses or customized software listed on SCHEDULE 10(v)(9)
hereto.
(10) All marketing or advertising brochures,
pamphlets, documentation or other tangible material owned by
Seller and used in connection with the Business.
(11) All content and computer source code relating to
the Business which is incorporated into Seller's website.
(12) All rights of Seller in and to any Courseware
maintenance fees.
(13) All other property, assets, claims, rights and
entitlements of any kind, character and description
whatsoever, to the extent such are transferable, which were
owned by Seller on the Contribution Date and used, or
primarily used or held for use, in connection with the
Business or necessary for the continuation of the Business.
(w) OPERATING CONTRACTS shall mean (1) all contracts to
provide training services conducted in the Business entered into by
Seller in the ordinary course of business prior to the Contribution
Date which had not been performed prior to the Contribution Date; and
(2) the contracts set forth on SCHEDULE 10(w) hereto.
(x) PBGC shall mean the Pension Benefit Guaranty
Corporation.
(y) PENSION PLAN shall mean any "employee pension benefit
plan" as defined in Section 3(2) of ERISA (other than a Multiemployer
Plan) which (i) is (or was within the six-year period ending on the
Closing Date) entered into, maintained, administered, contributed to or
required to be contributed to, as the case may be, by any of Seller or
any ERISA Affiliate and (ii) which covers or covered any current or
former employee, director, or consultant of any of Seller or any ERISA
Affiliate (with respect to their relationship with such entities).
(z) REGULATION shall mean any rule or regulation of any
governmental authority having the effect of law.
(aa) RETAINED ASSETS shall mean all of Seller's right,
title and interest in and to the following:
(1) Seller's training courses and all course
materials, training manuals, course templates, programs,
documentation, computer software, books, process
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documentation or other similar courseware which are solely
related to Seller's Voyager and Catalyst families of products,
as more particularly described on SCHEDULE 10(aa)(1) hereto,
or with current or future products of Seller, and all rights,
title and interest in and thereto, including all associated
intellectual property rights.
(2) Any employee benefit plan (within the meaning of
Section 3(3) of ERISA) with respect to which Seller or any
entity which, together with Seller, would be deemed a "single
employer" (within the meaning of Sections 414(b), (c), (m) or
(o) of the Code, is a plan sponsor or would otherwise have any
potential liability.
(3) Any of Seller's causes of action, judgments,
claims and demands of whatever nature, except those related to
the Operating Assets and the Assumed Liabilities.
(4) All financial records of Seller relating to the
Business, including Seller's general ledger and related items,
tax returns and related work papers, other than those
described under Section 10(v)(7) above.
(5) All of Seller's cash (including cash received
after the Contribution Date for services relating to the
Business performed on or before the Contribution Date) and
cash equivalents, including all deposits and other prepaid
items not described in Section 10(v)(5) above.
(6) All of Seller's personnel records and other
records related to the Business that Seller is required by law
to retain in its possession and all of Seller's invoices,
expense reports and purchase orders related to the Business.
(7) All of Seller's claims for refunds of Taxes and
other governmental charges of whatever nature relating to
periods prior to the Contribution Date.
(8) All of Seller's general office equipment,
furniture and furnishings, unless located at the Training
Facility, except for the personal computers used by the Newco
Employees.
(9) Seller's telephone system and telephone
equipment.
(10) Seller's enterprise-wide licensed software,
other than the licensed software located on the personal
computers used by the Newco Employees, which is set forth on
SCHEDULE 10(aa)(10) hereto.
(11) All of Seller's rights in insurance policies and
insurance claims.
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(12) Copies of the Courses and Courseware for
Seller's internal use as permitted by Section 6(a)(1). Such
use of the Courses and Courseware is limited to a level which,
as a result of a merger, acquisition, consolidation or similar
transaction, does not materially increase the level of use
contemplated as of the Contribution Date.
(13) All trademarks, trade names, service marks and
other intellectual property relating to the name "ObjectSpace"
and "Voyager."
(14) All of Seller's rights with respect to that
certain Consulting Agreement dated October 11, 1995 between
Seller and Ernst & Young.
(15) Seller's rights under its export license.
(16) The software licenses of Seller in and to the
IBM Visual Age for Java 2.0, Iona's Orbix Web 3.0 Pro and
Imprise Visibroker for Java 3.1 computer programs.
(ab) TAXES shall mean any and all taxes, duties, premiums,
imposts, charges, fees, levies, excises, deductions, withholdings or
other like assessments (and all related interest, fines, additions to
tax and penalties), including, without limitation, those levied on, or
measured by, or referred to as income, transfer, gains, gross receipts,
profits, capital, excise, inventory, property (real, personal or
intangible), land transfer, value-added, goods and services, sales,
use, license, withholding, payroll, health, employment, stamp,
business, capital stock, franchise, social services, education and
social security taxes, all surtaxes, all customs duties and import and
export taxes, all license, franchise and registration fees and all
unemployment insurance, health insurance and other government pension
plan premiums, imposed by the United States or any state, local or
foreign government or subdivision or agency thereof, whether computed
on a consolidated, unitary, combined or any other basis.
(ac) TAX RETURNS shall mean any and all reports, returns
or other information filed with or required to be supplied to a taxing
authority in connection with Taxes.
(ad) TRAINING FACILITY shall mean the training facility
located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
(ae) SELLER'S LEASE shall mean the lease agreement between
CarrAmerica Realty L.P., as landlord, and Seller, as tenant, dated
April 1997, relating to the office building located at ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
(af) VALTECH TECHNOLOGIES shall mean Valtech Technologies,
Inc., a Delaware corporation and wholly-owned subsidiary of Purchaser.
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(ag) WELFARE PLAN" shall mean any "employee welfare
benefit plan" as defined in Section 3(1) of ERISA, which (i) is (or
was within the six-year period ending on the Closing Date) entered
into, maintained, administered, contributed to or required to be
contributed to, as the case may be, by any of Seller or any ERISA
Affiliate and (ii) which covers or covered any current or former
employee, director, or consultant of any of Seller or any ERISA
Affiliate (with respect to their relationship with such entities).
11. MISCELLANEOUS.
(ag) FURTHER ASSURANCES. Upon reasonable request, from
time to time, each party agrees that it shall (or, if applicable, shall
direct its employees to) execute and deliver all documents, make all
rightful oaths, testify in any proceedings and do all other acts which
may be necessary or desirable in the reasonable opinion of the other
party to protect or record the right or title of Newco to the Operating
Assets or to aid in the prosecution or defense of any rights arising
therefrom, all without further consideration other than reimbursement
for reasonable out-of-pocket expenses.
(ag) AMENDMENTS AND WAIVER. This Agreement may be amended
only by an agreement in writing by the parties hereto. The failure of
any party to insist, in any one or more instances, upon performance of
any of the terms and conditions of this Agreement shall not be
construed as a waiver or relinquishment of any rights granted hereunder
or of the future performance of any such term, covenant or condition.
If any provision, clause or part of this Agreement, or the application
thereof under certain circumstances, is held invalid, the remainder of
this Agreement, or the application of each provision, clause or part
under other circumstances, shall not be affected thereby.
(ag) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF
TEXAS, WITHOUT GIVING EFFECT TO CHOICE OF LAW PRINCIPLES. TO THE
MAXIMUM EXTENT PRACTICABLE, THIS AGREEMENT IS PERFORMABLE IN DALLAS
COUNTY, TEXAS.
(ag) NOTICES. Any notice to be given hereunder shall be
deemed given and sufficient if either (1) delivered by hand messenger
or (2) mailed via an overnight "express mail" service with a telecopy
being sent within two days of such "express mail" notice, in the case
of Purchaser, to:
Valtech S.A.
c/o Valtech Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or in the case of Seller to:
ObjectSpace, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Each party may designate by notice in writing a new address to which
any notice, claim, instruction or communication may thereafter be so
given, served or sent.
(ag) BENEFIT. This Agreement shall be binding upon and inure
to the benefit of and shall be enforceable by Purchaser and Seller and
their respective successors and permitted assigns. This Agreement may
not be assigned without the written consent of the other party or
parties hereto, except that Purchaser may assign this Agreement to an
affiliate of Purchaser upon written notice to Seller but any such
assignment shall not release Purchaser from its obligations hereunder.
(ag) ENTIRE AGREEMENT. This Agreement, including the schedules
and exhibits attached hereto, constitutes the entire agreement and
understanding among Purchaser and Seller with respect to the purchase
and sale of the Shares and the other transactions contemplated by this
Agreement and supercedes any prior understandings or written or oral
agreements, including the Letter of Intent dated July 9, 1999 between
Valtech Technologies and Seller, between the parties or their
affiliates with respect to the subject matter of this Agreement.
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(ag) BROKERS. Purchaser and Seller represent and warrant to
each other that there are no brokerage or finder's fees in connection
with the transactions contemplated hereby resulting from any actions
taken by them and they hereby indemnify, save and hold each other
harmless from and against any claims by any broker or finder for a fee
or expense which is based in any way on an agreement, arrangement or
understanding made or alleged to have been made by them relating to the
transactions contemplated hereby.
(ag) DISCLOSURE SCHEDULE. Disclosure of any fact or item in
any Schedule hereto referenced by a particular paragraph or section in
this Agreement shall, should the existence of the fact or item or its
contents be relevant to any other paragraph or section, be deemed to be
disclosed with respect to that other paragraph or section whether or
not an explicit cross-reference appears.
(ag) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be deemed to be an original and all of
which will be deemed to be a single agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day, month and year first above written.
VALTECH S.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: President
---------------------
OBJECTSPACE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
Title: President
---------------------
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