EXHIBIT 2
INTELLECTUAL PROPERTY RIGHTS PURCHASE AGREEMENT
-----------------------------------------------
BETWEEN
GEAC CANADA LIMITED
AND
CLARUS CORPORATION
TABLE OF CONTENTS
1. Purchase and Sale of the Assets..........................................1
1.1. Purchase of the Assets................................................1
1.2. Further Assurances....................................................2
1.3. Purchase Price for the Company Intellectual Property..................2
1.4. No Assumption of Liabilities..........................................2
1.5. Closing...............................................................2
1.6. Company Actions.......................................................2
2. Representations of the Company...........................................3
2.1. Organization..........................................................3
2.2. Authorization.........................................................3
2.3. Ownership of Company Intellectual Property............................4
2.4. Intellectual Property.................................................4
2.5. Disclosure............................................................9
3. Representations of the Buyer.............................................9
3.1. Organization and Authority............................................9
3.2. Authorization.........................................................9
3.3. Regulatory Approvals.................................................10
4. Access to Information; Public Announcements; Covenants of the Company...10
4.1. Access to Management, Properties and Records.........................10
4.2. Confidentiality......................................................10
4.3. Public Announcements.................................................11
4.4. Third Party Acquisitions.............................................11
4.5. Filings; Other Actions; Notification.................................13
4.6. Information Supplied.................................................14
4.7. Stockholders Meeting.................................................14
4.8. Effect of Termination and Abandonment................................15
5. Efforts to Obtain Satisfaction of Conditions............................15
6. Conditions to Obligations of the Buyer..................................15
6.1. Continued Truth of Representations and Warranties of the Company;
Compliance with Covenants and Obligations.................................15
6.2. Corporate Proceedings and Shareholder Approval.......................16
6.3. The Company Intellectual Property....................................16
6.4. Governmental Approvals...............................................16
6.5. Consent of Third Parties.............................................16
6.6. Adverse Proceedings..................................................16
6.7. Fulfillment of Closing Conditions of Asset Purchase Agreement........16
6.8. Closing Deliveries...................................................16
7. Conditions to Obligations of the Company................................17
7.1. Continued Truth of Representations and Warranties of the Buyer;
Compliance with Covenants and Obligations .................................17
7.2. Company Proceedings..................................................17
7.3. Governmental Approvals...............................................17
7.4. Consents of Third Parties............................................18
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7.5. Adverse Proceedings..................................................18
7.6. Fulfillment of Conditions to Closing in US Asset Purchase Agreement..18
7.7. Stockholder Approval.................................................18
7.8. Closing Deliveries...................................................18
8. Post-Closing Agreements.................................................19
8.1. Proprietary Information..............................................19
8.2. Limitation on Use of Name............................................19
8.3. Non-Competition Agreement............................................19
8.4. Sharing of Data......................................................20
8.5. Cooperation of the Company...........................................20
8.6. Limited License to the Company to use the software comprising
the Company Intellectual Property..........................................20
9. Intentionally Omitted...................................................20
10. Termination of Agreement; Option to Proceed; Damages....................21
10.1. Termination by Lapse of Time......................................21
10.2. Termination by Agreement of the Parties...........................21
10.3. Termination by Reason of Breach...................................21
10.4. Availability of Remedies at Law...................................21
11. Dispute Resolution......................................................21
11.1. General...........................................................21
11.2. Consent of the Parties............................................21
11.3. Arbitration.......................................................22
12. Brokers.................................................................22
12.1. For the Company...................................................22
12.2. For the Buyer.....................................................22
13. Notices.................................................................23
14. Successors and Assigns..................................................24
15. Entire Agreement; Amendments; Attachments...............................24
16. Severability............................................................24
17. Expenses................................................................24
18. Governing Law...........................................................24
19. Section Headings........................................................24
20. Counterparts............................................................25
21. Definition of Knowledge.................................................25
22. Construction............................................................25
23. Defined Terms in Section of Agreement Indicated.........................25
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INTELLECTUAL PROPERTY RIGHTS PURCHASE AGREEMENT
THIS INTELLECTUAL PROPERTY RIGHTS PURCHASE AGREEMENT (the "Agreement")
is made as of the 24th day of August, 1999 by and between Clarus Corporation, a
Delaware Corporation (the "Company"), and Geac Canada Limited, a Canadian
corporation (the "Buyer"). All amounts referred to herein as denominated in
"dollars" or preceded by the "$" sign are stated in U.S. dollars.
WHEREAS, the Company desires to sell substantially all of the
intellectual property related to the Business, as such term is defined below,
for the consideration set forth below, subject to the terms and conditions of
this Agreement;
WHEREAS, the Buyer desires to purchase such assets and assume certain
related liabilities, subject to the terms and conditions of this Agreement;
WHEREAS, the Board of Directors of the Buyer has approved the
transactions contemplated herein upon the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, for purposes of this Agreement, the term "Business" means all
of the business conducted by the Company, of each and every nature, relating to
the development, marketing, licensing and sale of products for use in the
Financial, Enterprise Resource Planning and Human Resources markets, and, for
greater certainty, excluding the Electronic Commerce Business;
WHEREAS, for purposes of this Agreement, the term "Electronic Commerce
Business" means the development, marketing, licensing and sale of products for
use in electronic commerce, currently consisting of the "Clarus E Procurement"
and "Clarus Commerce" products;
WHEREAS, the Board of Directors of the Company (the "Company's Board of
Directors") has approved this Agreement, has determined that the transactions
contemplated by this Agreement, taken together, are in the best interests of the
Company's stockholders and has agreed to recommend that the stockholders of the
Company approve this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereby agree as follows:
1. Purchase and Sale of the Assets.
1.1. Purchase of the Assets. Subject to and upon the terms and
conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement the Company will sell, transfer, convey, assign and deliver to
the Buyer, and the Buyer will purchase, acquire,
accept and pay for, all of the Company's right, title and interest in and to all
of the Company Intellectual Property (as defined below).
1.2. Further Assurances. At any time and from time to time after
the Closing, at the Buyer's request and without further consideration, the
Company shall promptly execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take all such other action as the
Buyer may reasonably request, more effectively to transfer, convey and assign to
the Buyer, and to confirm the Buyer's title to, all of the Company Intellectual
Property and to carry out the purpose and intent of this Agreement.
1.3. Purchase Price for the Company Intellectual Property. The
aggregate purchase price to be paid by the Buyer for the Company Intellectual
Property shall be the sum of Eleven Million One Hundred Forty Thousand Dollars
($11,140,000), subject to adjustment pursuant to the Indemnification Agreement
among the Buyer, the Company and Geac Computer Systems, Inc., dated as of even
date herewith (the "Purchase Price"). The Purchase Price shall be payable by the
Buyer to the Company in cash, by cashier's or certified check, or by wire
transfer of immediately available funds to an account designated by the Company.
1.4. No Assumption of Liabilities. The Buyer shall not at the
Closing assume or agree to perform, pay or discharge, and the Company shall
remain unconditionally liable for, all obligations, liabilities and commitments,
fixed or contingent, known or unknown, of the Company, including, without
limitation, any liabilities or obligations related to (i) any litigation
involving the Company, (ii) brokers or other third parties acting on behalf of
the Company in connection with the sale of the Company Intellectual Property,
(iii) any taxes which are or were due and payable in connection with the Company
Intellectual Property on or prior to the Closing Date; and (iv) any liability
related to its business and operations not included in the Business.
1.5. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Green, P.C., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ at 10:00 a.m., Boston Time,
or such other place and time as the parties shall mutually agree, as soon as all
the necessary consents and approvals to the transactions contemplated herein are
obtained by the parties (the "Closing Date"), but in no event later than the
second business day following the satisfaction of the conditions set forth in
Sections 6.4, 6.5 and 7.7 hereof. The transfer of the Company Intellectual
Property to the Buyers shall be deemed to occur at 12:01 a.m., Boston time, on
the Closing Date.
1.6. Company Actions. The Company hereby approves of and consents
to this Agreement and represents that the Company's Board of Directors, at a
meeting duly called and held, has, subject to the terms and conditions set forth
herein, (i) determined that this Agreement and the transactions contemplated
hereby, taken together, are in the best interests of the Company's stockholders,
(ii) approved this Agreement and the transactions contemplated hereby in all
respects, and (iii) resolved to recommend that the stockholders of the Company
approve and adopt this Agreement; provided, however, that such recommendation
and approval may be withdrawn, modified or amended to the extent that the
Company's Board determines in good faith, after taking into consideration the
written advice of its outside legal counsel, that failure to take such action is
reasonably likely to result in a breach of the fiduciary obligations of the
Company's Board of Directors under applicable law. The Company also represents
that the
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Company's Board of Directors has reviewed the opinion of US Bancorp ▇▇▇▇▇
▇▇▇▇▇▇▇, financial advisor to the Company's Board of Directors (the "Financial
Advisor"), that, as of the date of this Agreement, the consideration to be
received pursuant to this Agreement is fair to the Company from a financial
point of view (the "Fairness Opinion"). The Company has been authorized by the
Financial Advisor to permit, subject to the prior review and consent by the
Financial Advisor (such consent not to be unreasonably withheld), the inclusion
of the Fairness Opinion (or a reference thereto) in the Proxy Statement
delivered by the Company to its Stockholders in connection with the transactions
contemplated herewith and any amendment or supplement thereto (the "Proxy
Statement").
2. Representations of the Company.
The Company represents and warrants to the Buyer as follows:
2.1. Organization. Each of the Company and its subsidiaries: (a) is
a corporation duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of organization, and (b) has all requisite
power and authority (corporate and otherwise) to own its properties and to carry
on its business as now being conducted. The Company has made available to the
Buyer a complete and correct copy of the Company's certificate of incorporation
and bylaws (or comparable operating documents), each as amended to date. The
Company's certificate of incorporation and bylaws (or comparable governing
documents) so made available are in full force and effect.
2.2. Authorization.
(a) The Company has all requisite power (corporate and otherwise) and
authority to execute, deliver and perform its obligations hereunder except for
the required approval of the stockholders of the Company. The execution and
delivery by the Company of this Agreement and the agreements provided for
herein, and the consummation by the Company of all transactions contemplated
hereunder and thereunder, have been duly authorized by all requisite corporate
and shareholder action except for the required approval of the stockholders of
the Company. This Agreement has been duly executed by the Company. This
Agreement and all other agreements and obligations entered into and undertaken
in connection with the transactions contemplated hereby to which the Company is
a party constitute the valid and legally binding obligations of the Company,
enforceable against it in accordance with their respective terms enforceable
against it in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally, and
equitable principles. The execution, delivery and performance by the Company of
this Agreement and the agreements provided for herein, and the consummation by
the Company of the transactions contemplated hereby and thereby following
approval by the Company's stockholders, will not, with or without the giving of
notice or the passage of time or both: (a) violate the provisions of any law,
rule or regulation applicable to the Company; (b) violate the provisions of the
charter or Bylaws of the Company; (c) violate any judgment, decree, order or
award of any court, governmental body or arbitrator; or (d) conflict with or
result in the breach or termination of any term or provision of, or constitute a
default under, or cause any acceleration under, or cause the creation of any
lien, charge or encumbrance upon the properties or assets of the Business
pursuant to, any indenture, mortgage, deed of trust
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or other agreement or instrument to which the Company is a party or by which the
Company is or may be bound, except as set forth on Schedule 2.2. Schedule 2.2
attached hereto sets forth a true, correct and complete list of all consents and
approvals of third parties that are required in connection with the consummation
by the Company of the transactions contemplated by this Agreement.
2.3. Ownership of Company Intellectual Property. Schedule 2.3
attached hereto sets forth a true, correct and complete list of all claims,
liabilities, security interests, mortgages, liens, pledges and encumbrances of
any kind affecting the Company Intellectual Property (the items set forth on
Schedule 2.3, together with any licenses granted to end user customers of the
Business in the ordinary course of business, being hereinafter referred to as
the "Encumbrances"). The Company is, and at the Closing will be, the true and
lawful owner of the Company Intellectual Property, and will have the right to
sell and transfer to the Buyer good title to the Company Intellectual Property,
free and clear of all Encumbrances of any kind. The delivery to the Buyer of the
instruments of transfer of ownership contemplated by this Agreement will vest
good title to the Company Intellectual Property in the Buyer, free and clear of
all Encumbrances.
2.4. Intellectual Property. For purposes of this Agreement, the
following terms have the following definitions:
"Intellectual Property Rights" shall mean any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether or not patentable),
invention disclosures, improvements, trade secrets, proprietary information,
processes, formulas, know how, computer software programs (in both source code
and object code form), technology, technical data and customer lists, tangible
or intangible proprietary information, and all documentation relating to any of
the foregoing; (iii) all copyrights, copyrights registrations and applications
therefor, and all other rights corresponding thereto throughout the world; (iv)
all industrial designs and any registrations and applications therefor
throughout the world; (v) all trade names, logos, business names, common law
trademarks and service marks, trademark and service ▇▇▇▇ registrations and
applications therefor throughout the world; (vi) all customer lists, databases
and data collections and all rights therein throughout the world; (vi) all moral
and economic rights of authors and inventors, however denominated, throughout
the world; (vii) all Software; (viii) all licenses and other agreements to which
the Company is a party (as licensor or licensee) or by which the Company is
bound relating to any of the foregoing kinds of property; (ix) all rights to any
"know how", trade secrets or use of ideas; and (x) any similar or equivalent
rights to any of the foregoing anywhere in the world;
"Commercial Software Rights" shall mean commercially available software programs
generally available to the public (including without limitation both so-called
"shrink-wrap" software and enterprise software) which have been licensed to the
Company or its subsidiaries pursuant to end-user licenses and which are used in
the Business, but are in no way a component of or incorporated in any of the
Company's or any of its subsidiaries' Software;
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"Company Intellectual Property" shall mean any Intellectual Property Rights to
the extent used in or under development for use in the Business, including
without limitation those Intellectual Property Rights used internally by the
Company in the Business and those licensed, sold or distributed by the Company
in the Business to third parties, but excluding all Commercial Software Rights
and Embedded Third Party Software;
"Software" means the software specified in Schedule 2.4 and all other software
used in connection with the Business or on order or under development for use in
connection with the Business, whether or not for internal use or for licensing,
sale or distribution.
"Registered Intellectual Property" shall mean all United States, international
and foreign: (i) patents and patent applications (including provisional
applications); (ii) registered trademarks, applications to register trademarks,
intent-to-use applications, or other registrations or applications related to
trademarks; (iii) registered copyrights and applications for copyright
registration; and (iv) any other Intellectual Property Rights that are the
subject of an application, certificate, filing, registration or other document
issued, filed with, or recorded by any state, government or other public legal
authority; and
"Company Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, the Company or any
subsidiary and used in the Business.
"Embedded Third Party Software" shall mean all Software that is licensed to the
Company by a third party and is a component of, or incorporated into, any of the
Company's or any of its subsidiaries' products that are included in the
Business.
(a) Schedule 2.4 sets forth a complete list of (i) all Registered
Intellectual Property, (ii) all material Intellectual Property Rights included
in the Company Intellectual Property and specifies the jurisdictions in which
such Company Registered Intellectual Property has been issued or registered or
in which an application for such issuance and registration has been filed,
including the respective registration or application numbers and the names of
all registered owners, together with (iii) a list of all software products
currently marketed by the Company and its subsidiaries in connection with the
Business and an indication as to which, if any, of such software products have
been registered for copyright protection with the United States Copyright Office
and any foreign offices and by whom such items have been registered. To the
Company's knowledge, all statements contained in all applications for
registration of the Company Registered Intellectual Property were true and
correct as of the date of such applications. Except as set forth on Schedule
2.4, each of the trademarks and trade names included in the Company Intellectual
Property is in use.
(b) Schedule 2.4 sets forth a complete list of (i) any requests the
Company or any subsidiary has received to make any such registration of Company
Intellectual Property, including the identity of the requestor and the item
requested to be so registered and the jurisdiction for which such request has
been made, (ii) all licenses, sublicenses, and other agreements to which the
Company or any subsidiary is a party and pursuant to which the Company, any
subsidiary, or any other person is authorized to use any material item of
Company Intellectual Property, and includes the identity of all parties thereto,
a description of the nature and subject matter thereof, the applicable royalty,
and the term thereof (provided that in the case
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of end user agreements only the identity of the parties thereto may be supplied)
and (iii) any agreement pursuant to which a third party has licensed or
transferred any Company Intellectual Property to the Company (other than
licenses of Commercial Software Rights). Except as set forth on Schedule 2.4,
the execution and delivery of this Agreement by the Company, and the
consummation of the transactions contemplated hereby, will cause neither the
Company nor any subsidiary to be in violation or default under any such license,
sublicense or agreement, nor entitle any other party to any such license,
sublicense or agreement to terminate or modify such license, sublicense or
agreement.
(c) Except as set forth on Schedule 2.4, neither the Company nor any
subsidiary has been sued or charged as a defendant in any claim, suit, action,
or proceeding which involves a claim of infringement by the Company Intellectual
Property of any Intellectual Property Rights of any third party used in the
Business and which has not been finally terminated prior to the date hereof, nor
does the Company have any knowledge of any such charge or claim or any valid
basis therefor, and there has been no decree, order, judgment, stipulation or
claim of any infringement liability by the Company or any subsidiary of any
Intellectual Property Rights of another. To the Company's knowledge, no Company
Intellectual Property or Embedded Third Party Software is subject to any
outstanding decree, order, judgment, or stipulation restricting in any manner
the licensing of products by the Company and the subsidiaries.
(d) Except as set forth on Schedule 2.4, each item of Company
Registered Intellectual Property is valid and subsisting, all necessary
registration, maintenance and renewal fees currently due in connection with such
Registered Intellectual Property have been made and all necessary documents,
recordations and certificates in connection with such Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or other
authorities in the United States or foreign jurisdictions, as the case may be,
for the purpose of maintaining the registrations of such Registered Intellectual
Property.
(e) Except as set forth on Schedule 2.4, the Company or a subsidiary is
the sole and exclusive owner or licensee of, with all right, title, and
interest, or license rights, as the case may be, in and to each item of Company
Intellectual Property, free and clear of any Encumbrance, and has sole and
exclusive rights, excluding licenses granted to end user customers of the
Business in the ordinary course of business (and is not contractually obligated
to pay any compensation to any third party in respect thereof) to the use
thereof or the material covered thereby in connection with the services or
products in respect of which the Company Intellectual Property is being used.
Except as set forth on Schedule 2.4, neither the Company nor any of its
subsidiaries is a party to or bound by any agreement, indenture, contract,
lease, deed of trust, license, sublicense, option, instrument or other
commitment, whether written or oral, that limits or impairs its ability to sell,
license or assign, or that otherwise adversely affects in any material respect,
the Company Intellectual Property. None of the Software which is owned by the
Company includes or incorporates, any (i) software distributed free of charge on
a trial basis for which a paid license would be required for commercial
distribution, (ii) software whose ownership has been retained by a third party
who controls its distribution, or (iii) any other code obtained from the public
domain.
(f) To the extent that any material Company Intellectual Property has
been developed or created by a third party for the Company or any subsidiary,
the Company or a subsidiary has a
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written agreement with such third party with respect thereto, and the Company or
a subsidiary, has obtained ownership of, and is the exclusive owner of all such
third party's Intellectual Property Rights in such work. All Embedded Third
Party Software is listed and identified as such on Schedule 2.4, which schedule
also indicates whether the Company's license for such Embedded Third Party
Software is exclusive or nonexclusive.
(g) Neither the Company nor any subsidiary has transferred ownership
of, or granted any exclusive license with respect to, any Company Intellectual
Property to any third party.
(h) All material contracts, licenses and agreements relating to the
Company Intellectual Property and the Embedded Third Party Software are in full
force and effect. Except as set forth on Schedule 2.4, the execution and
delivery of this Agreement by the Company and the consummation of the
transactions contemplated hereby will neither violate nor result in the material
breach, modification, cancellation, termination, or suspension of such
contracts, licenses and agreements. Except as set forth on Schedule 2.4 the
Company and each of the subsidiaries is in material compliance with, and has not
breached any material term of such contracts, licenses and agreements and, to
the knowledge of the Company, all other parties to such contracts, licenses and
agreements are in material compliance with, and have not breached any material
term of, such contracts, licenses and agreements. Except as set forth on
Schedule 2.4 following the Closing Date, the Buyer will be permitted to exercise
all of the Company's and the subsidiaries' rights under such contracts, licenses
and agreements to the same extent the Company or any subsidiary would have been
able to had the transactions contemplated by this Agreement not occurred and
without the payment of any additional amounts or consideration other than
ongoing fees, royalties, or payments which the Company or any subsidiary would
otherwise be required to pay.
(i) Except as set forth on Schedule 2.4, no claims with respect to
Company Intellectual Property have been asserted or, to the Company's knowledge,
are threatened by any person, nor to the Company's knowledge are there any valid
grounds with respect to Company Intellectual Property for any bona fide claims
(i) to the effect that the manufacture, sale, licensing or use of any of the
products of the Company and the subsidiaries used in the Business infringes on
or misappropriates any Intellectual Property Rights or constitutes unfair
competition or trade practices under the laws of any jurisdiction, (ii) against
the use by the Company or any subsidiary of any Company Intellectual Property or
(iii) challenging the ownership by the Company or any subsidiary of any Company
Intellectual Property or the validity or effectiveness of any Company
Intellectual Property. To the Company's knowledge, the foregoing representations
and warranties are true and correct with respect to Embedded Third Party
Software. To the knowledge of the Company, the Business as currently conducted
or as reasonably foreseeably proposed to be conducted as of the date hereof has
not and does not infringe on any proprietary right of any third party. To the
Company's knowledge, there is no unauthorized use, infringement or
misappropriation of any Company Intellectual Property or Third Party Embedded
Software by any third party, including any employee or former employee of the
Company or any subsidiary.
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(j) The Company has taken reasonable steps to protect the Company's and
the subsidiaries' rights in their confidential information and trade secrets or
any trade secrets or confidential information of third parties provided to the
Company, and, without limiting the foregoing, the Company has and enforces a
policy requiring each employee and contractor to execute a proprietary
information/confidentiality agreement substantially in the form provided to the
Buyer and all current and former employees and contractors of the Company have
executed such an agreement, except where the failure to do so is not reasonably
expected to result in a Business Material Adverse Effect. For purposes of this
Agreement, "Business Material Adverse Effect" means a material adverse effect on
any of the financial condition, properties, business, results of operations or
reasonably foreseeable prospects of the Business as contemplated on the date
hereof, taking such Business as a whole (either directly or as a result of its
effect on the Company), but excluding any effect on the sales of the Business or
the collection of the accounts receivable of the Company resulting from the
announcement of the transactions contemplated by this Agreement. For purposes of
this Agreement, when a representation or warranty is qualified by the phrase
"Business Material Adverse Effect," the determination of whether or not there is
a Business Material Adverse Effect with respect to the matters referenced in
such representation or warranty shall be made both with respect to each matter
referenced therein on an individual basis and with respect to all matters
referenced therein on a collective basis.
(k) The latest version of each software program included in the
Software (excluding the Commercial Software Rights) which is currently marketed
by the Company, including, without limitation, the controlled release version of
the FSA Program, conforms in all material respects to the published
specifications delivered by the Company for such software program. Such Software
does not contain any product keys, expiry codes, time locks, bombs, or other
routines, codes or devices that may prevent the Buyer or any end user of such
Software from using such Software at any time. To the knowledge of the Company,
such Software, and the computer systems and media on which such Software is
stored, do not contain any computer viruses or any other programs that may
affect the normal use of the Software or any other software, data or computer
systems.
(l) (i) Except as set forth on Schedule 2.4, all Date Sensitive Systems
are Year 2000 Compliant; provided, however, that with respect to Date Sensitive
Systems that constitute Embedded Third Party Software, the foregoing
representation and warranty is made to the Company's knowledge. "Date Sensitive
Systems" means the most recent versions (i.e., the C5 version, where applicable)
of Software included in the Company Intellectual Property and any Embedded Third
Party Software that is or was previously marketed by the Company, including any
electronic or electronically controlled systems or component thereof that
processes any Date Data, both for the Company's internal use and which the
Company sells, leases, licenses, assigns or otherwise provides, or the benefit
of which the Company provides, to its customers, vendors, suppliers, affiliates
or any other third party. "Date Data" means any data of any type that includes
date information or which is otherwise derived from, dependent on or related to
date information. "Year 2000 Compliant" means, with respect to Date Sensitive
Systems, that each such system when used in the manner currently used by the
Company and in accordance with such system's own documentation accurately
processes all Date Data without loss of any material functionality or
performance as a result of the change in year from 1999 to 2000 and thereafter,
including, but not limited to, calculating, comparing, sequencing, storing,
displaying
8
and otherwise processing such date data (including all leap year
considerations); (ii) except as set forth on Schedule 2.4, each of the suppliers
of goods or services that are material to the Business has certified or
otherwise provided evidence to the Company that its ability to carry on business
will not be adversely affected by the change from the year 1999 to the year
2000; (iii) Schedule 2.4 sets forth a true, correct and complete list of any
agreements, promises or statements by or between the Company and other persons
in respect of the year 2000, including but not limited to auditors, insurers,
bankers, customers and shareholders of the Business, excluding end user customer
warranties made in the ordinary course of business; (iv) Schedule 2.4 sets forth
a true, correct and complete list of reports prepared by or on behalf of the
Company in respect of the year 2000 in relation to the Business; (iv) Schedule
2.4 sets forth a true, correct and complete description of the Company's year
2000 compliance program, including but not limited to year 2000 test
methodologies, plans, scripts and outputs/results for all products that are
material to the Business.
2.5. Disclosure. The representations and warranties made by the
Company in this Agreement, in the Exhibits hereto and the Schedules delivered or
to be delivered pursuant to this Agreement, taken as a whole, do not contain and
will not contain any untrue statement of a material fact, and do not omit and
will not omit any material fact, necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. Copies of all documents heretofore or hereafter delivered or made
available to the Buyer, including, without limitation, the documents disclosed
in the Schedules to this Agreement, are complete and accurate copies of such
documents.
3. Representations of the Buyer
The Buyer represents and warrants to the Company as follows:
3.1. Organization and Authority. The Buyer is (a) a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation; (b) has all requisite power (corporate and
otherwise) and authority to own its properties and to carry on its business as
now being conducted and (c) is qualified to do business and in good standing as
a foreign corporation in each jurisdiction where the ownership or operation of
its properties or conduct of its business requires such qualification, except
where the failure to be so qualified or in such good standing, when taken
together with all other such failures, has not had and is not reasonably likely
to have a Buyer Material Adverse Effect. The Buyer has made available to the
Company a complete and correct copy of the certificate of incorporation and
bylaws of the Buyer, as amended to date. The certificate of incorporation and
bylaws so delivered are in full force and effect.
3.2. Authorization. The Buyer has all requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement. This Agreement and all
such other agreements and obligations entered into and undertaken in connection
with the transactions contemplated hereby to which the Buyer is a party
constitute the valid and legally binding obligations of it, enforceable against
the Buyer in accordance with their respective terms except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws
9
affecting the enforcement of creditors' rights generally, and equitable
principles. The execution, delivery and performance of this Agreement and the
agreements provided for herein, and the consummation by the Buyer of the
transactions contemplated hereby and thereby, will not, with or without the
giving of notice or the passage of time or both, (a) violate the provisions of
any law, rule or regulation applicable to the Buyer; (b) violate the provisions
of the charter or Bylaws of the Buyer; or (c) violate any judgment, decree,
order or award of any court, governmental body or arbitrator. Schedule 3.2
attached hereto sets forth a true, correct and complete list of all consents and
approvals of third parties that are required in connection with the consummation
by the Buyer of the transactions contemplated by this Agreement.
3.3. Regulatory Approvals. All consents, approvals, authorizations
and other requirements prescribed by any law, rule or regulation which must be
obtained or satisfied by the Buyer and which are necessary for the consummation
of the transactions contemplated by this Agreement have been, or prior to the
Closing Date will be, obtained and satisfied, including, without limitation,
filings and approvals pursuant to the HSR Act (as defined below) and Canadian
and provincial securities laws.
4. Access to Information; Public Announcements; Covenants of the
Company
4.1. Access to Management, Properties and Records. From the date of
this Agreement until the Closing Date, the Company shall afford the officers,
attorneys, accountants and other authorized representatives of the Buyer access
upon reasonable prior notice and during normal business hours to all management
personnel, offices, properties, books and records of the Business, for the sole
purpose of facilitating the Closing of the transactions contemplated hereunder.
The Company shall furnish to the Buyer such financial and operating data and
other information as to the Business as the Buyer shall reasonably request. Upon
prior approval of the Company, which shall not be unreasonably withheld or
delayed, the Buyer shall also have the right to contact the Company's vendors
and customers, and other persons having business dealings with the Company for
the sole purpose of facilitating the Closing of the transactions contemplated
hereunder. The Company shall be entitled to participate in such communications
and to make the initial introductions. The activities contemplated by this
subsection are hereinafter referred to as "Due Diligence Activities."
4.2. Confidentiality. All information not previously disclosed to
the public or generally known to the persons engaged in the respective
businesses of the Buyer or the Company which shall have been furnished by either
the Buyer or the Company to the other party in connection with the transactions
contemplated hereby or as provided pursuant to this Section 4 shall not be
disclosed to any other person other than their respective employees, directors,
attorneys, accountants, lenders or financial advisors or other than as
contemplated herein. In the event that the transactions contemplated by this
Agreement shall not be consummated and upon request by the either party in the
case of information disclosed by such party, all such information which shall be
in writing shall be returned to the party furnishing the same, including, to the
extent reasonably practicable, all copies or reproductions thereof which may
have been prepared, or destroyed by the receiving party (in which case the
receiving party shall provide the disclosing party with a certificate certifying
that such documents were destroyed) and neither party shall at any time
thereafter disclose to any third parties, or use, directly or indirectly, for
its own benefit, any such information, written or oral, about the business of
the
10
other party hereto. Notwithstanding the foregoing, the receiving party shall be
entitled to retain that portion of such confidential information that the
receiving party's counsel advises it is necessary or advisable to be retained
for the purposes of any subsequent legal action involving the receiving party
and the disclosing party or its shareholders, officers or directors, subject
however to all of the confidentiality provisions hereof for so long as such
confidential information is retained.
4.3. Public Announcements. Except as otherwise required by law, the
parties agree that prior to the Closing Date any and all general public
pronouncements or other general public communications concerning this Agreement
and the purchase of the Acquired Assets by the Buyer, and the timing, manner and
content of such disclosures, shall be subject to the mutual agreement of the
Company and the Buyer, provided that the Company and Geac Computer Corporation
Limited shall be permitted to make such disclosures as may be required by law or
rules of its securities exchange.
4.4. Third Party Acquisitions.
(a) The Company agrees that neither it nor any of its subsidiaries nor
any of its or its subsidiaries' employees or directors shall, and it shall
direct and use its best efforts to cause its and its Subsidiaries' agents and
representatives (including any investment banker or other financial advisor and
any attorney or accountant retained by it or any of its subsidiaries
(collectively, "Company Advisors")) not to, directly or indirectly, initiate,
solicit or otherwise facilitate any inquiries in respect of, or the making of
any proposal for, a Third Party Acquisition (as defined in clause (b) below).
The Company further agrees that neither it nor any of its subsidiaries nor any
of its or its subsidiaries' employees or directors shall, and it shall direct
and use its best efforts to cause all Company Advisors not to engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any Third Party (as defined in clause (b) below)
relating to the proposal of a Third Party Acquisition, or otherwise attempt to
make or implement a Third Party Acquisition; provided, however, that if at any
time prior to the Closing, the Company's Board of Directors determines in good
faith, after taking into consideration the written advice of its outside legal
counsel, that it is required in order for its members to comply with their
fiduciary duties under applicable law, the Company may, in response to an
inquiry, proposal or offer for a Third Party Acquisition which was not solicited
subsequent to the date hereof, (x) furnish non-public information with respect
to the Company to any such person pursuant to a confidentiality agreement on
terms substantially similar to the confidentiality agreement entered into
between the Company and the Buyer prior to the execution of this Agreement and
(y) participate in discussions and negotiations regarding such inquiry, proposal
or offer; and provided, further, that nothing contained in this Agreement shall
prevent the Company or the Company's Board of Directors from complying with
Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to any
proposed Third Party Acquisition or withdrawing its recommendation to the
stockholders of the Company to approve the transactions contemplated herein. The
Company shall immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Third Parties conducted
heretofore with respect to any of the foregoing. The Company shall take the
necessary steps to promptly inform all Company Advisors of the obligations
undertaken in this Section 4.4(a). The Company agrees to notify the Buyer as
promptly as reasonably practicable in writing if (i) any inquiries relating to
or proposals for a Third Party Acquisition are received by the Company, any
11
of its subsidiaries or any of the Company Advisors, (ii) any confidential or
other non-public information about the Company or any of its subsidiaries is
requested from the Company, any of its subsidiaries or any of the Company
Advisors, or (iii) any negotiations or discussions in connection with a possible
Third Party Acquisition are sought to be initiated or continued with the
Company, any of its subsidiaries or any of the Company Advisors indicating, in
connection with such notice, the principal terms and conditions of any proposals
or offers, and thereafter shall keep the Buyer informed in writing, on a
reasonably current basis, on the status and terms of any such proposals or
offers and the status of any such negotiations or discussions. The Company also
agrees promptly to request each Person that has heretofore executed a
confidentiality agreement in connection with its consideration of acquiring the
Company or any of its subsidiaries, if any, to return all confidential
information heretofore furnished to such Person by or on behalf of the Company
or any of its subsidiaries.
(b) Except as permitted by this clause (b), the Company's Board of
Directors shall not withdraw its recommendation to the stockholders of the
Company to approve the transactions contemplated herein or approve or recommend,
or cause the Company to enter into any agreement with respect to, any Third
Party Acquisition. Notwithstanding the preceding sentence, if the Company's
Board of Directors determines in its good faith judgment, after taking into
consideration the written advice of its outside legal counsel, that it is
required in order for its members to comply with their fiduciary duties under
applicable law, the Company's Board of Directors may withdraw its recommendation
to its stockholders of the approval of the transactions contemplated hereby, or
approve or recommend or cause the Company to enter into an agreement with
respect to a Superior Proposal (as defined below); provided, however, that the
Company shall not be entitled to enter into any agreement with respect to a
Superior Proposal unless this Agreement is concurrently terminated by its terms
pursuant to Section 10.3. For purposes of this Agreement, "Third Party
Acquisition" means the occurrence of any of the following events: (i) the
acquisition of the Company by merger or otherwise by any Person (which includes
a "person" as such term is defined in Section 13(d)(3) of the Exchange Act)
other than the Buyer or any affiliate thereof (a "Third Party"); (ii) the
acquisition by a Third Party of assets comprising the Business, or any part
thereof, outside the ordinary course of business; (iii) the acquisition by a
Third Party of 50% or more of the outstanding capital stock of the Company and
its subsidiaries; or (iv) the adoption by the Company of a plan of partial or
complete liquidation or the declaration or payment of an extraordinary dividend.
For purposes of this Agreement, a "Superior Proposal" means any bona fide
proposal to acquire directly or indirectly for consideration consisting of cash
and/or securities more than 50% of the capital stock of the Company then
outstanding or all or substantially all the assets of the Company and its
subsidiaries, taken as a whole, or the assets comprising the Business, or any
part thereof and outside the ordinary course of business, and otherwise on terms
which the Company's Board of Directors by a majority vote determines in its good
faith judgment (after consultation with its Financial Adviser or other financial
advisors of nationally recognized reputation) to be reasonably capable of being
completed (taking into account all material legal, financial, regulatory and
other aspects of the proposal and the Third Party making the proposal, including
the availability of financing therefor) and more favorable to the Company's
stockholders from a financial point of view than the transactions contemplated
by this Agreement.
12
4.5. Filings; Other Actions; Notification.
(a) A vote of the Company's stockholders is required by law in order to
consummate the transactions contemplated hereunder. Accordingly, the Company
shall promptly prepare and file with the SEC a Proxy Statement (as defined in
Section 4.6 below), which shall include the recommendation of the Company's
Board of Directors that stockholders of the Company vote in favor of the
approval and adoption of this Agreement and the Fairness Opinion. The Company
shall use all reasonable efforts to have the Proxy Statement cleared by the SEC
as promptly as practicable after such filing, and promptly thereafter mail the
Proxy Statement to the stockholders of the Company. The Company shall also use
its best efforts to obtain all necessary state securities law or "blue sky"
permits and approvals required in connection with the consummations of the
transactions contemplated by this Agreement and will pay all expenses incident
thereto.
(b) Upon and subject to the terms and conditions set forth in this
Agreement, the Company and the Buyer shall cooperate with each other and use
(and shall cause their respective subsidiaries to use) all reasonable efforts to
take or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable under this Agreement and applicable laws to
consummate the transactions contemplated by this Agreement as soon as
practicable, including preparing and filing as promptly as practicable all
documentation to effect all necessary applications, notices, petitions, filings
and other documents and to obtain as promptly as practicable all permits,
consents, approvals and authorizations necessary or advisable to be obtained
from any third party and/or any Governmental Entity in order to consummate the
transactions contemplated by this Agreement; provided, however, that nothing in
this Section 4.5 shall require, or be construed to require, the Company or the
Buyer to proffer to, or agree to, sell or hold separate and agree to sell,
before or after the Closing Date, any material assets, businesses or any
interest in any material assets or businesses of the Buyer, the Company or any
of their respective Affiliates (or to consent to any sale, or agreement to sell,
by the Company of any of its material assets or businesses) or to agree to any
material change in or material restriction on the operations of any such assets
or businesses; provided, further, that nothing in this Section shall require, or
be construed to require, a proffer or agreement that would, in the reasonable
judgment of the Company or the Buyer, as the case may be, be likely to have a
material adverse effect on the anticipated financial condition, properties,
business or results of operations of the Company and its subsidiaries or the
Buyer and its subsidiaries, as the case may be, after the consummation of the
transactions contemplated herein, taken as a whole, in order to obtain any
necessary or advisable consent, registration, approval, permit or authorization
from any Governmental Entity. Subject to applicable laws relating to the
exchange of information, the Buyer and the Company shall have the right to
review in advance, and to the extent practicable each will consult the other on,
all the information relating to the Buyer or the Company, as the case may be,
and any of their respective subsidiaries, that appears in any filing made with,
or written materials submitted to, any third party and/or any Governmental
Entity in connection with the transactions contemplated by this Agreement,
including the Proxy Statement to the extent it describes the transactions set
forth herein. In exercising the foregoing right, the Company and the Buyer shall
act reasonably and as promptly as practicable.
13
(c) Each of the Company and the Buyer shall, upon request by the other,
furnish the other with all information concerning itself, its subsidiaries,
directors, officers and stockholders and such other matters as may be reasonably
necessary or advisable in connection with filings pursuant to the HSR Act, the
Proxy Statement or any other statement, filing, notice or application made by or
on behalf of the Buyer, the Company or any of their respective subsidiaries to
any governmental entity or other person (including the NASD) in connection with
the transactions contemplated by this Agreement.
(d) Each of the Company and the Buyer shall keep the other apprised of
the status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other
communications received by the Buyer or the Company, as the case may be, or any
of their respective subsidiaries, from any third party and/or any governmental
entity alleging that the consent of such third party or governmental entity is
or may be required with respect to the transactions contemplated by this
Agreement. Each of the Company and the Buyer shall give prompt notice to the
other of (i) the occurrence or non-occurrence of any fact or event which would
be reasonably likely (x) to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Closing Date or (y) to cause any covenant, condition
or agreement under this Agreement not to be complied with or satisfied and (ii)
any failure of the Company or the Buyer, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder.
4.6. Information Supplied. Each of the Buyer and the Company
agrees, as to information provided by itself and its subsidiaries, that none of
the information included or incorporated by reference in the Proxy Statement,
will, at the time the Proxy Statement is cleared by the SEC, at the date of
mailing to stockholders of the Company, and at the time of the Stockholders
Meeting (as defined in Section 4.7), contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
4.7. Stockholders Meeting. The Company will take, in accordance
with applicable laws and its certificate of incorporation and bylaws, all
reasonable action necessary to convene a meeting of holders of the capital stock
of the Company (the "Stockholders Meeting") as promptly as practicable after the
Proxy Statement is cleared by the SEC to consider and vote upon the approval of
this Agreement. The Proxy Statement shall include a statement that the Company's
Board of Directors approved this Agreement, determined that this Agreement and
the transactions contemplated hereby are in the best interests of the Company's
Stockholders and recommended that the Company's Stockholders vote in favor of
the transactions contemplated herein, and the Company shall use all reasonable
and customary efforts to solicit such approval; provided, however, that if the
Company's Board of Directors determines in good faith, after taking into
consideration the written advice of its outside legal counsel, that the Proxy
Statement not containing such recommendation is required in order for its
members to comply with their fiduciary duties under applicable law, then any
failure of the Proxy Statement to contain such recommendation shall not
constitute a breach of this Agreement.
14
4.8. Effect of Termination and Abandonment
(a) If a proposal by a Third Party for a Third Party Acquisition has
been publicly announced at the time of termination of this Agreement by the
Buyer and the Buyer shall have terminated this Agreement pursuant to Section
10.3, the Company shall pay to the Buyer within two (2) business days of such
termination an amount equal to all costs and expenses (including attorneys' fees
and expenses) incurred by the Buyer in connection with the negotiation, drafting
and execution of this Agreement and the consummation of the transactions
contemplated herein.
(b) The Company acknowledges that the agreements contained in Section
4.8 are an integral part of the transactions contemplated by this Agreement and
that, without these agreements, the Buyer would not enter into this Agreement.
Accordingly, if the Company fails promptly to pay the amounts required pursuant
to Section 4.8 and, in order to obtain such payment the Buyer commence a suit
which results in a final non-appealable judgment against the Company for such
amounts, the Company shall pay to the Buyer (i) its costs and expenses
(including attorneys' fees) in connection with such suit and (ii) if (and only
if) this Agreement has been terminated pursuant to Section 10.3, interest on the
amount at the rate announced by Citibank, N.A. as its "reference rate" in effect
on the date such payment was required to be made.
5. Efforts to Obtain Satisfaction of Conditions
The Company and the Buyer each covenant and agree to use all
commercially reasonable efforts to obtain the satisfaction of the conditions
specified in this Agreement.
6. Conditions to Obligations of the Buyer
The obligations of the Buyer under this Agreement are subject to
the fulfillment, at the Closing Date, of the following conditions precedent,
each of which may be waived in writing in the sole discretion of the Buyer:
6.1. Continued Truth of Representations and Warranties of the
Company; Compliance with Covenants and Obligations. The representations and
warranties of the Company shall be true in all material respects on and as of
the Closing Date as though such representations and warranties were made on and
as of such date, except for any changes permitted by the terms hereof or
consented to in writing by the Buyer. The Company shall have performed and
complied in all material respects with all terms, conditions, covenants,
obligations, agreements and restrictions required by this Agreement to be
performed or complied with by it prior to or at the Closing Date.
Notwithstanding the foregoing the materiality qualifications in the preceding
two sentences shall not apply to any representation, warranty, term, condition,
covenant, obligation, agreement or restriction that is itself qualified by
materiality. At the Closing, the Company shall have delivered to the Buyer a
certificate signed by the President of the Company as to its compliance with
this Subsection 6.1.
15
6.2. Corporate Proceedings and Shareholder Approval. All corporate,
Board of Directors, shareholder and other proceedings required to be taken to
authorize the Company to carry out this Agreement and the transactions
contemplated hereby, and to convey, transfer, assign and deliver the Acquired
Assets to the Buyer, shall have been taken.
6.3. The Company Intellectual Property. At the Closing the Buyer
shall receive good, clear, record and marketable title to the Company
Intellectual Property, free and clear of all Encumbrances.
6.4. Governmental Approvals. All governmental agencies, department,
bureaus, commissions and similar bodies, the consent, authorization or approval
of which is necessary under any applicable law, rule, order or regulation for
the consummation by the Company or the Buyer of the transactions contemplated by
this Agreement shall have consented to, authorized, permitted or approved such
transactions, including, without limitation, consents of the Department of
Justice and Federal Trade Commission required pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and filings and
approvals from the SEC.
6.5. Consent of Third Parties. The Company shall have received all
requisite consents and approvals of all lenders, lessors and other third parties
whose consent or approval is required in order for the Company to consummate the
transactions contemplated by this Agreement, including without limitation, those
set forth on Schedule 2.2 attached hereto.
6.6. Adverse Proceedings. No action or proceeding by or before any
court or other governmental body shall have been instituted or, to the knowledge
of the Company, threatened by any governmental body or person whatsoever which
shall seek to restrain, prohibit or invalidate the transactions contemplated by
this Agreement or which might materially and adversely affect the right of the
Buyer to own or operate the Acquired Assets after the Closing.
6.7. Fulfillment of Closing Conditions of Asset Purchase Agreement.
On or prior to the Closing Date, the Company shall have fulfilled all conditions
to Closing set forth in the Asset Purchase Agreement of even date among the Geac
Computer Systems, Inc. (the "US Buyer"), a Georgia corporation, and the Company
(the "US Purchase Agreement").
6.8. Closing Deliveries. The Buyer shall have received at or prior
to the Closing all documents set forth in this Section 6 and such other
documents, instruments or certificates as the Buyer may reasonably request
including, without limitation:
(a) an executed Assignment of Intellectual Property in substantially
the form attached hereto as Exhibit A (the "Assignment");
(b) such other instruments of transfer and conveyance, in form and
substance reasonably satisfactory to counsel for the Buyer, as the Buyer shall
reasonably request to effectively vest in the Buyer all of the right, title and
interest in the Company Intellectual Property;
16
(c) all technical data, formulations, product literature and other
documentation relating to the Company Intellectual Property;
(d) a certificate of the Secretary of State of the State of Delaware as
to the legal existence and good standing of the Company in Delaware;
(e) a certificate of the Secretaries of State for each jurisdiction in
which the Company is qualified to do business as to the legal existence and good
standing of the Company in each such jurisdiction;
(f) a certificate signed by the Secretary of the Company attesting to
the incumbency of the Company's officers, the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement, and the
authenticity and continuing validity of the charter documents and bylaws
delivered pursuant to Section 2.1; and
(g) such other documents, instruments or certificates as the Buyer may
reasonably request.
7. Conditions to Obligations of the Company
The obligations of the Company under this Agreement are subject to
the fulfillment, at the Closing Date, of the following conditions precedent,
each of which may be waived in writing in the sole discretion of the Company:
7.1. Continued Truth of Representations and Warranties of the
Buyer; Compliance with Covenants and Obligations. The representations and
warranties of the Buyer in this Agreement shall be true in all material respects
on and as of the Closing Date as though such representations and warranties were
made on and as of such date, except for any changes permitted by the terms
hereof or consented to in writing by the Company. The Buyer shall have each
performed and complied in all material respects with all terms, conditions,
covenants, obligations, agreements and restrictions required by this Agreement
to be performed or complied with by it prior to or at the Closing Date.
Notwithstanding the foregoing the materiality qualifications in the preceding
two sentences shall not apply to any representation, warranty, term, condition,
covenant, obligation, agreement or restriction that is itself qualified by
materiality. At the Closing, the Buyer shall have delivered to the Company a
certificate signed by the President of the Buyer as to the Buyer's compliance
with this Section 7.1.
7.2. Company Proceedings. All corporate, Board of Directors,
shareholder and other proceedings required to be taken to authorize the Buyer to
carry out this Agreement and the transactions contemplated hereby shall have
been taken.
7.3. Governmental Approvals. All governmental agencies (including
Canadian and provincial agencies and authorities), departments, bureaus,
commissions and similar bodies, the consent, authorization or approval of which
is necessary under any applicable law, rule, order or regulation for the
consummation by the Buyer or the Company of the transactions contemplated by
this Agreement shall have consented to, authorized, permitted or approved such
17
transactions, including, without limitation, consent of the Department of
Justice and Federal Trade Commission as required pursuant to the HSR Act.
7.4. Consents of Third Parties. The Buyer shall have received all
requisite consents and approvals of all lenders, lessors and other third parties
whose consent or approval is required in order for the Buyer to consummate the
transactions contemplated by this Agreement.
7.5. Adverse Proceedings. No action or proceeding by or before any
court or other governmental body shall have been instituted or threatened by any
governmental body or person whatsoever which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement or which might affect
the right of the Company to transfer the Acquired Assets.
7.6. Fulfillment of Conditions to Closing in US Asset Purchase
Agreement. On or prior to the Closing Date, the US Buyer shall have fulfilled
all conditions to Closing set forth in the US Asset Purchase Agreement.
7.7. Stockholder Approval. All shareholder approvals required to
authorize the Company to carry out this Agreement and the transactions
contemplated hereby, and to convey, transfer, assign and deliver the Company
Intellectual Property to the Buyer, shall have been obtained.
7.8. Closing Deliveries. The Company shall have received at or
prior to the Closing all documents set forth in this Section 7 and such other
documents, instruments or certificates as the Company may reasonably request
including, without limitation:
(a) such certificates of the Buyer's officers and such other documents
evidencing satisfaction of the conditions specified in this Section 6 as the
Company shall reasonably request;
(b) a certificate of the Corporations Branch of the Province of Ontario
as to the legal existence and good standing of the Buyer;
(c) a certificate signed by an authorized representative of the Buyer
attesting to the authenticity of the resolutions authorizing the transactions
contemplated by this Agreement and the authenticity and continuing validity of
the certificate of incorporation and bylaws (or similar governing documents)
delivered pursuant to Section 3.1;
(d) the Purchase Price;
(e) an executed Software License Agreement, as described in Section 7.6
herein; and
18
(f) such other documents, instruments or certificates as the Company
may reasonably request.
8. Post-Closing Agreements
The Company agrees that from and after the Closing Date:
8.1. Proprietary Information. The Company shall hold in confidence
all knowledge and information of a secret or confidential nature with respect to
the terms of this Agreement and the agreements contemplated hereby or the
Business of the Company and not to disclose, publish or make use of the same
without the consent of the Buyer, except to the extent that such information
shall have become public knowledge other than by breach of this Agreement by the
Company. The Company agrees that the remedy at law for any breach of this
Subsection 9.1 would be inadequate and that the Buyer shall be entitled to
injunctive relief in addition to any other remedy it may have upon breach of any
provision of this Subsection 8.1.
8.2. Limitation on Use of Name. From and after the Closing Date,
neither the Company nor any affiliate thereof shall use the names "SQL" or any
derivation thereof in connection with any business related to, competitive with,
or an outgrowth of, the Business as it is conducted on the date hereof, or in
any new venture to which the Company, or any affiliate thereof, is a party.
8.3. Non-Competition Agreement.
(a) For a period of five (5) years after the Closing Date, the Company
shall not, directly or indirectly, within the United States, Canada or Mexico
(i) engage in any business competitive with the Business of the Company as of
the Closing Date, (ii) solicit customers, business, patronage or orders for, or
sell any products, or perform any services which are, directly or indirectly,
competitive with the products sold by and services rendered by the Business as
of the Closing Date, or (iii) directly or indirectly hire, solicit for
employment or encourage to leave the employment of the Buyer any of the
employees of the Company who become employed by the Buyer pursuant to Section
1.5 herein unless such employees have ceased to be employed by the Buyer for at
least six months.
(b) For a period of five (5) years after the Closing Date, the Buyer
shall not, directly or indirectly, hire, solicit for employment or encourage to
leave the employment of the Company any of the employees of the Company not
listed on the ERP List unless such employees have ceased to be employed by the
Company for at least six (6) months.
(c) The parties hereto agree that the duration and geographic scope of
the non-competition provision set forth in this Subsection 8.3 are reasonable.
In the event that any court determines that the duration or geographic scope, or
both, are unreasonable and that such provision is to that extent unenforceable,
the parties hereto agree that the provision shall remain in full force and
effect for the greatest time period and in the greatest area that would not
render it unenforceable. The parties intend that this non-competition provision
shall be deemed to be a series of separate covenants, one for each and every
county of each and every state of the United
19
States of America and each and every province of Canada. The parties also agree
that damages are an inadequate remedy for any breach of this provision and that
the Buyer or the Company, as the case may be, shall, whether or not it is
pursuing any potential remedies at law, be entitled to equitable relief in the
form of preliminary and permanent injunctions without bond or other security
upon any actual or threatened breach of this non-competition provision.
8.4. Sharing of Data.
(a) The Company shall have the right for a period of six (6) years
following the Closing Date to have reasonable access to such books, records and
accounts, including financial and tax information, correspondence, production
records, employment records and other similar information as are transferred to
the Buyer pursuant to the terms of this Agreement for the limited purposes of
concluding its involvement in the Business and the Acquired Assets prior to the
Closing Date and for complying with its obligations under applicable securities,
tax, environmental, employment or other laws and regulations. The Buyer shall
have the right for a period of six (6) years following the Closing Date to have
reasonable access to those books, records and accounts, including financial and
tax information, correspondence, production records, employment records and
other similar records which are retained by the Company pursuant to the terms of
this Agreement to the extent that any of the foregoing relates to the Business
or Acquired Assets transferred to the Buyer hereunder or is otherwise needed by
the Buyer in order to comply with its obligations under applicable securities,
tax, environmental, employment or other laws and regulations.
(b) The Company and the Buyer agree that from and after the Closing
Date they shall cooperate fully with each other to facilitate the transfer of
the Acquired Assets from the Company to the Buyer and the operation thereof by
the Buyer. Each party acknowledges and agrees that the transition contemplated
by the preceding sentence may take up to sixty (60) days following the Closing
Date, during which time the Company shall provide the Buyer with reasonable
access to the Company's senior management for the purposes of facilitating the
transfer of the Business and Acquired Assets to the Buyer.
8.5. Cooperation of the Company. The Company will cooperate with
the Buyer in furnishing information or other assistance reasonably requested in
connection with any actions, proceedings, arrangements or disputes involving the
Company Intellectual Property and based upon contracts, arrangements, property
rights, acts or omissions of the Company which were in effect or carried on
prior to the Closing Date.
8.6. Limited License to the Company to use the software comprising
the Company Intellectual Property. The Buyer hereby grants to the Company a
paid-up, non-exclusive, royalty-free, worldwide, irrevocable, perpetual license
to use the software programs set forth on Schedule 8.6 solely for the Company's
internal use and subject to the terms and conditions set forth in the Software
License Agreement attached hereto as Exhibit C. The parties agree that effective
one year after Closing the Company shall be liable to the Buyer for any costs
related to maintenance and support for such software, but such costs shall not
exceed the then-current maintenance and support fees charged by the Buyer to
third parties for such services.
9. Intentionally Omitted
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10. Termination of Agreement; Option to Proceed; Damages
10.1. Termination by Lapse of Time. This Agreement shall terminate
at 5:00 p.m., Boston Time, on (a) October 15, 1999 if the Company has not set a
date for its Stockholders' Meeting and mailed all materials required by law for
such meeting or (b) November 5, 1999, if the transactions contemplated hereby
have not been consummated, unless such date is extended by the written consent
of the Company and the Buyer.
10.2. Termination by Agreement of the Parties. This Agreement may
be terminated by the mutual written agreement of the Company and the Buyer. In
the event of such termination by agreement, the Buyer shall have no further
obligation or liability to the Company under this Agreement, and the Company
shall have no further obligation or liability to the Buyer under this Agreement.
10.3. Termination by Reason of Breach. This Agreement may be
terminated by the Company if at any time prior to the Closing there shall occur
a material breach of any of the representations, warranties or covenants of the
Buyer or the failure by the Buyer to perform any condition or obligation
hereunder (a "Pre-Closing Breach"). This Agreement may be terminated by the
Buyer if at any time prior to the Closing there shall occur a material breach of
any of the representations, warranties or covenants of the Company or the
failure of the Company to perform any condition or obligation hereunder. This
Agreement may be terminated by either the Company or the Buyer if at any time
prior to the Closing: (a) the Board of Directors of the Company shall have
withdrawn or modified its approval or recommendation of this Agreement and the
transactions contemplated herein, (b) Company enters into a binding written
agreement with respect to a Superior Proposal, or (c) the US Asset Purchase
Agreement is terminated.
10.4. Availability of Remedies at Law. In the event this Agreement
is terminated by the Buyer or the Company pursuant to the provisions of Section
10.3 (other than as permitted pursuant to Section 4.4(b)), the parties hereto
shall have available to them all remedies afforded to them by applicable law or
in equity, including, without limitation, claims for specific performance and
other equitable remedies.
11. Dispute Resolution
11.1. General. In the event that any dispute should arise between
the parties hereto with respect to any matter covered by this Agreement,
including, without limitation, the occurrence of a Pre-Closing Breach, the
parties hereto shall resolve such dispute in accordance with the procedures set
forth in this Section 11.
11.2. Consent of the Parties. In the event of any dispute between
the parties with respect to any matter covered by this Agreement or any of the
agreements entered into in connection herewith, the parties shall first use
their best efforts to resolve such dispute among themselves. If the parties are
unable to resolve the dispute within sixty (60) calendar days after the
commencement of efforts to resolve the dispute, the dispute will be submitted to
arbitration in accordance with this Section 11.
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11.3. Arbitration.
(a) The Buyer, on the one hand, or the Company, on the other hand, may
submit any matter referred to in Section 11.2 hereof to arbitration by notifying
the other parties hereto, in writing, of such dispute. Within 10 days after
receipt of such notice, the Buyer and the Company shall designate in writing one
arbitrator to resolve the dispute; provided, that if the parties hereto cannot
agree on an arbitrator within such 10-day period, the arbitrator shall be
selected by the American Arbitration Association's Boston office if the
arbitration is initiated by the Company and selected by the American Arbitration
Association's Atlanta office if initiated by the Buyer. The arbitrator so
designated shall not be an employee, consultant, officer, director or
stockholder of any party hereto or any Affiliate of any party to this Agreement.
(b) Within 15 days after the designation of the arbitrator, the
arbitrator, the Buyer and the Company shall meet, at which time the Buyer and
the Company shall be required to set forth in writing all disputed issues and a
proposed ruling on each such issue.
(c) The arbitrator shall set a date for a hearing, which shall be no
later than 30 days after the submission of written proposals pursuant to
paragraph (b) above, to discuss each of the issues identified by the Buyer and
the Company. Each such party shall have the right to be represented by counsel.
The arbitration shall be governed by the rules of the American Arbitration
Association; provided, that the arbitrator shall have sole discretion with
regard to the admissibility of evidence.
(d) The arbitrator shall use his best efforts to rule on each disputed
issue within 30 days after the completion of the hearings described in paragraph
(c) above. The determination of the arbitrator as to the resolution of any
dispute shall be binding and conclusive upon all parties hereto. All rulings of
the arbitrator shall be in writing and shall be delivered to the parties hereto.
(e) Any arbitration pursuant to this Section 11 shall be conducted in
Boston if initiated by the Company and Atlanta if initiated by the Buyer. Any
arbitration award may be entered in and enforced by any court having
jurisdiction thereover and the parties hereby consent and commit themselves to
the jurisdiction of the courts of the State of Georgia for purposes of the
enforcement of any arbitration award.
12. Brokers
12.1. For the Company. The Company represents and warrants that
other than US Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, no person, firm or corporation has acted in
the capacity of broker or finder on its or their behalf to bring about the
negotiation of this Agreement. The Company agrees to indemnify and hold harmless
the Buyer against any claims or liabilities asserted against it by any person
acting or claiming to act as a broker or finder on behalf of the Company.
12.2. For the Buyer. The Buyer represents and warrants that no
person, firm or corporation has acted in the capacity of broker or finder on its
behalf to bring about the negotiation of this Agreement. The Buyer agrees to
indemnify and hold harmless the Company
22
against any claims or liabilities asserted against it by any person acting or
claiming to act as a broker or finder on behalf of the Buyer.
13. Notices
Any notices or other communications required or permitted hereunder
shall be sufficiently given if delivered personally, by telecopy, or sent by
federal express, registered or certified mail, postage prepaid, addressed as
follows or to such other address of which the parties may have given notice:
To the Buyer: Geac Canada Limited
c/o Geac Computer Corporation Limited
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attn: General Counsel
With a copy to: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company: Clarus Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and CEO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ PLLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date actually delivered, if delivered personally, by
overnight courier or by telecopy or (b) three (3) business days after being
sent, if sent by registered or certified mail.
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14. Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Buyer, on the one hand, and the Company, on the other hand, may not assign their
respective obligations hereunder without the prior written consent of the other
party. Any assignment in contravention of this provision shall be void. No
assignment shall release the Buyer, or the Company from any obligation or
liability under this Agreement.
15. Entire Agreement; Amendments; Attachments
The Exhibits and Schedules attached hereto or to be attached
hereafter are hereby incorporated as integral parts of this Agreement. This
Agreement, all Schedules and Exhibits hereto, and all agreements and instruments
to be delivered by the parties pursuant hereto represent the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersede all prior oral and written and all
contemporaneous oral negotiations, commitments and understandings between such
parties. The parties hereto may amend or modify this Agreement by a written
instrument executed by the Buyer or the Company.
16. Severability
Any provision of this Agreement which is invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions hereof in such jurisdiction or
rendering that or any other provision of this Agreement invalid, illegal or
unenforceable in any other jurisdiction.
17. Expenses
Except as otherwise expressly provided herein, the Buyer, on the
one hand, and the Company, on the other hand, will pay all other fees and
expenses incurred by them in connection with the transactions contemplated
hereunder.
18. Governing Law
This Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia.
19. Section Headings
The section headings are for the convenience of the parties and in
no way alter, modify, amend, limit, or restrict the contractual obligations of
the parties.
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20. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which shall be one and the
same document.
21. Definition of Knowledge.
The term "knowledge" as used in the phrases "to the knowledge of
the Company," "to the Company's knowledge" or any other similar phrase
attributing knowledge to the Company means the actual knowledge of the officers
and key employees (i.e., vice presidents and above) of the Company after
reasonable inquiry; provided, however, that in the case of any representation or
warranty as to Embedded Third Party Software, "knowledge" means the actual
knowledge of the officers and key employees (i.e., vice presidents and above) of
the Company without inquiry. For purposes of the preceding definition, officers
and key employees (i.e., vice presidents and above) includes any officer or key
employee (i.e., vice presidents and above) who was an officer or key employee
(i.e., vice presidents and above) from May 26, 1999 through the Closing Date.
22. Construction.
In the construction of this Agreement general words introduced by
the word "other" shall not be given a restrictive meaning by reason of the fact
that they are preceded by words indicating a particular class of acts, matters
or things and general words shall not be given a restrictive meaning by reason
of the fact that they are followed by particular examples intended to be
embraced by the general words.
23. Defined Terms in Section of Agreement Indicated.
------------------------------------------------ -------------------------
DEFINED TERM SECTION
------------------------------------------------ -------------------------
"Agreement" Introduction
------------------------------------------------ -------------------------
"Assignment" Section 6.8(a)
------------------------------------------------ -------------------------
"Business" Introduction
------------------------------------------------ -------------------------
"Buyer" Introduction
------------------------------------------------ -------------------------
"Business Material Adverse Effect" Section 2.4(j)
------------------------------------------------ -------------------------
"Buyer Material Adverse Effect" Section 2.4(j)
------------------------------------------------ -------------------------
"Clarus Commerce" Introduction
------------------------------------------------ -------------------------
"Clarus E Procurement" Introduction
------------------------------------------------ -------------------------
"Closing" Section 1.5
------------------------------------------------ -------------------------
"Closing Date" Section 1.5
------------------------------------------------ -------------------------
"Commercial Intellectual Property" Section 2.4
------------------------------------------------ -------------------------
"Commercial Software Rights" Section 2.4
------------------------------------------------ -------------------------
"Company" Introduction
------------------------------------------------ -------------------------
"Company Advisors" Section 4.4(a)
------------------------------------------------ -------------------------
"Company's Board of Directors" Introduction
------------------------------------------------ -------------------------
"Company Registered Intellectual Property" Section 2.4
------------------------------------------------ -------------------------
25
------------------------------------------------ -------------------------
"Date Sensitive Systems" Section 2.4(l)
------------------------------------------------ -------------------------
"Date Data" Section 2.4(l)
------------------------------------------------ -------------------------
"Due Diligence Activities" Section 4.1
------------------------------------------------ -------------------------
"Electronic Commerce Business" Introduction
------------------------------------------------ -------------------------
"Embedded Third Party Software" Section 2.4
------------------------------------------------ -------------------------
"Encumbrances" Section 2.3
------------------------------------------------ -------------------------
"Fairness Opinion" Section 1.6
------------------------------------------------ -------------------------
"Financial Advisor" Section 1.6
------------------------------------------------ -------------------------
"HSR Act" Section 6.4
------------------------------------------------ -------------------------
"Intellectual Property Rights" Section 2.4
------------------------------------------------ -------------------------
"Knowledge" Section 21
------------------------------------------------ -------------------------
"Pre-Closing Breach" Section 10.3
------------------------------------------------ -------------------------
"Proxy Statement" Section 1.6
------------------------------------------------ -------------------------
"Purchase Price" Section 1.3
------------------------------------------------ -------------------------
"Reference Rate" Section 4.8(b)
------------------------------------------------ -------------------------
"Registered Intellectual Property" Section 2.4
------------------------------------------------ -------------------------
"Software" Section 2.4
------------------------------------------------ -------------------------
"SQL" Section 8.2
------------------------------------------------ -------------------------
"Stockholders Meeting" Section 4.7
------------------------------------------------ -------------------------
"Third Party" Section 4.4(b)
------------------------------------------------ -------------------------
"Third Party Acquisition" Section 4.4(b)
------------------------------------------------ -------------------------
"US Buyer" Section 6.7
------------------------------------------------ -------------------------
"US Purchase Agreement" Section 6.7
------------------------------------------------ -------------------------
"Year 2000 Complaint" Section 2.4(l)
------------------------------------------------ -------------------------
26
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of and on the date first above written.
GEAC CANADA LIMITED
By: __________________________
Title:
CLARUS CORPORATION
By: __________________________
Title:
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