AGREEMENT
FOR THE
PURCHASE AND SALE
OF
CERTAIN ASSETS
THIS AGREEMENT FOR THE PURCHASE AND SALE OF CERTAIN ASSETS is made by and
between Buyer (as defined below) and Seller (as defined below).
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and the
mutual representations, warranties, covenants and agreements contained herein,
Buyer and Seller hereby agree as follows:
ARTICLE ONE
DEFINITIONS
ACCOUNTS PAYABLE means any and all amounts incurred by Seller in operation of
the Business (including, appropriate accruals for expenses such as salaries and
commissions) which are unpaid as of the close of business on the day prior to
the Effective Time calculated in accordance with generally accepted accounting
principles.
AFFILIATE means any Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common Control with
Seller or Buyer, as the case may be.
AGREEMENT means this Agreement for the Purchase and Sale of Certain Assets and
all and any attachments, exhibits, schedules or the like hereto.
ANCILLARY AGREEMENTS(S) means any of the following agreements between the
Parties each dated the date hereof: a sublease of a portion of Seller's
premises located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Sublease"); a software and support services agreement whereby CLR will provide
certain support required of Seller under the AYCE Agreements (the "Software and
Support Services Agreement"); an agreement between the Parties providing for
Seller to provide Buyer with certain transition services and equipment (the
"Transition Agreement"); and an agreement whereby Seller will provide support of
PW/Wire commitments embedded in certain "retail" Contracts being Transferred to
Buyer (the "PW/Wire Service Agreement").
ASSUMED LIABILITIES means those liabilities expressly assumed by Buyer under the
terms of Section 2.3 of this Agreement and associated with the Seller Assets
being Transferred pursuant to this Agreement.
AYCE AGREEMENT means any of the software and services agreements listed in
Schedule I to the Software and Support Services Agreement (an Ancillary
Agreement).
BUSINESS means the designing, developing, licensing, distributing and
maintaining of tax compliance software for corporations, including the Seller
Software, carried on and conducted by Seller from offices located at ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ under
the tradenames "TMS" and "Price Waterhouse Tax Technology Group."
BUYER means Computer Language Research, Inc., a Texas corporation, with its
headquarters office located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇.
BUYER CLOSING DOCUMENTS means the documents so identified in the closing
memorandum relating to the consummation of the transactions contemplated by this
Agreement.
BUYER DISCLOSURE SCHEDULE means the schedule which discloses with particularity
exceptions to the Buyer's representations and warranties in this Agreement and
which identifies by number the section and subsection to which each such
disclosure relates.
BUYER INDEMNIFIED LIABILITIES means the matters described in Section 8.1 and the
subparts thereto, such liabilities being individually referred to as a "Buyer
Indemnified Liability".
BUYER INDEMNIFIED PARTIES means Seller and its Affiliates and their respective
Partners, Employees, agents, consultants, representatives, successors,
transferees and assigns (other than Buyer).
CASH CREDIT means a cash adjustment of a payment obligation to a Customer in the
form of an actual payment of cash to the Customer.
CLAIM(S) means all litigation (at law or in equity or admiralty and before any
Governmental Entity), suits, causes of action, proceedings, arbitrations,
mediations, appeals, injunctions, stays, orders, proceedings, investigations,
complaints, summons, subpoenas, demands, adverse verdicts, grievances, setoffs,
claims (including Customer claims for Credits), losses, costs, expenses
(including interest, penalties and reasonable attorneys' fees (including
attorneys' fees on appeal) and disbursements), fines, Taxes, levies, imposts,
duties, deficiencies, assessments, awards, charges, penalties, damages (whether
direct or indirect, actual, punitive or consequential) or judgments (including
those on or subject to appeal) of any kind or nature whatsoever.
CLAIM NOTICE is defined in Section 8.3.
CLOSING is defined in Section 7.1.
CLOSING DATE means December 2, 1995.
COMPILED CODE means the computer executable embodiment of the assembly-level
(human readable) computer code which has been compiled into executable files.
CONSENT means any consent, approval, order, authorization, acceptance of a
registration or filing, or grant of an exemption.
CONSTRUCTIVE KNOWLEDGE means (i) with regard to the Seller, the knowledge which
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ would have had upon a reasonable investigation and
upon the exercise of a reasonable level of skill, care and diligence in the
performance of such person's job, and (ii) with regard to the Buyer, the
knowledge which a director, officer or manager would have had upon the exercise
of a reasonable level of skill, care and diligence in the performance of such
person's job.
CONTRACT means any contract, arrangement, agreement, bond, license, lease,
indenture, instrument, promissory note, mortgage, deed of trust, franchise,
option, permit, indenture, authorization or other legally binding commitment,
whether oral or written, and all copies and tangible embodiments thereof in
whatever form or medium.
CONTRACT RIGHTS mean any and all of the rights of a party under a Contract
(including any Claims, rights or benefits arising thereunder or resulting
therefrom, all rights to enforce, receive payments, rentals, royalties, licenses
fees or the like), and all copies and tangible embodiments thereof in whatever
form or medium.
CONTROL (including the term "Controlled by") means the right to exercise,
directly or indirectly, the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
COPYRIGHT means current, abandoned and expired registered or common law,
domestic and foreign, copyrights and any applications, renewals and records
related thereto, and all attendant statutory rights associated therewith.
CREDIT means a Cash Credit or a Non-Cash Credit.
CUSTOMER(S) means, with respect to the Business, any and all of Seller's
customers, clients or licensees.
DOCUMENTATION means any and all documentation and specifications, addressing,
INTER ALIA, requirements, capabilities, limitations, functionality, design,
operation and maintenance of Software (including work in progress) and
Equipment.
EFFECTIVE TIME means 12:01 a.m. Chicago time on November 1, 1995.
EMPLOYEE(S) means present or former employees or retirees of the Business or
their beneficiaries, heirs, dependents, legatees, administrators or legal
representatives.
ENCUMBRANCES means liens, pledges, mortgages, security interests, Claims,
charges, options, and encumbrances, except for Permitted Liens.
EQUIPMENT means cubicles (and the office furniture relating thereto).
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
EXCLUDED ASSETS means those assets of the Business which are specifically
identified in the Schedule of Excluded Assets attached hereto.
GOVERNMENTAL ENTITY means any court, tribunal, administrative agency,
commission, board, bureau, instrumentality, legislature, government or other
governmental or judicial authority, whether foreign, federal, state, county,
municipal, special purpose or other.
INDEMNIFIED PARTY means, when used in connection with a particular indemnified
Claim, the Party, along with its Affiliates, Partners, Employees, employees,
shareholders, directors, officers, agents, consultants, representatives,
successors, transferees and assigns, having the right to be indemnified with
respect to such indemnified Claim by the other Party.
INTERIM PERIOD is defined in Section 9.17.
IRC means the Internal Revenue Code of 1986, as amended.
KNOWLEDGE means (i) with regard to the Seller, any fact or matter within the
actual knowledge or Constructive Knowledge of ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and
(ii) with regard to the Buyer, any fact or matter, after reasonable
investigation, within the actual knowledge or Constructive Knowledge of Buyer's,
directors, officers and managers.
LEGAL REQUIREMENT means any approval, authorization, award, code, consent,
decree, enactment, injunction, judgment, law, license, ordinance, order, Permit,
requirement, rule, regulation, statute, stay, restraining order, or writ of any
Governmental Entity.
MAKE AVAILABLE is defined in Section 4.1.1.
MISCELLANEOUS PERSONAL PROPERTY means choses in action (where Seller is
claimant), customer lists, finished goods, guaranties (running in favor of
Seller), office supplies, product and purchase orders, Permits, Records, refunds
from suppliers and rights to refunds from suppliers, sales orders, supplier
lists, and all other tangible and intangible personal property not included
within the definitions of Software, Proprietary Rights, Contracts, Contract
Rights and Equipment.
NON-CASH CREDIT means a non-cash adjustment of a payment obligation to a
Customer other than an immediate cash payment and includes future discounts,
price concessions, price adjustments and non-cash rebates and all Credits other
than Cash Credits.
NON-COMPETING PERSON(S) is defined in Section 4.1.1.
NON-STANDARD TERM means any oral or written provision, term, condition,
obligation, duty, standard, agreement, promise or understanding contained in (or
implied from any custom of the trade or course of dealing) any Seller Customer
Contract which is materially different from, in addition to, or absent from the
terms and conditions of a Standard Form Customer Contract.
NOTICE ADDRESS means (i) for the Seller: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (ii) for the Buyer: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
OPERATIVE DOCUMENTS means this Agreement, the Ancillary Agreements and all and
any attachments, exhibits, schedules or the like thereto, the Seller Closing
Documents and the Buyer Closing Documents.
PARTIES means collectively Buyer and Seller.
PARTNER(S) means present and former partners of Seller assigned to the Business,
and, where permissible in the context, their beneficiaries, heirs, dependents,
legatees, administrators or legal representatives.
PARTNER OR EMPLOYEE OBLIGATION means any obligation to any Partner or Employee
related to an employment or partnership relationship between Seller and the
Partner or Employee, including (i) obligations to pay any salary, commission,
bonus, overtime, prize, award, or severance; (ii) obligations pursuant to any
employee pension or savings plan, any employee welfare benefit plan, any plan,
policy or provision for hospitalization, medical, dental, survivor benefits,
life insurance, disability, paid leave of absence, vacation, perquisite,
severance, unemployment insurance, worker's compensation; (iii) obligations
relating to any other claims or expenses relating to any Partner or Employee
individually or to the Employees collectively; (iv) obligations arising from any
custom, understanding, practice, assurance or usage existing between Seller and
any Partner or Employee individually or with the Partners or Employees
collectively; or (v) obligations arising from any Seller personnel policies or
from any written or oral notifications, communications, statements, assurances
or promises by Seller applicable to any Partner or Employee individually or to
the Partners or Employees collectively.
PARTY means any one of the Parties.
PARTY INDEMNIFYING means, when used in connection with a particular indemnified
Claim, the Party having an obligation, under this Agreement, to indemnify the
other Party or Parties with respect to such indemnified Claim.
PATENTS mean current, abandoned and expired, domestic or foreign, letters patent
and any applications and Records related thereto, and all statutory rights
attendant associated therewith.
PERMIT means any license (including business operation licenses), concession,
franchise, permit (including environmental permit), authorization, certificate,
approval, sign-off, registration or other approval and any license granted by
any Governmental Entity in connection with the operation of the Business or the
ownership, use or maintenance of any asset of the Business, provided, that any
permits do not include any professional licenses of Seller or any Partner.
PERMITTED LIENS mean liens for taxes not yet due and payable; deposits under
workmen's compensation, unemployment insurance, social security and other
similar laws; liens which arise by operation of law under Article 2 of the
Uniform Commercial Code in favor of unpaid sellers of goods or prepaying buyers
of goods; liens securing claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other similar Persons.
PERSON means any individual, proprietorship, partnership, joint venture,
corporation, limited liability company, association, trust, unincorporated
organization, Governmental Entity or other entity. Such term shall not include
the Parties.
POST EFFECTIVE TIME BUSINESS is defined in Section 9.17.
PROHIBITED PRODUCT means any computer-based tax compliance product capable of
producing any corporate income tax returns. In no instance shall the term
Prohibited Product refer to any computer-based product which cannot produce
corporate income tax returns.
PROPRIETARY INFORMATION is defined in Section 4.3.
PROPRIETARY RIGHT(S) means Patents, Copyrights, logos, trade names, trade dress,
Trademarks, service marks, brand names, product or service names and
designations, designs, schematics, know-how, technology, Trade Secrets, Software
and other intangible proprietary or confidential information or rights,
including all renewals, applications, reversionary rights, moral rights,
subsidiary rights, and goodwill associated therewith, and all copies and
tangible embodiments thereof in whatever form or medium.
PURCHASE PRICE is defined in Section 2.4.
RECORD(S) means those books, documents, software, records, files (including file
wrappers for all Trademarks and Copyrights included within the Seller Assets and
for all expired or abandoned trademarks, copyrights and patents directly related
to the operation of the Business), Permits, operating and procedures manuals and
all other documents and instruments relating principally to the operation of the
Business and the use of the other Seller Assets. Records shall include: (i)
all correspondence (internal or external and regardless of media or format),
settlement agreements, agreements (including all attachments, exhibits,
schedules and the like thereto) relating to the acquisition of any of the
Software by Seller for use in the Business; (ii) the physical embodiment, in
whatever form or medium, of all Proprietary Rights and all Contracts and all
other documentation relating to any Contract arising from the operation of the
Business and whether or not presently in effect; (iii) the physical embodiment
of all non-disclosure/confidentiality agreements, including all "Statement
Requirements for Partners and Staff" executed by any Partner or Employee; (iv)
the physical embodiment of all agreements with independent contractors, outside
programmers, outside developers, outside consultants and the like; and (v) all
employee and client training materials in whatever form, media or format,
including self-study training guides, seminar materials, and audio visual
materials.
RECONCILIATION SCHEDULE is defined in Section 9.17.
RESTRICTED PERIOD is defined in Section 4.1.1.
REFUND means any payment to a Customer pursuant to a Seller Customer Contract
provision which entitles such Customer to a refund or where the initial payment
by Customer was in error as to amount.
SELLER means Price Waterhouse LLP, a Delaware registered limited liability
partnership having a registered office located at One ▇▇▇▇▇▇ Square, 10th Floor,
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SELLER ASSETS mean all of the properties and assets owned, licensed, leased,
possessed, controlled or used by Seller in the operation and conduct of the
Business or which are necessary for the continued conduct of the Business as
such was conducted by Seller (assuming adequate personnel) immediately prior to
the Closing, wherever located, including the assets reflected on the balance
sheet as of October 31, 1995, Seller Customer Lists, Seller Owned Assets, Seller
Leased Assets, Seller Licensed Assets, Seller Contracts, Seller Documentation,
Seller Equipment, Seller Miscellaneous Personal Property, and Seller Proprietary
Rights. Seller Assets shall not include any of the Excluded Assets.
SELLER CLOSING DOCUMENTS mean the documents so identified in the closing
memorandum relating to the consummation of the transactions contemplated by this
Agreement.
SELLER CONTRACT means any Contract, and the associated Contract Rights, to which
Seller is a party or to which Seller has any rights and which arose in the
course of operation of the Business by Seller. Seller Contract shall not
include any of the Excluded Assets.
SELLER CONTRACT SCHEDULES means the schedules required by Section 3.3.1 of this
Agreement.
SELLER CUSTOMER CONTRACT means a Seller Contract, other than an AYCE Agreement,
where Seller is licensor and a Customer is the licensee of Seller Software.
SELLER CUSTOMER LIST(S) means any and all existing written or digital
information and documentation currently possessed or controlled by Seller
relating to any and all of Seller's past or present Customers or prospects,
including, to the extent such exist, their names, street addresses, e-mail
addresses, Internet home page addresses, telephone numbers, facsimile numbers,
and principal contacts.
SELLER DISCLOSURE SCHEDULE means the schedule which discloses with particularity
exceptions to the Seller's representations and warranties in this Agreement and
which identifies by number the section and subsection to which each such
disclosure relates.
SELLER DOCUMENTATION means the Documentation relating to Seller Software and
Seller Equipment, except for Excluded Assets.
SELLER EQUIPMENT means all Equipment at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ used by Employees who become employees of Buyer following the transactions
contemplated herein.
SELLER FINANCIAL STATEMENTS mean the financial statements of the Business
attached to this Agreement as Schedule One.
SELLER INDEMNIFIED LIABILITIES means the matters described in Section 8.2 and
the subparts thereto, such liabilities being individually referred to as a
"Seller Indemnified Liability".
SELLER INDEMNIFIED PARTIES means Buyer and its Affiliates and their respective
directors, shareholders, officers, employees, agents, consultants,
representatives, successors, transferees and assigns (other than Seller).
SELLER LEASED ASSETS mean all of the tangible and intangible, personal assets
leased by Seller, as lessee, and used by Seller in the Business, except for the
Excluded Assets, and shall include all of the assets set forth on Seller
Contract Schedule Five.
SELLER LICENSED ASSETS mean all of the tangible and intangible, personal assets
licensed by Seller, as licensee, and used by Seller in the Business, except for
the Excluded Assets, and shall include all of the assets set forth on Seller
Contract Schedule Three.
SELLER MISCELLANEOUS PERSONAL PROPERTY means all of the Miscellaneous Personal
Property used, owned, leased or licensed by Seller in the Business, except for
the Excluded Assets, and shall include all of the assets set forth on Seller
Owned Asset Schedule One.
SELLER OWNED ASSETS means all of the tangible and intangible, personal
properties and assets owned by Seller and used by Seller in the Business, except
for the Excluded Assets, and shall include all of the assets set forth on the
Seller Owned Asset Schedules.
SELLER OWNED ASSET SCHEDULES means the schedules required by Sections 3.2.6,
3.5.1 and 3.6.1 of this Agreement.
SELLER PROPRIETARY RIGHTS means all of the Proprietary Rights owned, licensed,
leased, or used by Seller in the Business or which are necessary for the
continued conduct of the Business as such was conducted by Seller immediately
prior to the Closing, except for Excluded Assets.
SELLER SOFTWARE means all of the Software developed by, owned by, distributed
by, licensed to, licensed by, leased to, leased by or used by Seller, at any
time, in the Business or which is necessary for the continued conduct of the
Business, assuming adequate personnel, as such was conducted by Seller
immediately prior to the Closing, including the Software set forth on Seller
Owned Asset Schedule Three.
SOFTWARE means Source Codes, Compiled Codes and object codes, together with all
Documentation, updates, enhancements, modifications, current versions,
derivative works based on current versions, prior versions, derivative works
based on prior versions, and work(s) in progress (including those relating to
corrections, modifications, or enhancements) and all copies and tangible
embodiments thereof in whatever form or medium.
SOURCE CODE means, to the extent such exist in a given instance, (i) assembly-
level code or other human readable version of the code; (ii) a full source
language statement of the program; (iii) all developer notes, comments and
annotations, including a description of the system/program generation; (iv) the
names of the key developer(s); (v) all written information, including all
technical documentation (including cover, body copy and illustrations),
necessary for a reasonably skilled third party programmer to understand, create,
maintain, modify and/or enhance a program without the aid of the original writer
of the code or of any other person and without reference to any other materials;
(vi) internal documentation, internal specifications, flow charts, logic
diagrams, decision trees and other information or material used or prepared by
programmers for internal use in developing, testing, using, or documenting such
software; (vii) all maintenance tools and documentation, including test programs
and program specifications; (viii) all proprietary or third party system
utilities, including compiler and assembler descriptions; and (ix) all
proprietary or third party software programs necessary for the efficient use
and/or support of a program.
STANDARD FORM SELLER CUSTOMER CONTRACT means a pre-printed, standard form
Software license agreement (including any "shrink wrap" or "box top" license
agreements and "beta test" agreements) or pre-printed, standard attachment to a
Software license agreement setting forth terms and conditions, and currently
used by Seller as licensor of Seller Software.
TAX(ES) means any federal, state, local and foreign tax, assessment, duty,
impost, tariff, registration fee, including, without limitation, the following:
alternative or add-on minimum, capital stock, disability, environmental
(including taxes under Internal Revenue Code Sec. 59A), estimated, excise,
franchise, gross receipts, income, license, occupation, payroll, personal
property, premium, production, profits, real property, registration, sales,
severance, social security (or similar), stamp, transfer, unemployment, use,
value added, windfall profits, withholding, as well as any interest, additions
or penalties relating thereto and any interest in respect of such additions or
penalties, whether disputed or not.
TRADE SECRET(S) means non-copyrightable elements of Software and confidential,
proprietary business information not made public by means of any disclosure or
reporting made pursuant to a Legal Requirement, including ideas, research and
development, know-how, formulas, compositions, production processes, algorithms,
routines, data formats, fields, techniques, technical data, designs, drawings,
specifications, client and supplier lists, pricing and cost information, and
business and marketing plans and proposals.
TRADEMARK(S) means registered or common law, domestic or foreign, state or
federal trade names, trademarks and service marks and any applications, renewals
and Records related thereto, and all attendant statutory rights and goodwill
associated therewith.
TRANSFER (including the term "Transferred") means the process whereby Seller
sells, conveys, transfers, assigns and/or delivers all of its right, title and
interest in and to a Seller Asset to Buyer and Buyer purchases and accepts
delivery of that Seller Asset from Seller.
ARTICLE TWO
PURCHASE AND SALE
2.1 TRANSFER OF SELLER ASSETS. Subject to the terms, conditions,
representations, warranties and covenants set forth in this Agreement, at the
Closing, effective as of the Effective Time, the Seller Assets shall be
Transferred, in consideration of the payment of the Purchase Price and the
assumption of the Assumed Liabilities by Buyer.
2.2 RETENTION OF EXCLUDED ASSETS: The Schedule of Excluded Assets attached
hereto lists those assets of the Business which shall not be Transferred to
Buyer by Seller at the Closing and which do not represent any part of the
Buyer's consideration (the "Excluded Assets").
2.3 LIABILITIES BEING ASSUMED.
2.3.1 Subject to the terms and conditions of this Agreement, Buyer, after
the Effective Time, shall undertake, assume and agree to perform, pay, or
discharge, in accordance with their terms, to the extent not theretofore
performed, paid or discharged, the following: all of the executory obligations
and liabilities (including warranty obligations) pursuant to the Seller
Contracts set forth on Seller Contract Schedules One, Three, Four, Five, and Six
arising after the Effective Time; provided, that, Buyer is not undertaking to
perform any obligations or liabilities the sole time for performance of which
was between the Effective Time and the Closing Date.
2.3.2 It is expressly understood and agreed that Buyer shall not be
liable for any of the obligations or liabilities of Seller of any kind and
nature whatsoever other than the Assumed Liabilities.
2.3.3 Assumed Liabilities, without limitation, do not include (i) any
obligation under any AYCE Agreement, (ii) any liability of Seller for the unpaid
Taxes of Seller or any other Person arising after the Effective Time other than
Taxes relating to the Seller Assets, (iii) any obligation of Seller to indemnify
any Person by reason of the fact that such Person was a partner, Partner or
Employee, or agent of Seller, whether such indemnification is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such indemnification is pursuant to any Legal
Requirement, partnership document, agreement, or otherwise, (iv) any loans,
guarantees or the like made by Seller as debtor or guarantor, (v) Seller's
Accounts Payable as of the Effective Time (unless expressly and specifically
assumed), including expenses incurred in the operation of the Business prior to
the Effective Time which are billed or paid after the Effective Time.
2.3.4 Buyer shall not be considered or deemed a successor employer under
any provision of this Agreement. Buyer shall not be liable for any Partner or
Employee Obligation. No Partner or Employee Obligation shall be considered or
deemed to be an Assumed Liability. Nothing contained in this Agreement shall
obligate Buyer to honor any Partner or Employee Obligation or to provide any
benefit, including any severance benefit or post-termination benefit
continuation, to any Partner or Employee regardless of whether an Partner or
Employee becomes an employee of Buyer, remains a Partner or Employee of Seller
or is terminated by Seller. Nothing contained in this Agreement shall obligate
Buyer to make any offer of employment to, or to employ in any capacity, or to
continue the employment of any particular Partner or Employee of the Business.
Nothing in this Agreement, expressed or implied, shall or is intended to confer
upon any Person, including, any of the Partners or Employees, job applicants, or
any association or group of such persons, any rights or remedies of any nature
or kind whatsoever, including without limitation, any rights of employment or
severance. No Partner or Employee is to be considered or deemed a third party
beneficiary under any provision of this Agreement.
2.4 PURCHASE PRICE. Subject to the terms, conditions, representations,
warranties and covenants set forth in this Agreement, Buyer shall pay by wire
transfer to Seller, as the purchase price for the Seller Assets: Eleven Million
Five Hundred Thousand Dollars (U.S. $11,500,000), in immediately available funds
at the Closing (the "Purchase Price"). Payment of the Purchase Price shall be
deemed to have been made contemporaneously with the Transfer of the Seller
Assets.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as disclosed on the Seller Disclosure Schedule, Seller, as of the Closing
Date, represents and warrants to Buyer as follows:
3.1 ORGANIZATION, STANDING, AUTHORITY, POWER, AND CONSENTS.
3.1.1 Seller is a registered limited liability partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware.
3.1.2 Seller has all requisite power and authority to own, lease, license
and operate the assets and properties associated with the Business and to carry
on the Business as now being conducted.
3.1.3 Seller is duly qualified and in good standing to do business in
each jurisdiction where required in order for the Business to operate lawfully
or where a failure to so qualify would have a material adverse effect on the
Business.
3.1.4 Seller has all requisite power, authority and legal right to enter
into, execute, and deliver the Operative Documents and to consummate the
transactions and perform and discharge the obligations contemplated by the
Operative Documents.
3.1.5 The execution and delivery by Seller of the Operative Documents and
the consummation by Seller of the transactions contemplated hereby and thereby
have been duly authorized by all necessary partnership action. Seller's Office
of the Chairman has approved the transactions contemplated by the Operative
Documents and has authorized the partner whose name appears below to execute the
Operative Documents on behalf of the Seller.
3.1.6 The execution and delivery of the Operative Documents by Seller has
not, and the consummation of the transactions contemplated hereby and thereby
will not (i) violate the terms of any Seller Contract or Legal Requirement to
which Seller is a party, (ii) give rise to any right of termination or
cancellation of any Seller Contract to which Seller is a party, (iii) result in
the acceleration of any obligation of Seller, (iv) result in the creation of any
Encumbrance on, against or affecting any Seller Asset, or (v) cause any default
or violation of any term, condition or provision of any governing instrument of
Seller.
3.1.7 The Operative Documents have been duly executed and delivered by
Seller.
3.1.8 Each of the Operative Documents constitutes a valid and binding
obligation of Seller enforceable in accordance with its terms, except that such
enforceability may be subject to: (i) bankruptcy, insolvency, reorganization or
other similar laws relating to enforcement of creditors' rights generally, and
(ii) general equitable principles.
3.2 SELLER OWNED ASSETS.
3.2.1 Buyer will receive good and marketable title to the Seller Owned
Assets free and clear of any Encumbrances of any nature, except for Permitted
Liens, and Seller has sole, exclusive, transferable and good right, title and
interest in and to all of the Seller Owned Assets.
3.2.2 Seller has not agreed to transfer any Seller Owned Asset to any
Person other than pursuant to this Agreement or to a Contract listed on a Seller
Contract Schedule.
3.2.3 All tangible Seller Assets used in the operation of the Business
are in satisfactory condition and repair for the requirements of the Business
(assuming adequate personnel) as presently conducted.
3.2.4 All Seller Owned Assets, except Seller Contracts, are Transferable
without the Consent of any Person not already obtained.
3.2.5 Seller Owned Asset Schedule One sets forth a true and complete list
and description of the Seller owned Miscellaneous Personal Property (not set
forth on any other Seller Owned Asset Schedule and with an individual value in
excess of five thousand dollars (US $5,000)).
3.3 SELLER CONTRACTS.
3.3.1 Seller Contract Schedules
3.3.1.1 Seller Contract Schedule One sets forth, with regard to each
Seller Customer Contract, except for AYCE Agreements, the name of the licensee,
the program of Seller Software (as listed on Seller Owned Asset Schedule Three)
licensed, the termination date, and the license fees (if different from the
Seller pricing schedule provided to Buyer along with Seller Contract Schedule
One);
3.3.1.2 Seller Contract Schedule One also sets forth (i) a true and
substantially complete list of all Seller Customer Contracts which are not in
the form of a Standard Form Seller Customer Contract or which contain (y) Non-
Standard Terms or (z) any written amendment, and (ii) a true and complete
description of the nature of the variation from the terms and provisions of the
Standard Form Seller Customer Contract;
3.3.1.3 Seller Contract Schedule Two contains true, substantially
complete and legible exemplars of each and every Standard Form Seller Customer
Contract currently used by Seller in connection with the Business;
3.3.1.4 Seller Contract Schedule Three contains (i) a true and
substantially complete list of Seller Contracts involving the license of
Software wherein Seller is licensee, and (ii) a true and substantially complete
description of the terms and conditions thereof;
3.3.1.5 Seller Contract Schedule Four contains true, complete and
legible copies of Seller Contracts involving the license of Proprietary Rights
(other than Software) wherein Seller is (i) licensor or (ii) licensee;
3.3.1.6 Seller Contract Schedule Five contains true, complete and
legible copies of Seller Contracts involving the lease of Equipment wherein
Seller is lessee;
3.3.1.7 Seller Contract Schedule Six sets forth true, complete and
legible copies of all Software development Contracts entered into by Seller with
third party programmers/consultants and currently in effect, excluding Software
development Contracts that are Excluded Assets;
3.3.1.8 Seller Contract Schedule Seven sets forth true, complete and
legible copies of exemplars of all Partner or Employee and outside programmer
confidentiality agreements used by Seller at any time in connection with the
operation of the Business (see Section 3.6.5).
3.3.2 Except as otherwise disclosed in Seller Contract Schedule Eight or
any other Seller Schedule, except as may be contemplated by this Agreement or
except as such involves only an Excluded Asset, Seller, with regard to the
Business, is not a party to or subject to:
3.3.2.1 Any Contract involving the purchase of Software wherein Seller
is buyer;
3.3.2.2 Any Contract involving the purchase of Software wherein Seller
is seller;
3.3.2.3 Any Contract involving the purchase of Proprietary Rights
(other than Software) wherein Seller is buyer;
3.3.2.4 Any Contract involving the purchase of Proprietary Rights
(other than Software) wherein Seller is seller;
3.3.2.5 Any Contract involving the lease of Equipment wherein Seller
is lessor;
3.3.2.6 Any Contract involving the purchase of Equipment wherein Seller
is buyer;
3.3.2.7 Any Contract involving the purchase of Equipment wherein Seller
is seller;
3.3.2.8 Any union Contract or collective bargaining agreement applicable
to the Business;
3.3.2.9 Any Seller Customer Contract wherein the Customer may terminate
without cause, for its own convenience or general lack of satisfaction;
3.3.2.10 Any Seller Customer Contract containing any provision for
any refund of any prior payment(s) not involving a breach of warranty (for
example, a "money back guarantee of licensee satisfaction");
3.3.2.11 Any Seller Customer Contract incorporating terms and
conditions set forth in any Customer purchase order or the like;
3.3.2.12 Any partnership, limited liability company or joint venture
Contract applicable to the Business;
3.3.2.13 Any Contract applicable to the Business which involves
revenues to Seller in excess of $100,000 per annum and which (i) terminates
within six months prior to or six months after the date of this Agreement and
(ii) has not been renewed;
3.3.2.14 Any "requirements", "output", or "exclusive dealing"
Contract applicable to the Business or other agreement purporting to obligate
Seller to obtain its "requirements" for any good or service from any third party
or to supply any third party with such third party's "requirements" for any good
or service;
3.3.2.15 Any Contract applicable to the Business containing "non-
competition" obligations, "exclusivity" provisions or other covenants or
proposals purporting to limit Seller's freedom to compete for any group or class
of customers, in any line of business and/or in any geographic area; or
3.3.2.16 Any Contract applicable to the Business which appoints any
Person, other than a Partner or Employee, an agent, dealer, distributor or
franchisee for the purpose of obtaining Seller Customer Contracts.
3.3.3 All Seller Contracts are in full force and effect and are the legal,
valid, binding and enforceable obligations of the respective parties thereto in
accordance with their written terms. Seller has no Knowledge of any fact or
circumstance which would cause any of the Seller Contracts, immediately
following Closing, to cease to be legal, valid, binding, enforceable, and in
full force and effect on identical terms as immediately prior to Closing.
Seller has not received any notice of termination, repudiation (whether or not
anticipatory) or demand for renegotiation of any Seller Contract. Seller has
not, nor to the Knowledge of Seller has any other party thereto, breached any
material provisions of, or is in default in any material respect under, any
Seller Contract, including failure to (i) meet any reporting or accounting
requirements, or (ii) pay any required valid run time charge, user charge,
license fee, minimum license fee, minimum usage fee, royalty, minimum royalty,
guaranteed royalty, shortfall royalty, or other payment.
3.3.4 There are no open audits of licensor rights pursuant to the terms
of any Seller Contract wherein Seller is licensee. Seller has not, within 180
days prior to the Closing Date, received any notice of invocation of audit
rights from any licensor pursuant to the terms of any Seller Contract wherein
Seller is licensee.
3.3.5 No party has asserted in writing to Seller any defense, offset or
counterclaim with regard to any performance required pursuant to any Seller
Contract that has not been settled. Seller has not received notice of any Claim
arising out of any Seller Contract that has not been settled. To Seller's
Knowledge, no event has occurred that, with notice or lapse of time, or both,
would give rise to any Claim arising out of any Seller Contract.
3.3.6 No Seller Contract involves related party transactions with any
Partner, Affiliate or Employee of Seller.
3.3.7 There are no licensor or licensee obligations, lessor or lessee
obligations, agreements, commitments, customs of the trade or courses of
dealing, whether accrued, executory, absolute, contingent or otherwise, other
than as set forth in the text of a Seller Contract or in a written addendum or
amendment thereto. The Seller Contracts have not been amended orally, in
writing or through course of dealing of the parties. Seller has not waived any
material rights under any Seller Contract.
3.3.8 There are no addenda or other written or oral agreements, usages or
customs of dealing, or other understandings or arrangements pursuant to which
the fees or royalties -- stated in any Seller Customer Contract as being payable
by any Customer in respect of performance rendered after the Effective Time --
have been accelerated, prepaid, reduced, offset, compromised, or changed. The
obligations of Seller stated in any Seller Customer Contract as being owed to or
performable prior to the Effective Time, have not been decreased, postponed,
offset, deferred, abated or changed other than by a written amendment set forth
in Seller Contract Schedule One. The obligations of Seller stated in any Seller
Customer Contract as being owed to or performable after the Effective Time, have
not been increased other than by a written amendment set forth in Seller
Contract Schedule One.
3.3.9 No Seller Customer Contract, other than as set forth on Seller
Contract Schedule One, contains (expressly, by custom or course of dealing,
waiver or otherwise) any Non-Standard Term, including any Non-Standard Term
regarding: use of the product, provision of consulting services, provision of
professional services, support, training, product return, discount, credit,
refund, warranty, waiver of warranty exclusion, indemnity, limitation of
liability, right to consequential or special damages, special or client
programming, deferred payment, product performance, cancellation or early
termination.
3.4 ALL ASSETS LISTED. The Seller Assets are all of the assets, except for
Excluded Assets, owned, licensed, leased, or used by Seller in the operation and
conduct of the Business. The Seller Assets include all of the assets necessary
for the continued conduct of the Business (assuming adequate personnel) by Buyer
as such was conducted by Seller immediately prior to the Closing, except as such
conduct would be affected by the exclusion of the Excluded Assets, the absence
of any Partner or Employee who does not become a Buyer employee, any Legal
Requirement applicable to Buyer and not to Seller, and any circumstance unique
or particular to Buyer.
3.5 SELLER PROPRIETARY RIGHTS.
3.5.1 Seller Owned Asset Schedule Two sets forth a true and complete list
and description of the following Proprietary Rights owned by Seller in
connection with the Business: Patents, Copyrights, Trademarks, servicemarks,
trade names, un-trademarked brand names, and un-servicemarked service names.
3.5.2 None of the Proprietary Rights owned by Seller in connection with
the Business has entered the public domain.
3.5.3 No Person has disputed or is disputing, and to Seller's Knowledge,
no Person has the right to dispute Seller's right, title or interest in or to
any of the Proprietary Rights owned by Seller in connection with the Business.
3.5.4 Seller has no Knowledge of any unauthorized use, infringement or
misappropriation by any Person of any of the Proprietary Rights owned by Seller
in connection with the Business.
3.5.5 No Person has or, to Seller's Knowledge, claims (i) any interest in
any Proprietary Rights owned by Seller in connection with the Business or (ii)
any right to compensation (including royalties) from Seller by reason of the use
or other exploitation in the conduct of the Business of any such Proprietary
Rights.
3.5.6 To Seller's Knowledge, all Copyrights owned by Seller in connection
with the Business and being transferred hereunder are valid, enforceable and
subsisting.
3.5.7 The Proprietary Rights held by Seller pursuant to Contracts listed
on Seller Contract Schedule Four will be available for use by Buyer on identical
terms and conditions immediately subsequent to Closing to the same extent they
were available for use by Seller immediately prior to Closing. Other than
pursuant to any United States, State or foreign statute or regulation, and other
than those restrictions contained in the licenses of Proprietary Rights set
forth in Seller Contract Schedule Four, Seller has no Knowledge of any
restrictions, including Claims, on the ability of Buyer to use or otherwise
exploit any Seller Proprietary Right.
3.5.8 All of Seller's rights in and to all and any of the Proprietary
Rights held by Seller as licensee pursuant to the Contracts listed on Seller
Contract Schedule Four are transferable with the Consent of the applicable
licensors, all of which Consents have been obtained by Seller or will be
obtained by Seller prior to Closing.
3.5.9 Closing and effectuation of the transactions contemplated by this
Agreement will not subject Buyer to any payments, in addition to the royalty or
license fee or the like stipulated in the applicable license agreement, with
regard to any Proprietary Right held by Seller as licensee listed on Seller
Contract Schedule Four.
3.5.10 To the Knowledge of Seller, there are no Claims asserted or
unasserted, by any other Person with regard to all or any of the Seller
Proprietary Rights. To the Knowledge of Seller there are no valid grounds for
any bona fide Claims challenging the ownership, validity, enforceability or
effectiveness of any of the Seller Proprietary Rights. To the Knowledge of
Seller, there are no valid grounds for any bona fide Claims against the use by
Seller of any Proprietary Rights used in the Business as currently conducted.
To the Knowledge of Seller, none of the Seller Proprietary Rights is subject to
any outstanding Claim.
3.5.11 To Seller's Knowledge, neither the conduct of the Business nor use
or possession of all or any of the Seller Proprietary Rights by Seller has
infringed the Proprietary Rights of any other Person. To the Knowledge of
Seller there are no valid grounds for any bona fide Claims to the effect that
the manufacture, sale, license or use of any product or process as now used in
the operation of the Business or offered or proposed for manufacture, sale,
license or use by Seller infringes on any Proprietary Right of any other Person.
3.5.12 Seller has no Knowledge of any third party Proprietary Right,
whether registered or not, the rights attendant to which, if asserted by a third
party after the Closing Date, would prevent Buyer's use or other exploitation of
any Seller Proprietary Right in the operation of the Business.
3.6 SOFTWARE
3.6.1 Seller Owned Asset Schedule Three sets forth a true and complete
list and description of the Software owned by Seller.
3.6.2 With regard to the Seller Software listed on Seller Owned Asset
Schedule Three, Seller has itself developed, programmed, designed, written and
coded such Software, except for third party proprietary software for which a
license or permission to use has been obtained.
3.6.3 The Software listed on Seller Owned Asset Schedule Three is not
subject to any Claim or Legal Requirement or other legal, contractual or other
restriction that would prevent the Software from being licensed, sublicensed,
marketed, incorporated in other software, modified, or otherwise used, sold or
assigned by Buyer. None of the Software listed on Seller Owned Asset Schedule
Three has entered the public domain.
3.6.4 To Seller's Knowledge, during the time which Seller has owned any of
the Software listed on Seller Owned Asset Schedule Three, no third party has had
unauthorized access to such Software or to the Documentation, Source Code, any
Trade Secret or similar material relating to such Software.
3.6.5 During the time which Seller has owned any of the Software listed on
Seller Owned Asset Schedule Three, no Person other than the independent
contractors, outside programmers and developers, consultants and the like who
had entered into a valid and binding non-disclosure agreement have performed
work for Seller relating to any of such Software.
3.6.6 All employees, independent contractors, outside programmers or
developers, consultants or the like who have had access to any of the Software
listed on Seller Owned Asset Schedule Three or have performed work for Seller
relating to any of the Software listed on Seller Owned Asset Schedule Three
(including the independent contractors, outside programmers and developers,
consultants and the like listed in the Seller Disclosure Schedule have executed
enforceable "Statement Requirements for Partners and Staff" or other Contracts
containing trade secret non-disclosure/confidentiality provisions and provisions
precluding Claims of rights in or to any of such Software. All of such
agreements may be found in the Records of Seller.
3.6.7 Seller has required all Customers or potential Customers having
access to any of the owned Software listed on Seller Owned Asset Schedule Three
to execute enforceable software licenses or trade secret agreements (including
"alpha" or "beta" test or demonstration agreements).
3.6.8 To Seller's Knowledge, no Person other than Seller is in possession
of any Source Code relating to any of the Software listed on Seller Owned Asset
Schedule Three. There are no escrow agreements in effect relating to any Source
Code for any of the Software listed on Seller Owned Asset Schedule Three.
3.6.9 The Source Code for any of the Software listed on Seller Owned
Asset Schedule Three can be used to compile executable code which, when compared
to the commercial versions of such Software, will prove to be identical.
3.6.10 The Software listed on Seller Owned Asset Schedule Three operates
in all material respects in accordance with the manuals setting forth the
specifications, capabilities, operation, installation and use of such Software.
None of the Software listed on Seller Owned Asset Schedule Three has manifested
any significant operating problems, other than any such problems as have been
corrected or are correctable in the ordinary course of business. Seller,
subsequent to January 1, 1994, has received no written complaints from Customers
relating to operating problems which was not corrected and which would not have
been a breach of warranty pursuant to the applicable Seller Customer Contract.
To Seller's Knowledge, Seller's relationships with its Customers, either
individually or collectively (as in a user group), are satisfactory.
3.6.11 Seller and, to Seller's Knowledge, all licensors to and licensees
from Seller, as applicable, are in full compliance with all material obligations
set forth in the Contracts listed in Seller Contract Schedules One and Three.
Seller has no unresolved Claims against any Customer.
3.6.12 Schedule Two sets forth, by date, payee and amount, all payments,
of any kind due any licensor of any third party Software incorporated into any
Seller Software or otherwise used in the Business, which will become due or
payable during 1996 or which, with the occurrence of some event or series of
events, could become due or payable during 1996.
3.6.13 Seller has not retained any copy of any version of any of the Seller
Software and, at the Closing, has Transferred to Buyer all copies of all
versions of all such Seller Software.
3.6.14 There are no codes (including Source Codes, Complied Codes and
object codes), algorithms, programs, techniques, Software, procedures, concepts,
documents or instructional or other materials that have been created, designed,
licensed and/or used by Seller to create, develop, operate, maintain, enhance or
update the Seller Software that will not be Transferred to Buyer by means of
this Agreement.
3.6.15 As of October 31, 1995, to Seller's Knowledge, none of the Seller
Software contains any "trap doors", "time bombs", "Trojan horses", "worms" or
the like.
3.7 SELLER FINANCIAL STATEMENTS. The Seller Financial Statements have been
prepared in accordance with Price Waterhouse Tax Technology Group modified cash
basis accounting principles consistently applied and fairly present the
financial position of the Business as at the dates thereof and the results of
its operations and cash flows for the periods then ended. The Price Waterhouse
Tax Technology Group modified cash basis accounting principles employed are
described in the notes to such Seller Financial Statements.
3.8 TAXES. To the Knowledge of Seller, and to the extent necessary, Seller has
duly filed all Tax returns which are required to be filed by it with respect to
the Business and the failure of which to be filed would have a material adverse
effect. Such returns, if any, are true, correct and complete in all material
respects. Seller has paid all Taxes, if any, which have become due or have been
properly assessed against it with respect to the operation of the Business
through the Effective Time and all Taxes which any Taxing authority has properly
assessed, except where the failure to pay such Taxes would not have a material
adverse effect on the Business and except where such Taxes are being contested
in good faith through appropriate proceedings. To the Knowledge of Seller, none
of the Tax returns for Seller relating to the Business are currently under audit
and all previous audits have been resolved and the adjustments, if any, are
properly reflected on the Seller Financial Statements.
3.9 LITIGATION.
3.9.1 There are no currently asserted, pending or, to Seller's Knowledge,
threatened Claims affecting the Business or any Seller Asset by any Person.
Seller has no Knowledge of unasserted material Claims probable or capable of
assertion affecting the Business or any Seller Asset by any Person. Seller has
no Knowledge of any event, act or omission which could give rise to any Claim
affecting the Business or any Seller Asset by any Person. If applicable, the
Seller Disclosure Schedule, in so far as it relates to this Section 3.9.1, sets
forth the date the Claim was made or initiated, the forum, the judge or
magistrate, the other parties thereto, the subject matter thereof, the stage of
the proceedings, the amount of damages claimed, and the name, address and
telephone number of Seller's litigation counsel.
3.9.2 There is no Legal Requirement outstanding against Seller, the
Business or the Seller Assets having, or which, insofar as reasonably can be
foreseen, in the future could have, a material adverse effect on the Business or
any Seller Asset. Seller is not subject to or in default with respect to any
continuing Legal Requirement applicable specifically to the Business or the
Seller Assets. There is no investigation or proceeding pending or, to the
Knowledge of Seller, threatened against Seller before any Governmental Entity
affecting the Business.
3.10 NO VIOLATIONS. Seller has operated the Business in compliance with all
applicable Legal Requirements. Seller is not, nor will, with the passage of
time, be subject to liability under or in default or violation of any term,
condition or provision of any applicable Legal Requirement, including as a
result of the execution, delivery or performance Seller's obligations hereunder.
3.11 NO BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been conducted without the intervention of
any Person acting on behalf of Seller in such a manner as to give rise to any
claim against any Seller Asset, the Business or Buyer or its Affiliates for any
investment banker's, broker's, finder's or the like commission, fee or similar
compensation.
3.12 INTERESTS OF PARTNERS AND EMPLOYEES. None of Seller's partners or
employees has any individual ownership or other interest in any Seller Asset,
except for a partner's general partnership interest. None of Seller's partners
or employees has any material ownership or other interest in any supplier or
Customer of the Business.
3.13 THIRD PARTY CONSENTS. Seller has obtained all necessary third party
Consents to the assignment of any Seller Contract (including all Customer
Consents), the Transfer of any Seller Asset or to the consummation of any of the
transactions contemplated by this Agreement.
3.14 ACKNOWLEDGMENT OF BUYER'S DETRIMENTAL RELIANCE. The foregoing
representations and warranties are made by Seller with the knowledge and
expectation that Buyer is placing reliance thereon.
ARTICLE FOUR
COVENANTS OF SELLER
Seller covenants and agrees that:
4.1 NON-COMPETITION AGREEMENT.
4.1.1 For a period of 48 full calendar months after the month in which the
Closing shall occur (the "Restricted Period"), Seller, any United States
Affiliate of Seller and any Partner or Employee of Seller (while acting within
the scope of their employment) (collectively, the "Non-Competing Person(s)")
shall not -- within the territory of the United States, directly or indirectly,
in any form, fashion, or manner, through any kind of ownership or as a
stockholder, director, officer, principal, agent, employee, employer, advisor,
consultant, partner, creditor, investor, donee, lessor or in any other form
(including waiver or forbearance) or capacity, individual or representative,
whatever, either for the Non-Competing Person's own benefit or for the benefit
of any other Person -- finance, design, develop, program, create, market, sell,
lease to lessors, license to licensees, distribute, loan, sponsor, endorse,
service, maintain, debug, provide or make available (collectively, "Make
Available") a Prohibited Product.
4.1.2 During the Restricted Period, the Non-Competing Persons shall not,
within the territory of the United States, directly and shall not permit any
Person, Partner or Employee or United States Affiliate to Make Available a
Prohibited Product under the name "Price Waterhouse" or any variant thereof.
4.1.3 Nothing herein shall be deemed to prohibit a Non-Competing Person
from directly or indirectly, purchasing an equity interest in any Person that
Makes Available any Prohibited Product, provided, however, that the equity
interest of such Non-Competing Person may not exceed 5% of the issued and
outstanding shares of such Person.
4.1.4 Seller acknowledges that Buyer was not willing to purchase the
Seller Assets or pay the Purchase Price unless and until it received the
specific covenants contained in Section 4.1.1 and 4.1.2 of this Agreement.
4.1.5 Seller's provision of software services pursuant to any AYCE
Agreement in a situation where an AYCE licensee is demanding software services
over and above the software services to be provided by Buyer on behalf of Seller
pursuant to the Software and Support Services Agreement (an Ancillary Agreement)
shall not be considered to violate the requirements of this Section 4.1. Any
activities permitted Seller's Partners or Employees pursuant to any of the
Ancillary Agreements shall not be considered to violate the requirements of this
Section 4.1.
4.2 SELLER'S ON-GOING ASSISTANCE. Seller, for a reasonable period of time after
the Closing and at no cost to Buyer, will execute, acknowledge, and deliver any
further assignments, conveyances, and other assurances, documents, and
instruments of Transfer, reasonably requested by Buyer, and will take any other
action consistent with the terms of any Operative Document that may reasonably
be requested by Buyer for the purpose of assigning, Transferring, granting,
conveying, and confirming to Buyer, or reducing to Buyer's possession, any or
all of the Seller Assets to be conveyed and Transferred by any Operative
Document. Seller, for a reasonable period of time after the Closing and at no
cost to Buyer, shall cooperate with Buyer in implementing a harmonious and
efficient transition of the marketing, programming, licensing, maintenance
service and other functions of the Business and in complying with applicable
requirements of the United States Securities and Exchange Commission relating to
the filing on Form 8-K describing this Agreement and the transactions
contemplated herein. After the Closing Date, Seller shall promptly deliver to
Buyer any mail or other communications received by Seller after the Effective
Time pertaining to the Seller Assets or the Business and any cash, checks or
other instruments of payment to which Buyer is entitled under any Operative
Document. Seller, at its own cost and expense, shall retain for seven years
after the Closing Date or until expiration of all applicable record retention
statutes or regulations, whichever is later, all accounting, business, financial
and Tax Records or information not delivered to Buyer at Closing relating to the
Seller Assets or the Business for any period up to or prior to the Closing Date,
and, upon reasonable prior written request, shall make such materials available
to the Buyer.
4.3 CONFIDENTIALITY. For a period of 48 full calendar months after the month in
which Closing shall occur, with regard to information regarding, pertaining to
or about any Seller Proprietary Right (the "Proprietary Information"), Seller
shall (i) except as required by Legal Requirement, keep all
Proprietary Information absolutely confidential and not disclose or reveal the
content of any Proprietary Information to any Person other than those employed
by Seller or acting on Seller's behalf who are actively and directly
participating in meeting Seller's obligations or exercising Seller's rights
under this Agreement or any of the Ancillary Agreements and to cause those
Persons to be informed of the existence and content of this confidentiality
covenant and to strictly observe its terms and conditions and (ii) not use
Proprietary Information for any purposes other than those enumerated in the
immediately preceding clause. "Proprietary Information" shall not include
information which becomes generally available to the public or in the industry
other than as a result of disclosure by Seller, its Partners, Employees or
Affiliates. In the event that Seller is required by applicable law or legal
process to disclose any Proprietary Information, prior to doing so, it will
provide Buyer with written notice of such requirement sufficient to permit Buyer
to seek injunctive or other appropriate relief with regard to such disclosure.
4.4 NO SALE OR ASSIGNMENT OF AYCE AGREEMENTS. After the Closing Date, Seller
shall not sell, assign or otherwise transfer any AYCE Agreement or any right or
obligation arising thereunder or therefrom to any Person, unless such transfer
is to Buyer; provided, that Seller may sell, assign or otherwise transfer an
AYCE Agreement with regard to which Buyer shall be in material uncured default
of its obligation to provide software support services under the Software and
Support Services Agreement.
4.5 ASSIGNMENT OF AYCE REVENUE. After the Closing Date, Seller shall pay over
to Buyer all and any revenue arising from any AYCE Agreement, within a
reasonable time of receipt of such revenue.
4.6 PAYMENT OF TAXES ON TRANSACTION. Should any Texas Governmental Entity
impose or have the right to impose any Tax upon the Transfer of the Seller
Assets by the Seller to the Buyer or upon the assignment, assumption, purchase
or sale transactions contemplated by the Operative Documents, Seller, promptly
after receipt of notice of the existence of such right or imposition, shall, at
the reasonable direction of the Buyer, either itself pay the full amount of such
Tax or reimburse Buyer for the full amount of any such Tax actually paid by
Buyer. Purchaser will provide any necessary resale certificates under Texas
law.
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as disclosed on the Buyer Disclosure Schedule, Buyer, as of the Effective
Time and as of the Closing Date, represents and warrants to Seller as follows:
5.1 ORGANIZATION, STANDING, AUTHORITY, POWER, AND CONSENTS.
5.1.1 Buyer is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Texas.
5.1.2 Buyer has all requisite corporate power, authority and legal right
to enter into, execute, and deliver the Operative Documents and to consummate
the transactions and perform and discharge the obligations contemplated by the
Operative Documents.
5.1.3 The execution and delivery by Buyer of the Operative Documents and
the consummation by Buyer of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action. Buyer's Board of
Directors has authorized and approved the transactions contemplated by the
Operative Documents. Such authorizations and approvals have been duly entered
into its corporate minutes. Buyer's Board of Directors has authorized the
officer whose name appears below to execute the Operative Documents in behalf of
the Buyer and to deliver them to Seller.
5.1.4 The Operative Documents have been duly executed and delivered by
Buyer.
5.1.5 Each of the Operative Documents constitutes a legal, valid and
binding obligation of Buyer enforceable in accordance with its terms, except
that such enforceability may be subject to: (i) bankruptcy, insolvency,
reorganization or other similar laws relating to enforcement of creditors'
rights generally, and (ii) general equitable principles.
5.1.6 The execution, delivery and performance of the Operative Documents
by Buyer has not, and the consummation of the transactions contemplated hereby
and thereby will not (i) violate the terms of any Contract or Legal Requirement
to which Buyer is a party, (ii) violate the articles of incorporation or the
bylaws of Buyer or any other corporate governance policy or procedure of Buyer
or (iii) violate, conflict with, breach or cause any default or acceleration
under any Legal Requirement applicable to Buyer or under any Contract to which
Buyer is a party, which violation, conflict, breach, default or acceleration
would have a material and adverse effect on Buyer's ability to perform its
obligations under the Operative Documents.
5.1.7 No Consent by any Governmental Entity are required in connection
with the execution and delivery of the Operative Documents or the consummation
by Buyer of the transactions contemplated thereby.
5.1.8 Buyer has obtained all necessary third party Consents and approvals
(including the Consent of Buyer's lender) in connection with Buyer's execution
and delivery of the Operative Documents and consummation by Buyer of the
transactions contemplated hereby and thereby.
5.2 NO BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been conducted without the intervention of
any Person acting on behalf of Buyer in such a manner as to give rise to any
claim against Seller or its Affiliates for any investment banker's, broker's,
finder's or the like commission, fee or similar compensation.
5.3 ACKNOWLEDGMENT OF SELLER'S DETRIMENTAL RELIANCE. The foregoing
representations and warranties are made by Buyer with the knowledge and
expectation that Seller is placing reliance thereon.
ARTICLE SIX
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees that:
6.1 POST-CLOSING COOPERATION AND ACCESS. After the Closing Date, Buyer, at no
cost to Seller, shall, and shall cause its managers, employees, counsel and
independent public accountants to provide reasonable assistance to and to afford
to representatives of Seller, including its legal counsel and accountants,
reasonable access to all pre-Closing Records in Buyer's possession or under
Buyer's control as may be reasonably requested by Seller in order to permit
Seller (at its cost and expense) to prepare and file Tax returns and to prepare
for, participate in, assert or defend any Claim relating to or involving Seller,
the Business or a Partner or Employee, or to discharge Seller's obligations
under this Agreement. Buyer, at its own cost and expense, shall retain for
seven years after the Closing Date or until expiration of all applicable record
retention statutes or regulations, whichever is later, all accounting, business,
financial and Tax records or information delivered to Buyer at Closing relating
to the Seller Assets or the Business for any period up to or prior to the
Closing Date, and, upon reasonable prior written request, shall make such
materials available to the Seller.
6.2 COLLECTION OF SELLER PROCEEDS BY BUYER. After the Closing Date, to the
extent Buyer comes into possession of revenues and communications relating to an
Excluded Asset, Buyer shall immediately Transfer such to Seller.
6.3 SUPPORT OF TMS SOFTWARE. With regard to Seller Customer Contracts, Buyer
agrees to support, which shall include updates for required legislative and
regulatory changes to the current DOS and Windows versions of Tax Management
System ("TMS") software through the 1995 tax year. With regard to Seller
Customer Contracts, Buyer agrees to support, which shall include updates for
required legislative and regulatory changes, the current DOS and Windows version
of TMS for the 1996 tax year unless Buyer determines in good faith that the
projected 1996 software license fees from a TMS software package is projected to
be less than one million dollars (US $1,000,000), in which case, Buyer may
discontinue development and support of such 1996 TMS software package and permit
licensees of such software to convert to comparable Buyer Software.
ARTICLE SEVEN
CLOSING
7.1 DATE AND PLACE OF CLOSING. The Transfer of all of the Seller Assets by
Seller to Buyer in consideration of the payment of the Purchase Price (via wire
transfer to an account specified by Seller (for purposes of the Closing,
delivery shall be deemed effectuated upon the earlier to occur of confirmation
of receipt from Seller's bank or assignment of a "fed wire" identification
number)) and the assumption of the Assumed Liabilities by Buyer and the
execution and delivery by the applicable Party(ies) of the Ancillary Agreements,
the Buyer Closing Documents and the Seller Closing Documents (all in a manner
and form reasonably satisfactory to their respective legal counsel) (the
"Closing") shall take place effective as of the Effective Time, at the Chicago,
Illinois offices of the Business, commencing at 8:00 a.m., local time, on the
Closing Date. At the Closing, each event shall be deemed to have occurred
simultaneously with all other events.
7.2 BUYER PLACED IN POSSESSION. Simultaneously with the consummation of the
Closing, Seller, through its officers, Partners, agents, and Employees, will put
Buyer into full possession and enjoyment of the Seller Assets.
ARTICLE EIGHT
INDEMNIFICATION
8.1 BUYER INDEMNIFIED LIABILITIES. From and after the Closing Date, Buyer shall
indemnify, defend and hold harmless Buyer Indemnified Parties from and against
any and all of the following Buyer Indemnified Liabilities, in each case
regardless of by whom asserted and regardless of whether any such Buyer
Indemnified Liability is known or unknown or fixed or contingent:
8.1.1 Any and all Claims arising from, relating to or associated with
breach of any representation, warranty, covenant, or undertaking made or assumed
by Buyer under any Operative Document;
8.1.2 Any and all Claims arising or resulting from the Assumed Liabilities
or with Buyer's use, possession, enjoyment, operations, transactions or
ownership of the Business or the Seller Assets on or after the Closing Date,
except for Claims that such use, possession, enjoyment, operations, transactions
or ownership is limited, subject to a fee or royalty, or in some manner or
instance illegal or improper due to an improper or ineffective conveyance or
assignment by Seller or infringes the rights of a third party which rights
allegedly arose prior to the Effective Time; and
8.1.3 Any and all Claims brought by any taxing authority or other claimant
for uncollected or unpaid Taxes relating to the Seller Assets, the operation of
the Business or transactions of Buyer occurring or relating to the period after
the Effective Time;
8.2 SELLER INDEMNIFIED LIABILITIES. From and after the Closing Date, Seller
shall indemnify, defend and hold harmless Seller Indemnified Parties from and
against any and all of the below stated Seller Indemnified Liabilities, in each
case regardless of by whom asserted and regardless of whether any such Seller
Indemnified Liability is known or unknown or fixed or contingent:
8.2.1 Any and all Claims arising from, relating to or associated with
breach of any representation, warranty, covenant, or undertaking made or assumed
by Seller under any Operative Document;
8.2.2 Any and all Claims arising or resulting from Seller's use,
possession, enjoyment, operation, or ownership of the Business or the Seller
Assets prior to the Effective Time;
8.2.3 Any and all Claims arising from, relating to or associated with the
ownership, use, possession, enjoyment or operation of any of the Excluded Assets
regardless of whether the injury, damage, loss, expense, cost or liability
giving rise to the particular Claim occurred prior to or after the Effective
Time;
8.2.4 Any and all Claims brought by any taxing authority or other claimant
for uncollected or unpaid Taxes relating to the Seller Assets, the operation of
the Business or transactions of Seller occurring or relating to the period prior
to the Effective Time;
8.2.5 Any and all Claims arising from, relating to or associated with any
Partner or Employee Obligation, Partner or Employee welfare benefit plan or
employment practice of Seller, regardless of whether the injury, damage, loss or
liability giving rise to the particular Claim occurred prior to or after the
Effective Time;
8.2.6 Any and all Claims by Employees arising from, relating to or
associated with occurrences prior to the Effective Time;
8.2.7 Any damages, costs or expenses arising from the presence of a non-
disclosed Non-Standard Term in any Seller Customer Contract; provided, however,
that Seller shall have first been provided a reasonable opportunity to satisfy
any obligation under any such non-disclosed Non-Standard Term on behalf of
Buyer; and
8.2.8 Any Claim by a licensee under any Seller Customer Contract to a
Refund or Credit of any license fees received by Seller prior to the Effective
Time; provided that Buyer shall not be entitled to any indemnification relating
to any Non-Cash Credit unless payment of such to the Customer by the Buyer has
been approved in writing in advance by any of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇.
8.3 CLAIM NOTICE. Each Party agrees that, promptly after it becomes aware of
facts giving rise to a Claim, such Party will provide notice thereof in writing
to the other Party specifying the nature and specific basis for such Claim and,
to the extent feasible and reasonable, the estimated amount of damages
attributable thereto (a "Claim Notice"). Each Claim Notice shall set forth all
material information respecting the Claim as the applicable Party shall then
have and shall contain a statement to the effect that the Party giving the Claim
Notice is making a Claim pursuant to, and formal demand for indemnification
under, this Agreement. For any Claim hereunder arising out of any Claim brought
by a third party, the Indemnified Party shall give the Party Indemnifying a copy
of any written claim, process or legal pleadings with respect thereto promptly
after the Indemnified Party receives such documents. The giving of a Claim
Notice shall be a condition precedent to any liability of a Party Indemnifying
under this Agreement.
8.4 INDEMNIFICATION PROCEDURE.
8.4.1 Upon the occurrence of a Buyer or Seller Indemnified Liability not
involving a third party Claim, the Party Indemnifying shall, upon demand, pay to
or on behalf of the Indemnified Party, any amounts to which the Indemnified
Party is entitled by reason of the provisions of this Article Eight. Such
payment shall be made in cash or other immediately available funds at the then
address of the Indemnified Party for notice purposes pursuant to this Agreement.
8.4.2 If, within 30 business days of receipt of a Claim Notice involving a
third party Claim, the Party Indemnifying does not elect in writing to control
the defense of the Claim described therein or does not thereafter actively and
in good faith prosecute the defense thereof (including, if necessary, by all
appropriate legal proceedings, including appeal), the Indemnified Party may (but
shall have no obligation to) elect to thereafter control all aspects of the
defense of any such Claim with attorneys of its choice, at the expense of the
Party Indemnifying, and the Party Indemnifying shall be bound by the result
obtained with respect thereto by the Indemnified Party.
8.4.3 If the Party Indemnifying elects to conduct the defense of a third
party Claim, such may be conducted in the name and on behalf of the Party
Indemnifying or the Indemnified Party as may be appropriate. Such contest shall
be conducted by attorneys selected and employed and compensated by the Party
Indemnifying; provided, the Indemnified Party shall have the right to
participate in such proceedings and to be represented by attorneys of its own
choosing; however, the cost and expense attributable to such attorneys employed
by the Indemnified Party shall be borne solely by the Indemnified Party. Even
if the Indemnified Party joins in any such contest, the Party Indemnifying shall
have full authority to determine all action to be taken with respect thereto;
provided, however, that no Encumbrance on any asset of the Indemnified Party
shall result therefrom and that no judgment, award, decree, order, injunction or
equitable relief binding on the Indemnified Party shall be agreed to by the
Indemnifying Party without the written consent of the Indemnified Party which
consent shall not be unreasonably withheld. Any refusal to consent shall be
based on written advice by legal counsel to the Indemnified Party. The
Indemnified Party shall at all times retain the right to settle any Claim. If
such settlement is without the written consent of the Indemnifying Party (which
will not be unreasonably withheld or delayed), the Indemnifying Party shall be
relieved of its obligations with respect to such Claim under this Article Eight.
8.4.4 At any time after commencement of the defense of any Claim, the
Party Indemnifying may request the Indemnified Party to agree in writing to the
abandonment of such contest or to the payment or compromise by the Party
Indemnifying of such Claim, whereupon such action shall be taken unless the
Indemnified Party determines that the contest should be continued, and so
notifies the Party Indemnifying in writing within 15 working days of such
request from the Party Indemnifying. If the Indemnified Party determines that
the contest should be continued, the Party Indemnifying shall be liable
hereunder only to the extent of the lesser of (i) the amount which the other
party(ies) to the contested Claim had agreed to accept in payment or compromise
as of the time the Party Indemnifying made its request for abandonment to the
Indemnified Party or (ii) the amount for which the Party Indemnifying is found
to be liable with respect to such Claim, so long as no legal or property right
of the Indemnified Party hereunder shall be lessened or reduced in value as a
result of the payment or compromise. The Partying Indemnifying shall be
entitled to recover from the Indemnified Party any additional expenses
(including reasonable attorneys' fees) incurred by such Party Indemnifying as a
result of such decision by the Indemnified Party to continue to contest such
Claim.
8.4.5 If requested by the Party Indemnifying, the Indemnified Party agrees
to cooperate with the Party Indemnifying in contesting any Claim which the Party
Indemnifying elects to contest or, if necessary to preserve the right to assert
the same, in making any counterclaim against the Person asserting the Claim, or
any cross-complaint against any other Person; provided, the Party Indemnifying
shall reimburse the Indemnified Party for any reasonable expenses (including
reasonable attorneys' fees) incurred by it in so cooperating.
8.5 LIMITATIONS ON INDEMNIFICATION.
8.5.1 Neither Party shall be required to honor an indemnified Claim under
the provisions of Section 8.1.1, 8.2.1 or 8.2.7 hereof until such time as the
aggregate of all amounts for which indemnity would otherwise be due thereunder
exceeds $200,000, in which case the Indemnifying Party shall be responsible for
all amounts in excess of $200,000 under Section 8.1.1, 8.2.1 or 8.2.7 hereof, as
limited by Sections 8.5.3 and 8.5.4.
8.5.3 The Parties' obligations relating to indemnification shall survive
Closing and continue after Closing for a period of 48 full calendar months after
the month in which the Closing shall occur.
8.5.4 The amount of any loss, liability, claim, damage or expense for
which indemnification is provided under this Article Eight shall be net of any
amounts recovered or recoverable by the Indemnified Party under insurance
policies with respect to such loss, liability, claim, damage or expense and
shall be (i) increased to take account of any net tax cost incurred by the
Indemnified Party arising from the receipt of indemnity payments hereunder
(grossed up for such increase) and (ii) reduced to take account of any net tax
benefit realized by the Indemnified Party arising from the incurrence or payment
of any such loss, liability, claim, damage or expense. In computing the amount
of any such tax cost or tax benefit, the Indemnified Party shall be deemed to
recognize all other items of income, gain, loss deduction or credit before
recognizing any item arising from the receipt of any indemnity payment hereunder
or the incurrence or payment of any indemnified loss, liability, claim, damage
or expense.
ARTICLE NINE
MISCELLANEOUS
9.1 SEVERABILITY. If any provision of this Agreement, or the application
thereof to any person, place or circumstances, shall be held by a court of
competent jurisdiction to be invalid, unenforceable, or void, the remainder of
this Agreement and such provisions as applied to other Persons, places, and
circumstances shall remain in full force and effect; provided, however, that in
the event that the terms and conditions of this Agreement are materially altered
as a result of this paragraph, the Parties will, in good faith, re-negotiate the
terms and conditions of this Agreement to resolve any inequities. If any
provision of Section 4.1 or its subparts is held to be unenforceable because of
the scope, duration or area of its applicability, the court making such
determination shall have the power to modify such scope, duration or area or all
of them to the maximum extent necessary to make such provision legal, valid and
enforceable, and such provision shall then be applicable in such modified form.
9.2 CONSENTS TO ASSIGNMENTS. Any Transfer to Buyer by Seller of any Seller
Asset which shall require the Consent of any third party shall be made subject
to such Consent being obtained. No Operative Document shall constitute any
agreement to assign any Contract or Contract Rights if an attempted assignment
thereof, without the Consent of a third party thereto, would constitute a breach
thereof or in any way adversely affect the rights of Seller or Buyer thereunder.
If a Consent is obtained by Seller after Closing, the affected asset(s),
including all assets listed as Excluded Assets due to the lack of a Consent at
the time of Closing, to which the Consent applies shall immediately thereafter
be assigned to Buyer by Seller. If a Consent is not obtained, or if an
attempted assignment would be ineffective or would affect the rights of Seller
thereunder so that Buyer would not, in fact, receive all of Seller's rights,
Seller will, to the extent not prohibited by or in violation of any such
agreement, (i) cooperate with Buyer in any commercially reasonable arrangement
designed to provide for Buyer the benefits (including the exercise of Seller's
rights) under any such claims, contracts, agreements, licenses, leases,
commitments, sales orders or purchase orders, including enforcement for the
benefit of Buyer, and at Buyer's expense, of any and all rights of Seller
against a third party thereto arising out of the breach or cancellation by such
third party or otherwise, (ii) hold all monies paid thereunder in trust for the
account of Buyer, and (iii) remit such monies to Buyer as promptly as possible.
9.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All of Buyer's and
Seller's representations, warranties, and covenants contained in this Agreement
shall, except to the extent waived in writing by the applicable Party, survive
the Closing for a period of 48 full calendar months after the month in which the
Closing shall occur, and shall not be deemed waived by execution of this
Agreement, the consummation of the Closing or any investigation heretofore or
hereafter made by or on behalf of any Party.
9.4 ASSIGNMENT. The Parties may assign this Agreement and any right or
obligation hereunder to another Person as part of a sale of a major part of its
assets or as a part of a change of control, transaction or merger with another
Person. In all other circumstances, this Agreement and/or any right or
obligation hereunder shall not be assignable.
9.5 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon and enforceable by the Parties and
their respective permitted successors and assigns of the Parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party,
including any Partner or Employee, other than the Parties and their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of such agreements.
9.6 COMPLETE AGREEMENT. The Operative Documents constitute the entire agreement
by and among the Parties and supersede any other prior statements, negotiations,
letters of intent, understandings or agreements, whether written or oral, that
may have been made or entered into by Buyer or Seller relating to the matters
contemplated hereby and thereby and there are no agreements or commitments
except as expressly set forth herein and therein.
9.7 WAIVER. Any condition of this Agreement which may legally be waived may be
waived in writing at any time by the Party which is entitled to the benefit
thereof. No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant under this Agreement, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
9.8 AMENDMENT. Any Operative Document, or any term, condition or covenant
thereof, may be modified, supplemented, canceled, amended, waived or discharged,
at any time, but only by an instrument in writing and signed by an authorized
officer or Partner of the Party against whom such modification, supplementation,
cancellation, amendment, waiver or discharge is sought to be enforced.
9.9 EXPENSES. Except as otherwise set forth herein, all legal, accounting and
other costs and expenses incurred by each Party hereto in connection with the
negotiation, investigation and preparation of this Agreement shall be paid by
the Party which incurs such expenses.
9.10 NOTICES. All notices, requests, demands, and other communications
hereunder will be in writing and shall be deemed to have been duly given if (i)
hand delivered to an officer of the Buyer or a Partner of the Seller, (ii)
transmitted by facsimile to ▇▇▇-▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in the
case of the Seller or ▇▇▇-▇▇▇-▇▇▇▇, Attention: President in the case of the
Buyer, (iii) delivered to the United States Postal Service, certified or
registered mail with postage prepaid to the Notice Addresses to the attention of
the persons executing this Agreement in the respective behalves of Seller and
Buyer, or (iv) delivered prepaid to a nationally recognized overnight courier to
the Notice Addresses to the attention of the persons executing this Agreement in
the respective behalves of Seller and Buyer, in all cases with a copy to ▇▇▇▇▇▇
▇▇▇▇▇▇, Esq. (facsimile 212-790-6630) in behalf of the Seller.
9.11 HEADINGS. The article, section and subsection headings, if any, in any
Operative Document are inserted for convenience only and shall not constitute a
part hereof or thereof or be considered in construing or interpreting any
Operative Document.
9.12 COUNTERPARTS. The Operative Documents may be executed by the Parties in
any number of counterparts each of which shall for all purposes be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
9.13 CONSTRUCTION. The Parties have participated jointly in the negotiation
and drafting of the Operative Documents. In the event an ambiguity or question
of intent or interpretation arises, any Operative Document shall be construed as
if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of any Operative Document. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context clearly requires
otherwise. The Parties intend that each representation, warranty, and covenant
contained herein shall have independent significance. The word "or" is
disjunctive but not necessarily exclusive. Words in the singular include the
plural; words in the plural include the singular. Words in the neuter gender
include the masculine and feminine genders, and words in the masculine or
feminine gender include the other and neuter genders. The word "including" and
the phrase "not including" shall mean "including without limitation" or "not
including without limitation" as the case may be. As used in any Operative
Document, the words "herein," hereof" and "hereunder" and other words of similar
import shall, unless the context hereof or thereof shall clearly require
otherwise, refer to that document as a whole and not to any particular article,
section, subsection, paragraph, subpart or other subdivision.
9.14 ANNOUNCEMENTS. Neither Party shall issue any press release or make any
public announcement relating to the subject matter of this Agreement at any time
within five (5) calendar days of the Closing Date, without the prior written
approval of the other Party; provided, however, that either Party may make any
public disclosure it believes in good faith, upon the advice of legal counsel,
is required by any applicable Legal Requirement or, in the case of Buyer, any
listing or trading agreement concerning its publicly-traded securities, in which
case the disclosing Party will use reasonable commercial efforts to advise the
other Party prior to making the disclosure.
9.15 INCORPORATION BY REFERENCE. The attachments, exhibits, schedules,
Ancillary Agreements and other legal documents required to be delivered by
either or both Parties by the terms of this Agreement are incorporated herein by
reference and made a part hereof.
9.16 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED UNDER THE LAWS OF THE STATE OF ILLINOIS (WITHOUT REGARD TO THE
CONFLICTS OF LAW RULES THEREOF WHICH MIGHT APPLY THE LAWS OF ANY OTHER
JURISDICTION). IN THE EVENT OF A DISPUTE OR IN THE EVENT OF ANY OTHER LEGAL
ACTION ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, AND THE GENERAL CIVIL
TRIAL COURTS OF ▇▇▇▇ COUNTY, ILLINOIS, SHALL BE THE EXCLUSIVE JURISDICTION AND
VENUE FOR SUCH LEGAL ACTION OR PROCEEDING. Each Party irrevocably waives any
objection on the grounds of venue, forum non-convenience or any similar grounds
and irrevocably consents to service of process by mail or in any other matter
permitted by applicable law and consents to the jurisdiction of said courts.
9.17 NOVEMBER AND DECEMBER EXPENSES. Buyer will be responsible for all
expenses up to four million dollars (US $4,000,000), and Seller will be
responsible for all expenses in excess of $4,000,000, arising from the operation
of the Business and its successor (the "Post Effective Time Business") in the
ordinary course during the period November 1, 1995 through December 31, 1995,
inclusive, (the "Interim Period") (including payroll expenses plus expenses
relating to severance and accrued vacation payments approved by Buyer and made
in accordance with Seller's standard severance and vacation polices). Such
expenses are to be calculated in accordance with generally accepted accounting
principles and are period expenses accrued or paid during the Interim Period
(specifically excluding Accounts Payable associated with expenses incurred prior
to November 1, 1995). Such expenses will exclude items related to Partner
compensation and include expenses arising in accordance with the Ancillary
Agreements (including for equipment, the subleased Chicago premises, and
transition services), in lieu of expenses that would otherwise be incurred by
the Post Effective Time Business for the items contemplated by the Ancillary
Agreements. Interim Period expenses will include only expenses directly
attributable to the Post Effective Time Business (including expenses associated
with marketing related to the acquisition) and will not include a general
allocation of Buyer's overhead or a charge for any of Buyer's existing employees
or any legal fees or associated expenses related to the acquisition.
On or before January 31, 1996, each Party will provide the other with a list of
Interim Period expenses incurred by them. Each Party will represent that such
expenses meet all of the criteria set forth in this Section 9.17 and have been
or will be paid by them if not yet due. At the same time, each Party will
provide the other with a list of any cash collections that may have been
received by them, since the Effective Time, which properly belong to and have
not yet been tendered to the other Party. Upon review, each Party may request
that the other Party provide it with reasonable additional documentation in
support of the listed expenses and cash collections. By February 15, 1996, or
within 15 days of the availability of the above referenced lists and receipt of
the additional supporting material reasonably requested by the parties,
whichever is the later to occur, Buyer will provide Seller with a schedule (the
"Reconciliation Schedule") showing total expenses attributable to the Interim
Period incurred by both parties, and an amount to be paid by Buyer to Seller or
Seller to Buyer in accordance with this Section 9.17. In determining such
amount, Buyer will take into account the $4,000,000 expense limit specified in
this Section 9.17, which Party incurred the expense, and any increase or
decrease necessitated by the collection of any cash belonging to the other
Party. If the Reconciliation Schedule shows a net amount due Seller, Buyer will
remit such amount along with the Reconciliation Schedule. If there is a net
amount due Buyer, Seller will have 5 days from submission of the Reconciliation
Schedule in which to remit such amount to Buyer. Simple interest, at an annual
percentage rate of twelve percent (12%), will be paid by the owing party on any
net balance due from February 15, 1996 until paid; provided, that, the Party
owed is not in breach of its obligations under this Section 9.17 to provide data
for inclusion in the Reconciliation Schedule.
9.18 LIMITATION OF LIABILITY. In all events, neither Party will be liable
to the other Party for any single or aggregate sum in excess of the Purchase
Price with regard to any Claim arising under any of the Operative Documents,
whether such Claim arises by contract, tort, operation of law or otherwise.
IN WITNESS WHEREOF, the Parties to this Agreement, with full knowledge of its
contents, after consultation with legal counsel and intending to be legally
bound, have duly executed it on this, the second day of December, 1995.
SELLER:
PRICE WATERHOUSE LLP
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Authorized Partner
BUYER:
COMPUTER LANGUAGE RESEARCH, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: President