Exhibit 2.1
ASSET PURCHASE AGREEMENT
by and between
iET ACQUISITION, LLC
and
APPLIX, INC.
Dated as of January 21, 2003
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT dated as of January 21 2003, is entered
into by and between iET Acquisition, LLC, a Delaware limited liability company
("Purchaser"); and Applix, Inc., a Massachusetts corporation ("Parent") on
behalf of itself and its subsidiaries (the "Subsidiaries"). "Seller" shall refer
to each of the Parent and the Subsidiaries, jointly and severally.
R E C I T A L S
A. Seller develops, markets, licenses, supports and uses a suite
of customer relationship management ("CRM") products and software solutions
including without limitation the CRM Software and specifically excluding
business analytics software (the "Business").
B. Seller desires to sell to Purchaser substantially all of the
assets used or held for use in connection with the Business and to assign to
Purchaser substantially all of the liabilities relating to the Business, and
Purchaser desires to purchase from Seller substantially all of the assets used
or held for use in connection with the Business and to assume from Seller
substantially all the liabilities relating to the Business, in each case upon
the terms and conditions set forth in this Agreement.
A G R E E M E N T
In consideration of the foregoing recitals and the respective
covenants, agreements, representations and warranties contained herein, the
parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. Unless otherwise defined, capitalized terms
used herein shall have the meanings set forth in Schedule 1.1 hereto.
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ARTICLE II
PURCHASE AND SALE
2.1 Assets.
(a) On the terms and subject to the conditions of this
Agreement, at the Closing (or, in the case of the German Business, at the German
Closing) , except for the Excluded Assets, as such term is defined in Section
2.1(b), Seller shall sell, assign, transfer, convey and deliver to Purchaser or
such Purchaser affiliates as Purchaser may designate, and Purchaser or its
affiliate designees shall purchase and acquire from Seller, free and clear of
all Encumbrances, all of Seller's right, title and interest in and to all of the
assets, properties, rights and claims of every type and nature, real or
personal, tangible or intangible and wherever situated, that are owned by Seller
or in which Seller has any interest of any type or nature existing at the
Closing (or, in the case of the German Business, at the German Closing) and
which are used or held for use exclusively or primarily in the Business (except
with respect to the categories below which are specifically not limited to those
assets used or held for use exclusively or primarily in the Business), together
with the goodwill associated therewith (collectively, the "Purchased Assets").
The Purchased Assets include, without limitation, all of the following:
(i) All the equipment, computers, computer
equipment, furniture, fixtures, leasehold improvements and other tangible
property used or held for use exclusively or primarily in the Business,
including without limitation those set forth on Schedule 2.1(a)(i);
(ii) All of the rights of Seller in, to and under
all Contracts set forth on Schedule 2.1(a)(ii) and any additional Contracts
relating primarily or exclusively to the Business, but excluding all leases of
real property except as provided in clause (iii) below (together with the
Assumed Leases, the "Assumed Contracts");
(iii) All of Seller's rights under the Lease to
the Munich, Germany facility and the Melbourne, Australia facility identified at
items 5 through 8 and 9, respectively, in Section 3.9 of the Disclosure Schedule
(but not any other facility), whether or not exclusively or primarily relating
to the Business (the "Assumed Leases");
(iv) All packaging, packaging materials and
documentation materials used or held for use in connection with the Business,
whether or not exclusively or primarily relating to the Business;
(v) All prepaid expenses, prepaid royalties,
advance payments and security deposits (to the extent such security deposits
relate to the Assumed Leases) exclusively or primarily relating to the Business;
(vi) All rights and claims that Seller may have
against any person relating to or arising from the Purchased Assets or the
Business for recovery for damages for defective goods, claims for patent
infringement, claims for indemnification,
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claims for relief under any applicable Law, and all claims and rights under any
agreement pursuant to which any Purchased Assets were acquired from third
parties;
(vii) All Intellectual Property used or held for
use exclusively or primarily in the Business, including without limitation all
Intellectual Property in the CRM Software and all source code, object code,
documentation and user manuals related thereto (the "Business Intellectual
Property");
(viii) All other computer software programs used or
held for use exclusively or primarily in the Business, including without
limitation those set forth on Schedule 2.1(a)(viii) and including all source
code (to the extent Seller has an interest therein), object code, documentation
and user manuals related thereto;
(ix) All Books and Records used or held for use
exclusively or primarily in the Business, subject to any restrictions imposed by
applicable Law on the transfer of employee files or data;
(x) All Permits used or held for use exclusively
or primarily in the Business, but only to the extent that the transfer of such
Permits is not prohibited by the terms of such Permits or by applicable Law; and
(xi) All amounts existing at the Closing Date
(or, in the case of the German Business, at the German Closing Date) under
maintenance and support invoices primarily or exclusively relating to the
Business that, in accordance with Seller's past practice, have been invoiced but
not booked to the general ledger ("Billed Invoices").
(b) Excluded Assets. The foregoing notwithstanding, the
Purchased Assets shall not include the following assets (collectively, the
"Excluded Assets"):
(i) Cash and cash equivalents or similar
investments, bank accounts, commercial paper, certificates of deposit, treasury
bills and other marketable securities;
(ii) All of the accounts and notes receivable,
including any receivable for Tax, outstanding as of the Closing Date (or, in the
case of the German Business, at the German Closing Date) and relating to the
Business (but excluding any Billed Invoices);
(iii) All assets listed on Schedule 2.1(b)(iii);
(iv) The source code for Seller's iTM1 product;
(v) All rights to insurance claims, related
refunds and proceeds arising from or related to the Excluded Assets and Excluded
Liabilities;
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(vi) All rights which accrue or will accrue to
the benefit of the Seller under this Agreement or the Ancillary Agreements;
(vii) All rights relating to refunds or recoupment
of Seller's Taxes, including rights under any legal or administrative
proceedings relating thereto, whether or not yet commenced;
(viii) All actions, claims, causes of action,
rights of recovery, and rights of setoff of any kind arising before, on or after
the Closing (or, in the case of the German Business, on or after the German
Closing) relating to the items set forth above in this Section 2.1(b) or to any
Excluded Liabilities; and
(ix) All Books and Records related exclusively or
primarily to any Excluded Assets or Excluded Liabilities.
2.2 Liabilities.
(a) Assumed Liabilities. On the terms and subject to the
conditions of this Agreement, at the Closing (or, in the case of the German
Business, at the German Closing), Purchaser or its affiliate designees shall
assume and become obligated to discharge as the same shall become due, the
following liabilities and obligations of Seller (except for the Excluded
Liabilities) (collectively, the "Assumed Liabilities"), in each case to the
extent related exclusively or primarily to the Business or the Purchased Assets
as existing at the Closing (or, in the case of the German Business, existing at
the German Closing):
(i) All accounts payable as of the Closing Date
(or, in the case of the German Business, as of the German Closing Date);
(ii) Subject to Section 5.8, all obligations
(including deferred revenue obligations) of Seller under the Assumed Contracts
other than obligations for any breach thereof by Seller prior to the Closing
(or, in the case of the German Business, prior to the German Closing);
(iii) All liabilities and obligations under the
Permits transferred pursuant to Section 2.1(a)(xi);
(iv) All accrued liabilities and obligations in
respect of vacation and paid time off (but excluding liabilities and obligations
in respect of payroll, bonus and commission payments) with respect to the
individuals who are or become Transferred Employees (the "Assumed Accrued
Liabilities"); and
(v) All liabilities and obligations arising out
of or relating to the repair, rework, replacement, or any claim for breach of
warranty under the Assumed Contracts in respect of products or goods of the
Business, excluding in each case any claims for return of, or refund of the
purchase price of, products or goods
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(b) Excluded Liabilities. Notwithstanding anything to the
contrary herein or in any Schedule hereto, Purchaser shall not assume any of the
following liabilities, obligations or commitments of Seller, whether arising
before, on or after the Closing Date (or, in the case of the German Business,
whether arising before, on or after the German Closing Date) (the "Excluded
Liabilities"):
(i) All liabilities of Seller for borrowed money
and capital lease obligations;
(ii) All intercompany liabilities or obligations
of any kind;
(iii) Any liability or obligation of Seller for
Taxes;
(iv) All liabilities for checks which have been
written for the account of Seller and which have not been cashed, cleared or
otherwise settled on or before the Closing Date (or, in the case of the German
Business, on or before the German Closing Date);
(v) any liability or obligation to present or
past employees of the Business with respect to Seller's Employee Benefit Plans
established or existing on or prior to Closing (or, in the case of the German
Business, on or prior to the German Closing) (whether or not such liabilities
are accrued or payable at Closing (or the German Closing, as the case may be),
and whether or not such liabilities are contingent in nature and regardless when
such claims arise or are filed), including any current or future liabilities to
employees retiring on, before, or after Closing (or the German Closing, as the
case may be), and their dependents, except to the extent constituting an Assumed
Accrued Liability under Section 2.2(a)(iv);
(vi) any liability or obligation to present or
past employees of the Business other than the Transferred Employees;
(vii) any obligation under Contracts other than
the Assumed Contracts;
(viii) any liability or obligation relating to an
Excluded Asset;
(ix) All liabilities and obligations of Seller
under this Agreement and the Ancillary Agreements;
(x) Any liability or obligation set forth on
Schedule 2.2(b)(x); and
(xii) Any liability, obligation or commitment of
Seller other than the Assumed Liabilities.
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2.3 Consideration. The consideration for the Purchased Assets
(collectively, the "Purchase Price") shall be the assumption of the Assumed
Liabilities and the payment of $5,750,000 in cash. $4,250,000 of the Purchase
Price shall be paid at the Closing. $1,500,000 of the Purchase Price shall be
paid at the German Closing. The Purchase Price shall be subject to adjustment in
accordance with the provisions of Sections 2.4, 2.5 and 5.13.
2.4 Net Working Capital of Business at Closing.
(a) Estimated Net Working Capital as of the Closing Date.
No later than January 31, 2003, Seller shall prepare and deliver to Purchaser a
written estimate of the Net Working Capital of the Business (other than the
German Business) (the "Estimated Net Working Capital as of the Closing Date"),
signed by the chief financial officer of Seller, who shall certify that such
estimate was prepared in good faith from the books and records of Seller on a
basis consistent with the Financial Statements and represents his or her best
estimate of the Net Working Capital of the Business (other than the German
Business) as of the Closing Date. To the extent that the Estimated Net Working
Capital as of the Closing Date is less than the Target Amount, the amount of the
difference, together with interest on the amount of such difference at the Prime
Rate from the Closing Date to the date of payment (the "Estimated Shortfall
Payment"), shall be paid to Purchaser on the date of delivery of the estimate of
the Estimated Net Working Capital as of the Closing Date by wire transfer of
immediately available funds to such bank account as Purchaser may designate (or
in the absence of any such designation, by corporate check mailed to Purchaser).
(b) Seller's Final Statement; Purchaser's Review. No
later than sixty (60) days following the Closing Date, Seller shall prepare and
deliver to Purchaser a balance sheet of the Business (other than the German
Business) as of the Closing Date showing only the components of Net Working
Capital (the "Closing Balance Sheet") together with a statement of the Net
Working Capital of all portions of the Business other than the German Business
as of the Closing Date ("Seller's Final Statement"), together with a detailed
analysis of the line items included therein, in each case prepared in accordance
with GAAP consistently applied. Purchaser shall have a period of up to the
greater of (i) sixty (60) days from the receipt of the Closing Balance Sheet and
Seller's Final Statement or (ii) one hundred twenty (120) days from the Closing
Date (the "Review Period") to review the Closing Balance Sheet and Seller's
Final Statement, during which period Seller shall make available to Purchaser
all relevant books and records in Seller's possession or control and all
personnel with knowledge of information relevant to the determination of the
Closing Balance Sheet and Net Working Capital of all portions of the Business
other than the German Business as of the Closing Date. If as a result of such
review, Purchaser disagrees with the Closing Balance Sheet or Seller's Final
Statement, Purchaser shall deliver to Seller a written notice of disagreement (a
"Dispute Notice") prior to the expiration of the Review Period setting forth the
basis for such dispute.
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(c) Acceptance; Failure to Respond. If Purchaser does not
disagree with Seller's Final Statement, Purchaser shall deliver a written
statement to Seller within the Review Period accepting Seller's Final Statement
(an "Acceptance Notice"), in which case Seller's determination of the Net
Working Capital of all portions of the Business other than the German Business
as of the Closing Date as shown on Seller's Final Statement shall be final and
binding on the parties, effective as of the date on which Seller receives the
Acceptance Notice. If Purchaser does not deliver a Dispute Notice or an
Acceptance Notice within the Review Period, then Seller's determination of the
Net Working Capital of all portions of the Business other than the German
Business as of the Closing Date as shown on Seller's Final Statement shall be
final and binding on the parties, effective as of the first business day after
the expiration of the Review Period.
(d) Resolution of Disputes. If Purchaser delivers a
Dispute Notice to Seller in a timely manner, then Purchaser and Seller shall
attempt in good faith to resolve such dispute within thirty (30) days from the
date of the Dispute Notice. If Purchaser and Seller cannot reach agreement
within such thirty (30) day period (or such longer period as they may mutually
agree), then the dispute shall be promptly referred to an independent accounting
firm of national reputation mutually acceptable to Purchaser and Seller, or if
the parties are unable to agree on such a firm within ten (10) days (or such
longer period as they may mutually agree), to Deloitte & Touche LLP (the
"Independent Auditor") for binding resolution. The Independent Auditor shall
determine the Net Working Capital of all portions of the Business other than the
German Business as of the Closing Date (which amount may not be greater than as
set forth in Seller's Final Statement or less than as set forth in Purchaser's
Dispute Notice) in accordance with the provisions of this Agreement as promptly
as may be reasonably practicable and shall in any event complete such process
within a period of no more than sixty (60) days. The Independent Auditor may
conduct such proceedings as the Independent Auditor, in its sole discretion,
determines will assist the Independent Auditor in determining the Net Working
Capital of all portions of the Business other than the German Business as of the
Closing Date and shall deliver to both Purchaser and Seller a written opinion
setting forth the Independent Auditor's final determination of the Net Working
Capital of all portions of the Business other than the German Business as of the
Closing Date calculated in accordance with the provisions of this Agreement. The
determination of the Independent Auditor shall be final and binding on Purchaser
and Seller, effective as of the date the Independent Auditor's written opinion
is received by Purchaser and Seller. Seller and Purchaser shall each bear
one-half of the costs and expenses of the Independent Auditor and each of the
parties shall bear its own legal, accounting and other fees and expenses of
participating in such dispute resolution procedure.
(e) Certain Definitions. As used in this Section 2.4, (i)
the Net Working Capital of all portions of the Business other than the German
Business as of the Closing Date, as finally determined pursuant to clause (c) or
clause (d) of this Section 2.4 is referred to as the "Actual Net Working Capital
as of the Closing Date" and (ii) the date as of which such determination is
effective is referred to as the "Determination Date."
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(f) Final Settlement. If the Actual Net Working Capital
as of the Closing Date is less than the Target Amount, then Seller shall, within
five (5) business days of the Determination Date, pay to Purchaser the amount of
the difference between (i) the Actual Net Working Capital as of the Closing Date
and the Target Amount, minus (ii) the amount of the Estimated Shortfall Payment
paid by Seller pursuant to Section 2.4(a), together with interest on the amount
of such difference at the Prime Rate from the Closing Date to the date of
payment, such payment to be made by wire transfer of immediately available funds
to such bank account as Purchaser may designate (or in the absence of any such
designation, by corporate check mailed to Purchaser).
2.5 Working Capital of German Business at Closing.
(a) Seller's German Final Statement; Purchaser's Review.
No later than forty-five (45) days following the closing of the sale of the
German Business (the "German Closing Date"), Seller shall prepare and deliver to
Purchaser a balance sheet of the German Business as of the German Closing Date
showing only the components of Net Working Capital (the "German Closing Balance
Sheet") together with a statement of the Net Working Capital of the German
Business as of the German Closing Date ("Seller's German Final Statement"),
together with a detailed analysis of the line items included therein, in each
case prepared in accordance with GAAP consistently applied. Purchaser shall have
a period of up to the greater of (i) forty-five (45) days from the receipt of
the German Closing Balance Sheet and Seller's German Final Statement or (ii)
ninety (90) days from the German Closing Date (the "German Review Period") to
review the German Closing Balance Sheet and Seller's German Final Statement,
during which period Seller shall make available to Purchaser all relevant books
and records in Seller's possession or control and all personnel with knowledge
of information relevant to the determination of the German Closing Balance Sheet
and Net Working Capital of the German Business as of the Closing Date. If as a
result of such review, Purchaser disagrees with German Closing Balance Sheet or
Seller's German Final Statement, Purchaser shall deliver to Seller a written
notice of disagreement (a "German Dispute Notice") prior to the expiration of
the German Review Period setting forth the basis for such dispute.
(b) Acceptance; Failure to Respond. If Purchaser does not
disagree with Seller's German Final Statement, Purchaser shall deliver a written
statement to Seller within the German Review Period accepting Seller's German
Final Statement (a "German Acceptance Notice"), in which case Seller's
determination of the Net Working Capital of the German Business as of the German
Closing Date as shown on Seller's German Final Statement shall be final and
binding on the parties, effective as of the date on which Seller receives the
German Acceptance Notice. If Purchaser does not deliver a German Dispute Notice
or a German Acceptance Notice within the German Review Period, then Seller's
determination of the Net Working Capital of the German Business as of the German
Closing Date as shown on Seller's German Final Statement shall be final and
binding on the parties, effective as of the first business day after the
expiration of the German Review Period.
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(c) Resolution of Disputes. If Purchaser delivers a
German Dispute Notice to Seller in a timely manner, then Purchaser and Seller
shall attempt in good faith to resolve such dispute within thirty (30) days from
the date of the German Dispute Notice. If Purchaser and Seller cannot reach
agreement within such thirty (30) day period (or such longer period as they may
mutually agree), then the dispute shall be promptly referred to the Independent
Auditor for binding resolution. The Independent Auditor shall determine the Net
Working Capital of the German Business as of the German Closing Date (which
amount may not be greater than as set forth in Seller's German Final Statement
or less than as set forth in Purchaser's German Dispute Notice) in accordance
with the provisions of this Agreement as promptly as may be reasonably
practicable and shall in any event complete such process within a period of no
more than sixty (60) days. The Independent Auditor may conduct such proceedings
as the Independent Auditor, in its sole discretion, determines will assist the
Independent Auditor in determining the Net Working Capital of the German
Business as of the German Closing Date and shall deliver to both Purchaser and
Seller a written opinion setting forth the Independent Auditor's final
determination of the Net Working Capital of the German Business as of the German
Closing Date calculated in accordance with the provisions of this Agreement. The
determination of the Independent Auditor shall be final and binding on Purchaser
and Seller, effective as of the date the Independent Auditor's written opinion
is received by Purchaser and Seller. Seller and Purchaser shall each bear
one-half of the costs and expenses of the Independent Auditor and each of the
parties shall bear its own legal, accounting and other fees and expenses of
participating in such dispute resolution procedure.
(d) Certain Definitions. As used in this Section 2.5, (i)
the Net Working Capital of the German Business as of the German Closing Date, as
finally determined pursuant to clause (b) or clause (c) of this Section 2.5 is
referred to as the "Actual German Net Working Capital as of the German Closing
Date" and (ii) the date as of which such determination is effective is referred
to as the "German Determination Date."
(e) Final Settlement. If the Actual German Net Working
Capital as of the German Closing Date is less than the German Target Amount,
then Seller shall, within five (5) business days of the German Determination
Date, pay to Purchaser the amount of the difference between the Actual German
Net Working Capital as of the German Closing Date and the German Target Amount,
together with interest on the amount of such difference at the Prime Rate from
the German Closing Date to the date of payment, such payment to be made by wire
transfer of immediately available funds to such bank account as Purchaser may
designate (or in the absence of any such designation, by corporate check mailed
to Purchaser).
2.6 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets as mutually agreed between Seller and
Purchaser. Seller and Purchaser hereby covenant and agree that they will not
take a position on any tax
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return, before any governmental agency or in any judicial proceeding that is in
any way inconsistent with the terms of this Section 2.6.
2.7 Sales, Transfer and Use Taxes. Seller and Purchaser shall
share equally the payment of all sales, transfer and use Taxes, if any, arising
out of the transfer of the Purchased Assets to Purchaser.
2.8 VAT Matters.
(a) The Seller shall, as soon as reasonably practicable,
deliver Value Added Tax ("VAT") documents related to the Business to the
Purchaser.
(b) Notwithstanding any provision of this Agreement, to
the extent any portion of the acquisition of the Business is subject to VAT, the
VAT shall be borne by Purchaser. The Purchaser may endeavor to reclaim the VAT
assessed on the acquisition of the Business and the Seller shall cooperate in
connection with those efforts. Any such refund of the VAT shall be the property
of Purchaser.
(c) Seller and the Purchaser shall use all reasonable
endeavors (including, for the avoidance of doubt, the making of an election or
application in respect of VAT to any Tax Authority or entering into a written
agreement) to secure that the sale of the Transferred Business so far as carried
on in the EU is treated as neither a supply of goods nor a supply of services
for the purposes of the laws governing VAT in the relevant member state. The
Purchaser warrants that it is or will become at the Closing a taxable person for
VAT purposes in the relevant member state and agrees that it will use the assets
acquired in carrying on the same kind of business, whether or not as part of its
existing business, as the Seller.
(d) To the extent that any state outside the European
Union provides for relief or exemption from VAT on the transfer of a business or
treats such a transaction as being non-taxable for VAT purposes, the Seller and
the Purchaser shall use all reasonable endeavors (including, for the avoidance
of doubt, the making of an election or application in respect of VAT to any Tax
Authority or entering into a written agreement) to secure such treatment as
regards the sale of the Business under this Agreement. The Purchaser will use
the assets acquired in carrying on the same kind of business, whether or not as
part of the existing business of the Purchaser, as the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that the statements
contained in this Article III are true and correct as of the date hereof, except
as set forth in the Disclosure Schedule provided by the Seller to the Purchaser
on the date hereof (the "Disclosure Schedule"). The Disclosure Schedule shall be
arranged in sections and subsections corresponding to the numbered and lettered
sections and subsections contained in this Article III. The disclosures in any
section or subsection of the Disclosure Schedule shall
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qualify other sections and subsections in this Article III to the extent it is
reasonably clear from a reading of the disclosure that such disclosure is
applicable to such other sections and subsections. The inclusion of any
information in the Disclosure Schedule shall not be deemed to be an admission or
acknowledgment, in and of itself, that such information is required by the terms
hereof to be disclosed, is material to the Business, or is outside the ordinary
course of business. For purposes of this Agreement, the phrase "to the knowledge
of the Seller" or any phrase of similar import shall mean and be limited to the
knowledge of the following individuals: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇.
3.1 Organization and Existence. Parent is a corporation, duly
organized, validly existing and in good standing under the Laws of the
Commonwealth of Massachusetts. The Subsidiaries are duly organized, validly
existing and, to the extent applicable, in good standing under the Laws of their
respective jurisdictions. Seller has the requisite power and authority to own
and operate the Business and to carry on the Business as presently conducted.
3.2 Authorization of Seller. Seller has the requisite corporate
power and authority to enter into this Agreement and the Ancillary Agreements,
to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Ancillary Agreements by Seller have been
duly authorized by all necessary corporate action on the part of Seller,
including without limitation, to the extent required by applicable Law, any
stockholder approval process.
3.3 Due Execution and Delivery; Binding Obligations. This
Agreement has been, and each of the Ancillary Agreements will be at Closing,
duly executed and delivered by Seller. This Agreement and the Ancillary
Agreements comply with applicable Law and constitute the legal, valid and
binding agreements of Seller, enforceable against Seller in accordance with
their terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, arrangement, moratorium or similar Laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
3.4 No Conflict or Violation. Except for any antitrust filings
required in the European Union (which filings shall be made prior to the German
Closing Date), neither the execution and delivery of this Agreement or the
Ancillary Agreements by Seller nor the consummation of the transactions
contemplated hereby or thereby, will result in (a) a violation of, or a conflict
with, the charter documents of Seller, or of any subscription, shareholders' or
similar agreements or understandings to which Seller is a party; (b) a material
violation by Seller of any applicable Law; or (c) a violation by Seller of any
order, judgment, writ, injunction, decree or award to which Seller is a party or
by which Seller is bound or affected.
3.5 Pending Litigation. Except as set forth on Schedule 3.5
hereto, there is no pending or, to Seller's knowledge, threatened Action which
relates to the Business or
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which would reasonably be expected to affect the ability of Seller to consummate
the sale of the Purchased Assets contemplated by, or perform its obligations
under, this Agreement or any of the Ancillary Agreements.
3.6 Financial Statements. Seller has furnished to Purchaser copies
of (a) the unaudited balance sheet relating to the Business at November 30, 2002
showing only the components of Net Working Capital, (b) the unaudited balance
sheet relating to the Business (the "Balance Sheet") at December 31, 2002 (the
"Balance Sheet Date") showing only the components of Net Working Capital and (c)
the related statements of revenue for the twelve month period ended December 31,
2002 (collectively, the "Financial Statements"). The Financial Statements are
complete and correct in all material respects, have been prepared in accordance
with GAAP on a consistent basis during the respective periods and fairly present
the financial condition of the Business at the respective dates thereof and the
results of operations of the Business for the respective periods covered by the
statements of income contained therein; provided, however, that the Financial
Statements are subject to normal year-end audit adjustments, do not include
footnotes, and do not include allocations of corporate expense that are made on
a periodic basis. The Financial Statements are attached hereto as Schedule 3.6.
3.7 Undisclosed Liabilities. Except as set forth on Schedule 3.7
hereto, the Assumed Liabilities do not include any liabilities, obligations or
commitments (absolute, accrued, contingent or otherwise) except for liabilities,
obligations and commitments that are (i) reflected on the Balance Sheet, (ii)
under and pursuant to any Assumed Contract (other than by breach thereof by
Seller), (iii) incurred after the Balance Sheet Date in the ordinary course of
business consistent in all material respects with prior practice.
3.8 Absence of Certain Changes. Since the Balance Sheet Date,
except as set forth on Schedule 3.8 hereto, there has been no material adverse
change in the earnings, properties (whether real, tangible or intangible) or
financial condition of the Business, or any condition existing which would
reasonably be expected to lead to such a material adverse change, or any
transactions relating to the Business outside the ordinary course of business.
Without limiting the generality of the foregoing, since the Balance Sheet Date:
(a) No Assumed Contract has been amended, rescinded or
terminated, except as set forth on Schedule 3.8(a);
(b) Seller has not sold, transferred or disposed of any
of the Purchased Assets other than sales of software licenses and related
services in the ordinary course of business;
(c) Seller has not created or incurred any Encumbrance of
any kind upon any of the Purchased Assets;
(d) No Purchased Assets have been destroyed, materially
damaged or otherwise lost (whether or not covered by insurance);
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(e) There has been no waiver or amendment of any material
contractual right relating to the Business;
(f) Seller has not made any material change in any
pricing, marketing, purchasing, allowance or tax or accounting practice, policy
or method or any method of calculating any bad debt, contingency or other
reserve for accounting, financial reporting or tax purposes or made any material
Tax election;
(g) No increases have been made to the salary or other
compensation payable or to become payable to any employee of the Business and
Seller has not obligated itself to pay any bonus or other additional salary or
compensation to any employee of the Business;
(h) There have been no related party transactions
relating to the Business; and
(i) There has been no agreement to take any action
described above.
3.9 Real Property. Seller owns no real property that is used in
connection with the Business. Schedule 3.9 hereto sets forth a complete list of
all real property leased by Seller that is used in connection with the Business
(the "Leases"). Seller has a valid leasehold interest in the Assumed Leases,
free and clear of all Encumbrances.
3.10 Purchased Assets. At the Closing, Purchaser will obtain good
title to the Purchased Assets free and clear of all Encumbrances. Except for the
Excluded Assets, the Purchased Assets (a) include all of the assets, properties
and rights that are used or held for use by Seller in the conduct of the
Business, (b) when utilized by a labor force substantially similar to that
employed by Seller in connection with the Business on the date hereof, are
sufficient to enable Purchaser to conduct the Business in substantially the same
manner after the Closing as the Business was conducted prior to the Closing and
(c) include all of the assets reflected on the statements of assets and
liabilities included in the Financial Statements other than inventory and other
assets sold in the ordinary course of business since the dates of such
statements.
3.11 Contracts.
(a) Schedule 3.11 hereto sets forth a complete list of
all of the following Contracts relating to the Business, each of which is in
full force and effect. Items 3.11(vii) (except third party "off the shelf"
licenses), 3.11(viii), 3.11(ix) and the Assumed Leases shall, to the extent they
constitute Assumed Contracts, constitute the "Material Contracts":
(i) all security arrangements, loans, lines or
letters of credit, guarantees, performance or bid bonds, and other agreements
relating to the Business or
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Purchased Assets and involving the borrowing of money by, or any extension or
credit to, or security for performance by, Seller;
(ii) all agreements to make capital expeditures
with respect to the Business;
(iii) all agreements to sell, lease or otherwise
dispose of any Purchased Assets other than in the ordinary course of business;
(iv) all agreements limiting the freedom of the
Business to compete in any line of business or in any geographic area or with
any person;
(v) Leases relating to the Business;
(vi) all intercompany Contracts relating to the
Business;
(vii) all employment agreements with Statutory
Employees or Selected Employees that provide for the payment of severance upon
the termination of such employee's employment or which is in the nature of a
stay bonus, retention bonus, golden parachute, change of control payment or
similar arrangement (in the case of Statutory Employees located in the United
Kingdom, made anonymous to the extent required by applicable Law);
(viii) all Intellectual Property, other than
Intellectual Property licensed under customer contracts, used in connection with
the Business either licensed to any third party from Seller or licensed to
Seller from any third party;
(ix) all Intellectual Property licensed to any
third party pursuant to any customer contract during the past two (2) years,
excluding ordinary course software licenses involving revenues of less than
$100,000 per annum;
(x) all Contracts relating to the Business that
involve payments or receipts after the Closing of more than $100,000 per annum,
or otherwise requiring material performance obligations from Purchaser after the
Closing;
(xi) joint venture agreements and partnership
agreements relating to the Business; and
(xii) material Permits necessary for the operation
of the Business as presently conducted.
3.12 Intellectual Property. Schedule 3.12 sets forth a complete and
correct list of all patents, patent applications, registered trademarks, service
marks, trade names and registered copyrights included in the Business
Intellectual Property and of all licenses for Business Intellectual Property
licensed from any third party. The Intellectual Property included in the
Business Intellectual Property constitutes all of the proprietary rights
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necessary for the lawful and efficient operation of the Business as presently
conducted. The Business Intellectual Property is owned by Seller free and clear
of all Encumbrances or Seller has a valid license to use the same. Purchaser
will acquire at Closing good title to, or a valid license to use, the Business
Intellectual Property, free and clear of any Encumbrances other than the
licenses granted back to the Seller in the Technology License Agreement. Seller
has taken reasonable steps necessary to protect the trade secrets and other
confidential information of the Business, and all personnel, including
employees, agents, consultants and contractors, who have contributed to or
participated in the conception and development of any Business Intellectual
Property have (i) been party to a "work-for-hire" arrangement or agreement with
Seller in accordance with applicable Law that has accorded Seller full,
effective, exclusive and original ownership of all tangible and intangible
property arising as a result of such contributions or participation, or (ii)
have executed appropriate instruments of assignment in favor of Seller as
assignee that have conveyed to Seller full, effective and exclusive ownership of
all Business Intellectual Property arising as a result of such contributions or
participation. Except as set forth on Schedule 3.12, no claims have been made to
Seller in writing (or to the knowledge of Seller, otherwise threatened) by any
person or entity that (x) Seller does not own or have the right to use any
Business Intellectual Property, or (y) the use of any Business Intellectual
Property by Seller infringes upon the intellectual property rights of a third
party and Seller knows of no valid basis for any such claim. The use,
reproduction or sale of the Business Intellectual Property by Seller does not,
and the use, reproduction or sale of the Business Intellectual Property by
Purchaser after the Closing in the same manner will not, infringe upon the
intellectual property rights of any person under any Laws, provided, however,
that with respect to patent matters only, the foregoing representation is made
to Seller's knowledge. Seller is not in default and, to Seller's knowledge, no
third party is in default under, any license, sublicense or agreement by which
Seller holds or has given to others the right to use any Business Intellectual
Property.
3.13 Employees. Schedule 3.13 attached hereto sets forth a complete
and accurate list of (i) the names, seniority and current compensation levels of
all salaried employees of Seller whose employment relates primarily or
exclusively to the Business and (ii) the names and current compensation levels
of all consultants to Seller who provide services related primarily or
exclusively to the Business (in the case of employees and consultants located in
the United Kingdom, made anonymous to the extent required by applicable Law).
Except as set forth on Schedule 3.13 attached hereto, Seller is not a party to
any collective bargaining agreement or other labor union contract applicable to
the Employees.
3.14 Employee Benefits. Schedule 3.14 attached hereto sets forth a
complete and accurate list of all Employee Benefit Plans relating to the
Business. There are no pension or other retirement plans applicable to the
Business. No event has occurred with respect to any Employee Benefit Plan
relating to the Business that could result in the imposition of Taxes or
penalties on Seller or Purchaser, and Seller has not failed to make any
contribution to, or to make any payment under, any Employee Benefit Plan
relating
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to the Business that it was required to make pursuant to the terms of such
Employee Benefit Plan or pursuant to applicable Law.
3.15 Compliance with Law. Seller is in material compliance with all
Laws with respect to the operation of the Business. Seller has not received any
written notice from, or otherwise been advised in writing that, any Governmental
Authority or other person is claiming any violation or potential violation of
any Law with respect to the operation of the Business.
3.16 Taxes. All Tax Returns relating to the Business that are
required by any Taxing Authority to be filed by Seller, either separately or as
members of a group of corporations have been duly filed on a timely basis
(taking into account extensions) and all amounts set forth thereon have been
paid in full. All such Tax Returns are correct and complete in all material
respects. All Taxes that are due and payable by Seller with respect to the
operations of the Business have been paid in full and all deposits required to
be made with respect to any such Taxes have been duly made. No audit or other
examination of any Tax Return relating to any Taxes concerning or attributable
to the Business is presently in progress, nor does the Seller have knowledge of
any request for such an audit or other examination. The assets that constitute
the Business are and will be as of the Closing Date, free and clear of any liens
arising out of any unpaid Taxes and there are no grounds for the assertion or
assessment of any Encumbrances against the assets in respect of any Taxes.
3.17 Full Disclosure. No representation or warranty of Seller
contained in this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
4.1 Organization. Purchaser is a limited liability company duly
organized, validly existing and in good standing under the Laws of the State of
Delaware.
4.2 Authorization. Purchaser has the requisite power and authority
to enter into this Agreement and the Ancillary Agreements, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Purchaser of this Agreement and the Ancillary Agreements have been duly
authorized by all necessary action on the part of Purchaser.
4.3 Due Execution and Delivery; Binding Obligations. This
Agreement has been, and each of the Ancillary Agreements will be at Closing,
duly executed and delivered by Purchaser. This Agreement and the Ancillary
Agreements comply with applicable Law and constitute the legal, valid and
binding agreements of Purchaser,
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enforceable against Purchaser in accordance with their terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
arrangement, moratorium or similar Laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
4.4 No Conflict or Violation. Except for any antitrust filings
required in the European Union (which filings shall be made prior to the German
Closing Date), neither the execution and delivery of this Agreement or the
Ancillary Agreement by Purchaser nor the consummation of the transactions
contemplated hereby or thereby, will result in (a) a violation of, or a conflict
with, the organization or operating agreement documents of Purchaser; (b) a
material violation by Purchaser of any applicable Law; or (c) a violation by
Purchaser of any order, judgment, writ, injunction, decree or award to which
Purchaser is a party or by which Purchaser is bound or affected.
4.5 Full Disclosure. No representation or warranty of Purchaser
contained in this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein not misleading.
ARTICLE V
COVENANTS
5.1 Employee Matters. The employees of Seller working in the
Business who shall transfer with the Business by operation of applicable Law are
set forth on Schedule 5.1(a) hereto (the "Statutory Employees"). Purchaser or
its affiliate designee shall on and after the Closing (or, in the case of
Statutory Employees located in Germany, on and after the German Closing) employ
the Statutory Employees on the same terms and conditions to the terms and
conditions on which Seller employed the Statutory Employees, to the extent
required and in compliance with applicable Law. Promptly after the Closing,
Purchaser or its affiliate designee shall make offers of employment to each of
the employees of the Business listed on Schedule 5.1(b) hereto who is employed
by Seller on such date (the "Selected Employees"). Such offers of employment
shall be subject to the consummation of the transactions contemplated hereby and
shall be on terms and conditions consistent with the terms and conditions on
which Purchaser employs similarly situated employees. Selected Employees who
accept Purchaser's offer of employment and the Statutory Employees who do not
exercise any rights under Law they may possess to remain with Seller shall be
referred to collectively as "Transferred Employees." Purchaser shall give each
Transferred Employee credit for service with the Seller for purposes of
participation, vesting and level of benefit.
Seller and Purchaser acknowledge that the transfer of the
German Purchased Assets and the assumption of German Assumed Liabilities
constitute a transfer of business under Section 613 a German Civil Law Code
(BGB). Purchaser and Seller shall take any action required under Section 613 a
BGB including but not limited to a due notification to the German Employees
according to Section 613 a (5) BGB in a form mutually agreeable to Purchaser and
Seller (the "Transfer Notice"). German Employees are entitled to object to the
transfer of their employment to the Purchaser within one (1)
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month after receipt of the Transfer Notice according to Section 613 a (6) BGB.
German Employees not having objected or not having properly objected shall be
considered as Statutory Employees. German Employees who properly object to the
Transfer Notice shall remain employed with Seller.
5.2 Further Assurances. From time to time, as and when requested
by either party, each party shall execute and deliver, or cause to be executed
and delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions, as such other party may reasonably
deem necessary to give effect to the transactions contemplated by this
Agreement. Without limitation of the foregoing, in the event the Intellectual
Property included in the Purchased Assets is not sufficient to enable the
Purchaser to conduct the Business in substantially the same manner as the
Business was conducted prior to the Closing, the Seller shall, without
additional consideration, grant the Purchaser such additional licenses in
Seller's Intellectual Property as shall enable the Purchaser to so conduct the
Business. In addition, Seller shall obtain such discharges and releases of any
Encumbrances on the Purchased Assets as Purchaser shall reasonably request.
5.3 Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by any party without the prior
consent of Purchaser and Parent (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by law or the
rules or regulations of any United States or foreign securities exchange, in
which case the party required to make the release or announcement shall allow
the other party reasonable time to comment on such release or announcement in
advance of such issuance; provided, however, that each of Seller and Purchaser
may make internal announcements to their respective employees that are
consistent with the parties' prior public disclosures regarding the transactions
contemplated hereby after reasonable prior notice to, and consultation with, the
other.
5.4 Performance Bonds, Etc. After the Closing, Purchaser shall use
commercially reasonable efforts to replace all bid and performance bonds,
guarantees, security arrangements, letters of credit and the like presently in
effect (collectively, "Bonds"). Until Purchaser replaces the Bonds, Seller agree
to maintain, or cause to be maintained, the Bonds. Purchaser shall indemnify and
hold harmless Seller for any liability incurred by Seller in connection with the
maintenance of the Bonds if such liability is caused by Purchaser not properly
performing the bonded contract.
5.5 Limited License to Use Seller's Marks. Seller hereby grants
Purchaser a limited, royalty free license to continue to use any and all
trademarks, service marks, trade names, slogans and other like property owned by
Seller that are not included in the Purchased Assets ("Seller's Marks") for a
period of up to one year following the Closing Date, but only to the extent that
such Seller's Marks are incorporated in or printed on any products, packaging,
supplies, printed materials, training materials or other assets included in the
Purchased Assets and without any right to create any new inventory, products,
supplies, printed materials, training materials or other assets depicting any
Seller's ▇▇▇▇. As soon as practicable after the Closing, but in any event within
one year
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following the Closing Date, Purchaser shall cover, conceal, remove and cease to
use all references to Seller's Marks.
5.6 Covenant Not to Compete. For a period of five years following
the Closing Date, neither Seller nor any affiliate of Seller shall, directly or
indirectly, engage in any line of business that competes with any line of
business included in the Business as of the Closing Date in any county of any
state of the United States, or in any other country, in which the Business is
conducted as of the Closing Date. Notwithstanding the foregoing, the Seller and
its affiliates shall be permitted to (i) continue to engage in any type of
business conducted by Seller as of the date hereof which is not part of the
Business or selling products or services that are under development by Seller as
of the date hereof which are not part of the Business and (ii) market CRM
analytics to Seller's existing iEnterprise customer base and to other CRM
customers.
5.7 Payroll Taxes. Purchaser and Seller shall use the alternate
procedure set forth in Revenue Procedure 96-60 to prepare and file Form W-2,
Wage and Tax Statement; Form W-3, Transmittal of Income and Tax Statements; Form
941, Employer's Quarterly Federal Tax Return; From W-4, Employee's Withholding
Allowance Certificate; and Form W-5 Earned Income Credit Advance Payment
Certificate, in respect of individuals employed by Purchaser or its affiliates
who immediately prior to the acquisition of the Business by Purchaser were
employed by Seller or its affiliates.
5.8. Consent of Third Parties. Nothing in this Agreement shall be
construed as an attempt for Seller to assign to Purchaser, or for Purchaser to
assume from Seller, any Assumed Contract that is not capable of being validly
assigned, conveyed and transferred without the consent of a third party unless
such consent shall have been obtained and remains in full force and effect at
the Closing. Subsequent to the Closing, Seller shall use its reasonable best
efforts to assist Purchaser in obtaining such consents, and shall assign each
Assumed Contract to Purchaser upon receipt of the relevant consents for that
contract. Until such time as such consents may be obtained, the parties agree
that to the extent practicable they will engage in mutually agreeable
arrangements, including subcontracting, sublicensing or subleasing, by which
Purchaser will perform Seller's obligations under the relevant Assumed Contract
and by which Seller will provide the benefits of such contract to Purchaser,
including (i) enforcement of and for the account of Purchaser, at Purchaser's
expense and direction, any and all rights and remedies of Seller against the
other party thereto, and (ii) diligent collection and payment to Purchaser of
any amounts received after the Closing Date by Seller under the relevant
contract, in each case with payment to Purchaser to be made within 5 days of
receipt of such amounts; provided, however, that if Purchaser shall so request,
Seller shall instruct third parties to such contract to pay amounts due
thereunder directly to Purchaser and/or to accept invoices thereunder directly
from Seller. For the avoidance of doubt, Seller is retaining certain rights to
payment under Sections 2.1(b)(i) and 2.1(b)(ii) of this Agreement, and the
foregoing provisions shall not apply to such amounts. The relationship, if any,
between the Parties established by this Section 5.8 is that of independent
contractors, and nothing in this Section 5.8 shall be construed to create a
relationship of agency or partnership between the parties or to create any
obligation to, or provide any benefit for,
19
any third party. Seller and Purchaser shall similarly cooperate in
subcontracting, sublicensing or subleasing arrangements with respect to any
Contract that is shared between the Business and Seller's remaining business
until such time as such Contract shall be separated into separate contracts for
the Business and Seller's remaining business.
5.9 Mutual Assistance with Liabilities of the Business. With
respect to any liability of the Business which Seller has retained, or which
Purchaser has assumed, under this Agreement, if one party shall request the
other party's assistance in the defense of such liability, then the other party
shall use commercially reasonable efforts to provide such technical assistance
and access to personnel and records as may be reasonable in the circumstance,
provided however, that any costs hereunder shall be borne by the requesting
party.
5.10 Access to Information. From the date hereof through the German
Closing Date, Purchaser and its Representatives shall have access during normal
business hours to all properties, Books and Records, Contracts, Permits and
other documents of or relating to the German Business in order to make such
investigation as they shall deem desirable, and Seller shall furnish or cause to
be furnished to Purchaser and its Representatives all data and information
concerning the German Business as may reasonably be requested. No such
investigation performed or information received by Purchaser shall affect in any
way the liability of Seller for the breach of representation or warranty
contained herein.
5.11 Conduct of the German Business. Except as specifically
contemplated by this Agreement, from the date hereof through the German Closing
Date, Seller shall conduct the German Business in the ordinary course and
consistent with past practice and shall use reasonable commercial efforts to
preserve intact the business relationships of the German Business and to
maintain satisfactory relationships with the suppliers, customers and employees
of the German Business. Without limiting the generality of the foregoing, Seller
shall not, without the prior written consent of Purchaser, take or undertake or
incur or permit to exist with respect to the German Business any of the acts,
transactions, events or occurrences specified in Section 3.8.
5.12 German Consents and Antitrust Filings. Seller and Purchaser
will use reasonable efforts to obtain all waivers, Permits, consents, approvals,
authorizations and clearances and to effect all registrations, filings and
notices with or to third parties or Governmental Authorities which are
reasonably necessary or desirable in connection with the sale of the German
Business contemplated by this Agreement. Without limitation of the foregoing,
Purchaser and Seller shall (or shall cause their appropriate affiliate to)
promptly file any filings or submissions required under any German or European
Union antitrust or trade regulation law. Each of the parties shall use
reasonable commercial efforts to resolve any objections that may be asserted by
any European Governmental Authority with respect to the transactions
contemplated hereby, and shall cooperate with each other to contest any
challenges to the transactions contemplated hereby by any European Governmental
Authority. Notwithstanding any provision contained herein to the contrary, the
closing of the sale of the German Business shall not occur until such
20
time as all German and European Union approvals of the transactions contemplated
by this Agreement have been obtained.
5.13 Payment of Payroll and Other Amounts. On or before January 31,
2003, Seller shall pay all payroll, bonus and commission payments due and
payable to any employee of the Business (other than German Employees) for the
period ending on the Closing Date (which amounts, in the case of bonus and
commission, shall be at a rate consistent with Seller's bonus and commission
plan for the prior fiscal year). In the event Seller fails to pay such amounts
on or before the date of the German Closing, Purchaser shall be permitted to
offset against the portion of the Purchase Price payable at the German Closing
the amount of such unpaid payroll, bonus and commission payments. On or before
the date that is thirty (30) days after the German Closing Date, Seller shall
pay all payroll, bonus and commission payments due and payable to any German
Employee for the period ending on the German Closing Date (which amounts, in the
case of bonus and commission, shall be at a rate consistent with Seller's bonus
and commission plan for the prior fiscal year).
5.14 Collection of Billed Invoices; Remittance to Purchaser. Seller
shall use reasonable best efforts to make diligent collection and payment to
Purchaser of the Billed Invoices, in each case with payment to Purchaser to be
made within three (3) business days of receipt of such amounts; provided,
however, that if Purchaser shall so request, Seller shall instruct the relevant
third parties to pay the Billed Invoices directly to Purchaser. Seller and
Purchaser shall cooperate and provide to one another reasonable access to each
other's books and records in order to assist with the prompt collection and
payment to Purchaser of the Billed Invoices from the obligors thereto.
ARTICLE VI
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE OF GERMAN CLOSING
The obligation of Purchaser to consummate the purchase of the German
Business is subject to the satisfaction, at or before the German Closing Date,
of each of the following conditions, unless waived in writing by Purchaser:
6.1 Accuracy of Representations and Warranties. All
representations and warranties of Seller relating to the German Business
contained in this Agreement or in any document delivered pursuant hereto shall
be true and correct in all material respects when made and on and as of the
German Closing Date as though made at that time.
6.2 Seller's Performance of Covenants. All covenants, agreements
and obligations required by the terms of this Agreement to be performed,
satisfied or complied with by Seller with respect to the German Business at or
before the German Closing Date shall have been duly and properly performed in
all material respects.
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6.3 Officer's Certificate. Purchaser shall have received a
certificate, dated the German Closing Date, signed by an authorized executive
officer of Seller, certifying that the conditions specified in Section 6.1 and
Section 6.2 have each been fulfilled (the "Seller Certificate").
6.4 Consents and Regulatory Approvals. The conditions set forth in
Section 5.12 of this Agreement shall have been satisfied in full.
6.5 No Material Adverse Change. There shall have been, since the
time of the signing of this Agreement, no material adverse change to the
business, assets, liabilities, financial condition, or results of operation of
the German Business; provided, however, that a material adverse change shall not
be deemed to have occurred solely as a result of (i) not more than half of the
sales and professional service organization German Employees, and (ii) any
number of clerical German Employees having properly objected to the Transfer
Notice.
ARTICLE VII
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE OF GERMAN CLOSING
The obligation of Seller to consummate the sale of the German Business
is subject to the satisfaction, at or before the German Closing Date, of each of
the following conditions, unless waived in writing by Seller:
7.1 Accuracy of Purchaser's Representations and Warranties. All
representations and warranties of Purchaser relating to the German Business
contained in this Agreement or in any document delivered pursuant hereto shall
be true and correct in all material respects when made and on and as of the
German Closing Date as though made at that time.
7.2 Purchaser's Performance of Covenants. All covenants,
agreements and obligations required by the terms of this Agreement to be
performed, satisfied or complied with by Purchaser with respect to the German
Business at or before the German Closing Date shall have been duly and properly
performed in all material respects.
7.3 Officer's Certificate. Seller shall have received a
certificate, dated the German Closing Date, signed by an authorized officer of
Purchaser and an authorized officer of Purchaser, certifying that the conditions
specified in Section 7.1 and Section 7.2 have each been fulfilled (the
"Purchaser Certificate").
7.4 Consents and Regulatory Approvals. The conditions set forth in
Section 5.12 of this Agreement shall have been satisfied in full.
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ARTICLE VIII
TERMINATION PRIOR TO GERMAN CLOSING
8.1 Termination. This sale of the German Business may be
terminated at any time prior to the German Closing:
(a) By the mutual written consent of Purchaser and
Seller;
(b) By either Purchaser or Seller, by written notice to
the other party if the German Closing shall not have occurred on or before July
21, 2003; or
(c) By either Purchaser or Seller, by written notice to
the other party, if the other party shall (i) fail to perform in any material
respect its agreements with respect to the German Business contained herein
required to be performed prior to the German Closing Date and such failure
cannot reasonably be anticipated to be cured within a reasonable period of time
after such failure, or (ii) materially breach any of its representations or
warranties contained herein with respect to the German Business and such breach
cannot reasonably be anticipated to be cured within a reasonable period of time
after such breach;
provided, however, that the party seeking termination pursuant to clause (b) or
(c) is not then in material breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
8.2 Effect on Obligations. Termination of this Agreement pursuant
to Section 8.1 shall terminate all obligations of the parties hereunder with
respect to the German Business and this Agreement shall become void and have no
effect with respect to the German Business without any liability on the part of
any party with respect thereto, except for the obligations under Section 10.2
(Indemnification Obligations); provided, however, that termination pursuant to
Section 8.1(c), shall not relieve the defaulting or breaching party from any
liability to the nondefaulting or nonbreaching party.
ARTICLE IX
THE CLOSING
9.1 Closing. Except as provided below, the closing of the sale and
purchase of the Purchased Assets (other than the German Assets) (the "Closing"
or "Closing Date") shall take place at the offices of ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as of 9:00 a.m. January 21, 2003, or
at such other place, time and date as may be mutually agreed to by the parties.
9.2 Seller's Obligations At the Closing, Seller shall deliver to
Purchaser such instruments of assignment and transfer or other documents as
Purchaser may reasonably request to evidence or give effect to the transactions
contemplated by this Agreement; provided, however, that closing of the sale of
the German Business (the "German
23
Closing") shall not occur, and Seller shall not deliver any documents relating
to the sale of the German Business until such time as the conditions set forth
in Articles VI and VII have been satisfied.
9.3 Purchaser's Obligations. At the Closing, Purchaser shall
deliver to Seller such instruments of assumption or other documents as Seller
may reasonably request together with $4,250,000 of the Purchase Price by wire
transfer to such account as Seller shall designate; provided, however, that the
German Closing shall not occur, and Purchaser shall not deliver any documents
relating to the assumption of the liabilities of the German Business until such
time as the conditions set forth in Articles VI and VII have been satisfied.
9.4 German Closing. Within 10 days after satisfaction of the
conditions precedent to the German Closing, the Seller and Purchaser shall
execute and deliver such instruments of assignment, transfer and assumption as
Purchaser and Seller shall reasonably require to consummate the German Closing.
At the German Closing, Purchaser shall deliver to Seller the remaining
$1,500,000 of the Purchase Price by wire transfer to such account as Seller
shall designate.
ARTICLE X
SURVIVAL; INDEMNIFICATION
10.1 Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive the
Closing through the date which is eighteen months after the Closing Date.
10.2 Indemnification Obligations.
(a) Indemnification by Seller. Seller shall indemnify,
defend and hold harmless Purchaser and all of its affiliates, officers,
directors, members, employees and agents, and shall reimburse Purchaser and any
such other person or entity, on demand, for any Damages resulting from any of
the following:
(i) The Excluded Liabilities;
(ii) Any breach or default in the performance by
Seller of any covenant or agreement of Seller contained herein or in the
Ancillary Agreements;
(iii) Any breach of warranty or inaccurate
representation made by Seller herein or in the Seller Certificate; and
(iv) The operation of the Business through and
including the Closing Date (or, in the case of the German Business, through and
including the German Closing Date), except for any liabilities which constitute
Assumed Liabilities.
24
(b) Indemnification by Purchaser. Purchaser shall
indemnify, defend and hold harmless Seller and any of its affiliates, officers,
directors, members, employees and agents, and shall reimburse Seller and any
such other person or entity, on demand, for any Damages resulting from any of
the following:
(i) The Assumed Liabilities;
(ii) Any breach or default in the performance by
Purchaser of any covenant or agreement of Purchaser contained herein or in the
Ancillary Agreements;
(iii) Any breach of warranty or inaccurate
representation made by Purchaser herein or in the Purchaser Certificate; and
(iv) The operation of the Business after the
Closing Date (or, in the case of the German Business, after the German Closing
Date), except for any liabilities which are Excluded Liabilities.
(c) Limitations on Indemnification by Seller and by
Purchaser. The indemnification obligations of Seller under Section 10.2(a)(iii),
except as related to any Tax matters, and the indemnification obligations of
Purchaser under Section 10.2(b)(iii), shall be subject to the following
limitations:
(i) the applicable Indemnitor shall only be
liable to the extent the cumulative aggregate amount of Damages under the
applicable Section 10.2(a) or 10.2(b) exceeds $57,500, in which event the
applicable Indemnitees may assert their right to indemnification for that
portion of the aggregate Damages in excess of $57,500;
(ii) the aggregate amount of indemnification by
the applicable Indemnitor for all Damages of the type identified in the
applicable Section 10.2(a)(iii) or 10.2(b)(iii) shall not exceed $2,875,000.
In addition, the Purchaser shall not be entitled to make any claim for
indemnification with respect to any matter to the extent the Purchase Price has
been adjusted to reflect such matter pursuant to Sections 2.4, 2.5 and 5.13, and
the amount of any Damages for which a party is entitled to indemnification as
provided under this Article X shall be calculated net of any accruals, reserves
or provisions therefor reflected in the Seller's Final Statement. In no event
shall any Indemnitor be responsible or liable for any Damages or other amounts
under this Article X that are consequential, speculative in nature, special or
punitive, it being understood that if an Indemnitee is liable to a third party
for Damages for which it is entitled to indemnification under this Article X,
then irrespective of the nature of the third party Damages, such Damages shall
be the direct Damages of the Indemnitee and shall not be characterized as
consequential, speculative in nature, special or punitive. Each party shall (and
shall cause its affiliates to) use reasonable commercial efforts to mitigate
damages as provided by Law (including common law) in order to mitigate the
Damages for which indemnification is
25
provided to it under this Article X. The amount of Damages recoverable by an
Indemnitee under this Article X with respect to an indemnity claim shall be
reduced by the amount of any payment received by such Indemnitee (or an
affiliate thereof), with respect to the Damages to which such indemnity claim
relates, from an insurance carrier.
Except with respect to claims for equitable relief, including specific
performance, made with respect to breaches of any covenant or agreement
contained in this Agreement or the Ancillary Agreements, the rights of the
Indemnitees under this Article X shall be the sole and exclusive remedies of the
Indemnitees and their respective affiliates with respect to claims covered by
Section 10.2 or otherwise relating to the transactions that are the subject of
this Agreement. Without limiting the generality of the foregoing, in no event
shall any party, its successors or permitted assigns be entitled to claim or
seek rescission of the transactions consummated by this Agreement.
10.3 Claims for Indemnity.
(a) Whenever a claim for Damages shall arise for which
one party ("Indemnitee") shall be entitled to indemnification hereunder,
Indemnitee shall notify the other party ("Indemnitor") in writing within thirty
(30) days of the first receipt of notice of such claim, and in any event within
such shorter period as may be necessary for Indemnitor to take appropriate
action to resist such claim; provided that the failure to give notice as herein
provided shall not relieve Indemnitor of its obligation to indemnify Indemnitee
except to the extent that Indemnitor shall have been materially prejudiced in
its ability to defend such claim. Such notice shall specify all facts known to
Indemnitee giving rise to such indemnity rights and shall estimate the amount of
the liability arising therefrom. The right of Indemnitee to indemnification and
the estimated amount thereof, as set forth in this notice, shall be deemed
agreed to by Indemnitor unless, within thirty (30) days after the mailing of
such notice, Indemnitor shall notify Indemnitee in writing that it disputes the
right of Indemnitee to indemnification, or that Indemnitor elects to defend such
claim in the manner provided in Section 10.3(b). If Indemnitee shall be duly
notified of such dispute, the parties shall attempt to settle and compromise the
same, or if unable to do so within twenty (20) days of Indemnitor's delivery of
notice of a dispute, such dispute shall be settled by binding arbitration as
provided in Section 11.4, and any rights of indemnification established by
reason of such settlement, compromise or arbitration shall promptly thereafter
be paid and satisfied by Indemnitor.
(b) Defense of Claims. Upon receipt by Indemnitor of a
notice from Indemnitee with respect to any claim of a third party against
Indemnitee, and acknowledgment by Indemnitor (whether after resolution of a
dispute or otherwise) of Indemnitee's right to indemnification hereunder with
respect to such claim, Indemnitor shall assume the defense of such claim with
counsel reasonably satisfactory to Indemnitee, with the fees and expenses of
such counsel to be paid by Indemnitor, and Indemnitee shall cooperate to the
extent reasonably requested by Indemnitor in defense or prosecution thereof and
shall furnish such records, information and testimony and attend all such
conferences, discovery proceedings, hearings, trials and appeals as may be
26
reasonably requested by Indemnitor in connection therewith. If Indemnitor shall
acknowledge Indemnitee's right to indemnification and elect to assume the
defense of such claim, Indemnitee shall have the right to employ its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of Indemnitee. If Indemnitor has assumed the defense of any claim
against Indemnitee, Indemnitor shall have the right to settle any claim for
which indemnification has been sought and is available hereunder; provided that,
to the extent that such settlement requires Indemnitee to take, or prohibits
Indemnitee from taking, any action or purports to obligate Indemnitee, then
Indemnitor shall not settle such claim without the prior written consent of
Indemnitee, not to be unreasonably withheld or delayed. If Indemnitor does not
assume the defense of a third party claim and disputes Indemnitee's right to
indemnification, Indemnitee shall have the right to participate in the defense
of such claim through counsel of its choice, at Indemnitor's expense; provided,
however that Indemnitiee shall not be permitted to resolve any such claim
subject to this Article X without Indemnitor's consent, not to be unreasonably
withheld or delayed.
10.4 Indemnification Payments. Any payments made pursuant to this
Article X shall be consistently treated as adjustments to Purchase Price for all
Tax purposes by Seller and Purchaser.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Expenses. Except as provided in Article X, each of the parties
shall pay all costs and expenses incurred by it or on its behalf in connection
with this Agreement and the transactions contemplated hereby, including, without
limiting the generality of the foregoing, fees and expenses of its own financial
consultants, accountants and counsel.
11.2 Entire Agreement. This Agreement, together with the agreements
referred to herein and the Schedules and Exhibits hereto and thereto, set forth
the entire agreement between the parties with regard to the subject matter
hereof and thereof.
11.3 Arbitration. Except to the extent a party is entitled to
injunctive or other equitable relief, any controversy or claim arising out of or
relating to this Agreement or any agreement referred to herein or attached as an
Exhibit hereto, shall be settled by binding arbitration before a single
arbitrator in accordance with the then existing rules for commercial arbitration
of the American Arbitration Association, and judgment upon any award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. Any such
arbitration shall be held in Boston, Massachusetts, in the case of any claim for
arbitration by Purchaser or Los Angeles County, California, in the case of any
claim for arbitration by Seller. The costs of such arbitration (other than
attorneys' fees and other experts' fees and related costs) shall be borne
equally by the parties. Each party shall bear its own attorneys' fees and other
experts' fees and related costs. The arbitrator shall not have the authority to
award punitive damages or to award attorneys' fees or costs to any party in any
such arbitration proceedings.
27
11.4 Governing Law. The validity, construction and performance of
this Agreement, and any Action arising out of or relating to this Agreement
shall be governed by the Laws of the State of California, without regard to the
Laws of the State of California as to choice or conflict of Laws.
11.5 Interpretation. The captions of the Sections and Subsections
of this Agreement are for convenience only and shall not affect the construction
or interpretation of any of the provisions of this Agreement.
11.6 Waiver and Amendment. This Agreement may be amended,
supplemented, modified and/or rescinded only through an express written
instrument signed by all parties or their respective successors and permitted
assigns. Any party may specifically and expressly waive in writing any portion
of this Agreement or any breach hereof, but only to the extent such provision is
for the benefit of the waiving party, and no such waiver shall constitute a
further or continuing waiver of any preceding or succeeding breach of the same
or any other provision. The consent by one party to any act for which such
consent was required shall not be deemed to imply consent or waiver of the
necessity of obtaining such consent for the same or similar acts in the future,
and no forbearance by a party to seek a remedy for noncompliance or breach by
another party shall be construed as a waiver of any right or remedy with respect
to such noncompliance or breach.
11.7 Assignment. Except as specifically provided otherwise in this
Agreement, neither this Agreement nor any interest herein shall be assignable
(voluntarily, involuntarily, by judicial process, operation of Law or
otherwise), in whole or in part, by any party without the prior written consent
of the other party. Notwithstanding the foregoing, Purchaser may, without the
consent of Seller, whether before or after the Closing, assign all of its rights
and obligations under this Agreement to any affiliate of Purchaser or in
connection with a sale of the Business or substantially all of the assets
thereof.
11.8 Successors and Assigns; No Third Party Beneficiary. Each of
the terms, provisions, and obligations of this Agreement shall be binding upon,
shall inure to the benefit of, and shall be enforceable by the parties and their
respective legal representatives, successors and permitted assigns. Nothing in
this Agreement will be construed as giving any person, firm, corporation or
other entity, other than the parties to this Agreement and their successors and
permitted assigns, any right, remedy or claim under, or in respect of, this
Agreement or any provision hereof.
11.9 Notices. All notices, requests, demands and other
communications made under this Agreement shall be in writing, correctly
addressed to the recipient as follows:
If to Seller: Applix, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
28
Attn: President
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: c/o Applix, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: c/o Platinum Equity, LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notices, requests, demands and other communications made under this Agreement
shall be deemed to have been duly given (i) upon delivery, if served personally
on the party to whom notice is to be given, (ii) on the date of receipt, refusal
or non-delivery indicated on the receipt if mailed to the party to whom notice
is to be given by first class mail, registered or certified, postage prepaid, or
by air courier or (iii) upon confirmation of transmission, if sent by
telecopier. Any party may give written notice of a change of address in
accordance with the provisions of this Section and after such notice of change
has been received, any subsequent notice shall be given to such party in the
manner described at such new address.
11.10 Severability. Each provision of this Agreement is intended to
be severable. Should any provision of this Agreement or the application thereof
be judicially declared to be or become illegal, invalid, unenforceable or void,
the remainder of this Agreement will continue in full force and effect and the
application of such provision to other persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties.
11.11 Cumulative Remedies. Except as provided in Section 10.2(c), no
remedy made available hereunder by any of the provisions of this Agreement is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at Law or in equity or by statute or otherwise.
29
11.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single agreement.
11.13 Facsimile Signatures. This Agreement and any other document or
agreement executed in connection herewith (other than any document for which an
originally executed signature page is required by Law) may be executed by
delivery of a facsimile copy of an executed signature page with the same force
and effect as the delivery of an originally executed signature page. In the
event any party delivers a facsimile copy of a signature page to this Agreement
or any other document or agreement executed in connection herewith, such party
shall deliver an originally executed signature page within three (3) business
days of delivering such facsimile signature page or at any time thereafter upon
request; provided, however, that the failure to deliver any such originally
executed signature page shall not affect the validity of the signature page
delivered by facsimile, which has, and shall continue to have, the same force
and effect as the originally executed signature page.
[The remainder of this page has been intentionally left blank.]
30
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date first set forth above.
"PURCHASER": "SELLER":
iET ACQUISITION, LLC APPLIX, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Title: President and Chief
General Counsel Executive Officer
31
SCHEDULE 1.1
DEFINITIONS
"Acceptance Notice" shall have the meaning given to such term
in Section 2.4(c).
"Action" shall mean any action, claim, suit, litigation,
proceeding, investigation, arbitration, mediation or other dispute.
"Actual German Net Working Capital as of the German Closing
Date" shall have the meaning given to such term in Section 2.5(d).
"Actual Net Working Capital as of the Closing Date" shall have
the meaning given to such term in Section 2.4(e).
"Agreement" shall mean this Asset Purchase Agreement and all
exhibits and schedules attached hereto, as the same may be amended from time to
time, and the expressions "hereof," "hereto," "herein" and similar expressions
refer to this Agreement, including all exhibits and schedules attached hereto,
and not to any particular Article or Section of this Agreement or such exhibits
or schedules.
"Ancillary Agreements" shall mean a Transitional Services
Agreement in substantially the form set forth as Exhibit A hereto, a Technology
License Agreement in substantially the form set forth as Exhibit B hereto (the
"Technology License Agreement"), a Reseller Agreement in substantially the form
set forth as Exhibit C hereto, a German Assets and Assumed Liabilities Transfer
Agreement in a form mutually agreeable to Purchaser and Seller, a ▇▇▇▇ of Sale
and an Assumption Agreement, and such further instruments of conveyance or
assumption which may be necessary pursuant to local Law, each in the form to be
reasonably agreed by Purchaser and Seller.
"Assumed Contracts" shall have the meaning given to such term
in Section 2.1(a).
"Assumed Leases" shall have the meaning given to such term in
Section 2.1(a).
"Assumed Liabilities" shall have the meaning given to such
term in Section 2.2(a).
"Balance Sheet" shall have the meaning given to such term in
Section 3.6.
"Balance Sheet Date" shall have the meaning given to such term
in Section 3.6.
"Billed Invoices" shall have the meaning given to such term in
Section 2.1(a).
"Bonds" shall have the meaning given to such term in Section
5.4.
"Books and Records" shall mean all business, accounting and
operating records, personnel records for the Transferred Employees, customer
lists, prospects lists, supplier lists, information and data respecting leased
or owned equipment, products literature and information, correspondence, mailing
lists, advertising materials and brochures, and other business records, books,
ledgers, files, records, manuals and other materials (in any form or medium)
related to the Business other than Seller's corporate records and stock records.
"Business" shall have the meaning given to such term in
Recital A to this Agreement.
"Business Intellectual Property" shall have the meaning given
to such term in Section 2.1(a)(vii) of this Agreement.
"Closing" shall have the meaning given to such term in Section
9.1.
"Closing Balance Sheet" shall have the meaning given to such
term in Section 2.4(b).
"Closing Date" shall have the meaning given to such term in
Section 9.1.
"Contract" shall mean any contract, arrangement, license,
Lease, purchase order, invoice, or other agreement, whether written or oral,
relating to, or used in connection with, the Business.
"CRM" shall have the meaning given to such term in Recital A
to this Agreement.
"CRM Software" shall mean iHelp Desk; iSales, including
marketing; iService; ITSM, iEnterprise, to include Developer Studio, Weblink,
Mobile Link Server, all iEnterprise APIs to third party products, VIP,
notification, alert, workflow, Ent server, customer telephony integration (CTI),
Fulcrum software interface, report server related to Crystal Reports, database
gateways, relational repository (ERD); the supporting development software
A-Make, ASC (source control), project management, translation tool and all
glossaries and supporting internal production software, including iCC, Employee
Time Tracking ( ETT), Product Registration and Credit Collections.
"Damages" shall mean any claim, demand, loss, liability,
damage or expense, including without limitation, interest, penalties and
reasonable attorneys', accountants' and experts' fees and costs of investigation
incurred as a result thereof.
"Determination Date" shall have the meaning given to such term
in Section 2.4(e).
"Disclosure Schedule" shall have the meaning given to such
term in Article III of this Agreement.
"Dispute Notice" shall have the meaning given to such term in
Section 2.4(b).
"Employee Benefit Plan(s)" shall mean any employee benefit
plan, employment agreement, termination agreement, severance agreement or plan,
profit sharing, bonus, commission, stock option, stock purchase, stock bonus,
restricted stock, stock appreciation right, phantom stock, holiday pay, sick
pay, vacation pay, tuition reimbursement, scholarship, severance, dependent care
assistance, medical or dental care, disability, life insurance, sickness,
accident, death benefit, excess benefit, incentive compensation, salary
continuation, employee loan or loan guarantee program, split dollar, cafeteria,
pension, supplemental retirement, termination indemnity or other retirement plan
and other compensation arrangements.
"Encumbrances" shall mean any claim, lien, pledge, option,
charge, easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, restriction, encumbrance or other right of third parties, of any
kind or nature other than (i) mechanic's, materialmen's, landlord's and similar
liens, (ii) liens arising under worker's compensation, unemployment insurance,
social security, retirement and similar legislation, (iii) liens for Taxes not
yet due and payable, or (iv) liens arising solely by action of the Purchaser.
"Estimated Net Working Capital as of the Closing Date" shall
have the meaning given to such term in Section 2.4(a).
"Estimated Shortfall Payment" shall have the meaning given to
such term in Section 2.4(a).
"Excluded Assets" shall have the meaning given to such term in
Section 2.1(b).
"Excluded Liabilities" shall have the meaning given to such
term in Section 2.2(b).
"Financial Statements" shall have the meaning given to such
term in Section 3.6.
"GAAP" shall mean generally accepted accounting principles as
in effect in the United States of America from time to time.
"German Assets" shall mean those Purchased Assets owned by or
held for use in the German Business.
"German Assumed Liabilities" shall mean those Assumed
Liabilities relating to the German Business.
"German Business" shall mean that portion of the Business
conducted by the Seller in Germany.
"German Closing" shall have the meaning given to such term in
Section 9.2.
"German Closing Balance Sheet" shall have the meaning given to
such term in Section 2.5(a).
"German Closing Date" shall have the meaning given to such
term in Section 2.5(a).
"German Determination Date" shall have the meaning given to
such term in Section 2.5(d).
"German Dispute Notice" shall have the meaning given to such
term in Section 2.5(a).
"German Employees" shall mean the employees of the German
Business.
"German Review Period" shall have the meaning given to such
term in Section 2.5(a).
"German Target Amount" shall mean negative $1,110,583.
"Governmental Authority" shall mean any federal, state, local
or foreign government or any court of competent jurisdiction, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign.
"Indemnitee" shall have the meaning given to such term in
Section 10.3.
"Indemnitor" shall have the meaning given to such term in
Section 10.3.
"Independent Auditor" shall have the meaning given to such
term in Section 2.4(d).
"Intellectual Property" shall mean (excluding in each case any
right to use the name Applix and the Applix logo) all trademarks, trademark
registrations, trademark applications, service marks, trade names, business
names, Internet domain names, brand names, logos, copyrights, copyright
registrations and patents (including registrations,
licenses and applications pertaining thereto), software, source code, object
code, data and related documentation, or other intangible property and any and
all trade secrets, confidential information, inventions, know-how, formulae,
process, procedures, research records, market surveys, and any and all other
intellectual property rights.
"Laws" shall mean the laws of any country or any political
subdivision thereof, including, without limitation, all federal, regional, state
and local statutes, regulations and ordinances.
"Leases" shall have the meaning given to such term in Section
3.9.
"Material Contracts" shall have the meaning given to such term
in Section 3.11.
"Net Working Capital" shall mean an amount equal to (i) the
sum of the amount of (A)"prepaid royalty" and (B) other current assets (shown as
"other assets"), minus (ii) the sum of the amount of (A) "payables," (B)
"accrued vacation and paid time off," (C) "accrued other," (D) "deferred
maintenance and deferred service revenue" and (E) all other current liabilities
of the Business, as each item in clauses (i) and (ii) appears on the Closing
Balance Sheet and the Seller's Final Statement (or in the case of the German
Business, as each item in clauses (i) and (ii) appears on the German Closing
Balance Sheet and the Seller's German Final Statement) to be prepared by Seller
in accordance with the provisions with Section 2.4(b) (or, in the case of the
German Business, Section 2.5(a)). All items in clauses (i) and (ii) above shall
be determined in accordance with GAAP consistently applied. The Net Working
Capital shall not include any amount for Taxes, payroll, bonus and commission,
deferred license revenue or Billed Invoices.
"Parent" shall have the meaning given to such term in the
Preamble to this Agreement.
"Permits" shall mean all franchises, permits, licenses,
qualifications, rights-of-way, easements, municipal and other approvals,
authorizations, orders, consents and other rights from, and filings with, any
Governmental Authority of any jurisdiction worldwide relating to the Business.
"Prime Rate" shall mean the prime rate of interest published
from time to time in The Wall Street Journal (Eastern Edition).
"Purchased Assets" shall have the meaning given to such term
in Section 2.1(a).
"Purchase Price" shall have the meaning given to such term in
Section 2.3.
"Purchaser Certificate" shall have the meaning given to such
term in Section 7.3.
"Purchaser" shall have the meaning given to such term in the
Preamble to this Agreement.
"Representative" shall mean any officer, director, principal,
shareholder, member, partner, attorney, accountant, advisor, lender, agent,
trustee, employee or other representative of a party.
"Review Period" shall have the meaning given to such term in
Section 2.4(b).
"Selected Employees" shall have the meaning given to such term
in Section 5.1.
"Seller" shall have the meaning given to such term in the
Preamble to this Agreement.
"Seller Certificate" shall have the meaning given to such term
in Section 6.3.
"Seller's Final Statement" shall have the meaning given to
such term in Section 2.4(b).
"Seller's German Final Statement" shall have the meaning given
to such term in Section 2.5(a).
"Seller's Marks" shall have the meaning given to such term in
Section 5.5.
"Statutory Employees" shall have the meaning given to such
term in Section 5.1.
"Subsidiaries" shall have the meaning given to such term in
the Preamble to this Agreement.
"Target Amount" shall mean negative $2,174,796.
"Tax(es)" shall mean shall mean any taxes and more generally
any mandatory levies (including their principal amount and, as the case may be,
penalties, surcharges and interest thereon). Taxes include, without limitation,
(i) corporation taxes, taxes on distributions, withholding taxes, Value Added
Tax (V.A.T.), turnover, consumption, real and personal property taxes, sales,
excise taxes, property taxes, business taxes, customs and other import and
export duties, transfer and contribution taxes, stamp duty, and capital taxes
registration taxes and any taxes based on salaries, (ii) any liability
determined on the basis of any Tax or by reference to any taxable basis, (iii)
any Tax due as a result of any joint and several obligation with such person,
any obligation to hold harmless and indemnify such person, any obligation to
bear the Taxes
of such person (in particular as a result of a tax consolidation or any similar
agreement); Taxes shall also include social charges, which shall mean any
social security contributions and any other charges and liabilities relating to
employment including contributions relating to unemployment, medical costs,
disability, death and retirement. Taxes include all forms of taxation levied by
statute, governmental, state, provincial, local or municipal bodies.
"Tax Authority" shall mean any taxing or other authority
competent to impose any liability in respect of Taxes or responsible of the
administration and/ or collection of Taxes or enforcement of any law in relation
to Taxes.
"Tax Return" shall mean any return, report, information return
or other document (including any related or supporting information) filed or
required to be filed with any federal, state, local or foreign governmental
entity or other authority in connection with the determination, assessment or
collection of any Tax or the administration of any Laws, regulations or
administrative requirements relating to any Tax.
"Transfer Notice" shall have the meaning given to such term in
Section 5.1.
"Transferred Employees" shall have the meaning given to such
term in Section 5.1.
"VAT" shall have the meaning given to such term in Section
2.8(a).