EXECUTION FORM
ASSET PURCHASE AGREEMENT
DATED AS OF JULY 29, 2003
BY AND AMONG
USDATA CORPORATION
AND
UNITED STATES DATA CORPORATION
AND
USDATA INTERNATIONAL SOLUTIONS, INC.
AND
USDATA INTERNATIONAL, INC.
AND
TECNOMATIX TECHNOLOGIES LTD.
AND
TECNOMATIX TECHNOLOGIES, INC.
EXECUTION FORM
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES:
Disclosure Schedule
Purchaser Disclosure Schedule
EXHIBITS:
Exhibit A Form of Significant Stockholder Undertakings
Exhibit B Rockwell License Agreement and Indemnification
Undertaking
Exhibit 1.1(A) Acquired Contracts
Exhibit 1.1(B) Certain Assumed Liabilities
Exhibit 1.1(C) Form of Assignment and Assumption Agreement
Exhibit 1.1(D) Form of ▇▇▇▇ of Sale and Assignment
Exhibit 1.1(E) Budget and Operating Plan
Exhibit 1.1(F) Form of Escrow Agreement
Exhibit 1.1(G) Products
Exhibit 1.1(H) Signing Date Balance Sheet
Exhibit 1.1(I) Excluded Network Identifiers
Exhibit 2.3.3(A) Form of Standstill Agreement
Exhibit 2.3.3(B) Form of Registration Rights Agreement
Exhibit 2.3.3(C) Form of Undertaking to the OCS
Exhibit 2.5.4 Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ & Bockius, LLP
Exhibit 2.6.5 Opinion of Meitar, Liquornik, Geva & Co.
Exhibit 2.9.2 Definition of Net Asset Actual Amount and Net Asset
Target Amount
Exhibit 3.16.3 Forms of Customer License Agreements
Exhibit 3.24.1 Certain Due Diligence Material(a)
Exhibit 3.24.2 Certain Due Diligence Material(b)
Exhibit 3.24.3 Certain Due Diligence Material(c)
Exhibit 5.15.1(A) License Agreement
Exhibit 5.15.1(B) Persons Against Which USDATA Shall Not Commence
Litigation
Exhibit 5.15.11 Common Interest Agreement
Exhibit 7.3.4 CEO Engagement letter
Exhibit 7.3.5 Form of the Release
Exhibit 7.3.6 Required Consents
Exhibit 7.3.7 Form of Share Purchase Agreement
Exhibit 7.3.8 The Indemnification Agreement
Exhibit 7.3.10 Draft Amendment No. 3 to the Supplier Software
Agreement SSA-USD-090700
TABLE OF CONTENTS
1. DEFINITIONS...........................................................................................................1
1.1. CERTAIN DEFINED TERMS...........................................................................................1
1.2. TERMS GENERALLY................................................................................................10
2. PURCHASE AND SALE....................................................................................................11
2.1. PURCHASE AND SALE OF ACQUIRED ASSETS...........................................................................11
2.2. PURCHASE AND SALE OF ASSUMED LIABILITIES.......................................................................12
2.3. CONSIDERATION..................................................................................................13
2.4. CLOSING........................................................................................................14
2.5. CLOSING DELIVERIES BY THE SELLERS..............................................................................15
2.6. CLOSING DELIVERIES BY THE PURCHASER............................................................................16
2.7. SIMULTANEOUS TRANSACTIONS......................................................................................16
2.8. CHANGE OF STRUCTURE............................................................................................16
2.9. PRICE ADJUSTMENT...............................................................................................17
2.10. ADJUSTMENT IN THE EVENT OF RECAPITALIZATION....................................................................21
3. REPRESENTATIONS AND WARRANTIES OF SELLERS............................................................................21
3.1. INCORPORATION AND AUTHORITY OF USDATA AND ITS SUBSIDIARIES.....................................................22
3.2. NO CONFLICT....................................................................................................23
3.3. CONSENTS AND APPROVALS.........................................................................................23
3.4. SUBSIDIARIES...................................................................................................23
3.5. REPORTS AND FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES...................................................24
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS...........................................................................24
3.7. ABSENCE OF LITIGATION..........................................................................................25
3.8. COMPLIANCE WITH LAWS...........................................................................................26
3.9. GOVERNMENTAL LICENSES AND PERMITS..............................................................................26
3.10. THE ASSETS.....................................................................................................26
3.11. SHARE CAPITAL..................................................................................................27
3.12. EMPLOYEE MATTERS...............................................................................................27
3.13. TAXES..........................................................................................................29
3.14. ACCOUNTS RECEIVABLE; BANK ACCOUNTS.............................................................................29
3.15. ENVIRONMENTAL MATTERS..........................................................................................30
3.16. CONTRACTS......................................................................................................30
3.17. BROKERS........................................................................................................31
3.18. INTELLECTUAL PROPERTY..........................................................................................31
3.19. INSIDER INTERESTS..............................................................................................33
3.20. CUSTOMERS AND SUPPLIERS........................................................................................34
3.21. INSURANCE......................................................................................................34
3.22. TRUTHFULNESS...................................................................................................34
3.23. ACCREDITED INVESTOR REPRESENTATIONS............................................................................34
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......................................................................35
4.1. INCORPORATION AND AUTHORITY OF THE PURCHASER...................................................................36
4.2. NO CONFLICT....................................................................................................36
4.3. CONSENTS AND APPROVALS.........................................................................................37
4.4. BROKERS........................................................................................................37
4.5. REPORTS AND FINANCIAL STATEMENTS...............................................................................37
4.6. ISSUANCE OF CONSIDERATION SHARES...............................................................................38
4.7. SHARE CAPITAL..................................................................................................38
4.8. ABSENCE OF CERTAIN CHANGES OR EVENTS...........................................................................38
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4.9. ABSENCE OF LITIGATION..........................................................................................39
4.10. COMPLIANCE WITH LAWS...........................................................................................39
4.11. GOVERNMENTAL LICENSES AND PERMITS..............................................................................39
4.12. PROPERTY AND LEASES............................................................................................39
4.13. INTELLECTUAL PROPERTY..........................................................................................39
4.14. ENVIRONMENTAL MATTERS..........................................................................................40
4.15. TAX MATTERS....................................................................................................40
4.16. TRUTHFULNESS...................................................................................................40
5. COVENANTS............................................................................................................40
5.1. OPERATION OF THE BUSINESS FOR THE BENEFIT OF PURCHASER.........................................................40
5.2. CONDUCT OF BUSINESS............................................................................................41
5.3. CONDUCT OF THE PURCHASER.......................................................................................43
5.4. ACCESS TO INFORMATION..........................................................................................43
5.5. USE OF NAME....................................................................................................43
5.6. NON-COMPETE....................................................................................................43
5.7. NO SOLICITATION................................................................................................44
5.8. CONFIDENTIALITY................................................................................................46
5.9. REGULATORY AND OTHER AUTHORIZATIONS; CONSENTS..................................................................46
5.10. INJUNCTIVE RELIEF..............................................................................................46
5.11. FURTHER ACTION.................................................................................................47
5.12. NOTIFICATION OF CERTAIN MATTERS................................................................................47
5.13. COVENANTS OF USDATA'S SUBSIDIARIES.............................................................................47
5.14. BULK TRANSFER..................................................................................................47
5.15. INFRINGEMENT OF EXCLUDED PATENTS; LICENSE OF EXCLUDED PATENTS..................................................48
5.16. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT...........................................................50
5.17. PUBLIC ANNOUNCEMENTS...........................................................................................51
5.18. POST-CLOSING ASSISTANCE OF HIRED EMPLOYEES.....................................................................51
5.19. CERTAIN TAX MATTERS............................................................................................51
5.20. PAYMENT OF PROLINK AMOUNT......................................................................................52
6. EMPLOYEE MATTERS.....................................................................................................52
6.1. EMPLOYMENT OFFERS..............................................................................................52
6.2. BENEFITS.......................................................................................................52
6.3. CERTAIN EMPLOYEE LIABILITIES...................................................................................53
6.4. OBLIGATION FOR SEVERANCE PAYMENTS..............................................................................53
7. CONDITIONS TO CLOSING................................................................................................53
7.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE CLOSING...................................................53
7.2. CONDITIONS TO OBLIGATIONS OF THE SELLERS.......................................................................54
7.3. CONDITIONS TO OBLIGATIONS OF THE PURCHASER.....................................................................54
8. TERMINATION, AMENDMENT AND WAIVER....................................................................................56
8.1. TERMINATION....................................................................................................56
8.2. EFFECT OF TERMINATION..........................................................................................57
8.3. WAIVER.........................................................................................................57
8.4. EXPENSE ON TERMINATION.........................................................................................57
9. INDEMNIFICATION......................................................................................................58
9.1. GENERAL........................................................................................................58
9.2. INDEMNIFICATION BY USDATA......................................................................................58
9.3. NOTIFICATION OF CLAIMS.........................................................................................58
9.4. PROCEDURES FOR INDEMNIFICATION.................................................................................59
9.5. LIMITS ON INDEMNIFICATION UNDER SECTION 9.2.1..................................................................61
9.6. REMEDIES EXCLUSIVE.............................................................................................62
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10. GENERAL PROVISIONS................................................................................................62
10.1. EXPENSES.......................................................................................................62
10.2. MISCELLANEOUS TAX MATTERS......................................................................................62
10.3. NOTICES........................................................................................................63
10.4. HEADINGS.......................................................................................................63
10.5. SEVERABILITY...................................................................................................64
10.6. ENTIRE AGREEMENT...............................................................................................64
10.7. ASSIGNMENT.....................................................................................................64
10.8. NO THIRD-PARTY BENEFICIARIES...................................................................................64
10.9. AMENDMENT......................................................................................................64
10.10. SECTIONS AND SCHEDULES......................................................................................64
10.11. GOVERNING LAW...............................................................................................64
10.12. COUNTERPARTS................................................................................................65
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated as of July 29, 2003, by and among: (i)
USDATA Corporation, a Delaware corporation ("USDATA"); (ii) United States Data
Corporation, a Delaware corporation ("USDATA SUB"); (iii) USDATA International
Solutions, Inc., a Delaware corporation ("WIZARD"), (iv) USDATA International,
Inc., a Delaware corporation ("USDATA INTERNATIONAL" and together with USDATA,
USDATA Sub and Wizard, the "SELLERS"); (iv) Tecnomatix Technologies Ltd., a
company incorporated in Israel (the "PURCHASER"); and (v) Tecnomatix
Technologies, Inc. (the "PURCHASING SUBSIDIARY"). Each of the foregoing parties
may also be referred to herein as a "PARTY" and collectively, the "PARTIES".
W I T N E S S E T H:
WHEREAS, the Sellers own various assets and liabilities relating primarily
to their FactoryLink and Xfactory business; and
WHEREAS, the Sellers wish to sell and assign to the Purchaser, and the
Purchaser wishes to purchase and assume from the Sellers the Acquired Assets (as
defined below) and the Assumed Liabilities (as defined below) relating to the
Sellers' Business (as defined below), in consideration for newly issued ordinary
shares, par value NIS 0.01 per share of the Purchaser (the "ORDINARY SHARES"),
all upon the terms and subject to the conditions set forth herein (the "ASSET
PURCHASE"); and
WHEREAS, the respective boards of directors of the Sellers and the
Purchaser have determined the Asset Purchase desirable and in the best interests
of their respective corporations and their respective stockholders and have
approved the Asset Purchase pursuant to this Agreement (as defined below) and
all the other transactions contemplated hereby; and
WHEREAS, in order to induce the Purchaser to enter into this Agreement and
to consummate the Asset Purchase, concurrently with the execution and delivery
of this Agreement, SCP Private Equity Partners II, L.P., a Delaware limited
partnership ("SCP"), is delivering to the Purchaser certain Stockholder
Undertakings, dated the date hereof in the form of EXHIBIT A hereto (the
"SIGNIFICANT STOCKHOLDERS UNDERTAKINGS"); and
WHEREAS, pursuant to this Agreement, USDATA proposes to effect a tax-free
reorganization under Section 368(a)(1)(C) of the Code (as defined below),
whereby (i) USDATA will transfer substantially all of its assets to Purchaser,
(ii) not later than the first anniversary of the Closing Date, USDATA will
dissolve, and pursuant to the dissolution and as part of the Asset Purchase,
will distribute to the stockholders of USDATA the Consideration Shares and any
other remaining assets and liabilities of USDATA that have not been transferred
to Purchaser pursuant to this Agreement, subject to the Escrow Agreement and
other arrangements that adequately provide for the payment of all liabilities of
USDATA under this Agreement.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the Sellers and the Purchaser agree as follows:
1. DEFINITIONS
1.1. CERTAIN DEFINED TERMS
As used in this Agreement, the following terms shall have the following
meanings:
1
"ACQUIRED ASSETS" means all of the following:
(i) the Transferred Intellectual Property (whether or not included in the
Signing Date Balance Sheet);
(ii) the Business Information;
(iii) all rights, benefits and privileges under the Acquired Contracts;
(iv) all franchises, permits, licenses, agreements, waivers and
authorizations from or with any Governmental Authority relating to the
Business, to the extent transferable;
(v) all Inventory (whether or not included in the Signing Date Balance
Sheet);
(vi) all assets included on the Signing Date Balance Sheet, including,
without limitation, all prepaid expenses, other than prepaid expenses of
directors and officers liability insurance;
(vii) all Fixtures and Equipment (whether or not included in the Signing
Date Balance Sheet);
(viii)all accounts and other receivables of USDATA and any of its
Subsidiaries (whether or not included in the Signing Date Balance Sheet);
(ix) all claims, causes of action, choices in action, rights of recovery
and rights of set off pertaining to or arising out of the Acquired Assets
or the Assumed Liabilities;
(x) all cash, cash equivalents, bank deposits, short terms investments,
securities and other balances and accounts in any bank, financial
institution or similar institutions (whether or not included in the Signing
Date Balance Sheet) other than the Retained Cash, all as adjusted under
Sections 2.9.8 and 2.9.12;
(xi) the Non-Exclusive Patent License Agreement, dated July 28, 2003,
between USDATA and Rockwell Automation, Inc. ("ROCKWELL"), in the form of
EXHIBIT B hereto (the "ROCKWELL LICENSE AGREEMENT"), including the release
and indemnification provisions of Article A(1) and Article A(2) of the
indemnification undertaking of Rockwell, included in Exhibit A to the
Rockwell License Agreement, which will be assigned to Purchaser in
accordance with the terms of such agreement, subject to USDATA's
continuing right to benefit from such release and indemnification
provisions as set forth in Annex 2 to such Exhibit A;
(xii) all assets acquired by Sellers subsequent to the date hereof; and
(xiii)any and all rights to or arising from any of the foregoing, however,
for the avoidance of doubt, such rights shall not include any rights that
constitute or that are derived from an Excluded Asset.
2
"ACQUIRED CONTRACTS" means (i) all agreements currently in effect for the
licensing of any of the Products by Sellers to customers, (ii) all other
agreements, contracts and arrangements relating to the Business to which any of
the Sellers is a party and are listed in EXHIBIT 1.1(A) hereto or such other
agreements and contracts relating to the Business entered into after the date
hereof and prior to the Closing with the written consent of the Purchaser,
provided that with respect to the agreement with ▇▇▇▇▇▇▇▇▇ Automation S.A.S. the
agreement will be substantially in the form of the draft Amendment No. 3 to the
Supplier Software Agreement SSA-USD-090700 delivered to Purchaser and attached
hereto as Exhibit 7.3.10, with such changes or amendments that are not material
in nature, and (iii) all other agreements and contracts in effect as of the
Closing to which any of the Sellers is a party and are related directly or
indirectly to the Acquired Assets or the Business (the "OTHER CONTRACTS"),
provided that (a) any liabilities under any of the Acquired Contracts will be
assumed only to the extent of (x) the amounts of such liabilities that are
either included in the Signing Date Balance Sheet or specifically listed in the
Assumed Liabilities as described below or (y) obligations and liabilities
incurred by the Purchaser under such Acquired Contracts after the Closing Date,
but excluding, for the avoidance of doubt, all Excluded Liabilities, and (b) any
Other Contract of which the Purchaser is made aware after the Closing Date shall
become an Acquired Contract subject to the specific consent of Purchaser.
Notwithstanding anything in the foregoing sentence to the contrary, USDATA's
directors and officers' insurance policy shall not constitute an Acquired
Contract.
"ACTION" means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"AFFILIATE" shall have the meaning set forth in Rule 12b-2 of the rules and
regulations promulgated under the Exchange Act.
"AGREEMENT" means this Agreement, including the Disclosure Schedule, the
Purchaser Disclosure Schedule, all exhibits and schedules hereto, and all
amendments hereto made in accordance with Section 10.
"APPLICABLE LAW" means, with respect to any Person, any Israeli, U.S. or foreign
Law applicable to such Person or any of its respective properties, assets,
officers, directors, employees, independent contractors, consultants or agents.
"ASSUMED LIABILITIES" means all of the following:
(i) all obligations and liabilities of the Sellers, whether absolute,
accrued, contingent or otherwise, arising under the Acquired Contracts
which obligations and liabilities are either (a) included in the Signing
Date Balance Sheet but solely up to the amounts included in the Signing
Date Balance Sheet, or (b) are obligations and liabilities incurred by the
Purchaser under such Acquired Contracts after the Closing Date, but
excluding, for the avoidance of doubt, all Excluded Liabilities, or (c) are
other liabilities included in the definition of "Assumed Liabilities";
(ii) all liabilities and obligations of the Sellers for compensation and
benefits to the Current Employees that are either (a) included in the
Signing Date Balance Sheet as set forth in clause (ii) of EXHIBIT 1.1(B) up
to the amounts set forth therein, or (b) incurred after the date hereof and
prior to the Closing Date in accordance with the Budget and Operating Plan,
provided however, that the Purchaser does not assume any obligation to
contribute any amounts to any USDATA Employee Plan or to continue any
existing USDATA Employee Plan, and does not assume any other obligation
under currently existing Employee Plans , except to the extent set forth in
clauses (a) and (b) of this subsection (ii) or in subsection (iii) below;
(iii) the liabilities arising from termination of employment of the Current
Employees solely under Applicable Laws relevant to such Current Employees
or as set forth in Section 3.12.3 of the Disclosure Schedule hereto; and
(iv) all liabilities set forth in EXHIBIT 1.1(B) hereto.
3
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means one or more Assignment and
Assumption Agreements to be executed by the Purchaser and/or any of its
Subsidiaries (as determined by the Purchaser) and the relevant Seller (or any of
its Subsidiaries) at the Closing in the form of EXHIBIT 1.1(C).
"AVERAGE SHARE PRICE" means the average last sale price of the Ordinary Shares
reported on the primary stock exchange or quotation system in which such
Ordinary Shares are traded or quoted, as the case may be, during the 30 trading
days ending on the third trading day preceding the date on which such
determination is made.
"▇▇▇▇ OF SALE" means the ▇▇▇▇ of Sale and Assignment to be executed by each of
the Sellers (or their Subsidiaries, if applicable) at the Closing in the form of
EXHIBIT 1.1(D).
"BUDGET AND OPERATING PLAN" means the budget and operating plan included in
EXHIBIT 1.1(E) for the operation of USDATA and its Subsidiaries from the date
hereof until the Closing Date as may be amended from time to time by USDATA with
the express prior written consent of the Purchaser, which Budget and Operating
Plan shall also include a separate operational cash flow.
"BUSINESS" means the operations and activities of the Sellers and/or any of
their Subsidiaries concerning the development, marketing, sale, maintenance,
provision of other services and other related activities, related directly or
indirectly to the Products, including all other existing or potential commercial
uses of the technologies, ideas and inventions used, developed, considered,
explored or examined or that are contemplated to be used, developed, considered,
explored or examined by the Sellers and/or any of their Subsidiaries in
connection with the Products. Notwithstanding anything to the contrary in the
immediately preceding sentence, the Business shall not include the Sellers'
pursuit of legal proceedings and licensing arrangements based on alleged
violations of the Excluded Patents by third parties.
"BUSINESS DAY" shall have the meaning set forth in Rule 14d-1(g)(3) under the
Exchange Act.
"BUSINESS INFORMATION" means copies of all books, records, files and
documentation of the Sellers and/or any of their Subsidiaries in any media
prepared, used or held for use by any Person, related directly or indirectly, in
whole or in part, to the Business, the Acquired Assets or the Assumed
Liabilities, including but not limited to, all business records, audit records,
tangible data, computer software, electronic media and management information
systems, disks, files, customer lists, supplier lists, blueprints,
specifications, designs, drawings, operation or maintenance manuals, bids,
personnel records, policy and instruction manuals and directories, all Products
documentation, invoices, credit records, sales, market and promotional
literature of any kind, tax, financial and accounting records and all other
books and records relating to the Acquired Assets, the Assumed Liabilities and
the Business. Notwithstanding the foregoing, Business Information shall not
include such documents and records that relate exclusively to Excluded Assets or
Excluded Liabilities.
"CODE" means the United States Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"COMPUTER SOFTWARE" means all computer software used, licensed or owned by
USDATA or any of its Subsidiaries, related directly or indirectly, in whole or
in part, to the Business, including source code, object code, operating systems
and specifications, data, data bases, files, comments, user interfaces, menus,
buttons and icons, and all files, data, manuals, design notes and other items
and documentation related thereto or associated therewith (with respect to third
party computer software, to the extent available under the applicable license).
4
"CONSIDERATION SHARES" means 1,011,747 Ordinary Shares, subject to adjustment
under Section 2.9 and Section 2.10.
"CURRENT EMPLOYEES" means the employees, including officers, employed by USDATA
or any of its Subsidiaries on the date hereof and listed in SECTION 3.12.1 OF
THE DISCLOSURE SCHEDULE.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule delivered by the Sellers to
the Purchaser on the date hereof containing the information required to be
included therein pursuant to this Agreement.
"USDATA EMPLOYEE" means any current, former, or retired employee, director, or
officer of USDATA or any of its Subsidiaries or any of their ERISA Affiliates.
"USDATA STOCKHOLDER" means any Person holding shares of capital stock of USDATA
and entitled to participate in any distribution of assets of USDATA in
accordance with USDATA's Certificate of Incorporation as in effect on the date
hereof.
"EMPLOYEE AGREEMENT" means, with respect to USDATA or any of its Subsidiaries,
each employment and consulting agreement as to which there are unsatisfied
obligations (contingent or otherwise) of USDATA or any of its Subsidiaries or
any of their ERISA Affiliates and each signing bonus, relocation, repatriation,
expatriation, or similar agreement between USDATA or any of its Subsidiaries or
any of their ERISA Affiliates and any USDATA Employee, as to which unsatisfied
obligations (contingent or otherwise) of USDATA or any of its Subsidiaries or
any of their ERISA Affiliates are outstanding.
"EMPLOYEE PLAN" means each "employee benefit plan," within the meaning of
Section 3(3) of ERISA and each bonus, incentive compensation, stock option,
deferred compensation, profit-sharing, retirement, pension, welfare, severance
pay, supplemental income, group insurance, death benefit, or other fringe
benefit plans, arrangements or trust agreements covering USDATA Employees and
pursuant to which USDATA or any of its Subsidiaries or ERISA Affiliates has any
liability contingent or otherwise.
"ENVIRONMENTAL LAW" means any Law currently in effect and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to pollution or protection of the
environment, health, safety or natural resources, including, without limitation,
to the manufacture, processing, use, handling, transportation, treatment,
storage, disposal, release, emission, exposure, or discharge of Hazardous
Materials.
"ENVIRONMENTAL LIABILITY" means any claim, demand, order, suit, obligation,
liability, cost (including, without limitation, the reasonable cost of any
investigation, testing, compliance or remedial action), or expense (including
attorney's and consultant's fees and expenses) arising out of, relating to or
resulting from any Environmental Law.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification number,
license or other authorization required under or issued pursuant to any
Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
"ERISA AFFILIATE" means, with respect to any Person, any other Person under
common control with such Person or any of such Person's Subsidiaries within the
meaning of Section 414(b), (c), (m) or (o) of the Code;
5
"ESCROW AGENT" means a Person reasonably approved by both the Purchaser and
USDATA, to serve as an escrow agent under the Escrow Agreement.
"ESCROW AGREEMENT" means the escrow agreement among the Purchaser, USDATA and
the Escrow Agent, in the form of EXHIBIT 1.1(F) hereto.
"EXCLUDED PATENTS" means the following patents registered in the name of USDATA:
U.S. Patent 4,908,746 (Industrial Control System) and U.S. Patent 5,325,522
(Apparatus and Method for Communicating Between Devices).
"FIXTURES AND EQUIPMENT" means all office equipment, telecom equipment and any
material or machines, as well as all furniture, fixtures, furnishings, leasehold
improvements, vehicles, computer and computer related hardware, equipment
(including research and development equipment) and other tangible personal
property used, owned or leased by USDATA or any of its Subsidiaries, whether or
not related to the Business, except to the extent included in the Excluded
Assets, provided that any of the foregoing that is leased by USDATA or any of
its Subsidiaries is subject to the terms and conditions of the applicable lease
to the extent such lease was provided to the Purchaser and is referred to in
SECTION 3.16.1(III) OF THE DISCLOSURE SCHEDULE.
"GOVERNMENTAL AUTHORITY" means, with respect to a Person, any Israeli, U.S. or
foreign, federal, state, provincial or local governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, judicial
or arbitral body having jurisdiction with respect to such Person or any of its
assets or operations.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by any Governmental Authority.
"HAZARDOUS MATERIALS" means any chemical, material or substance defined or
regulated as toxic or as a pollutant, contaminant or waste under any
Environmental Law.
"INTELLECTUAL PROPERTY" means any and all intellectual property, in any
jurisdiction including: (a) all goodwill, trade marks, service marks, brand
names, certification marks, trade dress, assumed names, business names, trade
names and other indications of origin ("TRADEMARKS"); (b) patents and patent
rights ("PATENTS"); (c) trade secrets and other confidential or non-public
business information, including formulas, compositions, inventor's notes,
discoveries and improvements, know-how, manufacturing and production processes
and techniques, and research and development information (whether or not
patentable), invention disclosures, unpatented blue prints, drawings,
specifications, designs, plans, proposals and technical data, business and
marketing plans, and customer lists and information; (d) writings and other
copyrightable works of authorship, including computer programs, databases and
documentation therefore, and all copyrights to any of the foregoing
("COPYRIGHTS"); (e) integrated circuit topographies and mask works; (f) moral
rights; (g) features of shape, configuration, pattern or ornament and design
registrations; (h) Network Identifiers; (i) any other intellectual property
rights and (j) registrations of, and applications to register, any of the
foregoing with any Governmental Authority and any renewals or extensions
thereof.
"INVENTORY" means all inventory held for resale and all other raw materials,
work in process, finished products, spares, wrapping, supply and packaging items
related to the Business, except to the extent included in the Excluded Assets.
"IRS" means the United States Internal Revenue Service.
6
"KNOWLEDGE OF SELLER" or "SELLER'S KNOWLEDGE" means the actual knowledge of any
of the executive officers and management personnel of USDATA listed below and
the knowledge that any of them would have acquired in the performance of his or
her duties as performed by a prudent person in such position. Such persons shall
be ▇▇▇▇▇ ▇. Fleet (who is deemed to be, for the purpose of this definition, both
in the position of a CEO and in the position of Vice President Sales), ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
"LAW" means any Israeli, U.S. or foreign, federal, state, provincial or local
law, ordinance, regulation, rule, code, order, other requirement or rule of law
or rules or regulations promulgated under any of the foregoing.
"LIEN" means any mortgage, deed or trust, pledge, hypothecation, security
interest, encumbrance, restriction, claim, lien, lease or charge or third party
right of any kind whatsoever.
"LOSS" means all liability, loss, damage or injury, and all costs and expenses,
including without limitation, interest, penalties, costs of preparation and
investigation and the reasonable fees and expenses of attorneys, accountants and
other professional advisers.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means any event, fact,
occurrence, circumstance or condition that has a long-term or short-term
material adverse effect either (a) on the Assets as a whole, or (b) on the
business, results of operations, assets, affairs, prospects or the condition
(financial or otherwise) of USDATA and its Subsidiaries, taken as a whole,
provided however that if such effect on the USDATA and its subsidiaries does not
have any material affect on the Assets then it would not be deemed to be a
Material Adverse Effect, or (c) on the ability of any of the parties hereto to
perform any of their obligations under this Agreement, but shall not include (i)
adverse effects resulting solely from a change in the trading prices of USDATA's
equity securities between the date hereof and the Closing Date, in and of
itself; (ii) adverse effects resulting solely from effects, changes, events,
circumstances or conditions generally affecting the industry or markets in which
USDATA operate or arising solely from changes in general business or economic
conditions; and (iii) any effects, changes, events, circumstances or conditions
resulting solely from the announcement or pendency of any of the transactions
contemplated by this Agreement.
"NETWORK IDENTIFIERS" means all internet protocol addresses and networks used by
USDATA or any of its Subsidiaries, related directly or indirectly, in whole or
in part, to the Business, including without limitation, DNS domain names, e-mail
addresses, world wide web (www) and http addresses, network names, network
addresses, and services (such as mail or web-site) whether or not used or
currently in service, and including all registrations relating thereto in or
with all registration bodies or organizations.
"PER SHARE FIGURE" means $10.97 being the Average Share Price as of the date
hereof.
"PERSON" means any natural person, general or limited partnership, corporation,
limited liability company, firm, association or other legal entity.
"PRODUCTS" means the products listed in EXHIBIT 1.1(G) hereto.
"Purchaser DISCLOSURE SCHEDULE" means the disclosure schedule delivered by the
Purchaser to the Sellers on the date hereof containing the information required
to be included therein pursuant to this Agreement.
7
"PURCHASER MATERIAL ADVERSE EFFECT" means any event, fact, occurrence,
circumstance or condition that has a long-term or short-term material adverse
effect either (a) on the business, results of operations, assets, affairs,
prospects or the condition (financial or otherwise) of the Purchaser and its
Subsidiaries, taken as a whole, or (b) on the ability of any of the parties
hereto to perform any of their obligations under this Agreement, but shall not
include (i) adverse effects resulting solely from a change in the trading prices
of Purchaser's equity securities between the date hereof and the Closing Date,
in and of itself; (ii) adverse effects resulting solely from effects, changes,
events, circumstances or conditions generally affecting the industry or markets
in which Purchaser operate or arising solely from changes in general business or
economic conditions; and (iii) any effects, changes, events, circumstances or
conditions resulting solely from the announcement or pendency of any of the
transactions contemplated by this Agreement.
"SIGNING DATE BALANCE SHEET" means the consolidated balance sheet of USDATA as
of July 31, 2003 attached hereto as EXHIBIT 1.1(H).
"SOLAIA PATENT" means U.S. Patent 5,038,318 - Device for Communicating Real Time
Data between a Programmable Logic Controller and a Program Operating in a
Central Controller.
"SUBSIDIARY" of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of: (a) the issued and outstanding capital stock having ordinary voting power to
elect a majority of the board of directors or other governing body of such
entity; or (b) the interest in the capital or profits of such entity, is at the
time directly or indirectly owned or controlled by such Person and/or one or
more of its other Subsidiaries.
"TAX" or "TAXES" means any and all taxes, charges, fees, levies, imposts, duties
or other assessments of any kind whatsoever, imposed by or payable to any
federal, state, local, or foreign Tax authority, including, without limitation,
any gross income, net income, franchise, profits, gross receipts, estimated, ad
valorem, value added, sales, use service, customs, real or personal property,
capital stock, license, payroll, withholding, employment, social security,
workers' compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits, occupancy,
transfer and gains taxes, together with any interest and any penalties or
additions to tax.
"TAX RETURNS" means all returns, reports (including elections, declarations,
disclosures, schedules, estimates and information returns) and other information
required to be supplied to a Tax authority relating to Taxes under any
Applicable Law.
"THIRD PARTY LICENSE AGREEMENTS" means the license agreements listed in SECTION
3.16.1(I) OF THE DISCLOSURE SCHEDULE relating to the Transferred Intellectual
Property.
"TRANSFERRED INTELLECTUAL PROPERTY" means any and all of the rights, titles and
interest in registered and unregistered Intellectual Property, used, licensed or
owned by USDATA or any of its Subsidiaries, related directly or indirectly, in
whole or in part, to the Business, including without limitation all Computer
Software, except for (i) the Excluded Patents, (ii) the Network Identifiers set
forth in EXHIBIT 1.1(I) hereto, and (iii) any Trademarks or rights of use in the
names USDATA (provided that additional names or words are added to the name
USDATA that are reasonably sufficient to distinguish between the Business and
such use of the name USDATA) or eMake, provided that with respect to any
Transferred Intellectual Property identified in SECTION 3.18.1 OF THE
DISCLOSURE SCHEDULE as being subject to any Third Party License Agreement, then
such Transferred Intellectual Property is subject to the terms and conditions of
the relevant Third Party License Agreements.
8
OTHER DEFINED TERMS. The following terms have the meanings defined for such
terms in the Sections set forth below:
TERM SECTION
NUMBER/LOCATION
Other Contracts 1.1 (under "Acquired
Contracts")
Trademarks 1.1 (under
"Intellectual
Property")
Patents 1.1 (under
"Intellectual
Property")
Copyrights 1.1 (under
"Intellectual
Property")
Excluded Assets 2.1.3
Assets 2.2.1
Prolink 2.2.2
Prolink Agreement 2.2.2
Prolink Amount 2.2.2
Excluded Liabilities 2.2.2
USDATA Consideration Shares 2.3.2
Escrow Consideration Shares 2.3.2
Standstill Agreement 2.3.3
Registration Rights Agreement 2.3.3
Securities Act 2.3.3
SEC 2.3.3
OCS 2.3.3
Closing 2.4
Closing Date 2.4
Adjusted Signing Date Balance 2.9.1
Notice of Dispute 2.9.1
Net Asset Excess Amount 2.9.3
Net Asset Deficit Amount 2.9.5
Reduction Shares 2.9.5
Retained Cash 2.9.6
Dispute Shares 2.9.7.1
Closing Cash Report 2.9.8
Cash Report Notice of Dispute 2.9.8
Cash Adjustment Amount 2.9.9
Cash Adjustment Shares 2.9.10
Transaction Expenses Savings 2.9.12
Ancillary Agreements 3.1.2
Bankruptcy Events 3.1.3
Exchange Act 3.5.1
USDATA Reports 3.5.1
GAAP 3.5.1
Permitted Liens 3.10.1
Material Contracts 3.16.1
Purchaser Reports 4.5.1
2002 Annual Report 4.7.2
Purchaser Intellectual Property 4.13
9
TERM SECTION
NUMBER/LOCATION
NDA 5.4
Non-Compete Period 5.6.1
Acquisition Proposal 5.7.1
Board 5.7.1
Superior Proposal 5.7.1
Revised Offer 5.7.3
License Agreement 5.15.1
Patent Revenues 5.15.2
Patent Transaction 5.15.2
Customer Patent Revenues 5.15.2
Vendor Patent Revenues 5.15.3
Sale Transaction 5.15.4
Employment Offer 6.1.1
Assumed Employee 6.1.1
Hired Employees 6.1.1
Commencement Date 6.1.1
Seller Qualified Plan 6.2
Purchaser Qualified Plan 6.2
Share Purchase Agreement 7.3.7
Indemnification Agreement 7.3.8
Termination Fee 8.4
Indemnified Parties 9.2
Indemnifying Party 9.3.1
Notice of Claim 9.4.1
Indemnity Claim Amount 9.4.1
Dispute Notice 9.4.2
Purchaser Final Order 9.4.3
Agreement Preamble
Party or parties Preamble
Purchaser Preamble
Sellers Preamble
Ordinary Shares Preamble
Asset Purchase Preamble
SCP Preamble
Significant Stockholders Undertakings Preamble
USDATA Preamble
USDATA Sub Preamble
Wizard Preamble
USDATA International Preamble
Purchasing Subsidiary Preamble
1.2. TERMS GENERALLY.
1.2.1. Words in the singular shall include the plural and vice versa, and
words of one gender shall include the other genders as the context
requires.
1.2.2. The terms "hereof," "herein," and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this
Agreement and not to any particular provision of this Agreement, and
Article, Section, paragraph, Exhibit and Schedule references are to the
Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement
unless otherwise specified.
10
1.2.3. The word "including" and words of similar import when used in this
Agreement shall mean "including, without limitation," unless otherwise
specified.
2. PURCHASE AND SALE
2.1. PURCHASE AND SALE OF ACQUIRED ASSETS
2.1.1. On the terms and subject to the conditions set forth in this
Agreement, at the Closing, the Sellers shall sell, convey, assign, transfer
and deliver to the Purchaser and/or one or more of Purchaser's Subsidiaries
(as determined by the Purchaser in its discretion), and in reliance on the
accuracy of the representations and warranties and the performance of the
agreements of the Sellers, the Purchaser and/or one or more of Purchaser's
Subsidiaries (as determined by the Purchaser in its discretion) shall
purchase, acquire and accept from the Sellers, all of the Sellers' rights,
title and interest in and to the Acquired Assets, subject to adjustment
under Section 2.9, free and clear of all Liens, other than Permitted
Liens, and without any further liability or obligation of any kind, known
or unknown, contingent, matured or otherwise, whether currently existing or
hereinafter created that are not included in the Assumed Liabilities. In
the event that any Acquired Assets are to be purchased by any Subsidiaries
of Purchaser, separate instruments of transfer shall be executed with such
Subsidiaries and each such Subsidiary shall be deemed to be a Purchaser
under this Agreement to the extent and with respect to the Acquired Assets
purchased by such Subsidiary. In the event that any Acquired Assets are
owned or held by a Subsidiary of a Seller, separate instruments of transfer
shall be executed with such Subsidiaries and each such Subsidiary shall be
deemed to be a Seller under this Agreement to the extent and with respect
to the Acquired Assets purchased from such Subsidiary. USDATA and the
Purchaser shall cause their respective Subsidiaries to execute such
separate instruments. In the event that the assignment, transfer,
conveyance or delivery of any Acquired Asset to the Purchaser or any
Subsidiary thereof involves or gives rise to any liability or obligation,
other than such obligation or liability which is an Assumed Liability, then
such liability or obligation shall be deemed to be an Excluded Liability as
further described in Section 2.2., except that with respect to such
liabilities or obligations arising from transfers or assignments occurring
after the Closing Date, then such liabilities and obligations shall be
shared between USDATA and the Purchaser on an equal basis, provided that
the Purchaser's aggregate liability for all such transfers and assignments
together shall in no event exceed a total amount of $50,000 and any amount
in excess of such $50,000 shall be borne and paid solely by USDATA and
shall be deemed to be an Excluded Liability.
11
2.1.2. Notwithstanding anything to the contrary contained in this
Agreement, to the extent the sale, assignment, transfer, conveyance or
delivery or attempted sale, assignment, transfer, conveyance or delivery to
the Purchaser of any Acquired Asset is prohibited by any applicable law or
would require any Governmental Authority or third-party authorizations,
approvals, consents, or waivers and such authorizations, approvals,
consents or waivers shall not have been obtained prior to the Closing Date,
and the obtaining thereof is not a condition to the Closing, then following
the Closing, and without limiting the provisions set forth in Sections 5.8
and 5.10, the Sellers shall be deemed to hold the respective Acquired
Asset and all rights and privileges with respect thereto as a trustee for
the sole benefit of the Purchaser and shall manage such Acquired Asset
solely in accordance with instructions of the Purchaser, and the parties
shall use their respective reasonable best efforts, and cooperate with each
other, to obtain promptly such authorizations, approvals, consents or
waivers. Pending such authorization, approval, consent, or waiver, the
parties shall cooperate with each other in any reasonable and lawful
arrangements designed to provide to the Purchaser the benefits of use of
such Acquired Asset. Once such authorization, approval, consent or waiver
for the sale, assignment, transfer, conveyance or delivery of an Acquired
Asset not sold, assigned, transferred, conveyed or delivered at the Closing
is obtained, the applicable Seller shall promptly assign, transfer convey
or deliver, or cause to be assigned, transferred, conveyed and delivered,
such Acquired Asset to the Purchaser for no additional consideration. To
the extent that any such Acquired Asset cannot be transferred or the full
benefits of use of any such Acquired Asset cannot be provided to the
Purchaser following the Closing, the Purchaser and the applicable Seller
shall enter into such arrangements for no additional consideration from the
Purchaser (including subleasing or subcontracting if permitted) to provide
to the Purchaser the operational equivalent of obtaining such
authorization, approval, consent or waiver. Without limitation of the
foregoing, in the event that at the Closing the registration of any
Transferred Intellectual Property in the name of the Purchaser at the
relevant Governmental Authority was not yet completed and perfected then
without limitation of any other rights of the Purchaser, to the extent
necessary to grant to the Purchaser full and unrestricted use of such
Transferred Intellectual Property, the Sellers hereby grant to the
Purchaser, effective as of the Closing and subject to any Third Party
Licenses, an irrevocable, perpetual, royalty free, fully paid, worldwide,
unrestricted, exclusive license to make any use or exploitation with
respect thereto. In the event that any Asset was not duly transferred or
assigned to the Purchaser or its Subsidiary at the Closing, and
notwithstanding, the Closing was completed, then the Sellers shall, and
shall cause their Subsidiaries to, take any action after the Closing, as
reasonably requested by Purchaser, to allow Purchaser to enforce any rights
or privileges of Sellers or such Subsidiaries under or with respect to such
Assets, including pursuit of legal proceedings, solely for the benefit of
and at the expense of Purchaser, and Sellers shall fully cooperate with
Purchaser in order to allow Purchaser to achieve the desired result in this
regard.
2.1.3. Notwithstanding anything herein to the contrary, from and after the
Closing Date, the Sellers shall retain all of their right, title and
interest in and to, and there shall be excluded from the sale, conveyance,
assignment or transfer to the Purchaser hereunder, all assets of the
Sellers other than the Acquired Assets (the "EXCLUDED ASSETS"). Without
limiting the generality of the foregoing, the Excluded Assets include all
right, title and interest of the Sellers and/or any of their Subsidiaries
in (i) the shares and assets of eMake Corp., a Delaware corporation and all
its Subsidiaries, (ii) the shares and assets of USDATA Foreign Sales Corp,
a company incorporated in Barbados, (iii) the shares of any and all other
Subsidiaries of USDATA, (iv) the Excluded Patents, solely to the extent set
forth in Section 5.15 and subject to the patents license granted to
Purchaser under Section 5.15, and (v) the Retained Cash.
2.2. PURCHASE AND SALE OF ASSUMED LIABILITIES
2.2.1. On the terms and subject to the conditions set forth herein, at the
Closing the Sellers shall sell, convey, assign, transfer and deliver to the
Purchaser and/or one or more of Purchaser's Subsidiaries (as determined by
the Purchaser in its discretion), and in reliance on the accuracy of the
representations and warranties and the performance of the agreements of the
Sellers, the Purchaser and/or one or more of the Purchaser's Subsidiaries
(as determined by the Purchaser in its discretion) shall assume, purchase,
acquire and accept from the Sellers, all of the Assumed Liabilities,
subject to adjustment under Section 2.9. The Acquired Assets and the
Assumed Liabilities are collectively referred to herein as the "ASSETS".
12
2.2.2. The Purchaser shall not assume any of the Sellers' obligations or
liabilities of any kind, known or unknown, contingent, matured or
otherwise, whether currently existing or hereinafter created that are not
included in the Assumed Liabilities. Notwithstanding anything in this
Section 2.2 to the contrary, the Assumed Liabilities shall not include any
liabilities or obligations whether arising under any contract, commitment,
agreement, tort or otherwise, that should have been reflected or provided
for on the Signing Date Balance Sheet in accordance with GAAP (had it been
prepared in accordance with GAAP) but were not so reflected on such Signing
Date Balance Sheet, or which were incurred after the date hereof not in
accordance with the Budget and Operating Plan. Without limitation of the
foregoing, the Assumed Liabilities shall also exclude (i) all liabilities
and obligations arising out of or in connection with any Excluded Asset or
any agreement among USDATA and any of its Subsidiaries or among any such
Subsidiaries, (ii) all of the Sellers' obligations and liabilities in
respect of costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby as well as any cost or liability
incurred in order to facilitate the transfer of the Assets at the Closing
and which is not specifically listed in the Assumed Liabilities or is
payable by the Purchaser in accordance with Section 2.1.1, (iii) all
liabilities and obligations in respect of all USDATA Employees, other than
the liabilities in connection with the Current Employees included in the
Assumed Liabilities, (iv) all liabilities and obligations arising out of or
in connection with any activity or matter which is not part of the
Business, except to the extent specifically included in items of the
Signing Date Balance Sheet that are included in the Assumed Liabilities,
(iv) any obligation or liability arising from any of the Sellers' failure
(either individually or together) to perform any of their agreements
contained in this Agreement or in any Ancillary Agreement or incurred by
the Sellers in connection with the transactions contemplated by this
Agreement or any Ancillary Agreement, (iv) all liabilities and obligations
arising out of, or in connection with, or as a result of, directly or
indirectly, any claim or Action in connection with or related directly or
indirectly to the Solaia Patent, (v) any and all liabilities of USDATA or
any of its Subsidiaries for Taxes (including without limitation all Taxes
applicable to USDATA or any of its Subsidiaries arising from or in
connection with the transactions contemplated hereby), except for Taxes
incurred with respect to the operation of the Acquired Assets as a business
after the date hereof in accordance with the Budget and Operating Plan,
(vi) a liability of USDATA Sub to Prolink AG ("PROLINK") for software
license fees under the Contract of Sale between Prolink and USDATA Sub
dated July 2, 2002 (the "PROLINK AGREEMENT") in the amount of $280,000 (the
"PROLINK AMOUNT"), and (vii) any Action or threatened Action by or on
behalf of any stockholder of USDATA in connection with, directly or
indirectly, this Agreement or the transactions contemplated hereby. Without
limitation, all liabilities and obligations excluded under this Section
2.2 shall be referred herein as "EXCLUDED LIABILITIES".
2.3. CONSIDERATION
2.3.1. On the terms and subject to the conditions set forth in this
Agreement, in reliance on the accuracy of the representations and
warranties and the performance of the agreements of the Sellers and their
compliance with the covenants made by them, respectively, hereunder, at the
Closing, the Purchaser shall issue to USDATA and the Escrow Agent in
accordance with Section 2.3.2, an aggregate number of validly authorized,
fully paid and non-assessable Ordinary Shares equal to the Consideration
Shares, free and clear of Liens, except for such Liens contemplated by this
Agreement or by any Ancillary Agreement.
13
2.3.2. Of the Consideration Shares, at the Closing 70%, less the Prolink
Amount Shares, will be issued to and in the name of USDATA ("USDATA
CONSIDERATION SHARES") and 30%, plus the Prolink Amount Shares, will be
issued to and in the name of the Escrow Agent, to be held pursuant to the
terms and conditions of the Escrow Agreement ("ESCROW CONSIDERATION
SHARES"), except that under Section 2.9.7 and Section 2.9.11 hereof,
portions of the USDATA Consideration Shares and portions of the Escrow
Consideration Shares may be held back at Closing and not issued until the
matters referred to in such Sections are resolved pursuant to the
procedures set forth in such Sections. The term "PROLINK AMOUNT SHARES"
shall mean the Prolink Amount divided by the Average Share Price as at the
Closing Date.
2.3.3. The Consideration Shares shall be subject to certain restrictions as
set forth in the Standstill Agreement in the form of EXHIBIT 2.3.3(A)
hereto (the "STANDSTILL AGREEMENT") entered into on the date hereof among
USDATA and the Purchaser. At the Closing, the Purchaser shall execute and
deliver to SCP the Registration Rights Agreement, in the form of EXHIBIT
2.3.3(B) hereto (the "REGISTRATION RIGHTS AGREEMENT"). USDATA will not
distribute or dispose of any Consideration Shares issued under this
Agreement, except in accordance with the Standstill Agreement, and in each
such distribution or disposal, pursuant to valid exemptions from, or
otherwise not requiring, registration under the U.S. Securities Act of
1933, as amended and the rules and regulations promulgated thereunder (the
"SECURITIES ACT"). Prior to any proposed distribution of Consideration
Shares that is permitted under this Section 2.3.3, USDATA shall give a 5
Business Day prior written notice to the Purchaser of its intention to
effect such distribution. Such notice shall describe the manner and
circumstances of the proposed distribution in sufficient detail, and shall
be accompanied, at USDATA's expense by either (i) an opinion of counsel
(who shall be reasonably satisfactory to the Purchaser, and whose opinion
shall be addressed to the Purchaser) to the effect that the proposed
distribution of the Consideration Shares may be effected without
registration under the Securities Act, or (ii) a "no action" letter from
the U.S. Securities and Exchange Commission (the "SEC") to the effect that
the distribution of such Consideration Shares without registration will not
result in a recommendation by the staff of the SEC that action be taken
with respect thereto. Each USDATA Stockholder or any other Person that
receives greater than 25,000 Consideration Shares (provided that in the
event that holders of less than 25,000 Consideration Shares hold in the
aggregate more than 100,000 Consideration Shares, then this requirement
will apply to any holder) shall execute and deliver to the Purchaser a
Standstill Agreement, and each USDATA Stockholder that receives any
Consideration Shares that is a non Israeli Person shall execute and deliver
to Purchaser an undertaking to the office of the Israeli Chief Scientist in
the Ministry of Trade and Industry (the "OCS") in the form of EXHIBIT
2.3.3(C) hereto.
2.4. CLOSING
Subject to the terms and conditions of this Agreement, the sale and purchase of
the Assets, as contemplated hereby shall take place at a closing (the "CLOSING")
to be held at such place to be agreed upon between the Parties three Business
Days after all the closing conditions set forth in Section 7 have been duly
satisfied or waived or at such other time as the parties may mutually agree upon
in writing (the day on which the Closing takes place being the "CLOSING DATE").
14
2.5. CLOSING DELIVERIES BY THE SELLERS
At the Closing, the Sellers shall deliver or cause to be delivered to the
Purchaser:
2.5.1. Resolutions of the Board of Directors of each Seller and the
resolution of the general meeting of the stockholders of each Seller,
approved by the majority required under all Applicable Laws, approving the
execution, delivery and performance by the Sellers of this Agreement and
any Ancillary Agreement to which they are party;
2.5.2. The Sellers shall deliver a closing certificate executed by two
authorized officers of USDATA in a form pre-approved by the Purchaser, on
behalf of all the Sellers certifying that: (i) the representations and
warranties of the Sellers hereunder are true and correct as of the date
hereof and as of the Closing Date as if then originally made, except for
inaccuracies as of the date of Closing Date that, considered collectively,
do not constitute a Material Adverse Effect; (ii) all covenants required by
the terms hereof to be performed by the Sellers on or before the Closing
Date have been so performed in all material respects and (iii) all
documents to be executed and delivered by the Sellers at the Closing have
been executed by a duly authorized officer of the respective Seller;
2.5.3. The Sellers shall deliver good standing certificates of each of the
Sellers issued by the Secretary of State of the state of incorporation of
the respective Seller within three (3) Business Days prior to the Closing
Date;
2.5.4. The Sellers shall deliver the opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, counsel for the Sellers, addressed to the Purchaser and dated as of
the Closing Date, in the form of EXHIBIT 2.5.4;
2.5.5. The Sellers shall deliver the ▇▇▇▇ of Sale duly executed by each of
the Sellers;
2.5.6. The Sellers shall deliver the specific assignments, bills of sale,
endorsements, deeds and other good and sufficient instruments of conveyance
and transfer reasonably requested by the Purchaser, in form and substance
reasonably satisfactory to the Purchaser and its counsel, including,
without limitation, the Assignment and Assumption Agreement, as shall be
effective to vest in the Purchaser title to all the Acquired Assets,
including, without limitation, assignment deeds and powers of attorney with
respect to any and all Patents, registrable Copyright, Trademarks, Network
Identifiers and all the applications to register any of the foregoing as
well as physical possession (whether by way of actual delivery or, if more
appropriate, by confirmation of handing over of possession to the control
of a Purchaser representative) of certain Assets acquired hereunder, whose
physical delivery is reasonably required, including, without limitation,
all source code of all Products and Computer Software; and
2.5.7. The Sellers shall deliver a written confirmation and consent from
each Person listed in the Disclosure Schedule as having any Lien over any
of the Acquired Assets or any Person who as of the Closing Date have any
such Lien, that such Lien has been removed and is no longer in effect.
15
2.6. CLOSING DELIVERIES BY THE PURCHASER
At the Closing, the Purchaser shall deliver or cause to be delivered:
2.6.1. to USDATA, executed resolution of the Board of Directors of the
Purchaser approving the execution, delivery and performance by the
Purchaser of this Agreement and any Ancillary Agreements to which Purchaser
is a party;
2.6.2. to USDATA, share certificate(s) representing the USDATA
Consideration Shares registered in the name of USDATA;
2.6.3. to the Escrow Agent, share certificate(s) representing the Escrow
Consideration Shares registered in the name of the Escrow Agent;
2.6.4. to USDATA, a closing certificate executed by two authorized officers
of the Purchaser in form pre-approved by USDATA certifying that: (i) the
representations and warranties of the Purchaser hereunder are true and
correct as of the date hereof and as of the Closing Date as if then
originally made except for inaccuracies, as of the Closing Date, that,
considered collectively, do not constitute a Purchaser Material Adverse
Effect; (ii) all covenants required by the terms hereof to be performed by
the Purchaser on or before the Closing Date have been so performed in all
material respects; and (iii) all documents to be executed and delivered by
the Purchaser at the Closing have been executed by a duly authorized
officer of the Purchaser.
2.6.5. The Purchaser shall deliver the opinion of Meitar, Liquornik, Geva &
Co., counsel for the Purchaser, addressed to the Sellers and dated as of
the Closing Date, in the form of EXHIBIT 2.6.5;
2.6.6. The Purchaser shall deliver the specific assumption agreements and
other good and sufficient instruments of assumption reasonably requested by
USDATA, in form and substance reasonably satisfactory to USDATA and its
counsel, as shall be effective to obligate the Purchaser with respect to
the Assumed Liabilities, including without limitation, the Assignment and
Assumption Agreement.
2.7. SIMULTANEOUS TRANSACTIONS.
All transactions occurring at the Closing as specified in Section 2.5 and 2.6
shall be deemed to take place simultaneously and no transaction shall be deemed
to have been completed and no document or certificate shall be deemed to have
been delivered until all transactions are completed and all documents delivered.
Unless otherwise indicated, all documents and certificates shall be dated on or
as of the Closing Date.
2.8. CHANGE OF STRUCTURE
Notwithstanding anything to the contrary contained in this Agreement, if the
Purchaser determines in its discretion that the Asset Purchase under this
Agreement cannot be consummated in the structure contemplated by this Agreement,
then the transaction shall be restructured to the extent possible as a merger;
PROVIDED, HOWEVER, that no restructuring pursuant to this Section 2.8 shall
change the number of Consideration Shares otherwise issuable hereunder,
materially delay consummation of the transaction or have a material adverse
effect on the ability of the parties to satisfy the conditions to the Closing or
on the anticipated Tax consequences to the parties, and provided further that
such restructuring shall be economically equivalent to the Asset Purchase in all
material respects. In the event the transaction is restructured as a merger
pursuant to this Section 2.8, the parties shall (i) execute such documents as
the Purchaser may reasonably determine to be appropriate for the purpose of
reflecting the restructuring of the transaction as a merger, and (ii) make such
applications and filings and take such other actions as are appropriate in order
to implement such merger.
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2.9. PRICE ADJUSTMENT
2.9.1. Within 14 days after the date hereof, USDATA shall cause the
completion of a consolidated balance sheet of USDATA and its Subsidiaries
as of July 31, 2003 with the account balances included thereon calculated
in accordance with GAAP (the "ADJUSTED SIGNING DATE BALANCE SHEET"). A
draft of the Adjusted Signing Date Balance Sheet shall be delivered to
Purchaser upon its completion. Within 14 days after the receipt of the
draft Adjusted Signing Date Balance Sheet by Purchaser, Purchaser and/or
its representatives shall review all the relevant files and records of
USDATA and its Subsidiaries in order to examine the draft Adjusted Signing
Date Balance Sheet and shall deliver in writing to USDATA any good faith
objections that Purchaser may have with respect to any balances included on
the draft Adjusted Signing Date Balance Sheet (the "NOTICE OF DISPUTE"),
together with any supporting documentation, in reasonable detail of any
such objections. USDATA shall fully cooperate in good faith as to any
requests for supporting documentation made by Purchaser and shall allow
Purchaser's representatives full access to all records reasonably related
to the preparation of the Adjusted Signing Date Balance Sheet. If no Notice
of Dispute is received by USDATA within 14 days after Purchaser's receipt
of the draft Adjusted Signing Date Balance Sheet, the Adjusted Signing Date
Balance Sheet shall be determined final and all references in the
definitions of Assumed Liabilities (including Exhibit 1.1(B)), Acquired
Contracts and Acquired Assets to the term Signing Date Balance Sheet, shall
be deemed to refer to the Adjusted Signing Date Balance Sheet, however such
determination shall not limit any remedies available under this Agreement
with respect to any differences between the Signing Date Balance Sheet and
the Adjusted Signing Date Balance Sheet and any claim that such differences
cause the failure of any applicable closing condition to be satisfied.
Within seven (7) days after delivery of the Notice of Dispute, Purchaser
and USDATA shall attempt to resolve the underlying dispute in good faith,
and if such parties cannot agree within such seven (7)-day period, such
dispute shall be resolved by a nationally known independent firm of
certified public accountants jointly chosen by the Purchaser and USDATA,
which in the absence of an agreement shall be PricewaterhouseCoopers. The
written decision of such accounting firm shall be rendered within no more
than 21 days from the date that the matter is referred to such firm and
shall be final and binding on the parties hereto and shall not be subject
to dispute or review. Following any such dispute resolution (whether by
mutual agreement of the parties or by written decision of the accounting
firm), the Adjusted Signing Date Balance Sheet (as determined in such
dispute resolution) shall be determined final and all references in the
definitions of Assumed Liabilities (including Exhibit 1.1(B)), Acquired
Contracts and Acquired Assets to the term Signing Date Balance Sheet, shall
be deemed to refer to the Adjusted Signing Date Balance Sheet, in
accordance with the provisions of this Section 2.9.1. Any fees or expenses
payable to such accounting firm shall be shared equally between USDATA and
the Purchaser, with all fees and expenses payable by USDATA being deemed to
be an Excluded Liability.
2.9.2. In the event that based on the Adjusted Signing Date Balance Sheet
it transpires that as of the date hereof, the Net Asset Actual Amount, as
defined in EXHIBIT 2.9.2, is different than the Net Asset Target Amount, as
defined in EXHIBIT 2.9.2, then the adjustment provisions of Sections 2.9.3
- 2.9.5 shall apply.
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2.9.3. In the event that the Net Asset Actual Amount is greater than the
Net Asset Target Amount by more than 5% then there shall be no adjustment
to the number of Consideration Shares, however an amount equal to such
excess of the Net Asset Actual Amount over the Net Asset Target Amount (the
"NET ASSET EXCESS AMOUNT") shall be allocated to an increase in the
Retained Cash, provided that, at the election of USDATA an amount of up to
$200,000 of the Net Asset Excess Amount may be allocated by issuance to
USDATA of Ordinary Shares in an amount equal to such portion of the Net
Asset Excess Amount divided by a price per share equal to 150% of the
Average Share Price as of Closing Date and such shares shall be deemed to
be Consideration Shares.
2.9.4. In the event that the Net Asset Actual Amount is equal to the Net
Asset Target Amount or is greater or less than the Net Asset Target Amount
by not more than 5% then there shall be no adjustment to the number of
Consideration Shares.
2.9.5. In the event that the Net Asset Actual Amount is less than the Net
Asset Target Amount by more than 5% then the total number of Consideration
Shares shall be reduced by an amount of Ordinary Shares equal to the
difference between the Net Asset Actual Amount and the Net Asset Target
Amount (the "NET ASSET DEFICIT AMOUNT"), divided by the Per Share Figure
(the "REDUCTION SHARES").
2.9.6. USDATA may retain any cash or cash equivalents held by USDATA as of
the Closing, in an amount up to the Net Asset Excess Amount (the "RETAINED
CASH").
2.9.7. In the event that at the time that all closing conditions under
Section 7 hereof, other than the closing condition included in Section
7.3.9, have been fulfilled but (without limitation of any such
conditions), the parties have not resolved any outstanding dispute set
forth in the Notice of Dispute with respect to the draft Adjusted Signing
Date Balance Sheet then:
2.9.7.1. in the event that the amount in dispute (in terms of the Net
Asset Actual Amount) is no more than 10% of the Consideration Shares,
the closing condition included in Section 7.3.9 shall be satisfied,
and the Closing shall be held, however, an amount of Consideration
Shares equal to the amount in dispute, based on the Average Share
Price at such time (the "DISPUTE SHARES") shall not be issued to the
Escrow Agent and shall be deducted from the Escrow Consideration
Shares and will be treated as follows: (a) to the extent that upon
resolution of the dispute in accordance with Section 2.9.1 it is
determined that any Dispute Shares are required to be included in the
Consideration Shares, then such Dispute Shares shall be issued at such
time to the Escrow Agent and shall be deemed to be part of the Escrow
Consideration Shares, and (b) to the extent that upon resolution of
the dispute it is determined that any Dispute Shares are required to
be deducted from the number of Consideration Shares, then such Dispute
Shares shall not be issued at all;
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2.9.7.2. in the event that the amount in dispute (in terms of the Net
Asset Actual Amount) is greater than 10% of the Consideration Shares,
then at USDATA's election, either (i) the Closing will be postponed
until such dispute is resolved, or (ii) the closing condition included
in Section 7.3.9 shall be satisfied, and the Closing shall be held,
however, an amount of Consideration Shares equal to the Dispute Shares
shall not be issued at Closing (to be allocated such that up to 10% of
the Consideration Shares are reduced from the Escrow Consideration
Shares and the balance reduced from the USDATA Consideration Shares)
and will be treated as follows: (a) to the extent that upon resolution
of the dispute in accordance with Section 2.9.1 it is determined that
any Dispute Shares are required to be included in the Consideration
Shares, then such Dispute Shares shall be issued at such time to
USDATA and to the Escrow Agent based on the allocation of the hold
back described above and shall be deemed to be part of the USDATA
Consideration Shares and Escrow Consideration Shares, respectively,
and (b) to the extent that upon resolution of the dispute it is
determined that any Dispute Shares are required to be deducted from
the number of Consideration Shares, then such Dispute Shares shall not
be issued at all.
2.9.8. Within 10 days after Closing, Purchaser shall cause the completion
of a report that lists the total cash and cash equivalents transferred to
Purchaser at Closing and a list of all cash expended by USDATA and its
Subsidiaries from the date hereof until Closing (the "CLOSING CASH
REPORT"). A draft of the Closing Cash Report shall be delivered to USDATA
upon its completion. Within 14 days after the receipt of the draft Closing
Cash Report by USDATA, USDATA and/or its representatives shall review all
the relevant files and records of USDATA and its Subsidiaries in order to
examine the draft Closing Cash Report and shall deliver in writing to
Purchaser any good faith objections with respect to any amounts included in
the draft Closing Cash Report (the "CASH REPORT NOTICE OF DISPUTE"),
together with any supporting documentation in reasonable detail of any such
objections. Purchaser shall fully cooperate in good faith as to any
requests for supporting documentation made by USDATA and shall allow
USDATA's representatives full access to all records reasonably related to
the preparation of the Closing Cash Report. If no Cash Report Notice of
Dispute is received by Purchaser within 14 days after USDATA's receipt of
the draft Closing Cash Report, the Closing Cash Report shall be determined
final and the adjustments under Section 2.9.10 shall be made. Within seven
(7) days after delivery of the Cash Report Notice of Dispute, Purchaser and
USDATA shall attempt to resolve the underlying dispute in good faith, and
if such parties cannot agree within such seven (7) day period, such dispute
shall be resolved by a nationally known independent firm of certified
public accountants jointly chosen by the Purchaser and USDATA, which in the
absence of an agreement shall be PricewaterhouseCoopers. The written
decision of such accounting firm shall be rendered within no more than 21
days from the date that the matter is referred to such firm and shall be
final and binding on the parties hereto and shall not be subject to dispute
or review. Any fees or expenses payable to such accounting firm shall be
shared equally between USDATA and the Purchaser, with all fees and expenses
payable by USDATA being deemed to be an Excluded Liability.
2.9.9. In the event that from the Closing Cash Report it transpires that
either (i) the total cash amounts expended by USDATA and its Subsidiaries
from the date hereof until Closing exceeds the total amount that USDATA and
its Subsidiaries should have expended during such period in accordance with
the operational cash flow included in the Budget and Operating Plan by more
than 5% or (ii) the total cash amount expended by USDATA and its
Subsidiaries from the date hereof until Closing in any specific category of
expenses detailed in the operational cash flow included in the Budget and
Operating Plan exceeds the total amount that USDATA and its Subsidiaries
should have expended in such specific category of expense during such
period in accordance with the operational cash flow included in the Budget
and Operating Plan by more than 15%, then USDATA shall be required to
disburse to Purchaser cash in an amount equal to the greater of (a) the
total excess amount described in clause (i) above or (b) the total of the
excess of all categories of expenses included in clause (ii) above together
(the "CASH ADJUSTMENT AMOUNT").
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2.9.10. The Cash Adjustment Amount shall be paid by USDATA to Purchaser
within 10 days after the final determination of the Cash Adjustment Amount
pursuant to Section 2.9.8, in cash to Purchaser's bank account, however, at
USDATA's election, the Cash Adjustment Amount shall be disbursed within
such 10 days to Purchaser by reduction of the Consideration Shares in an
amount of shares equal to the Cash Adjustment Amount divided by the Per
Share Figure (the "CASH ADJUSTMENT SHARES"), to be allocated as follows:
(i) a number of Escrow Consideration Shares held back by Purchaser at
Closing under Section 2.9.11(i) equal in an amount to the Cash Adjustment
Shares shall not be issued and shall no longer be required to be included
in the Consideration Shares and any remaining Escrow Consideration Shares
left after such adjustment, if any, shall be issued to the Escrow Agent and
shall be deemed to be Escrow Consideration Shares, (ii) if after allocation
under clause (i) Cash Adjustment Shares remain, a number of USDATA
Consideration Shares held back by Purchaser at Closing under Section
2.9.11(ii) equal in an amount to the Cash Adjustment Shares less any
shares disbursed under clause (i) above, shall not be issued and shall no
longer be required to be included in the Consideration Shares and any
remaining USDATA Consideration Shares left after such disbursement, if any,
shall be issued to USDATA and shall be deemed to be USDATA Consideration
Shares, and (iii) if allocation under clauses (i) and (ii) was not
sufficient to disburse the full Cash Adjustment Shares, then any balance of
Cash Adjustment Shares shall be subject to indemnification as if it was an
Excluded Liability.
2.9.11. At Closing, an amount of Consideration Shares shall not be issued
and will be withheld by Purchaser for purposes of the payment of the Cash
Adjustment Shares in accordance with Section 2.9.10 as follows: (i) in the
event that there is no dispute as described in Section 2.9.7.1, then an
amount equal to 10% of the Consideration Shares shall not be issued to the
Escrow Agent and shall be deducted from the Escrow Consideration Shares and
will be treated in accordance with Section 2.9.10, and (ii) in the event
that there is a dispute as described in Section 2.9.7.1 or 2.9.7.2, then
the Dispute Shares under Section 2.9.7.1 or 2.9.7.2, as the case may be,
plus an amount of Consideration Shares equal to 5% of the Consideration
Shares (to be allocated such that up to 10% of the Consideration Shares are
reduced from the Escrow Consideration Shares and the balance reduced from
the USDATA Consideration Shares) shall not be issued to the Escrow Agent or
USDATA, as the case may be, and shall be reduced from the Escrow
Consideration Shares and the balance reduced from the USDATA Consideration
Shares and will be treated in accordance with Section 2.9.10.
20
2.9.12. In the event that from the Closing Cash Report it transpires that
the total cash amounts expended by USDATA and its Subsidiaries from the
date hereof until Closing was less than the total amount that USDATA and
its Subsidiaries should have expended during such period in accordance with
the operational cash flow included in the Budget and Operating Plan no
adjustment will be made and all shares withheld under Section 2.9.11 shall
be issued to the Escrow Agent or USDATA, respectively, in the same
allocation as held back, subject to any remaining dispute under Section
2.9.7, and any excess cash balances will be left in the hands of
Purchaser. Notwithstanding the foregoing, in the event that from the
Closing Cash Report it transpires that the total cash amounts expended by
USDATA and its Subsidiaries from the date hereof until Closing on expenses
in connection with the negotiation and execution of this Agreement or the
transactions contemplated hereby or in connection with the dissolution of
USDATA or its Subsidiaries or the internal restructuring of USDATA in
connection with the foregoing, was less than the total amount that USDATA
and its Subsidiaries should have expended during such period in accordance
with the operational cash flow included in the Budget and Operating Plan on
such matters (the "TRANSACTION EXPENSES SAVINGS"), and no Cash Adjustment
Amount is due to Purchaser under Section 2.9.9, then USDATA shall be
entitled to receive the Transaction Expenses Savings, in cash, provided
however, that at USDATA's election an amount of up to $200,000 of the
Transactions Expenses Savings may be allocated by issuance to USDATA of
Ordinary Shares in an amount equal to such portion of the Transaction
Expenses Savings divided by a price per share equal to 150% of the Average
Share Price as of the Closing Date and such shares shall be deemed to be
Consideration Shares.
2.10. ADJUSTMENT IN THE EVENT OF RECAPITALIZATION
2.10.1. If at any time during the period from the date hereof until the
Closing Date, there shall occur with respect to the Purchaser's Ordinary
Shares any reclassification, recapitalization, stock split or combination,
exchange, readjustment or stock dividend thereon, the number of Ordinary
Shares constituting Consideration Shares, USDATA Consideration Shares and
Escrow Consideration Shares shall be proportionately adjusted.
2.10.2. If at any time during the period from the date hereof until the
Closing Date, there shall be a capital reorganization of the Purchaser or a
merger or consolidation of the Purchaser with or into another entity, then,
as part of such reorganization, merger or consolidation, lawful provision
shall be made so that USDATA at the Closing shall be entitled to receive,
in lieu of the Consideration Shares, the shares of stock or other
securities or property of the Purchaser or of the successor corporation
resulting from such merger or consolidation that a holder of Ordinary
Shares of the Purchaser is entitled to receive on such capital
reorganization, merger or consolidation, as if the Consideration Shares
were issued immediately prior to such reorganization, merger or
consolidation.
2.11. TAX ALLOCATION
The purchase price of the Acquired Assets pursuant hereto shall be allocated
among the Acquired Assets as of the Closing Date in a manner as set forth by
Purchaser, subject to the reasonable review and comment by USDATA, consistent
with GAAP.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as otherwise set forth in the Disclosure Schedule, the Sellers hereby
jointly and severally represent and warrant to the Purchaser as of the date
hereof and as of the Closing Date as set forth below:
21
3.1. INCORPORATION AND AUTHORITY OF USDATA AND ITS SUBSIDIARIES
3.1.1. Each Seller is a company duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and
has all necessary corporate power and authority to enter into this
Agreement and the Ancillary Agreements, to own, lease and operate its
properties and assets, including the Acquired Assets, as currently, owned,
leased or operated, to conduct its business as currently conducted and as
currently proposed to be conducted, to perform its obligations hereunder
and under the Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby. The Sellers have heretofore made available
to the Purchaser complete and correct copies of the respective certificates
of incorporation and by-laws, each as amended to date, of each Seller. Such
certificates of incorporation and by-laws are in full force and effect.
Each of USDATA's Subsidiaries that is not a Seller, is a corporation duly
formed and validly existing under the laws of the jurisdiction of its
incorporation and has all necessary power and authority to own, lease and
operate its properties and assets as currently, owned, leased, or operated,
and to conduct its business as currently conducted and as currently
proposed to be conducted. USDATA and each of its Subsidiaries is duly
licensed or qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction in which, because of its business
conducted there or the nature of its properties there, it would be required
to be so licensed or qualified and in which the failure to be so licensed
or qualified would have, either individually or in the aggregate, or would
reasonably likely to have a Material Adverse Effect.
3.1.2. The execution and delivery of this Agreement and all documents,
instruments and ancillary agreements hereunder (the "ANCILLARY AGREEMENTS")
by the Sellers, the performance by the Sellers of their obligations
hereunder and thereunder and the consummation by the Sellers of the
transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action on the part of the Sellers, except for
approval by the stockholders of USDATA which shall have been obtained no
later than the Closing. No other corporate action on the part of the
Sellers is necessary to authorize this Agreement and the Ancillary
Agreements or to consummate the transactions contemplated hereby and
thereby, except for approval by the stockholders of USDATA which shall have
been obtained no later than the Closing through either action by written
consent of USDATA's stockholders or a stockholders meeting of USDATA
approving this Agreement and the Ancillary Agreements, in each case by a
vote of a majority of the outstanding voting rights in USDATA. No Seller
has taken any action or failed to take any action, which action or failure
would preclude or prevent any of the Sellers from conducting its business
(except for such preclusion or prevention that does not have and is not
reasonably likely to have a Material Adverse Effect), performing its
obligations hereunder and consummating the transactions contemplated
hereby. This Agreement has been, and the Ancillary Agreement to which any
Seller is a party shall have been as of the Closing Date, duly executed and
delivered by each of the Sellers, and this Agreement constitutes, and such
Ancillary Agreements will constitute as of the Closing Date, the legal,
valid and binding obligations of each of the Sellers, enforceable against
them in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, debtor relief or similar
laws affecting the rights of creditors generally.
22
3.1.3. Neither USDATA nor any of its Subsidiaries has: (i) received any
notice from any applicable Governmental Authority in their respective
states of incorporation that its registration may be revoked, stricken or
erased; (ii) admitted an inability to pay its debts generally as they
become due, filed or consented to the filing against it of a petition in
bankruptcy, liquidation winding up, stay of proceedings, plan of
arrangement or any similar proceeding, or (iii) consented to the
appointment of a receiver, liquidator, trustee or special manager for
itself or for any substantial part of its properties, or made any
determination in respect of the distribution of its assets (the forgoing
collectively referred to below as "BANKRUPTCY EVENTS"). No notice, written
or oral, has been received of any Action for, or the intent of any Person
to request to seek or pursue, any remedy under or in connection with a
Bankruptcy Event and neither Seller is aware of any such intent of any
Person.
3.2. NO CONFLICT
The execution, delivery and performance of this Agreement or any Ancillary
Agreement by the Sellers does not and will not (a) violate or conflict with the
Certificate of Incorporation, By-laws or any other organizational or charter
documents of USDATA or any of its Subsidiaries; (b) conflict with or violate any
Law or Governmental Order; (c) except as set forth in SECTION 3.2 OF THE
DISCLOSURE SCHEDULE, result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to any Person any rights of termination, amendment,
acceleration or cancellation of any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which USDATA
or any of its Subsidiaries is a party or to which any properties of USDATA or
any of its Subsidiaries are subject; or (d) except as set forth in SECTION 3.2
OF THE DISCLOSURE SCHEDULE, result in the creation of any Lien on any assets
held, leased, licensed, owned or used by USDATA or any of its Subsidiaries.
3.3. CONSENTS AND APPROVALS
Except as set forth in SECTION 3.3 OF THE DISCLOSURE SCHEDULE, the execution
and delivery of this Agreement and the Ancillary Agreements by each of the
Sellers do not, and the performance of this Agreement by any of the Sellers,
including, without limitation, transfer and assignment of all the Assets, will
not, require any consent, approval, authorization or other action by, or filing
with or notification to, any Governmental Authority or any other Person.
3.4. SUBSIDIARIES.
3.4.1. Except as set forth in SECTION 3.4.1 OF THE DISCLOSURE SCHEDULE,
USDATA does not own, directly or indirectly, beneficially or of record, any
capital stock of, or any securities convertible into shares nor rights to
acquire any such securities of any company, nor is USDATA a participant,
directly or indirectly, in any partnership, trust, joint venture, or other
business association.
3.4.2. Except as set forth in SECTION 3.4.2 OF THE DISCLOSURE SCHEDULE,
USDATA owns, directly or indirectly, beneficially and of record, all of the
issued and outstanding capital stock of each of its Subsidiaries' shares
and all rights thereto free and clear of all Liens. There are no other
share capital, preemptive rights, convertible securities, outstanding
warrants, options or other rights to subscribe for, purchase or acquire
from USDATA or any of its Subsidiaries any of such Subsidiaries' shares and
there are no contracts or binding commitments providing for the issuance
of, or the granting of rights to acquire, any share capital of any such
Subsidiaries. All issued and outstanding capital stock of any of USDATA's
Subsidiaries was duly authorized, and is validly issued and outstanding,
fully paid and non-assessable.
23
3.4.3. USDATA has made available to the Purchaser true and correct copies
of all the respective certificate of incorporation, articles of
incorporation and by-laws or comparable organizational or charter documents
of USDATA and each of its Subsidiaries since their respective dates of
incorporation and any amendment thereto. SECTION 3.4.3 OF THE DISCLOSURE
SCHEDULE sets forth the authorized and issued capital stock of each USDATA
Subsidiary.
3.5. REPORTS AND FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES.
3.5.1. USDATA has previously made available to the Purchaser true and
complete copies of (a) all annual reports on Form 10-K as filed with the
SEC pursuant to the Securities Exchange Act of 1934, as amended and the
rules and regulations promulgated thereunder (the "EXCHANGE ACT") since
December 31, 1998, (b) all other reports, including proxy statements, filed
by USDATA with the SEC since December 31, 1998, and (c) any registration
statements relating to USDATA capital stock declared effective by the SEC
since December 31, 1998. Since December 31, 1998, USDATA has timely filed
all reports and filings required to be filed by USDATA under the Exchange
Act (the "USDATA REPORTS"). The consolidated financial statements of USDATA
and its Subsidiaries included in USDATA's report on Form 10-K for the
fiscal year ended December 31, 2002 and reports on Form 10-Q filed
subsequent to such Form 10-K were, or (if filed after the date hereof) will
be, prepared in accordance with U.S. generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods
involved and fairly present, or will present, in all material respects the
consolidated financial position for USDATA and its Subsidiaries as of the
dates thereof and the consolidated results of their operations and changes
in financial position for the periods then ended (except with respect to
interim period financial statements, for normal year-end adjustments which
are, individually or in the aggregate, not material in amount); the USDATA
Reports were, or (if filed after the date hereof) will be, prepared in all
material respects in accordance with all the requirements of the Securities
Act and the Exchange Act and the rules of any stock exchange or trading
system on which the shares of USDATA were traded or quoted at such time, as
the case may be; and, as of the time of filing or on the date that an
amendment or supplement thereto was filed, the USDATA Reports, as amended
or supplemented, did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
3.5.2. Neither USDATA nor any of its Subsidiaries has any debts,
liabilities and obligations, whether accrued or fixed, absolute or
contingent, matured or unmatured or determined or undeterminable,
including, without limitation, those arising under any Law, Action or
Governmental Order and those arising under any contract, tort, agreement,
arrangement, commitment or undertaking or otherwise, which is not either
(i) included or reflected in the Signing Date Balance Sheet or in the
Budget and Operating Plan, or (ii) is listed in SECTION 3.5.2 OF THE
DISCLOSURE SCHEDULE. Without limiting the generality of the foregoing, all
of the Assumed Liabilities relate solely to the Business and arose out of
or were incurred solely in the conduct of the Business.
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS
Since December 31, 2002, and except as set forth in SECTION 3.6 OF THE
DISCLOSURE SCHEDULE there has not been:
24
3.6.1. any damage, destruction or loss, whether or not covered by insurance
to any of the Acquired Assets;
3.6.2. any material transaction relating to any of the Acquired Assets
which was not disclosed in the Disclosure Schedule;
3.6.3. any modification, waiver, change, amendment, release, rescission,
accord and satisfaction, or termination of, or with respect to, any term,
condition, or provision of any material contract, agreement, license, or
other instrument to which USDATA or any of its Subsidiaries is a party and
relating to or affecting the Business, the Assets, or any part thereof;
3.6.4. any waiver by USDATA and/or any of its Subsidiaries, of a valuable
right or of a debt owed to USDATA and/or any of its Subsidiaries and
relating to or affecting the Business, the Assets, or any part thereof;
3.6.5. any satisfaction or discharge of any Lien by USDATA and/or any of
its Subsidiaries other than Permitted Liens in the ordinary course of
business consistent with past practice;
3.6.6. any loans made by USDATA and/or any of its Subsidiaries, to any of
their employees, officers, or directors or Affiliates other than reasonable
travel advances made in the ordinary course of business;
3.6.7. any transaction conducted between USDATA and/or any of its
Subsidiaries, and any of their stockholders or their respective Affiliates;
3.6.8. any sale, transfer or lease of, other than in the ordinary course of
business, or imposition of Lien other than Permitted Liens in the ordinary
course of business consistent with past practice, on, any of USDATA's
and/or any of its Subsidiaries' assets or rights, or any material portion
thereof;
3.6.9. any change in the accounting methods or accounting principles or
practices employed by USDATA other than changes required by GAAP and
disclosed in writing to Purchaser; or
3.6.10. any other event or condition of any character which has resulted or
could reasonably be expected to result in a Material Adverse Effect,
provided that this Section 3.6.10 shall apply only to the period from
December 31, 2002 until the date hereof.
3.7. ABSENCE OF LITIGATION
Except as set forth in SECTION 3.7 OF THE DISCLOSURE SCHEDULE, there are no
Actions pending or, to the best of the Sellers' Knowledge, threatened, against
USDATA and/or any of its Subsidiaries, or, to the best of the Sellers'
Knowledge, their respective stockholders, directors, officers or employees in
their capacity as such, or to which any of the Assets are or may be subject,
and, to the best of the Sellers' Knowledge, there is no valid basis for any such
Action. No default by USDATA or any of its Subsidiaries has occurred and is
continuing with respect to any material Governmental Order.
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3.8. COMPLIANCE WITH LAWS
None of USDATA and/or any its Subsidiaries, has been or is presently in material
violation of any Law or Governmental Order applicable to USDATA or its
Subsidiaries, the Business or any Asset except for such violations that do not
have a material effect on a material portion of the Assets to be acquired
hereunder.
3.9. GOVERNMENTAL LICENSES AND PERMITS
USDATA and each of its Subsidiaries holds all licenses and permits necessary for
the operation of the Business as presently conducted and as contemplated to be
conducted and is in compliance with the terms of such licenses and permits,
except for such failure to comply that does not have and is not reasonably
likely to have a Material Adverse Effect. All such licenses and permits are part
of the Assets, are valid and in full force and effect, and will remain in full
force and effect immediately after the Closing, except for such licenses and
permits the failure of which to maintain in full force and effect after the
Closing will not have a and is not reasonably likely to have Material Adverse
Effect. There are not pending, or to the best of Sellers' Knowledge, threatened,
any proceedings which would reasonably result in the termination or impairment
of any such license or permit. SECTION 3.9 OF THE DISCLOSURE SCHEDULE contains
a list of all such governmental licenses and permits.
3.10. THE ASSETS
3.10.1. The Sellers hold good and marketable title to and have valid
interests in all of the Acquired Assets free and clear of any and all Liens
except for (i) liens for taxes not yet due and payable which are in amounts
for which the Sellers have sufficient funds and that do not impose any
liability in excess of the Assumed Liabilities, (ii) liens of employees and
laborers for current wages not yet due which are in amounts for which the
Sellers have sufficient funds and that do not impose any liability in
excess of the Assumed Liabilities, and (iii) liens set forth on SECTION
3.10.1 OF THE DISCLOSURE SCHEDULE (collectively, "PERMITTED LIENS"). The
sellers are not in default or in breach of any provision which is required
to be performed by any of them under any of their leases or licenses and
hold a valid ownership, leasehold or licensed interest in the Assets not
outright owned by them. The Assets are in good operating condition and
repair, reasonable wear and tear excepted, and conform in all material
respects with all Applicable Laws.
3.10.2. USDATA and each of its Subsidiaries enjoy peaceful and quiet usage
and possession rights of all of the properties and assets included in the
Acquired Assets, both real, personal or tangible, that USDATA and/or any of
its Subsidiaries uses or purports to own.
3.10.3. The Acquired Assets include all assets, rights, properties,
licenses and permits, contracts and other benefits that are necessary for
the Business as presently conducted and as contemplated to be conducted,
and, other than the Acquired Assets there are no other assets, properties
or rights owned, used, held, or licensed by any of the Sellers or any third
party which are necessary for the Business as presently conducted or as
contemplated to be conducted.
3.10.4. At and as of the Closing, the Purchaser shall have good, valid and
marketable title to all of the Acquired Assets, free and clear of any Liens
and any adverse claims by any Person, other than Permitted Liens, and to
the best of Sellers' Knowledge, the Purchaser shall have full right and
power to the peaceful and quite usage and possession rights of the Acquired
Assets so transferred. To the best of Sellers' Knowledge, the Purchaser
shall be subject to no limitations, obligations or restrictions with regard
to the sale, license, distribution or other transfer or exploitation of the
Acquired Assets, whether in the form transferred to it or after
modification, except for any such limitation, obligations or restrictions
that are created by Purchaser or are derived from agreements to which it is
a party.
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3.10.5. All references to the Acquired Assets in this Section 3.10 shall
not include the Transferred Intellectual Property.
3.11. SHARE CAPITAL
3.11.1. The authorized and issued capital stock of USDATA is as set forth
in SECTION 3.11.1 OF THE DISCLOSURE SCHEDULE. The designations, powers,
preferences, rights, qualifications, limitations and restrictions in
respect of each class and series of authorized capital stock of USDATA are
as set forth in USDATA's certificate of incorporation. All such
designations, powers, preferences, rights, qualifications, limitations and
restrictions are valid, binding and enforceable and in accordance with all
Applicable Laws.
3.11.2. SECTION 3.11.2 OF THE DISCLOSURE SCHEDULE contains a description of
the identity of each holder of record of shares in USDATA holding more than
5% of the issued and outstanding share capital of USDATA, on an as
converted basis, and the respective number and class of such shares.
SECTION 3.11.3 OF THE DISCLOSURE SCHEDULE sets forth all options and other
rights to acquire shares of USDATA.
3.11.3. Except as set forth in SECTION 3.11.3 OF THE DISCLOSURE SCHEDULE:
(i) there are no outstanding shareholder loans, preemptive rights,
convertible securities, warrants, options, redemption rights or other
rights to subscribe for, purchase or acquire from USDATA any share capital
of USDATA, or anti dilution rights; and (ii) there are no contracts, rights
or binding commitments, written or oral, providing for the issuance of, or
the granting of rights to acquire, any capital stock of USDATA or under
which USDATA is, or may become, obligated to issue any of its securities.
No stock plan, stock purchase, stock option or other agreement or
understanding between USDATA and any holder of any equity securities or
rights to purchase equity securities provides for acceleration or other
changes in the vesting provisions or other terms of such agreement or
understanding as the result of any merger, consolidation, sale of stock or
assets, change in control or any other transaction by USDATA.
3.11.4. All issued and outstanding share capital of USDATA has been duly
authorized, is validly issued and outstanding, fully paid and
non-assessable. Since its incorporation, USDATA has not declared or paid
dividends or any other distribution, whether in cash or in kind, to any of
its stockholders.
3.12. EMPLOYEE MATTERS
3.12.1. SECTION 3.12.1 OF THE DISCLOSURE SCHEDULE contains a list of the
names of all the Current Employees. Neither USDATA nor any of its
Subsidiaries is in default with respect to any of its obligations relating
to the salaries or benefits owed to the Current Employees.
3.12.2. Neither USDATA nor any of its Subsidiaries is a party to any
collective bargaining agreement with any labor union applicable to the
Current Employees. To the best of Sellers' Knowledge there are no
representation or certification proceedings or petitions seeking a
representation or certification proceeding pending or threatened to be
brought or filed with any labor relations tribunal involving the Current
Employees.
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3.12.3. EXCEPT AS SET FORTH IN SECTION 3.12.3 OF THE DISCLOSURE SCHEDULE,
here are no grievances, unfair labor practices or employment discrimination
charges, complaints or claims of the Current Employees against USDATA or
any Subsidiary thereof that is either pending, or, to the best of Sellers'
Knowledge, threatened before any Governmental Entity.
3.12.4. No Current Employee and no other USDATA Employee is or will be
entitled to any compensation, bonus, severance pay or any other benefits or
entitlements on account of or resulting from any action taken by USDATA or
any of its Subsidiaries in connection with any of the transactions
contemplated under the Agreement or on account of or resulting from the
termination of any Current Employees or their recruitment by the Purchaser.
No Current Employee is or will be entitled to any compensation, bonus,
severance pay or any other benefits or entitlements on account of or
resulting from termination of employment except (i) as set forth in SECTION
3.12.4 OF THE DISCLOSURE SCHEDULE, (ii) rights and benefits provided under
Applicable Law but solely to the extent so provided in such Applicable
Laws, and (iii) amounts due from USDATA Employee Plans which have been
fully funded and will be payable solely by such Employee Plans.
3.12.5. SECTION 3.12.5 OF THE DISCLOSURE SCHEDULE contains an accurate and
complete list of each Employee Plan and each Employee Agreement. USDATA has
made available to the Purchaser or its counsel true, complete and correct
copies of (i) the most recent plan documents, adoption agreements, summary
plan descriptions, and all amendments thereto for each Employee Plan, and
(ii) the most recent actuarial and audit reports for each Employee Plan for
which such reports are available.
3.12.6. Except in each case for which non-compliance would not have and
would not reasonably be likely to have a Material Adverse Effect each
Employee Plan, including plans maintained for the benefit of USDATA
Employees outside the United States, has been established and maintained in
accordance with its terms and all Applicable Laws and (i) all contributions
to each such Employee Plan required through the Closing Date have been and
will be made by USDATA or any of its Subsidiaries, (iii) each Employee Plan
is either fully funded (or fully insured) based upon generally accepted
local actuarial and accounting practices and procedures or adequate
accruals for each Employee Plan have been made in USDATA's financial
statements in accordance with GAAP, (iii) there are no judicial,
regulatory, arbitration or similar proceedings, inquiries, investigations
or audits pending, or, to the Sellers' knowledge, threatened or anticipated
(other than routine claims for benefits) against any Employee Plan or
against the assets of any Employee Plan; (iv) neither USDATA nor any of its
Subsidiaries nor any ERISA Affiliate is subject to any penalty or Tax with
respect to any Employee Plan; (v) each Employee Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and has received
a favorable determination opinion, notification or advisory letter with
respect to such status from the IRS, and (vi) no event has occurred and no
condition or circumstance has existed or exists which may reasonably be
expected to result in the disqualification of such Employee Plan.
3.12.7. No payment or benefit which will or may be made under any Employee
Plan or Employee Agreement in connection with the consummation of the
transactions contemplated hereby with respect to any Current Employee will
be characterized as an "excess parachute payment," within the meaning of
Section 280G(b)(1) of the Code.
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3.12.8. All amounts that USDATA or any of its Subsidiaries is legally or
contractually required either (i) to deduct from any USDATA Employee's
salary or to transfer to such USDATA Employee's pension or provident, life
insurance, incapacity insurance, continuing education fund or other similar
fund or (ii) to withhold from any USDATA Employee's salary and pay to any
Governmental Authority as required by Applicable Laws have, in each case,
been duly deducted, transferred, withheld and paid, and neither USDATA nor
any of its Subsidiaries have any outstanding obligation to make any such
deduction, transfer, withholding or payment.
3.13. TAXES.
3.13.1. Except as set forth in SECTION 3.13.1 OF THE DISCLOSURE SCHEDULE,
USDATA and its Subsidiaries have duly and timely filed all material Tax
Returns required to be filed (after taking into account all available
extensions) and have timely paid or adequately provided for in accordance
with GAAP all Taxes due in respect of the periods covered by such Tax
Returns, except, in each case, where the failure so to file, pay or provide
would not have and would not be reasonably expected to have a Material
Adverse Effect.
3.13.2. No material penalty, interest or other charge is due or has been
asserted in writing, with respect to the late filing of any Tax Return or
late payment of any Tax. No material claim for assessment or collection of
Taxes is presently being asserted against USDATA or its Subsidiaries and
neither USDATA nor any of its Subsidiaries is a party to any pending
action, proceeding, or investigation by any governmental taxing authority
relating to a material Tax nor to the best of Sellers' Knowledge has there
been any such threatened action, proceeding or investigation.
3.13.3. Neither USDATA nor any of its Subsidiaries is a party to or bound
by any obligation under any Tax sharing, Tax allocation, Tax indemnity or
similar agreement or arrangement.
3.14. ACCOUNTS RECEIVABLE; BANK ACCOUNTS
3.14.1. Except as set forth in SECTION 3.14.1 OF THE DISCLOSURE SCHEDULE,
all the accounts receivable included in the Acquired Assets arise from the
conduct of the Business, represent sales actually made in the ordinary
course of business for goods or services delivered or rendered in bona fide
arms length transactions.
3.14.2. All existing cash, cash equivalents, bank deposits, short terms
investments, securities and other balances and accounts in any bank,
financial institution or similar institutions of USDATA and its
Subsidiaries are set forth in SECTION 3.14.2 OF THE DISCLOSURE SCHEDULE.
SECTION 3.14.2 OF THE DISCLOSURE SCHEDULE sets forth a complete and
accurate list of (i) all bank accounts, investment accounts, lock boxes and
safe deposit boxes maintained by or on behalf of USDATA or any of its
Subsidiaries, including the location and account numbers of all such bank
accounts, investment accounts, lock boxes and safe deposit boxes, (ii) the
names of all Persons authorized to take action with respect to such bank
accounts, investment accounts, lock boxes and safe deposit boxes or who
have access thereto, and (iii) the names of all Persons holding general or
special powers of attorney from USDATA or any of its Subsidiaries.
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3.15. ENVIRONMENTAL MATTERS
USDATA and each of its Subsidiaries are and have been at all times in compliance
with all applicable Environmental Laws and have obtained and are in compliance
with all Environmental Permits. There are no Environmental Liabilities pending
or, to the best of the Sellers' Knowledge, threatened relating to the Business
or the Assets and to the best of Sellers' Knowledge there is no basis for any
such Environmental Liabilities against USDATA and/or any of its Subsidiaries.
3.16. CONTRACTS
3.16.1. SECTION 3.16.1 OF THE DISCLOSURE SCHEDULE lists each of the
following contracts and agreements to which USDATA, or any of its
Subsidiaries are parties or by which they are bound (such contracts being
"MATERIAL CONTRACTS"):
(i) each agreement under which any of the Sellers licenses or
purchases any Intellectual Property from any third party (other than
license agreements relating to third party off-the-shelf software that
are available to Purchaser with no additional cost or liability)
whether or not such agreement involves any remaining obligations or
liabilities of either party;
(ii) each agreement under which any of the Sellers licenses or sells
any Products to any third party and under which any obligations or
liabilities of either party are still outstanding or contingent;
(iii) each agreement for the purchase of Fixtures and Equipment or for
the furnishing of services in connection therewith and under which any
obligations or liabilities of either party are still outstanding or
contingent and which agreement involves a total value of at least
$25,000 or remaining payment obligations of Sellers of at least
$10,000;
(iv) all broker, distributor, dealer, manufacturer's representative,
franchise, agency, sales promotion, marketing and consulting contracts
and agreements relating to the Business under which any obligations or
liabilities of either party are still outstanding or contingent;
(v) all OEM, joint development and similar agreements concerning
development of products or integration of products with other
applications, systems or products, in each case, relating to the
Business and under which any obligations or liabilities of either
party are still outstanding or contingent;
(vi) all agreements relating to indebtedness for money borrowed of or
to USDATA and/or any of its Subsidiaries under which any obligations
or liabilities of either party are still outstanding or contingent;
(vii) all agreements between or among USDATA and/or any of its
Subsidiaries on the one hand, and any of their respective Affiliates
(other than such Affiliates constituting USDATA and any of its
Subsidiaries), on the other hand under which any obligations or
liabilities of either party are still outstanding or contingent;
(viii) all non-compete or other agreements restricting USDATA and/or
any of its Subsidiaries with respect to any future activity or
operations;
30
(ix) (a) all contracts and agreements which include a provision for
their termination or any change of any term thereof as a result of a
change in control event, or a sale of all or any of the assets of
USDATA or any of its Subsidiaries, and (b) all contracts and
agreements which include a provision for their termination or any
change of any term thereof as a result of their assignment.
(x) any other material agreement related to the Transferred
Intellectual Property, any other Acquired Asset, or the Business.
3.16.2. Copies of all the Material Contracts have been delivered to the
Purchaser. All of the Material Contracts are valid and in full force and
effect, neither USDATA nor any of its Subsidiaries are in default of any
such Material Contract and there is no event that, with notice or lapse of
time or both, would constitute a material default by USDATA or any such
Subsidiary under any Material Contract, and, to the best of Sellers'
Knowledge, there does not exist any material default by any other party
under any Material Contract or any event that, with notice or lapse of time
or both, would constitute a material default by any such other party under
any Material Contract. Neither USDATA, nor any of its Subsidiaries has
received any notice that any party to any Material Contract intends to
cancel or terminate such Material Contract or to exercise or not exercise
options or rights under such Material Contract. All liabilities and
obligations of USDATA and/or any of its Subsidiaries to be paid or
performed on or before the Closing Date under the Material Contracts have
been, or will have been on the Closing Date, duly paid in full or
performed, except for liabilities and obligations constituting Assumed
Liabilities. 3.16.3. EXHIBIT 3.16.3 hereto contains the standard forms of
customer license agreements of USDATA and each of its Subsidiaries for the
Products.
3.17. BROKERS
No broker, finder, investment banker, or any other third party is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of any of the Sellers.
3.18. INTELLECTUAL PROPERTY
3.18.1. SECTION 3.18.1 OF THE DISCLOSURE SCHEDULE lists all Trademarks,
Patents and registered Copyrights, owned or held by USDATA or any of its
Subsidiaries with any applications relating thereto, which are related
directly or indirectly, in whole or in part to the Business. Except for the
Intellectual Property listed in SECTION 3.18.1 OF THE DISCLOSURE SCHEDULE
and all other Transferred Intellectual Property, no other Intellectual
Property is, to Sellers' best Knowledge, necessary for use in the Business
as presently conducted and as proposed to be conducted, except for
Intellectual Property which is necessary for new products which are
contemplated to be developed by Sellers but have not yet been developed.
Neither USDATA nor any of its Subsidiaries has received, and to the best of
Sellers' Knowledge there are no, injunctions or Actions from any
Governmental Authorities or from any other Person, in each case, in respect
of the Transferred Intellectual Property, nor in respect of any Actions for
any third party rights in such Transferred Intellectual Property. All the
Transferred Intellectual Property is owned by the Sellers, except that with
respect to Transferred Intellectual Property that is subject to Third Party
Licenses, the Sellers have the right to use the Transferred Intellectual
Property free and clear of all Liens, subject to the terms of such Third
Party Licenses.
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3.18.2. All rights, title and interests of the Sellers in or related to the
Transferred Intellectual Property are owned by the Sellers, and, to the
Sellers' best Knowledge, are in full force and effect, and, to the Sellers'
best Knowledge, the Sellers have the unrestricted right to use, hold,
dispose and exploit all the Transferred Intellectual Property free and
clear of any Liens, except for the restrictions included in any Third Party
License Agreements. The consummation of the transactions contemplated in
this Agreement will not alter or impair any such rights, title and interest
and shall not result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to any Person any rights of termination, amendment,
acceleration or cancellation of any Transferred Intellectual Property which
is subject to a Third Party License Agreement. No claims or Actions have
been asserted against USDATA or any of its Subsidiaries (and the Sellers
are not aware of any claims which are likely to be asserted against USDATA
or any of its Subsidiaries or which have been asserted against others) by
any Person challenging the Sellers' use or disposition of the Transferred
Intellectual Property or challenging or questioning the validity or
effectiveness of any of the Transferred Intellectual Property. To Sellers'
best Knowledge, none of the Products nor the use by the Sellers of any of
the Transferred Intellectual Property nor the transfer of the Transferred
Intellectual Property hereunder or license of the Excluded Patents under
Section 5.15 or, if applicable, Section 2.1, or their use by the
Purchaser or any customer using the Products, infringes or will infringe on
the right of, constitutes or will constitute misappropriation of, or
violates or will violate in any other way, any Intellectual Property rights
or any other rights of any Person.
3.18.3. Except as listed in SECTION 3.18.3 OF THE DISCLOSURE SCHEDULE, all
licenses related to or used in connection with the Business are and shall
remain in full force and effect as of the Closing Date and thereafter,
subject to the same terms and conditions of the Third Party License
Agreements.
3.18.4. Except as listed in SECTION 3.18.4 OF THE DISCLOSURE SCHEDULE, all
Transferred Intellectual Property, other than Transferred Intellectual
Property which is subject to Third Party License Agreements, were (a)
developed exclusively by the Sellers and/or by employees of the Sellers
without the assistance of any third party or entity, pursuant to customary
inventions assignment agreements assigning all rights with respect thereto
to the Sellers or any of them, (b) created by third parties who assigned
ownership of their rights to USDATA pursuant to customary confidentiality
and invention assignment agreements to the Sellers or any of them or (c)
assigned to the Sellers or any of them pursuant to specific assignment
agreements.
3.18.5. Except as disclosed in SECTION 3.18.5 OF THE DISCLOSURE SCHEDULE,
neither USDATA nor any of its Subsidiaries is subject to any Governmental
Order or has entered into or is a party to any contract which restricts or
impairs the use of any such Transferred Intellectual Property or that
grants to any third party any rights to use, exploit or benefit from any
such Transferred Intellectual Property, except for licenses to customers
relating to Products in the ordinary course of business.
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3.18.6. Except as disclosed in SECTION 3.18.6 OF THE DISCLOSURE SCHEDULE,
each person employed by USDATA and/or any of its Subsidiaries (excluding
eMake Corporation and eMake Solutions, Inc.) (including consultants and
independent contractors) during the four-year period ending on the date
hereof and each other Person having access during such period to
confidential information of USDATA and/or any of its Subsidiaries and/or to
the Transferred Intellectual Property, has executed a confidentiality and
non-disclosure agreement pursuant to the form of agreement previously
provided to the Purchaser or its representatives; provided, that, with
respect to the first year in such four-year period, the foregoing statement
shall not apply to consultants and independent contractors. Such
confidentiality and non-disclosure agreements constitute valid and binding
obligations of USDATA or any of its Subsidiaries, as the case may be, and,
to Sellers' best Knowledge, such Person, enforceable in accordance with
their respective terms. To the Sellers' Knowledge, neither the execution or
delivery of such agreements, nor the carrying on of the Business by such
employees conflicts with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract covenant or
instrument under which any of such Persons is obligated. In addition, each
Current Employee has signed, or as of the Closing shall have signed, an
assignment agreement with respect to any Intellectual Property developed or
created while in the employ of USDATA or any of its Subsidiaries assigning
all rights with respect thereto to the Sellers or any of them.
3.18.7. All Sellers' Trademark registrations are currently in compliance in
all material respects with all legal requirements (including, where
applicable, the timely post-registration filing of affidavits of use and
incontestability and renewal applications) other than any requirement that,
if not satisfied, would not result in a cancellation of any such
registration or otherwise materially affect the priority and enforceability
of the Trademark in question. No registered Trademark of Sellers has been
or is now involved in any opposition or cancellation proceeding in the
United States Patent and Trademark Office or other applicable Governmental
Authority. To the Sellers' Knowledge, there has been no prior use of any
Trademark of Sellers by any third party that confers upon such third party
superior rights in any such Trademark.
3.18.8. All Patents of Sellers are currently in compliance with legal
requirements (including payment of filing, examination, and maintenance
fees and proofs of working or use) other than any requirement that, if not
satisfied, would not result in a revocation or otherwise materially affect
the enforceability of such patent in question. No Patent of Sellers has
been or is now involved in any interference, reissue, reexamination or
opposition proceeding in the United States Patent and Trademark Office or
other applicable Governmental Authority. To the best of Sellers' Knowledge,
no such action has been threatened in writing. To the best of Sellers'
Knowledge, there is no patent or patent application of any Person that
conflicts in any material respect with any Patent of Sellers or invalidates
any claim the Sellers have in any Patent.
3.18.9. USDATA and its Subsidiaries have taken reasonable steps in
accordance with normal industry practice to protect their rights in
confidential information and trade secrets. Except under confidentiality
obligations, to the Sellers' Knowledge there has been no disclosure by
USDATA or any Subsidiary of material confidential information or trade
secrets relating to the Transferred Intellectual Property.
3.19. INSIDER INTERESTS
No officer, director or stockholder of USDATA or of any of its Subsidiaries, or
any of the respective Affiliates or family members of any such persons or
entities has, either directly or indirectly: (a) any interest in any property or
asset, real or personal, tangible or intangible, including without limitation,
Intellectual Property, used in or pertaining to the Business; (b) furnishes or
sells services or products which are furnished or sold or are proposed to be
furnished or sold by USDATA and/or any of its Subsidiaries, (c) purchases from
or sells or furnishes to USDATA and/or any of its Subsidiaries any goods or
services, or (d) a beneficial interest in any contract or agreement to which
USDATA or any of its Subsidiaries is a party or by which it, the Assets, or the
Business may be bound or affected. There are no existing arrangements or
proposed transactions between USDATA or any of its Subsidiaries and their
respective officers, directors, or shareholders, or any Affiliate or family
member or associate of any such Person, nor any indebtedness by USDATA or any of
its Subsidiaries to any of the foregoing.
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3.20. CUSTOMERS AND SUPPLIERS
As of the date hereof, except as set forth in SECTION 3.20 OF THE DISCLOSURE
SCHEDULE to the best of Sellers' Knowledge, there has not been any material
adverse change and no Seller reasonably expects any material adverse change in
the business relationship of USDATA or any of its Subsidiaries with any material
customer, distributor, supplier, licensor, partner, agent or consultant of the
Business in the next 12 months, and neither USDATA nor any of its Subsidiaries
is engaged in any material dispute with any of the material customers,
distributors, suppliers, licensors, partners, agents or consultants of the
Business.
3.21. INSURANCE
The insurable properties relating to the Assets, the Business or the conduct of
the Business by USDATA and its Subsidiaries, are insured by financially sound
and reputable insurers and all insurance policies relating to such coverage have
been provided to the Purchaser. All insurance policies by which any or all of
the Acquired Assets are covered are set forth in SECTION 3.21 OF THE DISCLOSURE
SCHEDULE and all such policies are in full force and effect, all premiums with
respect thereto have been duly paid and USDATA is not aware of any reason that
such policies shall not be extended on similar terms upon their expiration.
Since January 1, 2000, no material claim by USDATA or its Subsidiaries for
coverage under any such policies (or any predecessor policies) has been denied.
3.22. TRUTHFULNESS.
No representation or warranty of any of the Sellers in this Agreement (including
the Schedules) by or on behalf of any of the Sellers in connection with the
transactions contemplated hereby contains or, at the Closing Date, will contain,
any untrue statement of a material fact or omits or will, at the Closing Date,
omit, to state a material fact necessary in order to make the statements
contained herein or therein not misleading. The Sellers have disclosed to the
Purchaser all information concerning USDATA, its Subsidiaries, the Business and
the Assets, that USDATA would have been required to disclose in a Form 8-K
(other than item 12) under the Exchange Act had it been subject to the
requirement to file such Form 8-K until the Closing Date.
3.23. ACCREDITED INVESTOR REPRESENTATIONS
3.23.1. USDATA is an "accredited investor" within the meaning of Rule 501
of Regulation D of the Securities Act, as presently in effect. USDATA is
capable of evaluating the merits and risks of its investment in the
Purchaser and has the capacity to protect USDATA's own interests.
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3.23.2. USDATA is acquiring the Consideration Shares for investment for
USDATA's own account, not as a nominee or agent, and not with the view to,
or for resale or distribution thereof. USDATA has no present intention of
selling, granting any participation in, or otherwise distributing said
Consideration Shares, except that in connection with the contemplated
dissolution of USDATA, USDATA intends to distribute the Consideration
Shares to its stockholders in compliance with all Applicable Laws. USDATA
understands that the Consideration Shares to be purchased have not been,
and will not be, registered under the Securities Act by reason of specific
exemptions from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of USDATA's
representations as expressed herein. USDATA represents and undertakes that
it does not have any contract, undertaking, agreement or arrangement with
any Person to sell, transfer, or grant participation to any such Person,
with respect to any Consideration Shares, however, it is contemplated that
USDATA will distribute the Consideration Shares to its stockholders in
connection with the dissolution of USDATA.
3.23.3. USDATA acknowledges that the Consideration Shares are characterized
as "restricted securities" under the U.S. federal securities laws and must
be held indefinitely unless subsequently registered under the Securities
Act or unless an exemption from such registration is available. USDATA is
aware of the provisions of Rule 144 promulgated under the Securities Act
which permits limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the shares, the availability
of certain current public information about the Purchaser, the resale
occurring not less than one year after a party has purchased and paid for
the security to be sold, the sale being effected through a "broker's
transaction" or in transactions directly with a "market maker" and the
number of shares being sold during any three-month period not exceeding
specified limitations.
3.24. CERTAIN DUE DILIGENCE MATERIALS.
3.24.1. The information included in the documents set forth as EXHIBIT
3.24.1 hereto is accurate in all material respects.
3.24.2. The information included in the document set forth as EXHIBIT
3.24.2 hereto describes certain plans and objectives with respect to the
business of USDATA. Such plans and objectives were prepared by USDATA in
good faith and represented the reasonable beliefs of management as of March
5, 2003. USDATA makes no representation or warranty as to the current
reasonableness or achievability of such plans and objectives.
3.24.3. The document set forth as EXHIBIT 3.24.3 was prepared by USDATA
internally, consistent with USDATA's past practices for preparation of
information of the type included in such document, to assist in the
management of USDATA's business and was not modified by USDATA for delivery
to Purchaser in connection with the transactions contemplated hereby.
USDATA makes no representation or warranty as to the accuracy of any
information contained in EXHIBIT 3.24.3.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser, and with respect to Sections 4.1, 4.2 and 4.3, the Purchasing
Subsidiary, represents and warrants to the Sellers as of the date hereof and as
of the Closing Date as follows:
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4.1. INCORPORATION AND AUTHORITY OF THE PURCHASER
4.1.1. Each of Purchaser and Purchasing Subsidiary is a company duly
incorporated and validly existing under the laws of the jurisdiction of its
incorporation and has all necessary corporate power and authority to enter
into this Agreement, to own, lease and operate its properties and assets,
to conduct its business as currently conducted and as proposed to be
conducted, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. Purchaser has heretofore made available
to USDATA a complete and correct copy of the Memorandum of Association and
Articles of Association, each as amended to date, of the Purchaser. Such
Memorandum of Association and Articles of Association are in full force and
effect.
4.1.2. The execution and delivery of this Agreement and all the Ancillary
Agreements by the Purchaser and Purchasing Subsidiary, the performance by
the Purchaser and Purchasing Subsidiary of its obligations hereunder and
thereunder and the consummation by the Purchaser and Purchasing Subsidiary
of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action on the part of the Purchaser
and Purchasing Subsidiary. No other corporate or shareholders proceedings
or action on the part of the Purchaser and Purchasing Subsidiary is
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby or thereby. Each of the Purchaser and Purchasing
Subsidiary has not taken any action or failed to take any action, which
action or failure would preclude or prevent the Purchaser or Purchasing
Subsidiary, as the case may be, from conducting its business, performing
its obligations hereunder and consummating the transactions contemplated
hereby. This Agreement has been, and the Ancillary Agreements shall have
been as of Closing Date, duly executed and delivered by the Purchaser or
Purchasing Subsidiary, as the case may be, and this Agreement constitutes,
and the Ancillary Agreements shall constitute as of the Closing Date, the
legal, valid and binding obligation of the Purchaser and Purchasing
Subsidiary, as the case may be, enforceable against it in accordance with
their terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, debtor relief or similar laws affecting the
rights of creditors generally.
4.2. NO CONFLICT
The execution, delivery and performance of this Agreement or the Ancillary
Agreements by the Purchaser and Purchasing Subsidiary, as the case may be, does
not and will not (a) violate or conflict with the Memorandum of Association and
Articles of Association of the Purchaser or the Purchasing Subsidiary, as the
case may be; (b) except as set forth in Section 4.2 of the Purchaser Disclosure
Schedule, conflict with or violate any Law or Governmental Order; (c) except as
set forth in Section 4.2 of the Purchaser Disclosure Schedule, result in any
breach of, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or give to any Person any
rights of termination, amendment, acceleration or cancellation of any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument to which the Purchaser or the Purchasing
Subsidiary, as the case may be, is a party or to which any properties of the
Purchaser or the Purchasing Subsidiary are subject; or (d) result in the
creation of any Lien on any assets held, leased, licensed, owned or used by the
Purchaser or the Purchasing Subsidiary.
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4.3. CONSENTS AND APPROVALS
Except as set forth in SECTION 4.3 OF THE PURCHASER DISCLOSURE SCHEDULE, the
execution and delivery of this Agreement and the Ancillary Agreements by
Purchaser and the Purchasing Subsidiary do not, and the performance of this
Agreement by the Purchaser and the Purchasing Subsidiary, will not require any
consent, approval, authorization or other action by, or filing with or
notification to, any Governmental Authority or any other Person.
4.4. BROKERS
No Broker, finder, investment banker, or any other third party is entitled to a
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Purchaser.
4.5. REPORTS AND FINANCIAL STATEMENTS.
4.5.1. The Purchaser has previously made available to USDATA true and
complete copies of (a) all annual reports filed with the SEC pursuant to
the Exchange Act since December 31, 1998, (b) all other reports, filed with
the SEC since December 31, 1998, and (c) any registration statements
declared effective by the SEC since December 31, 1998. Since December 31,
1998, the Purchaser has timely filed all reports and filings required to be
filed by Purchaser under the Exchange Act (the "PURCHASER REPORTS"). The
consolidated financial statements of Purchaser and its Subsidiaries
included in the Purchaser's most recent report on Form 20-F and any other
reports filed with the SEC by Purchaser subsequent thereto were, or (if
filed after the date hereof) will be, prepared in accordance with GAAP
applied on a consistent basis during the periods involved and fairly
present, or will present, the consolidated financial position for the
Purchaser and its Subsidiaries as of the dates thereof and the consolidated
results of their operations and changes in financial position for the
periods then ended (except with respect to interim period financial
statements and for normal year-end adjustments which are, individually or
in the aggregate, not material in amount); the Purchaser Reports were or
(if filed after the date hereof) will be, prepared in all material respects
in accordance with all the requirements of the Securities Act and the
Exchange Act and the rules of any stock exchange or trading system on which
the shares of the Purchaser were traded or quoted at such time, as the case
may be; and, as of the time of filing or on the date that an amendment or
supplement thereto was filed, the Purchaser Reports, as amended or
supplemented, did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Purchaser has
delivered to USDATA true, correct and complete (except for normal year-end
adjustments which are, individually or in the aggregate, not material in
amount) draft consolidated, non audited and non reviewed balance sheet and
statement of profit and loss of the Purchaser for the six months ended June
30, 2003.
4.5.2. The Purchaser does not have any debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or undeterminable, including, without limitation, those arising
under any Law, Action or Governmental Order and those arising under any
contract, tort, agreement, arrangement, commitment or undertaking or
otherwise, which is not either (i) included or reflected in Purchaser's
draft June 30 balance sheet referred to in the last sentence of Section
4.5.1, (ii) was incurred in the ordinary course of the Purchaser's business
consistent with past practice, or (iii) is listed in SECTION 4.5.2 OF THE
PURCHASER DISCLOSURE SCHEDULE.
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4.6. ISSUANCE OF CONSIDERATION SHARES
The Consideration Shares, when issued and allotted at the Closing in accordance
with this Agreement will be duly authorized, validly issued, fully paid,
non-assessable, and free of any pre-emptive rights, and will have the rights,
preferences, privileges, and restrictions set forth in the Articles of
Association of the Purchaser as in effect from time to time, and will be free
and clear of any Liens, except as set forth in this Agreement or in the Articles
of Association of the Purchaser.
4.7. SHARE CAPITAL
4.7.1. The authorized and issued share capital of the Purchaser is as set
forth in SECTION 4.7.1 OF THE PURCHASER DISCLOSURE SCHEDULE. The
designations, powers, preferences, rights, qualifications, limitations and
restrictions in respect of the Ordinary Shares are as set forth in
Purchaser's Articles of Association. All such designations, powers,
preferences, rights, qualifications, limitations and restrictions are
valid, binding and enforceable and in accordance with all Applicable Laws.
4.7.2. The Purchaser's annual report on form 20-F for the year ended
December 31, 2002 (the "2002 ANNUAL REPORT") contains a description of the
identity, to the best knowledge of the Purchaser, of each holder of record
of shares in Purchaser holding more than 5% of the issued and outstanding
share capital of Purchaser, on an as-converted basis, and the respective
number and class of such shares as of the date set forth in the 2002 Annual
Report. The 2002 Annual Report and SECTION 4.7.2 OF THE PURCHASER
DISCLOSURE SCHEDULE set forth all options and other rights to acquire
shares of Purchaser as of the dates set forth in the 2002 Annual Report
and, with respect to SECTION 4.7.2 OF THE PURCHASER DISCLOSURE SCHEDULE as
of the date hereof. Except as set forth in SECTION 4.7.2 OF THE PURCHASER
DISCLOSURE SCHEDULE, there has been no material change in the number or
terms of such options and other rights to acquire shares of Purchaser since
the dates as of which such information is provided in the 2002 Annual
Report, except for grants of employee stock options in the ordinary course
of business.
4.7.3. Except as set forth in the 2002 Annual Report, in SECTION 4.7.2 OF
THE PURCHASER DISCLOSURE SCHEDULE, and except for employee stock options
granted by Purchaser in the ordinary course of business since the dates as
of which information on the employee stock options is provided in the 2002
Annual Report (i) there are no outstanding shareholder loans, preemptive
rights, convertible securities, warrants, options, or other rights to
subscribe for, purchase or acquire from the Purchaser any share capital of
the Purchaser; and (ii) there are no contracts, rights or binding
commitments, written or oral, providing for the issuance of, or the
granting of rights to acquire, any share capital of the Purchaser or under
which the Purchaser is, or may become, obligated to issue any of its
securities.
4.7.4. All issued and outstanding share capital of the Purchaser has been
duly authorized, is validly issued and outstanding, fully paid and
non-assessable.
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4.8. ABSENCE OF CERTAIN CHANGES OR EVENTS
Since December 31, 2002, except as set forth in the 2002 Annual Report or
otherwise publicly disclosed through a press release or similar publication, the
Purchaser and its Subsidiaries have conducted their businesses only in the
ordinary course consistent with past practice and, since December 31, 2002,
except as set forth in the 2002 Annual Report, SECTION 4.7.2 OF THE PURCHASER
DISCLOSURE SCHEDULE, or otherwise publicly disclosed through a press release or
similar publication, there has not been (a) any event or events having,
individually or in the aggregate, a Purchaser Material Adverse Effect, provided
that this Section 4.8(a) shall apply only to the period from December 31, 2002
until the date hereof; (b) any declaration, setting aside or payment of any
dividend or distribution in respect of any share capital of the Purchaser or any
redemption, purchase or other acquisition of any of its securities; (c) any
material transaction conducted between the Purchaser, and any of its
shareholders, officers, employees or Affiliates (except for inter-company
transactions); or (e) any change in the accounting methods or accounting
principles or practices employed by the Purchaser other than changes required by
GAAP and disclosed to USDATA. In addition, since the date of filing of the 2002
Annual Report until the date of this Agreement, to Purchaser's best knowledge,
there has been no fundamental and material adverse change in the relationships
of Purchaser with its customers and suppliers, as a whole.
4.9. ABSENCE OF LITIGATION
Except as set forth in SECTION 4.9 OF THE PURCHASER DISCLOSURE SCHEDULE and in
the 2002 Annual Report, there are no Actions pending or, to the best of the
Purchaser's knowledge, threatened, against Purchaser or any of its Subsidiaries,
or, to the best of the Purchaser's knowledge, their respective stockholders,
directors, officers or employees in their capacity as such, which, if determined
adversely to the Purchaser or any of it Subsidiaries, would result in a
Purchaser Material Adverse Effect and, to the best of the Purchaser's knowledge,
there is no valid basis for any such Action.
4.10. COMPLIANCE WITH LAWS
Purchaser has not been and is not presently in material violation of any
Applicable Law or Governmental Order applicable to Purchaser or any of its
Subsidiaries, except for such non-compliance that do not have and are not
reasonably likely to have a Purchaser Material Adverse Effect.
4.11. GOVERNMENTAL LICENSES AND PERMITS
Purchaser holds all licenses and permits necessary for the operation of its
business as presently conducted and as currently proposed to be conducted and is
in compliance with the terms of such licenses and permits, except for such
licenses and permits the absence of which or failures to comply that do not
have, a Purchaser Material Adverse Effect. There are not pending, or to the best
knowledge of Purchaser, threatened, any proceedings which could result in the
termination or impairment of any such license or permit, except for such
termination or impairment that is not reasonably likely to have a Purchaser
Material Adverse Effect.
4.12. PROPERTY AND LEASES
Purchaser has sufficient title to, or right of use in, all its properties and
assets with only such exceptions as would not have a Purchaser Material Adverse
Effect.
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4.13. INTELLECTUAL PROPERTY.
Neither the Purchaser nor any of its Subsidiaries has received, and to the best
of the Purchaser's knowledge there are no, injunctions or Actions from any
Governmental Authorities or from any other Person, in each case, in respect of
the any Intellectual Property material to the Purchaser's business (the
"PURCHASER INTELLECTUAL PROPERTY"), nor in respect of any Actions for any third
party rights in the Purchaser Intellectual Property. All the Purchaser
Intellectual Property is owned by the Purchaser or its Subsidiaries or the
Purchaser or its Subsidiaries have the right to use the Purchaser Intellectual
Property. Except as referred to in the 2002 Annual Report, all rights, title and
interests of the Purchaser in or related to the Purchaser Intellectual Property
owned by the Purchaser, to the best of the Purchaser's knowledge, are in full
force and effect and the Purchaser or its Subsidiaries have, to the Purchaser's
best knowledge, the unrestricted right to use, hold, dispose and exploit all the
Purchaser Intellectual Property owned by the Purchaser free and clear of any
Liens. To the Purchaser's best knowledge and except as set forth in SECTION 4.13
OF THE PURCHASER DISCLOSURE SCHEDULE, the consummation of the transactions
contemplated in this Agreement will not alter or impair any such rights. No
claims or Actions have been asserted against the Purchaser or any of its
Subsidiaries (and Purchaser is not aware of any claims which are likely to be
asserted against the Purchaser or any of its Subsidiaries or which have been
asserted against others) by any Person challenging use or disposition by the
Purchaser or its Subsidiaries of the Purchaser Intellectual Property or
challenging or questioning the validity or effectiveness of any of the Purchaser
Intellectual Property owned by the Purchaser except to the extent that does not
result in a Purchaser Material Adverse Change. To the best of the Purchaser's
knowledge, none of the use by the Purchaser or its Subsidiaries of any of the
Purchaser Intellectual Property infringes or will infringe on the right of, any
Intellectual Property rights of any Person except to the extent that does not
result in a Purchaser Material Adverse Change.
4.14. ENVIRONMENTAL MATTERS
Purchaser and its Subsidiaries are in compliance with all applicable
Environmental Laws and have obtained and are in compliance with all
Environmental Permits, except for failure to comply or failure to hold such
permits that does not and is not reasonably expected to have a Purchaser
Material Adverse Effect. There are no Environmental Liabilities pending or, to
the best of the Purchaser's knowledge, threatened relating to the Purchaser,
except for such liabilities that do not and are not reasonably expected to have
a Purchaser Material Adverse Effect.
4.15. TAX MATTERS.
Currently, Purchaser has no plan or intention to (i) dispose of the stock of the
Purchasing Subsidiary within the meaning of Treasury Regulation Section
1.367(a)-8(e)(1) or Treasury Regulation Section 1.367(a)-8(e)(2) or (ii) dispose
of substantially all of the Acquired Assets within the meaning of Treasury
Regulation Section 1.367(a)-8(e)(3).
4.16. TRUTHFULNESS.
No representation or warranty of the Purchaser or the Purchasing Subsidiary in
this Agreement (including the Purchaser Disclosure Schedule) contains or, at the
Closing Date, will contain, any untrue statement of a material fact or omits or
will, at the Closing Date, omit, to state a material fact necessary in order to
make the statements contained herein or therein not misleading.
5. COVENANTS
5.1. OPERATION OF THE BUSINESS FOR THE BENEFIT OF PURCHASER
From the date hereof until the Closing Date, the Sellers shall operate the
Business (i) exclusively, to the extent possible and permitted by Applicable
Law, for the benefit of the Purchaser and (ii) in accordance with the provisions
of the Budget and Operating Plan and Section 5.2. In furtherance of the
foregoing, all profits (losses) resulting from the Assets from the date hereof
shall be for the benefit (expense) of the Purchaser. Notwithstanding the
foregoing, if this Agreement is terminated prior to Closing, any profits
(losses) resulting from the Assets from the date hereof shall be for the benefit
(expense) of the Sellers.
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5.2. CONDUCT OF BUSINESS
Each of the Sellers hereby covenants that from the date hereof until the
Closing, and except as contemplated by this Agreement or expressly consented to
by the Purchaser, each Seller will and will cause its respective Subsidiaries
that are involved in the Business or that own any Acquired Assets to conduct the
Business in the ordinary course consistent with past practice, and with respect
to incurring any expense, cost or liability solely in accordance with and as
permitted under the Budget and Operating Plan, and use their reasonable best
efforts to preserve intact the Assets and the Business as conducted as of the
date hereof. Without limiting the generality of the foregoing, from the date
hereof and until the Closing Date each Seller will, and will cause its
respective Subsidiaries that are involved in the Business, with respect to the
Business and the Acquired Assets, not to take any action or omit to take an
action if such action or omission is not in the ordinary course and consistent
with past practice, and with respect to incurring any expense, cost or
liability, not permitted under or inconsistent with the Budget and Operating
Plan, and, without the express prior written consent of the Purchaser, to:
5.2.1. maintain the Acquired Assets and properties of the Business in
reasonably good working order and condition, ordinary wear and tear
excepted;
5.2.2. maintain insurance of the Acquired Assets and the properties of the
Business in such amounts and of such kinds as are comparable to those in
effect on the date of this Agreement;
5.2.3. use its reasonable best efforts to keep available (subject to
dismissals and retirements in the ordinary course of business consistent
with past practice), the services of the Current Employees;
5.2.4. use its reasonable best efforts to preserve the current advantageous
relationships with Persons having business dealings with the Business,
including under all the Acquired Contracts;
5.2.5. maintain its Business Information, comply in all material respects
with all Laws and contractual obligations applicable to the Acquired Assets
or the Business and perform all of its material obligations relating to the
Business;
5.2.6. not, except as required by the terms of employment contracts entered
into prior to the date hereof and disclosed in the Disclosure Schedule make
any increase in the salary, wages or other compensation of any Current
Employee;
5.2.7. not adopt, enter into or modify (except for termination or amendment
that does not create any liability or obligation to or that may be assumed
by Purchaser) the terms of any Employee Plan, except to the extent required
by Applicable Law;
5.2.8. not modify or change any Acquired Contract or any other agreements
relating to the Business, or enter into any new contract or agreement
relating to the Business or the Assets other than in accordance with the
Budget and Operating Plan;
5.2.9. not make, or enter into commitments to make, capital expenditures or
any operating or non-operating expenses or undertake any liabilities or
obligations, other than in accordance with the Budget and Operating Plan
and in the amounts set forth therein;
41
5.2.10. not sell, transfer, or otherwise dispose of or voluntarily encumber
any fixed asset of the Business, other than dispositions of fixed assets in
accordance with the Budget and Operating Plan;
5.2.11. not sell, transfer, license or otherwise dispose of, any
Intellectual Property, except for licenses to customers in the ordinary
course of business consistent with past practice provided that the
financial liabilities and expenses under such licenses are permitted and
provided for in the Budget and Operating Plan;
5.2.12. not settle any lawsuit or claim if such settlements of lawsuits and
claims impose any continuing liability or non-monetary obligation on the
Business or any of the Assets or if such settlement payments (net of any
insurance recoveries) exceed the reserves therefor set forth in the Signing
Date Balance Sheet;
5.2.13. not enter into or agree to enter into any employment agreement or
collective bargaining agreement for the benefit of the Current Employees or
amend or modify or agree to amend or modify any existing employment or
collective bargaining agreement for the benefit of the Current Employees;
5.2.14. not make any changes in the Sellers' accounting methods, practices
or procedures as they relate to the Business (except as required by GAAP
and approved by the Sellers' independent accountants);
5.2.15. not make any changes in the Sellers' methods, practices or
procedures relating to accounts receivable, accounts payable or credit
policies of the Business (including without limitation extending its trade
receivables or making any changes to its receivables write-off policies or
changing its payables cycle policies);
5.2.16. not make any material changes in its marketing programs, sales
promotion, pricing policies or product lines relating to the Products or
the Business;
5.2.17. otherwise take any action or engage in any transaction which would
render any representation or warranty of any Seller inaccurate in any
material respect as of the date hereof or as of the Closing Date;
5.2.18. not issue or sell, or issue options or rights to subscribe to, or
enter into any contract or commitment to issue or sell (upon conversion or
otherwise), any shares of its capital stock or subdivide or in any way
reclassify any shares of its capital stock, or acquire, or agree to
acquire, any shares of its capital stock; and
5.2.19. not enter into any agreement to do or engage in any of the
foregoing.
Notwithstanding the provisions of this Section 5.2, USDATA may (i) enter into
agreements to engage professional advisors as preparation for the dissolution of
USDATA to be effected after Closing, provided that such agreements do not affect
and are not related to any of the Acquired Assets and provided further that all
costs and expenses with respect thereto are not included in the Assumed
Liabilities and are deemed to be Excluded Liabilities payable solely out of the
Retained Cash, (ii) immediately prior to the Closing cause a merger of USDATA
with any of its Subsidiaries, with USDATA being the surviving corporation, or
perform any other internal restructuring in order to qualify the Asset Purchase
as a tax-free reorganization, in each case, provided that with respect to such
merger USDATA succeeds all the assets and liabilities of such merged
Subsidiaries and, provided further that any such merger or other internal
restructuring does not affect any of the Acquired Assets, and provided further
that all costs and expenses with respect thereto are not included in the Assumed
Liabilities and are deemed to be Excluded Liabilities payable solely out of the
Retained Cash.
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5.3. CONDUCT OF THE PURCHASER
Purchaser hereby covenants that from the date hereof until the Closing Date, and
except as expressly consented to by USDATA, the Purchaser will not declare or
pay dividends, or any other distribution, whether in cash, capital stock or in
kind, to any of its shareholders, other than distribution of bonus shares with
respect to all outstanding Ordinary Shares of Purchaser or in connection with a
recapitalization or reclassification with respect to which adjustment is made to
the Consideration Shares pursuant to Section 2.10 hereof.
5.4. ACCESS TO INFORMATION
From and after the date hereof until the earlier of the Closing Date or the date
on which this Agreement is terminated, the Sellers will and will cause their
officers, employees, representatives and auditors (i) afford the Purchaser and
its representatives reasonable access to all of its offices and other facilities
and properties, (ii) permit the Purchaser to make such inspections thereof as it
may reasonably request, and (iii) furnish the Purchaser with such financial and
operating data and other information as it may from time to time reasonably
request, and (iv) make the Current Employees available to the Purchaser for such
consultation as it may from time to time reasonably request. In furtherance of
the foregoing, the Sellers shall provide Purchaser and its representatives
reasonable access to the Business Information and authorize its independent
accountants and auditors, and otherwise use its reasonable best efforts to cause
such independent accountants and auditors to, provide access to their work
papers and documents concerning the Sellers, the Assets and the Business. All
information obtained by or on behalf of the Purchaser pursuant to this Section
5.4 shall be kept confidential in accordance with the provisions of the Non
Disclosure Agreement, dated March 20, 2003, between USDATA and Purchaser (the
"NDA"), subject to the provisions of Section 5.8.1 below. All access and
inspections of the Purchaser shall be made and conducted in a manner not to
interfere unreasonably with the Sellers' operation of the Business.
5.5. USE OF NAME.
As of the Closing, the Purchaser shall be entitled to fully use any name related
to the Products to be chosen by the Purchaser, and USDATA and its Subsidiaries
shall take all action and execute any consent reasonably required in order to
give effect to the foregoing. From the Closing Date and thereafter neither
USDATA nor any of its Subsidiaries shall use the name of the Sellers for any
commercial purpose, except for any actions taken in connection with the winding
up of USDATA's and its Subsidiaries activities and any actions taken in
connection with the Excluded Assets, provided that additional names or words
determined by USDATA are added to the name USDATA that are reasonably sufficient
to distinguish between the Business and such use of the name USDATA.
43
5.6. NON-COMPETE
5.6.1. In order that the Purchaser may have and enjoy the full benefit of
the Acquired Assets, USDATA, each of its Subsidiaries and each transferee
or successor in interest of the Excluded Patents shall not, directly or
indirectly, from the Closing Date hereof until the expiration of 60 (sixty)
months after the Closing (the "NON-COMPETE PERIOD"): (i) own, manage
operate, finance, join, control or participate in the ownership,
management, financing, operation, business or control of or otherwise be
involved in any way in any business or Person anywhere in the world that at
any time during the Non-Compete Period: (a) engages in the developing,
producing, offering, distributing, selling or supporting of products or
services similar to, or directly or indirectly competitive with, the
Products and services that are included in the Business, as conducted and
as proposed to be conducted; (b) engages in any activity concerning
Intellectual Property that is competitive with the Transferred Intellectual
Property or any other technology developed or contemplated to be developed
by the Purchaser during the Non-Compete Period, in each case, which are
directly or indirectly related to, derived from, on the basis of, or
resulting from, directly or indirectly, the Transferred Intellectual
Property; or (c) is otherwise directly or indirectly competing with the
Purchaser or any of its Subsidiaries; or (ii) initiate or maintain any
contact with any Person associated with USDATA or any of its Subsidiaries
in the past and/or the present regarding all matters relating to the
Acquired Assets in a manner that interferes with the use of the Acquired
Assets by Purchaser after Closing. The Sellers acknowledge that the
consideration received by the Sellers hereunder is paid in consideration,
in part, for the non-compete obligations hereunder and that in light of the
nature of this transaction, the interest that the Sellers have in the
success of the Purchaser and the critical significance of the non-compete
covenant to the Purchaser's business and to its willingness to enter into
this Agreement and issue the Consideration Shares, the non-compete covenant
is reasonable and fair in the circumstances.
5.6.2. As part of this non-compete obligation, USDATA and each of its
Subsidiaries will refrain from filing, directly or indirectly, any Patent
application or obtaining any Intellectual Property rights in connection
with the Transferred Intellectual Property or the Business.
5.6.3. Notwithstanding anything to the contrary set forth herein, this
Section 5.6 shall not prevent the Sellers from pursuing legal proceedings
and licensing arrangements based on alleged violations of the Excluded
Patents by third parties to the extent provided under Section 5.15 below.
44
5.7. NO SOLICITATION.
5.7.1. Neither USDATA, nor any of its Subsidiaries, any stockholder,
director, officer, employee, representative or agent of USDATA, any of its
Subsidiaries, shall directly or indirectly, continue any current or prior
discussions or negotiations with respect to, or solicit (including by way
of furnishing information) any inquiries or the making of any proposal by
any person or entity with respect to USDATA or any of its Subsidiaries that
constitutes or could reasonably be expected to lead to any acquisition or
purchase, grant of exclusive license or a similar right or other
disposition of, a substantial amount of assets of, or any equity interest
in USDATA, or any merger, consolidation, business combination,
amalgamation, recapitalization or similar transaction involving USDATA, any
of its Subsidiaries or a substantial portion of the Assets (each, an
"ACQUISITION PROPOSAL"). USDATA shall not (a) approve, endorse or recommend
any Acquisition Proposal, or enter into any letter of intent or similar
document or any agreement or contract for, contemplating or otherwise
relating to, any Acquisition Proposal, or (b) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to the Purchaser, the
approval or recommendation by the Board of Directors of USDATA (the
"BOARD") or any such committee of this Agreement or the transactions
contemplated hereby. Notwithstanding the foregoing, prior to the approval
of this Agreement and the transactions contemplated hereby by the
stockholders of USDATA, USDATA may participate in discussions or
negotiations regarding, or furnish to any Person, information with respect
to, or otherwise cooperate with respect to, any Acquisition Proposal solely
in response to an unsolicited proposal received by USDATA for an
Acquisition Proposal if all the following conditions are met: (A) the Board
determines in good faith, based on consultation with independent legal
counsel, that it is required to do so in order to comply with its fiduciary
duties under applicable law, (B) the Board determines in good faith that
the Acquisition Proposal is a Superior Proposal (defined below) and (C)
after giving prior written notice to the Purchaser specifying the material
terms and conditions of such Superior Proposal and identifying the Person
making such Superior Proposal and entering into a customary confidentiality
agreement on terms not materially less favorable to USDATA than those
contained in the NDA, Purchaser does not make, within 5 days after receipt
of such notice an offer that the Board determines in its good faith
judgment (based on the written advice of Hempstead & Co., Incorporated or
another financial advisor of nationally recognized reputation) to be at
least as favorable to the USDATA shareholders as such Superior Proposal,
PROVIDED, HOWEVER, that USDATA shall not be entitled to enter into any
agreement with respect to a Superior Proposal unless and until this
Agreement is terminated by its terms pursuant to Section 8.1 and USDATA
has paid all amounts due to the Purchaser pursuant to Section 8.4. For
purposes of this Agreement, a "SUPERIOR PROPOSAL" means any bona fide
written proposal, not solicited, initiated or encouraged in violation of
this Section 5.7, made by a third person to acquire, directly or
indirectly, for consideration consisting of cash and/or tradeable
securities, at least 50% of the equity securities of USDATA entitled to
vote generally in the election of directors or all or at least 50% of the
consolidated assets of USDATA and its Subsidiaries, which proposal does not
contain any "due diligence" conditions, if and only if, the Board
reasonably determines in good faith (x) that the proposed Acquisition
Proposal (based on the written advice of Hempstead & Co., Incorporated or
another financial advisor of nationally recognized reputation) would be
substantially more favorable to its stockholders than the Asset Purchase
and the transactions contemplated hereby and (y) that the Person making
such Superior Proposal is capable of consummating such Acquisition Proposal
(after considering, among other things, the expectation of obtaining
required regulatory approvals and the identity and background of such
Person as well as the availability of the consideration payable under the
Superior Proposal and the certainty of the receipt thereof).
5.7.2. If USDATA or any of its Subsidiaries or any of their stockholders,
directors, officers, employees, representatives or agents, receives any
such inquiry or proposal for an Acquisition Proposal, then it or he shall
promptly inform the Purchaser of the terms and conditions, if any, of such
inquiry or proposal and the identity of the person making it. USDATA, each
of its Subsidiaries and each stockholder, director, officer, employee,
representative or agent of USDATA or any of its Subsidiaries will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any of the foregoing.
5.7.3. USDATA shall promptly, but in any event within 48 hours of such
occurrence, advise Purchaser of the determination by the Board that an
Acquisition Proposal is a Superior Proposal, with the intent of enabling
the Purchaser to make a Revised Offer (as defined below). Within 5 days
after receipt of the notice contemplated in the immediately preceding
sentence, Purchaser may, in its discretion, submit a matching offer to
USDATA (the "REVISED OFFER"). The Board shall consider the Revised Offer in
good faith and determine, in consultation with independent legal counsel
and a written advice of Hempstead & Co., Incorporated or another financial
advisor of nationally recognized reputation whether the Acquisition
Proposal is a Superior Proposal relative to the Revised Offer. If the Board
concludes that the Acquisition Proposal is no longer a Superior Proposal
relative to the Revised Offer, this Agreement shall be amended by the
parties to reflect the terms of the Revised Offer.
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5.8. CONFIDENTIALITY.
5.8.1. From and after the Closing Date, to the maximum extent permitted by
Applicable Law, all technical, marketing and other information relating to
or included in the Assets, the Business or the Business Information shall
at all times be and remain the sole and exclusive property of the
Purchaser, and the Purchaser may freely use, disclose, transfer, sell or
assign such information. At all times after the Closing Date, USDATA, its
Subsidiaries and their directors, officers, employees, agents and
representatives shall maintain in strictest confidence, and shall not
disclose to third parties or use for their benefit or for the benefit of
any third party, any and all non public information concerning the
Purchaser, the Assets, the Business and the Business Information, except as
may be required by Law.
5.8.2. Without limitation of the foregoing, the NDA shall continue to be in
full force and effect at any time after the date hereof.
5.8.3. After the Closing Date, except as may be required for Tax purposes
or other regulatory purposes, or in connection with the liquidation of
USDATA or the Excluded Patents, neither USDATA, nor any of its Subsidiaries
shall retain any document, databases or other media embodying any
information referred to in this Section 5.8.
5.9. REGULATORY AND OTHER AUTHORIZATIONS; CONSENTS.
The Sellers shall use their reasonable best efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Authorities
and any third Persons that may be or become necessary for the execution and
delivery of, and the performance of the obligations pursuant to, this Agreement
including for the transfer of all the Assets hereunder without any additional
liability or obligation to the Purchaser, other than the liabilities to be borne
by Purchaser in accordance with the last sentence of Section 2.1.1 up to the
amount set forth therein, and will cooperate fully with the Purchaser and such
Governmental Authorities and third Persons in promptly seeking to obtain all
such authorizations, consents, orders and approvals, both before and after
Closing. USDATA shall provide to the Purchaser, upon request, a duly executed
undertaking to the OCS in the form of Exhibit 2.3.3(C) hereto. The Purchaser
will, to the extent reasonably necessary, cooperate with Sellers with respect to
the Sellers' efforts to obtain the authorizations, consents, orders and
approvals contemplated by this Section 5.9. In the event that under this
Agreement, any authorizations, consents, orders and approvals are not a
condition to the Closing, then Sellers shall continue to be bound by this
Section 5.9 after the Closing in order to obtain the foregoing as soon as
reasonably possible after the Closing.
5.10. INJUNCTIVE RELIEF.
Each Seller agrees that the Purchaser shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages, in
connection with any violation of Sections 5.6, 5.7 and 5.8 hereof, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Purchaser may be entitled. In the event that any of the provisions of
this Article 5 should ever be adjudicated to exceed the time, geographic,
product or service, or other limitations permitted by Applicable Law in any
jurisdiction, then such provisions shall be deemed reformed in such jurisdiction
to the maximum time, geographic, product or service, or other limitations
permitted by Applicable Law.
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5.11. FURTHER ACTION.
Until the Closing Date, the parties shall use their reasonable best efforts to
cause and facilitate the prompt satisfaction of all conditions in Section 7,
including without limitation, signing and delivering of all documents required
to be signed or delivered by them. From and after the date hereof, USDATA, its
Subsidiaries and the Purchaser shall execute and deliver such documents and
other papers and take such further actions as may be reasonably required to
carry out the provisions of this Agreement and give effect to the transactions
contemplated hereby. Without limiting the foregoing, from and after the Closing
Date, USDATA and its Subsidiaries shall (at their own expense) do all things
necessary, proper or advisable under Applicable Laws, including signing and
delivery any documents and instruments, as reasonably requested by the Purchaser
to put the Purchaser in effective and registered possession, ownership and
control of the Assets. No party nor any of its Subsidiaries shall take any
action that is intended to have the effect of, or is reasonably expected to have
the effect of, delaying, impairing or impeding the receipt of any required
approvals or the satisfaction of any condition in Section 7.
5.12. NOTIFICATION OF CERTAIN MATTERS.
Each party shall give prompt notice to the other parties of (i) the occurrence
or nonoccurrence of any event the occurrence or nonoccurrence of which has
caused or would be likely to cause any representation or warranty contained in
this Agreement by such first party to be untrue or inaccurate in any material
respect at or prior to the Closing; (ii) any material failure by such first
party to comply with or satisfy in any material respect any covenant condition
or agreement to be complied with or satisfied by it hereunder; (iii) any
material notice or other material communication of which such party has
knowledge from any Governmental Authority or other Person in connection with the
transactions contemplated by this Agreement or the Ancillary Agreements; (iv)
any Actions commenced or to the knowledge of such party threatened against,
relating to, involving or otherwise affecting, the Assets which, if pending on
the date of this Agreement, would individually or in the aggregate have or would
reasonably be expected to have a Material Adverse Effect or which relate to the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements; or (v) any other material adverse effect or of any event
that would materially impair such party's ability to perform its obligations
under this Agreement or the Ancillary Agreements. The delivery of any notice
pursuant to this Section 5.12 shall not cure such breach or non-compliance or
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
5.13. COVENANTS OF USDATA'S SUBSIDIARIES
The Sellers shall cause USDATA's Subsidiaries to comply with the provisions of
this Agreement and the Sellers shall take all actions to prevent any action or
failure to act on the part of USDATA's Subsidiaries, in contravention of this
Agreement. In the event that either of USDATA's Subsidiaries shall take any act
or fail to act, that if taken or failed to be taken by USDATA would have
constituted a breach of this Agreement, then, such action or failure to act
shall be deemed a breach of the Sellers' obligations and covenants hereunder.
5.14. BULK TRANSFER.
The parties hereby waive compliance with any bulk transfer law applicable to any
of the transactions contemplated hereby.
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5.15. INFRINGEMENT OF EXCLUDED PATENTS; LICENSE OF EXCLUDED PATENTS
5.15.1. Title to the Excluded Patents shall be retained by USDATA or,
subject to compliance with Section 5.15.4 below, a special purpose entity
controlled by USDATA, however, USDATA shall grant to Purchaser, at the
Closing a license with respect to the Excluded Patents in the form of
EXHIBIT 5.15.1(A) to exploit or make any use of the Excluded Patents (the
"LICENSE AGREEMENT"). Prior to the initiation of any legal proceedings,
including cease and desist letter, by USDATA against any third party based
on alleged violations of the Excluded Patents, USDATA shall provide to
Purchaser a written notice briefly setting forth the names of third parties
allegedly infringing the Excluded Patents and the actions intended to be
taken by USDATA. USDATA shall not, without the permission of Purchaser,
take any action in connection with any alleged infringement of the Excluded
Patents, including giving notice of infringement, offering a license, or
the filing of a patent infringement lawsuit, against the Persons set forth
on EXHIBIT 5.15.1(B) hereto and their respective Affiliates, or any other
Person that subsequently is added by Purchaser to such Exhibit 5.15.1(B),
provided that Purchaser may add Person to such Exhibit only if such Person
or any of its Affiliates is, at the time of inclusion of its name in such
Exhibit, either a customer or party to a business cooperation with,
Purchaser or any of its Subsidiaries or is a prospective customer or
business partner of Purchaser or any Subsidiary with whom Purchaser or its
Subsidiary are engaged in negotiations, and provided further that Exhibit
5.15.1(B) may not include more than 20 Persons and their respective
Affiliates. Purchaser may remove from Exhibit 5.15.1(B) at its discretion a
Person and replace it with a different Person only if the removed Person
was included in such Exhibit for at least 6 months, and from such time and
thereafter the removed Person will not be protected from such infringement
proceedings. Any Person that was removed may not be added again to the
Exhibit if subsequent to its removal infringement proceedings were
commenced against such Person. USDATA may submit to Purchaser from time to
time a list of Persons with respect to which it intends in good faith to
initiate infringement proceedings within the subsequent six months and in
such event Purchaser may within 30 days thereafter identify from such list
Persons that it wishes to add to Exhibit 5.15.1(B), however, with respect
to any Person that was included in such list provided by USDATA to
Purchaser and was not included within 30 days by Purchaser in Exhibit
5.15.1(B), USDATA shall be free to commence infringement proceedings, and
if such proceedings were commenced then thereafter such Persons may not be
added to the Exhibit. Without limitation of the foregoing, USDATA shall not
take any action in connection with any alleged infringement of the Excluded
Patents for use of products sold by USDATA or Purchaser against any Persons
that shall have been granted a license to use the Excluded Patents for use
of products sold by USDATA or Purchaser whether by USDATA or its
Subsidiaries prior to Closing, or by Purchaser or its Subsidiaries, by
virtue of the License Agreement, after Closing.
5.15.2. In the event that at any time and from time to time in the future
USDATA derives any damages, revenues or any other compensation, including
royalties, whether in cash or in kind (in each case after deducting legal
and enforcement expenses actually incurred by USDATA to fund any legal
proceedings as well as compensation paid to third party unaffiliated
brokers who assist in reaching resolution of such successful proceedings)
("PATENT REVENUES") whether from legal proceedings relating to the Excluded
Patents or any agreement or other arrangement for the grant of a license or
other right of use with respect to any of the Excluded Patents, sale of or
any grant of rights with respect to any of the Excluded Patents, and any
other agreement, arrangement or transaction related directly or indirectly
to any of the Excluded Patents (a "PATENT TRANSACTION") in each case from a
customer that uses or implements any products or services involving any of
the Excluded Patents or any other Person that is not covered by Section
5.15.3 ("CUSTOMER PATENT REVENUES") 10% of such Customer Patent Revenues
shall be paid to Purchaser.
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5.15.3. In the event that at any time and from time to time in the future
USDATA derives any Patent Revenues, whether from legal proceedings relating
to the Excluded Patents or any Patent Transaction, in each case from a
software vendor or other entity involved in distribution or resale of
software ("VENDOR PATENT REVENUES"), 20% of such Vendor Patent Revenues
shall be paid to Purchaser.
5.15.4. USDATA may not transfer or otherwise dispose in any way any of the
Excluded Patents and shall not merge or consolidate with any other entity
(a "SALE TRANSACTION") if the party to which such Excluded Patent is
transferred or disposed or the surviving entity in such Sale Transaction is
an Affiliate of USDATA unless such Affiliate undertakes in writing to be
bound by and comply with all the obligations of USDATA under the License
Agreement and this Section 5.15. (including the obligation under this
Section 5.15.4 but not any other provisions of this Agreement) and such
written undertaking is delivered to Purchaser prior to such transfer,
disposal, merger or consolidation. In the event of a Sale Transaction in
which the party to which such Excluded Patent is transferred or disposed or
the surviving entity in such Sale Transaction is not an Affiliate of
USDATA, then as a condition to such Sale Transaction the purchaser or
surviving entity in such Sale Transaction shall undertake in writing to be
bound by the License Agreement and comply with all the obligations of
USDATA thereunder. In addition, in such event a percent of the total
consideration paid or payable in such Sale Transaction, in cash or in kind,
at a level to be agreed upon between USDATA and Purchaser at such time
(which shall not exceed 20% but shall not be less than 10%), shall be paid
to Purchaser at the closing of such Sale Transaction.
5.15.5. All payments due to Purchaser under this Section 5.15 shall be
paid to Purchaser within 30 days after the respective Patent Revenues are
received by or on behalf of USDATA. Purchaser may from time to time, but
not more frequently than once in every six months, audit, through its
auditors, the records of USDATA to verify the amount of Patent Revenues,
during normal business hours, with prior reasonable notice by Purchaser. If
the audit should determine a discrepancy of 5% or more between the amounts
paid by USDATA to Purchaser under Section 5.15.2 or 5.15.3 and that are
actually due, then the reasonable expense of the audit shall be borne by
USDATA. Otherwise, the expense of the audit shall be borne by Purchaser.
Payment made more than thirty days after the due date shall be considered
late, and all late payments, or amounts found due because of an audit shall
bear interest from the due date at an annual rate of 90 day LIBOR plus 5%.
5.15.6. Purchaser shall make available to USDATA the services of ▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ in connection with the pursuit of licensing legal
proceedings for alleged infringements of the Excluded Patents, as long as
these individuals are employees of Purchaser, for no additional
consideration, provided that such services do not exceed 30 hours per three
months period per person and provided further that any expense and cost
incurred in connection with such services shall be paid only by USDATA.
Purchaser shall have no liability or responsibility with respect to the
services so provided by such individuals. In addition, if requested by
USDATA in writing at least 90 days in advance, such services will be made
available to the extent of an additional 50 hours per three months' period
per person in consideration for payment to Purchaser of an amount equal to
the total gross cost to Purchaser of the compensation payable to such
individuals for such hours of service to USDATA.
49
5.15.7. Purchaser will reasonably cooperate with USDATA after Closing in
providing USDATA access to documents and other material relating to the
licensing or enforcement of the Excluded Patents, subject to USDATA
executing confidentiality agreements in a form reasonably appropriate in
such circumstances.
5.15.8. USDATA will retain for a reasonable period of time ownership of all
documents and material relating to the Excluded Patents and the invention
development contained in the Excluded Patents, such as any development
records and patent prosecution files.
5.15.9. USDATA shall have the right to use early records in connection with
the licensing or enforcement of the Excluded Patents, such as sales records
prior to 1990, early participation in OPC, or customer license agreements
all subject to standard confidentiality obligations in form to be provided
by Purchaser.
5.15.10. USDATA shall have the right to use records relevant to damages in
connection with the licensing or enforcement of the Excluded Patents, such
as sales records for the last six years, profit margins and customer
license agreements. Such damage records will only be used as confidential
documents subject to standard confidentiality obligations in form to be
provided by Purchaser.
5.15.11. Prior to providing Purchaser with any notice or other information
with respect to infringement or enforcement of the Excluded Patents as
provided in the Section 5.15.1, USDATA and Purchaser will execute a Common
Interest Agreement in the form of EXHIBIT 5.15.11 to preserve the
confidentiality and privilege of such information.
5.15.12. USDATA shall not amend, terminate, breach or modify the Non
Exclusive Patent License Agreement between USDATA and Rockwell dated July
28, 2003 or the indemnification undertaking attached thereto, without the
prior written consent of Purchaser and shall take all action reasonably
necessary to maintain such Non Exclusive License Agreement and the
indemnification undertakings thereunder included in Exhibit A thereto, in
full force and effect.
5.15.13. In the event that the owner of the Solaia Patent claims that any
of the Products infringe the Solaia Patent then USDATA undertakes to
promptly obtain, at its expense, an opinion of reputable U.S. patent
counsel to the effect that the Products do not infringe the Solaia Patent,
which opinion shall be addressed to USDATA and Purchaser. USDATA confirms
that preliminary analysis was done by its counsel that supports such
conclusion and that will facilitate the issuance of such opinion.
5.16. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT
5.16.1. USDATA shall take all action necessary in accordance with its
Certificate of Incorporation, By laws or any other constitutive documents,
Applicable Law and applicable stock exchange rules to obtain the approval
of the stockholders of USDATA of this Agreement and the Asset Purchase.
Subject to Section 5.7 hereof, the Board shall recommend that USDATA's
stockholders vote to approve this Agreement and the Asset Purchase
contemplated hereby, and, if USDATA shall obtain such stockholder approval
by convening a stockholders meeting, it shall use its reasonable best
efforts to solicit from the stockholders proxies in favor of the approval
of this Agreement and the Asset Purchase contemplated hereby.
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5.16.2. In the event that USDATA obtains the stockholder approval
contemplated by Section 5.16.1 through a stockholders meeting then if
required by Applicable Law or applicable stock exchange rules, USDATA shall
prepare a proxy statement and file it with the SEC as promptly as
practicable after such determination to convene a meeting is made by
USDATA. As promptly as practicable after it has been filed with the SEC,
USDATA shall mail the proxy statement to its stockholders as of the record
date for the stockholder meeting.
5.16.3. To the extent applicable, USDATA shall as promptly as practicable
notify Purchaser of the receipt of any comments from the SEC relating to
the proxy statement and any request by the SEC for any amendment to the
proxy statement or for additional information. All filings by USDATA with
the SEC in connection with the transactions contemplated hereby, if any,
including the proxy statement, shall be subject to the prior review of
Purchaser, and all mailings to USDATA's stockholders in connection with the
transactions contemplated by this Agreement shall be subject to the prior
review of Purchaser.
5.17. PUBLIC ANNOUNCEMENTS
No press release or announcement concerning the transactions contemplated hereby
will be issued by any Seller without the prior consent of Purchaser or by
Purchaser without the prior consent of USDATA, except as such release or
announcement may be required by Law, in which case the Person required to make
the release or announcement will allow the Person whose consent would otherwise
be required reasonable time to comment on such release or announcement in
advance of such issuance.
5.18. POST-CLOSING ASSISTANCE OF HIRED EMPLOYEES
For the six month period beginning on the Closing, Purchaser shall provide to
Sellers the services of any Hired Employee (as such term is defined below)
requested by USDATA to assist Sellers in connection with activities related to
Sellers' liquidation and dissolution; provided however, that the aggregate hours
of service that Purchaser shall be obligated to provide pursuant to this Section
5.18 shall be no more than ten (10) hours per week in the aggregate. The
provision of such services shall be at no charge to Sellers, however Sellers
shall bear all costs and expenses with respect to such services.
5.19. CERTAIN TAX MATTERS
The parties shall, and shall cause all of their wholly-owned subsidiaries to,
properly file all Tax Returns consistent with the treatment of the Asset
Purchase as a "reorganization" within the meaning of Section 368 of the Code.
Purchaser will notify USDATA and SCP upon (i) a disposition by Purchaser of the
stock of the Purchasing Subsidiary within the meaning of Treasury Regulation
Section 1.367(a)-8(e)(1) or Treasury Regulation Section 1.367(a)-8(e)(2) or (ii)
a disposition by Purchaser of substantially all of the Acquired Assets within
the meaning of Treasury Regulation Section 1.367(a)-8(e)(3); provided, however,
that no such notice shall be required if such disposition occurs more than five
years following the Closing.
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5.20. PAYMENT OF PROLINK AMOUNT
USDATA undertakes to pay the Prolink Amount to Prolink at such time that such
amount is due in accordance with the Prolink Agreement.
6. EMPLOYEE MATTERS
6.1. EMPLOYMENT OFFERS
6.1.1. Purchaser shall determine the Current Employees to whom Purchaser
will offer employment, effective as of the Closing and thereafter (each
such offer, an "EMPLOYMENT OFFER" and each such Current Employee or
consultant shall be referred to herein as the "ASSUMED EMPLOYEE").
Purchaser shall provide to USDATA a written list of the Assumed Employees
to whom Employment Offers shall be made within thirty days after the date
hereof which list shall include at least 80% of the Current Employees. Each
Employment Offer (a) shall be made on terms and conditions that are
substantially similar to the terms and conditions offered to similarly
situated employees of the relevant Subsidiary of Purchaser, except that
salaries offered to the Assumed Employees shall be no less than the
salaries paid to them under their current employment terms with USDATA and
its Subsidiaries, (b) will not require that any Assumed Employee work in a
different location from where he/she is currently working, and (c)
Purchaser will not, prior to the Closing, take any action that contradicts
or materially amends any Employment Offer. Without limitation, Purchaser is
not required to grant any stock options or other equity based incentives to
the Assumed Employees and it will be free to determine the type and amount,
if any, of any such benefits offered to any Assumed Employee, if at all.
Each Assumed Employee who accepts an Employment Offer and who actually
becomes employed by Purchaser or any of its Subsidiaries in accordance with
such offer is referred to herein as a "HIRED EMPLOYEE." USDATA and its
Subsidiaries shall cooperate with and use their reasonable efforts to
assist Purchaser in its efforts to secure satisfactory employment
arrangements with the Assumed Employees. The "COMMENCEMENT DATE" for all
Hired Employees shall be the Closing Date, except with respect to those
Assumed Employees who (A) are, as of the Closing Date, on short-term
disability, in which case the Commencement Date shall be the date upon
which such an Assumed Employee is able to and does commence active duty
with Purchaser or (B) Purchaser and Sellers have agreed will have a later
Commencement Date.
6.1.2. Nothing in the employment or other agreements between any employees
or consultants referred to in this Section 6.1 and USDATA or any of its
Subsidiaries shall: (i) limit or restrict such employee or consultant from
serving as employees or consultant of the Purchaser or any of its
Subsidiaries; and (ii) as of the Closing, the Hired Employees or any other
employee or consultant subsequently employed or engaged by the Purchaser
shall be relieved and released from the confidentiality and non-compete
obligations owed to USDATA or any of its Subsidiaries to the extent
required to perform the obligations and duties under their respective
employment or engagement agreements with the Purchaser.
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6.2. BENEFITS.
On and after the Commencement Date, Purchaser shall cause each Hired Employee to
receive full credit for all prior service with USDATA or any of its Subsidiaries
for purposes of determining any benefits to be received by such Hired Employee
to the extent that service or length of employment is an applicable factor for
determining benefits under any benefit plan of Purchaser. Purchaser shall not be
required to make any contributions to any Employee Plans of USDATA or any
Subsidiary that were previously due by USDATA or any of its Subsidiaries but
were not duly fulfilled. Except as provided in this Section 6.2, nothing in
this Agreement shall be construed to require Purchaser to continue any Employee
Plan or Employee Agreement or to prevent amendment, modification or termination
of the current terms of employment of any Current Employee after the Closing.
Purchaser agrees, to the extent practicable, to facilitate a rollover of the
account balances and related liabilities of the Hired Employees from the tax
qualified defined contribution plan maintained by USDATA (the "SELLER QUALIFIED
PLAN") to a tax-qualified defined contribution plan maintained by Purchaser (the
"PURCHASER QUALIFIED PLAN"), if any. Purchaser shall take reasonable actions
with respect to the Purchaser Qualified Plan to permit the Hired Employees to
roll over any outstanding loan notes that comprise in whole or in part any such
account balances to be distributed from the Seller Qualified Plan and rolled
over to the Purchaser Qualified Plan.
6.3. CERTAIN EMPLOYEE LIABILITIES
Sellers shall be solely responsible for (A) claims of Hired Employees and their
eligible beneficiaries and dependents for workers compensation and unemployment
compensation and claims under Seller Welfare Plans that are incurred before the
Commencement Date and (B) claims relating to COBRA coverage, or similar
statutory requirements in non-U.S. jurisdictions, attributable to "qualifying
events" occurring on or before the Commencement Date with respect to any Hired
Employees and their eligible beneficiaries and dependents. Purchaser shall be
solely responsible for (A) claims of Hired Employees and their eligible
beneficiaries and dependents for workers compensation and unemployment
compensation and claims under Purchaser Welfare Plans that are incurred on or
after Commencement Date and (B) claims relating to COBRA coverage, or similar
statutory requirements in non-U.S. jurisdictions, attributable to "qualifying
events" occurring after the Commencement Date with respect to Hired Employees
and their beneficiaries and dependents.
6.4. OBLIGATION FOR SEVERANCE PAYMENTS
The Purchaser shall be responsible for any severance or other obligation that
becomes payable to or due to any Current Employee as a result of a termination
of employment on or after the Closing Date solely to the extent of the amounts
required under Applicable Laws relevant to such Current Employees or as set
forth in SECTION 6.4 OF THE DISCLOSURE SCHEDULE. Notwithstanding the foregoing,
in the event that as a result of termination of employment any Current Employee
is entitled to any benefit or payment from an Employee Plan of USDATA or its
Subsidiaries, then Purchaser shall not be responsible to make such benefit or
payment and USDATA undertakes to cause such Employee Plan to make the benefit or
payment to the relevant Current Employee, except for payments to three
executives under clause (ix) of Exhibit 1.1(B).
7. CONDITIONS TO CLOSING
7.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE CLOSING
The respective obligations of each party hereto to effect the Closing are
subject to the satisfaction or waiver at or prior to the Closing Date of the
following conditions:
7.1.1. no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
Israeli, United States federal or state or foreign court or any Israeli,
United States federal or state or foreign Governmental Authority that
prohibits, restrains, enjoins or restricts the consummation of the Closing;
and
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7.1.2. any Governmental Authorities' notices, consents, approvals or other
requirements necessary to consummate the transactions contemplated hereby
shall have been given, obtained or complied with, as applicable.
7.2. CONDITIONS TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing, of each of the following conditions:
7.2.1. the representations and warranties of the Purchaser contained in
Section 4 shall be true and correct in all material respects as of the
date hereof and as of the Closing as though restated on and as of such
date, provided that solely for the purpose of this Section 7.2.1 any
inaccuracies in such representations and warranties shall be disregarded if
all such inaccuracies considered collectively do not constitute a Purchaser
Material Adverse Effect (it being understood that any materiality
qualification contained in such representations and warranties shall be
disregarded for this purpose). The foregoing shall not be in limitation of
any rights and remedies that the Sellers may have with respect to any such
inaccuracies whether or not they constitute a Purchaser Material Adverse
Effect;
7.2.2. the covenants contained in this Agreement to be complied with by the
Purchaser on or before the Closing (including, without limitation, all
obligations which Purchaser would be required to perform at the Closing if
the transactions contemplated hereby were consummated) shall have been
complied with in all material respects;
7.2.3. the stockholders of USDATA shall have approved the Asset Purchase in
accordance with Applicable Law and the USDATA's certificate of
incorporation and bylaws; and
7.2.4. Purchaser and SCP shall have entered into the Registration Rights
Agreement.
7.2.5. there shall be no action, suit, proceeding or investigation by or
before any court, administrative agency or other Governmental Authority, to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement, or which may affect the right of the Sellers to sell, transfer
or assign to the Purchaser, or the right of the Purchaser to purchase and
assume, the Assets or any material portion thereof, at the Closing, which
has not been initiated by the Sellers or their Affiliates, family members,
representatives or any party acting in concert with any of the foregoing.
7.3. CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing, of each of the following conditions:
7.3.1. the representations and warranties of Sellers contained in Section
3 shall be true and correct in all material respects as of the date hereof
and as of the Closing as though restated on and as of such date, provided
that solely for the purpose of this Section 7.3.1 any inaccuracies in such
representations and warranties as of the Closing Date shall be disregarded
if all such inaccuracies, considered collectively, do not constitute a
Material Adverse Effect (it being understood that any materiality
qualification contained in such representations and warranties shall be
disregarded for this purpose). The foregoing shall not be in limitation of
any rights and remedies, including under Section 9 hereof, that the
Purchaser may have with respect to any such inaccuracies whether or not
they constitute a Material Adverse Effect;
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7.3.2. the covenants and obligations contained in this Agreement to be
complied with by Sellers on or before the Closing (including, without
limitation, all obligations which Sellers would be required to perform at
the Closing if the transactions contemplated hereby were consummated) shall
have been complied with in all material respects;
7.3.3. there shall be no action, suit, proceeding or investigation by or
before any court, administrative agency or other Governmental Authority, to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement, or which may affect the right of the Sellers to sell, transfer
or assign to the Purchaser, or the right of the Purchaser to purchase and
assume, the Assets or any material portion thereof, at the Closing, which
has not been initiated by the Purchaser or its Affiliates, family members,
representatives or any party acting in concert with any of the foregoing.
7.3.4. Purchaser, Phoenix Management Services, Inc. and ▇▇▇▇▇ ▇. Fleet
shall have entered into an agreement under which the services of Mr. Fleet
as interim CEO of USDATA are secured for a period of at least 6 months
after the Closing on terms and conditions set forth in Exhibit 7.3.4
hereof;
7.3.5. not less than (a) 90% of the Assumed Employees in the areas of
research and development and sales, (b) 75% of the Assumed Employees in the
areas of administrative and other operations, and (c) certain key employees
agreed upon in writing between USDATA and Purchaser shall have agreed in
writing to become employees of Purchaser or any of its Subsidiaries on
terms offered by Purchaser which shall include a waiver of claims for
certain rights and benefits arising from their employment by USDATA or its
Subsidiaries in the form of the Release set forth on EXHIBIT 7.3.5 and
certain other terms agreed upon in writing between Purchaser and USDATA;
7.3.6. the Sellers shall have obtained, in accordance with this Agreement,
at or prior to the Closing the consents, approvals, authorizations and
permits from any Governmental Authorities or any other Person required to
consummate the transactions contemplated by this Agreement set forth on
EXHIBIT 7.3.6 hereto and such approvals, authorizations and permits shall
have been reasonably satisfactory to Purchaser;
7.3.7. the closing under the Share Purchase Agreement between SCP and
Purchaser in the form of EXHIBIT 7.3.7, dated the date hereof, shall have
taken place in accordance with its terms (the "SHARE PURCHASE AGREEMENT");
7.3.8. SCP and USDATA shall have executed the Escrow Agreement as a party
thereto and shall have executed and delivered the Indemnification Agreement
in the form of EXHIBIT 7.3.8 hereto (the "INDEMNIFICATION Agreement");
7.3.9. the adjustments under Section 2.9 shall have been completed subject
to any provisions included therein that allow for Closing prior to the
completion of such adjustment;
7.3.10. USDATA shall have entered into an agreement with ▇▇▇▇▇▇▇▇▇
Automation S.A.S. substantially in the form of the draft Amendment No. 3 to
the Supplier Software Agreement SSA-USD-090700 delivered to Purchaser and
attached hereto as Exhibit 7.3.10, with such changes that are not material
in nature.
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7.3.11. the Non Exclusive License Agreement, dated July 28, 2003 between
USDATA and Rockwell in the form of EXHIBIT B hereto, and the
indemnification obligations under Exhibit A thereto, shall have become
effective.
7.3.12. Purchaser shall have received an opinion from counsel elected by
Purchaser, at Purchaser's own expense, stating that the issuance and sale
of the Consideration Shares is exempt from the registration and prospectus
delivery requirements of the Securities Act.
8. TERMINATION, AMENDMENT AND WAIVER
8.1. TERMINATION
Without limitation of the rights of termination under Law, this Agreement
may be terminated at any time prior to the Closing:
8.1.1. by the mutual written consent of the Sellers and the Purchaser;
8.1.2. by either Sellers or Purchaser, if all conditions to consummation of
the Closing shall not have been satisfied or waived on or before November
30, 2003, other than as a result of a breach of this Agreement by the
terminating party; PROVIDED, HOWEVER, the Purchaser may, at its sole
option, by written notice to the Sellers cause such date to be extended to
a later date not later than March 1, 2004;
8.1.3. by Purchaser if (i) there has been a breach by any Seller of its
respective representations, warranties, covenants or agreements set forth
in this Agreement if, as a result of such breach, the conditions set forth
in Sections 7.1 or 7.3 would not be satisfied, and Sellers, as the case
may be, fail to cure such breach within 20 Business Days after written
notice thereof from Purchaser (except that no cure period shall be provided
for any breach by a Seller which by its nature cannot be cured), or (ii)
USDATA shall have convened a meeting of its stockholders to vote upon the
approval of the transactions contemplated hereby in accordance with this
Agreement and shall have failed to obtain the requisite vote for approval
at such meeting (including any adjournments thereof), or (iii) the
stockholders of USDATA shall have approved a Superior Transaction, or (iv)
USDATA shall have ceased using best efforts to obtain the stockholder
approval of the transactions contemplated hereby as required under Section
5.16 hereof, provided that if USDATA pursues stockholder approval through
the solicitation of written consent in lieu of a meeting, USDATA shall be
deemed to have used its best efforts if such consent solicitation occurs
prior to September 30, 2003;
8.1.4. by Purchaser, if the Board of USDATA withdraws, modifies or changes
its recommendation of this Agreement or the Asset Purchase after receiving
a Superior Proposal;
8.1.5. by Sellers, if there has been a breach by Purchaser of any of its
respective representations, warranties, covenants or agreements set forth
in this Agreement if, as a result of such breach, the conditions set forth
in Sections 7.1 or 7.2 would not be satisfied, and Purchaser fails to
cure such breach within 20 Business Days after written notice thereof from
Sellers (except that no cure period shall be provided for any breach by
Purchaser which by its nature cannot be cured);
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8.1.6. by USDATA, if the Board of USDATA withdraws, modifies or changes its
recommendation of this Agreement or the Asset Purchase after receiving a
Superior Proposal and complying with the requirements of Section
5.7.1(A)-(C), provided, however, that any termination of this Agreement by
USDATA pursuant to this Section 8.1.6 shall not be effective until USDATA
has made payment of the full termination fee required by Section 8.4
hereof; and
8.1.7. by Sellers or Purchaser if (i) a statute, rule, regulation or
executive order shall have been enacted, entered or promulgated prohibiting
the consummation of the Closing substantially on the terms contemplated
hereby or (ii) an order, decree, ruling or injunction shall have been
entered permanently restraining, enjoining or otherwise prohibiting the
consummation of the Closing substantially on the terms contemplated hereby
and such order, decree, ruling or injunction shall have become final and
non-appealable; provided, that the party seeking to terminate this
Agreement pursuant to this Section 8.17 shall have used its reasonable best
efforts to remove such injunction, order or decree.
8.2. EFFECT OF TERMINATION
In the event of the termination and abandonment of this Agreement pursuant to
and in accordance with the provisions of Section 8.1 hereof, this Agreement
shall become void and have no effect, without any liability on the part of any
party hereto (or its stockholders or controlling persons or directors or
officers), except (i) the provisions of Section 8.4 shall survive such
termination and abandonment and (ii) neither party shall be released or relieved
from any liability arising from the breach by such party of any of its
representations, warranties, covenants or agreements as set forth in this
Agreement.
8.3. WAIVER
At any time prior to the Closing, any party may (i) extend the time for the
performance of any of the obligations or other acts to be performed by any other
party hereto on his behalf, (ii) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto or
(iii) waive compliance with any of the agreements or conditions contained
herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party to be bound thereby.
8.4. EXPENSE ON TERMINATION
If this Agreement is terminated pursuant to and in accordance with the
provisions of Section 8.1.3 (iii), Section 8.1.3 (iv), Section 8.1.4 or
Section 8.1.6, then in each such event, USDATA shall pay to Purchaser
simultaneously with termination by Seller or within two Business Days of
termination by Purchaser (by wire transfer of immediately available funds to an
account designated by Purchaser for such purpose), a fee (the "TERMINATION FEE")
in an amount equal to US$500,000.
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9. INDEMNIFICATION
9.1. GENERAL
The Parties have the right to rely fully upon all representations and warranties
of the other party contained in this Agreement, including any schedule attached
hereto, or any ancillary agreement executed and delivered in connection with the
Agreement. The right of the Purchaser (and any other Indemnified Party) to be
indemnified upon a breach of any of the representations and warranties contained
herein under this Section 9 is regardless of, and shall not be limited to as a
result of, any due diligence investigation, which was conducted or that could
have been conducted by any party hereto.
9.2. INDEMNIFICATION BY USDATA
From and after the Closing, USDATA shall indemnify and hold the Purchaser, its
Affiliates, officers, directors, shareholders, agents, representatives and
advisors (collectively, the "INDEMNIFIED PARTIES") harmless from and against,
and agree to promptly defend any Indemnified Party from and reimburse any
Indemnified Party for, any and all Losses, at such time that they are incurred,
which such Indemnified Party may at any time suffer or incur, or become subject
to, directly or indirectly, as a result of, in connection with or relating to:
9.2.1. any inaccuracy in, or breach of any representations and warranties
made by any Seller in this Agreement;
9.2.2. any failure by any of the Sellers to carry out, perform, satisfy and
discharge any of their covenants, agreements, undertakings, liabilities or
obligations under this Agreement; and
9.2.3. any Excluded Assets and any Excluded Liability (whether absolute,
accrued, contingent or otherwise) existing prior to or after the Closing or
arising out of facts or circumstances related to the Excluded Asset or
Excluded Liability, existing prior to or after the Closing, whether or not
such liabilities, obligations or claims were known at the time of the
Closing and whether or not it is ultimately determined that such
liabilities are owed by USDATA or its Subsidiaries.
9.3. NOTIFICATION OF CLAIMS
9.3.1. The Indemnified Party shall as soon as possible notify USDATA, being
the party liable for such indemnification (the "INDEMNIFYING PARTY") and
SCP in writing of any claim or demand made by a third party which the
Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement, provided however that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party shall
relieve the Indemnifying Party from any liability or obligation hereunder
unless and solely to the extent that the Indemnifying Party is materially
damaged thereby.
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9.3.2. The Indemnifying Party shall have the right to employ counsel
reasonably acceptable to the Indemnified Party to actively, diligently and
efficiently defend any such claim or demand asserted against the
Indemnified Party; PROVIDED that such counsel has no conflict of interest,
and in the event that a conflict of interests exists, the Indemnifying
Party shall bear the fees and expenses of the attorney retained by the
Indemnified Party due to such conflict. Subject to the previous sentence,
the Indemnified Party shall have the right to participate in (but not
control) the defense of any such claim or demand at its own expense. The
Indemnifying Party shall notify the Indemnified Party in writing, within
five (5) days after the date of the notice of claim given by the
Indemnified Party to the Indemnifying Party under Section 9.3 of its
election to defend in good faith any such third party's claim or demand.
The Indemnifying Party shall not settle or compromise any such claim or
demand unless such settlement contains a complete discharge of any
liability of the Indemnified Parties under such claim or demand. The
Indemnified Party shall make available to the Indemnifying Party or its
agents, all records and other material in the Indemnified Party's
possession reasonably required by it for its use in contesting any third
party claim or demand. If any injunction or other equitable relief is
entered against an Indemnified Party during the course of a claim for which
Indemnifying Party assumed the defense and such injunction or equitable
relief is not removed within ten (10) days then the Indemnified Party may
assume control of the defense of such claim and may, in its discretion
consent to the entry of any judgment or enter into any settlement with
respect to such claim and the Indemnifying Party will remain responsible
for any Losses of the Indemnified Parties which arise from such claim and
which are otherwise subject to indemnity hereunder.
9.4. PROCEDURES FOR INDEMNIFICATION
9.4.1. If any Indemnified Party determines in good faith that it is
entitled to indemnification pursuant to this Section 9 and such
Indemnified Party desires to seek an indemnification claim hereunder, the
Indemnified Party shall give to the Indemnifying Party and the Escrow Agent
a written notice with respect thereto (a "NOTICE OF CLAIM") setting forth
in reasonable detail the basis for such claim, and specifying the amount of
Losses claimed (which, if not finally determined, may be a good faith
estimate thereof) (the amount of Losses so claimed being hereinafter
referred to as the "INDEMNITY CLAIM AMOUNT").
9.4.2. The Indemnifying Party may, within 15 days after receipt of any
Notice of Claim, object to such Notice of Claim and dispute the claim in
full or any Indemnity Claim Amount set forth in such Notice of Claim by
delivery to the Indemnified Party and the Escrow Agent of written notice of
such dispute (a "DISPUTE NOTICE"), setting forth in reasonable detail the
basis for such dispute and the amount of the Indemnity Claim Amount which
the Indemnifying Party objects to being claimed by the Indemnified Party in
respect of the Notice of Claim.
9.4.3. If the Indemnified Party does not receive a Dispute Notice that
relates to a Notice of Claim within fifteen (15) days after the Indemnified
Party delivers such Notice of Claim, the Escrow Agent will disburse to
Purchaser, on behalf of all the Indemnified Parties, from the Escrow
Consideration Shares a number of shares with a value, based on the Average
Share Price as of the date of disbursement, equal to the Indemnity Claim
Amount specified in such Notice of Claim within three (3) Business Days
after the expiration of such 15-day period. If the Indemnified Party and
the Escrow Agent receive a Dispute Notice that relates to a Notice of Claim
within fifteen (15) days after receipt of such Notice of Claim, the Escrow
Agent (A) will, in respect of such Notice of Claim, disburse to Purchaser,
on behalf of the Indemnified Parties, from the Escrow Consideration Shares
a number of Consideration Shares with a value, based on the Average Share
Price as of the date of disbursement, equal to the portion, if any, of the
Indemnity Claim Amount specified in such Notice of Claim which is not
objected to in such Dispute Notice within three Business Days after the
receipt of such Dispute Notice, and (B) will not disburse to Purchaser from
the Escrow Consideration Shares, any shares in respect of such portion of
the Indemnity Claim Amount which is objected to in such Dispute Notice
unless it has received either a joint notice of release signed by the
Indemnifying Party and the Purchaser directing the Escrow Agent to deliver
Escrow Consideration Shares with a value, based on the Average Share Price
as of the date of delivery of such Escrow Consideration Shares, equal to
all or any portion of such funds, which joint notice the parties agree to
deliver to the Escrow Agent promptly following resolution of such Notice of
Claim, or a final order by a court of competent jurisdiction or an arbitral
award, which order or award is not subject to appeal (a "PURCHASER FINAL
Order"), directing the Escrow Agent to disburse to Purchaser, on behalf of
all the Indemnified Parties, from the Escrow Consideration Shares, shares
with a value, based on the Average Share Price as of the date of delivery
of such Escrow Consideration Shares, equal to an amount set forth in such
Purchaser Final Order.
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9.4.4. In the event that under the terms of the Escrow Agreement any Escrow
Consideration Shares are due to be released from escrow while any dispute
under Section 9.4.4 is pending, the number of Escrow Consideration Shares
to be released from escrow shall be reduced by a number of Escrow
Consideration Shares with a value, based on the Average Share Price as of
the date of release, equal to all Indemnity Claim Amounts pending at such
time that are either subject to dispute or due to be disbursed to the
Purchaser.
9.4.5. If it has been determined that any Indemnified Party is due Escrow
Consideration Shares pursuant to Sections 9.2 and 9.4 hereof, the
Indemnifying Party may elect to pay the value of the applicable Indemnity
Claim Amount (or portion thereof) in immediately available funds (in U.S.
dollars) by wire transfer no later than the date on which release of the
Escrow Consideration Shares for such Indemnity Claim Amount (or portion
thereof) is required. The Indemnifying Party shall provide Purchaser and
the Escrow Agent notice of its election to pay cash no later than five (5)
days prior to the date on which release of Escrow Consideration Shares is
due. If the Indemnifying Party breaches its obligation and does not make
cash payment of such amount on the date so scheduled, Escrow Consideration
Shares for the applicable Indemnity Claim Amount (or portion thereof) shall
be released to Purchaser on the next day in accordance with the provisions
of Section 9.
9.4.6. Prolink Amount Shares will be held in escrow only for the purposes
described in this Section 9.4.6 and shall not serve for indemnification for
any other matter under Section 9.2.1. At such time that USDATA or USDATA
Sub pays any portion of the Prolink Amount in accordance with and at such
time required by the Prolink Agreement, Prolink Amount Shares in an amount
equal to the amount so paid divided by the Average Share Price as of the
date of payment shall be released from escrow to USDATA. In the event that
any Prolink Amount due to be paid to Prolink is not paid by USDATA or
USDATA Sub to Prolink as required under the Prolink Agreement, Prolink
Amount Shares in an amount equal to the amount so defaulted, based on the
Average Share Price as of the date of default will be disbursed to
Purchaser. Notwithstanding anything to the contrary, the Prolink Amount
Shares shall not be released to USDATA or Purchaser other than in
accordance with this Section 9.4.6 and Section 9.4.7. In the event that the
Prolink Amount Shares are not sufficient to indemnify Purchaser for any
default in payment of the Prolink Amount then any excess damages shall be
deemed to be an Excluded Liability. Notwithstanding anything to the
contrary set forth herein, when the Prolink Amount has been paid in full by
USDATA or any Affiliate of USDATA and written evidence of such payment has
been provide to the Escrow Agent and the Purchaser, all Prolink Amount
Shares remaining in escrow shall be released to USDATA.
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9.4.7. At any time as USDATA or USDATA Sub pays a portion of the Prolink
Amount in accordance with and at such time required by the Prolink
Agreement, it shall provide the Escrow Agent and the Purchaser with written
notice with respect thereto which notice shall be deemed a Notice of Claim
under Section 9.4.1. Purchaser may, within 15 days after receipt of any
such notice, dispute such notice and give to USDATA and the Escrow Agent a
written notice with respect thereto which notice shall be deemed a Dispute
Notice under Section 9.4.2. In addition, Purchaser may also provide the
Seller and the Escrow Agent a written notice at any time requesting that
Prolink Amount Shares be disbursed to the Purchaser in accordance with
Section 9.4.6 above, if Purchaser determines in good faith that USDATA or
USDATA Sub is in default under the Prolink Agreement, which notice shall be
deemed a Notice of Claim under Section 9.4.1. and USDATA may, within 15
days after receipt of any such notice, dispute such notice and give to the
Purchaser and the Escrow Agent a written notice with respect thereto which
notice shall be deemed a Dispute Notice under Section 9.4.2. All such
notices and disputes with respect to the Prolink Amount Shares shall be
dealt with in the same manner provided for in Section 9.4.1 through 9.4.4,
mutatis mutandis.
9.5. LIMITS ON INDEMNIFICATION UNDER SECTION 9.2.1
9.5.1. Except as set forth below, all claims of the Indemnified Parties for
indemnification under Section 9.2.1 that are resolved in favor of the
Indemnified Parties shall be payable from the Escrow Consideration Shares
until no Escrow Consideration Shares remain on deposit with the Escrow
Agent. Following the time when such Escrow Consideration Shares are fully
depleted, then with respect to claims under Section 9.2.1, Indemnified
Parties may continue to pursue any unresolved Indemnity Claim Amounts
against the Sellers solely with respect to any Excluded Liabilities and any
claims of fraud, and the indemnification for such matters may be paid in
cash or Consideration Shares. Notwithstanding the foregoing, with respect
to any indemnification claims under Section 9.2.1 relating to breaches or
inaccuracies in the representations included in Section 3.18, then,
regardless of the reduction or depletion of the escrow, the Indemnifying
Party shall continue to be liable for indemnification under Section 9.2.1
up to an amount which shall not exceed 20% of the Consideration Shares that
may be paid either in cash or in Consideration Shares.
9.5.2. No indemnification shall be payable by the Indemnifying Party to any
Indemnified Party with respect to any claims pursuant to Section 9.2.1
(except with respect to any claims for Excluded Liabilities and any claims
of fraud, and except with respect to breaches of or inaccuracies in a
representation included in Section 3.18) if the aggregate amount of Losses
already paid by the Indemnifying Party pursuant to indemnification claims
under Section 9.2.1 exceeds the total amount of the Escrow Consideration
Shares. No indemnification shall be payable by the Indemnifying Party to
any Indemnified Party with respect to any claims pursuant to Section 9.2.1
for Excluded Liabilities and any claims of fraud if the aggregate amount of
Losses already paid by the Indemnifying Party pursuant to indemnification
claims under Section 9.2.1 exceeds, at the time of payment of such claim,
the value of the Consideration Shares then held, plus the proceeds received
by USDATA or any holder who receives such Consideration Shares distributed
by USDATA from the sale of any such Consideration Shares to such date.
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9.5.3. No indemnification shall be payable by the Indemnifying Party with
respect to any claims pursuant to Section 9, until the aggregate amount of
Losses actually incurred by the Indemnified Parties with respect to such
claims exceeds US$60,000 in the aggregate, in which event the Indemnifying
Party shall be responsible for the full amount of such Losses from the
first dollar of such Losses.
9.5.4. No indemnification shall be payable by the Indemnifying Party with
respect to any claims pursuant to Section 9.2.1 unless the Notice of Claim
is submitted (i) with respect to any claim relating to breaches of or
inaccuracies in representations included in Section 3.18 within 36 months
after the Closing Date and (ii) with respect to all other matters within 18
months after the Closing Date, except that such limitation shall not apply
with respect to any Excluded Liabilities and any claims of fraud.
9.6. REMEDIES EXCLUSIVE.
Except as set forth in Section 5.10 hereof and except for specific performance
and any other equitable remedies, the parties hereto acknowledge and agree that
the indemnification provisions of this Section 9 shall be the exclusive remedies
of the Purchaser with respect to the transactions contemplated by this Agreement
and the Purchaser agrees that it will not exercise any other remedy.
10. GENERAL PROVISIONS
10.1. EXPENSES
Except as otherwise provided, the parties shall bear their respective direct and
indirect expenses incurred in connection with the negotiation, preparation,
execution and performance of this Agreement and the transaction contemplated
hereby. For the avoidance of doubt, such expenses incurred by Sellers shall be
deemed to be Excluded Liabilities.
10.2. MISCELLANEOUS TAX MATTERS
10.2.1. USDATA shall be liable for any real property transfer or gains,
sales, use, transfer, value added, consumption, goods and services, stock
transfer, stamp duties, and any similar taxes, duties, registration charges
or other like charges which become payable in connection with the
transactions contemplated hereby, other than stamp tax with respect to the
issuance of the Consideration Shares which shall be borne by the Purchaser,
if applicable, and the parties shall file such applications and documents
as shall permit any such Tax to be assessed and paid in accordance with any
Applicable Law.
10.2.2. Except as otherwise provided in this Agreement, as among the
parties hereto, the Sellers and the Purchaser will each be responsible for
its own income and franchise Taxes, if any, arising from the transactions
contemplated by this Agreement.
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10.3. NOTICES
All notices, requests, claims, demands and other communications hereunder shall
be in writing and shall be given or made by delivery in person (and shall be
deemed to have been duly given upon such delivery), by overnight courier service
(and shall be deemed to have been duly given two days after delivery to the
courier service), by facsimile (and shall be deemed to have been duly given
after transmission in full with electronic confirmation of transmission if
delivered during recipient's business hours), or by registered or certified mail
(postage prepaid, return receipt requested) (and shall be deemed to have been
duly given five days after delivery to the mail service) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.3):
10.3.1. if to USDATA:
USDATA Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
10.3.2 if to Purchaser:
Tecnomatix Technologies Ltd.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Fax: ▇▇▇-▇-▇▇▇▇▇▇▇
Attention: Legal Counsel
With a copy to:
Meitar, Liquornik, Geva & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇) ▇▇▇-▇▇▇▇
or such other address with respect to a party as such party shall notify
each other party in writing as above provided.
10.4. HEADINGS
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
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10.5. SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any applicable law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not fundamentally changed. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
10.6. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral, between the parties hereto with respect to
the subject matter hereof.
10.7. ASSIGNMENT
Except as otherwise expressly limited herein, the provisions hereof shall inure
to the benefit of, and be binding upon, the successors, assigns, heirs,
executors, and administrators of the parties hereto. None of the rights,
privileges, or obligations set forth in, arising under, or created by this
Agreement may be assigned or transferred without the prior consent in writing of
the Purchaser and USDATA, with the exception of assignments and transfers, of
any or all of the foregoing, from the Purchaser to any one or more of its
Subsidiaries and also with the exception of any assignment of an Acquired Asset
by Purchaser after the Closing. Any transfer or assignment in violation of this
Section 10.7 shall be null and void.
10.8. NO THIRD-PARTY BENEFICIARIES
Except as provided in Article 9, this Agreement is for the sole benefit of the
parties hereto and their permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any other Person or entity any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
10.9. AMENDMENT
This Agreement may not be amended or modified except by an instrument in writing
signed by the Purchaser and USDATA.
10.10. SECTIONS AND SCHEDULES
Any disclosure with respect to a Section or Schedule of this Agreement shall be
deemed to be disclosure for all other Sections and Schedules of this Agreement.
10.11. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with, the Laws
of the State of Delaware, United States of America, without regard to the
conflict of laws provisions thereof, and any dispute with respect to this
Agreement or its execution, binding effect, performance or interpretation shall
be adjudicated solely in the Courts of the State of Delaware, United States of
America. Each party to this Agreement:
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10.11.1. expressly and irrevocably consents and submits to the exclusive
jurisdiction of each court located in the State of Delaware, United States
of America in connection with any such legal proceeding, including to
enforce any settlement, order or award;
10.11.2. agrees that each court located in the State of Delaware, United
States of America shall be deemed to be a convenient forum;
10.11.3. waives and agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any court located in
the State of Delaware, United States of America, any claim that such party
is not subject personally to the jurisdiction of such court, that such
legal proceeding has been brought in any inconvenient forum, that the venue
of such proceeding is improper or that this Agreement or the subject matter
hereof or thereof may not be enforced in or by such court; and
10.11.4. each party hereto agrees to the entry of an order to enforce any
resolution, settlement, order or award made pursuant to this Section 10.11
by the courts located in the State of Delaware, United States of America
and in connection therewith hereby waives, and agrees not to assert by way
of motion, as a defense or otherwise, any claim that such resolution,
settlement, order or award is inconsistent with or violative of the laws or
public policy of the laws of the State of Delaware, United States of
America or any other jurisdiction
10.12. COUNTERPARTS
This Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
[intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Asset Purchase Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
USDATA CORPORATION
By:________________________________
Name:
Title:
UNITED STATES DATA CORPORATION
By:________________________________
Name:
Title:
USDATA INTERNATIONAL SOLUTIONS, INC.
By:________________________________
Name:
Title:
USDATA INTERNATIONAL, INC.
By:________________________________
Name:
Title:
TECNOMATIX TECHNOLOGIES LTD.
By:________________________________
Name:
Title:
TECNOMATIX TECHNOLOGIES, INC.
By:________________________________
Name:
Title:
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