Exhibit 10.5
ASSET PURCHASE AGREEMENT
Asset Purchase Agreement (this "Agreement") by and among
Ultimate Investors Group, Inc., a Texas corporation ("Assignor"), The Ultimate
Software Group, Inc., a Delaware corporation (the "Company") and the principals
whose names appear on the signature page hereto (the "Principals"), dated as of
March 4, 1998.
WHEREAS, Assignor entered into the Exclusive Reseller
Agreement (the "Reseller Agreement") dated July 13, 1994 with The Ultimate
Software Group, Ltd. (the "Partnership"), the assets and liabilities of which
were subsequently assigned to and assumed by the Company;
WHEREAS, Assignor desires to assign and transfer to the
Company, and the Company desires to assume from Assignor, certain business
assets and liabilities of Assignor pursuant to the terms hereof;
WHEREAS, the transactions contemplated hereby are intended to
be treated as a pooling of interests business combination by the Company for
financial accounting purposes;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Assignment. Subject to the terms hereof, Assignor, upon
the Closing Date (as defined below), shall sell, assign, convey, transfer and
deliver to the Company all right, title, benefits and interest in the assets
described on Schedule I hereto (the "Assets") and deliver bills of sale and
assignment documents in form and substance satisfactory to the Company with
respect to such Assets in exchange for (i) the assumption by the Company of
Assignor's obligations, duties and liabilities described on Schedule II hereto
(the "Assumed Liabilities") and (ii) 38,000 shares (the "Shares") of Class B
Common Stock of the Company.
2. Reseller Agreement. Each of the parties hereto agrees
that because the Reseller Agreement is among the Assets being sold to the
Company hereunder, any rights of Assignor and its affiliates arising
thereunder shall terminate on the Closing Date.
3. Representations and Warranties of the Company.
The Company hereby represents and warrants to and agrees with Assignor
as follows:
(a) Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
power and authority to carry on its business as now conducted and as
proposed to be conducted, and the Company
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has all requisite power and authority to enter into and perform this
Agreement and the transactions contemplated hereby.
(b) Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the
performance of all obligations of the Company hereunder and the
authorization, issuance (or reservation for issuance) and delivery of
the Shares and any interest therein has been taken or will be taken
prior to the Closing Date.
(c) Valid Issuance of Shares. The Shares, when issued and
delivered in accordance with the terms hereof, (i) will be duly and
validly issued, fully paid and nonassessable, (ii) will be free of any
pledges, liens, security interests, claims or other encumbrances of
any kind, and (iii) will be issued in compliance with all applicable
federal and state securities laws.
(d) Prospectus. The Company shall provide Assignor with the
preliminary and final prospectuses with respect to its proposed
initial public offering of common stock and any amendments thereto,
promptly after the Company's Registration Statement and amendments
thereto containing such prospectuses are filed with the Securities and
Exchange Commission (the "SEC").
(e) Outstanding Options and Warrants. Except as set forth on
Schedule III hereto, there are not outstanding any options, warrants or
agreements for the purchase or acquisition from or by the Company of
any shares of its capital stock.
(f) Anti-Dilution Adjustments. No outstanding options,
warrants or other securities exercisable or convertible into common
stock of the Company require anti-dilution adjustments by reason of the
consummation of the transactions contemplated hereby.
(g) Percentage Interest. As of the Closing Date, the Shares
will represent at least 2.658% of the outstanding capital stock of the
Company on a fully diluted basis determined as if all outstanding
shares of such capital stock had been converted into one class of
common stock of the Company.
(h) Reseller Agreement. To the knowledge of the Company, the
Assignor is not in material breach of any of its obligations under
the Reseller Agreement as of the date hereof.
4. Representations and Warranties of Assignor and the Principals.
Assignor and the Principals hereby jointly and severally represent and warrant
to and agree with the Company as follows:
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(a) Assets. Assignor is or on the Closing Date will
be the legal and beneficial owner of the Assets, free and clear of any
lien, charge, encumbrance or adverse claim, except as set forth on
Schedule II hereto, and has or on the Closing Date will have the legal
authority to transfer the Assets. There are no assets used in, or
necessary for the operation of, the business of Assignor as presently
operated (the "Business") other than (i) the Assets and (ii) $40,000.
The Assets are substantially all of the assets of Assignor.
(b) Liabilities; Litigation. Assignor has no
liabilities known or unknown, fixed or contingent, including
contractual liabilities, other than the Assumed Liabilities and as set
forth in Section 12. There is no pending or threatened action or
proceeding affecting the Assets or the Business before any court,
governmental agency or arbitrator, which may materially adversely
affect the Assets or the Business or which could affect the legality,
validity or enforceability of this Agreement.
(c) Consents; No Conflicts. The execution, delivery
and performance of this Agreement by Assignor and the Principals and
the consummation by Assignor and the Principals of the transactions
contemplated hereby (x) do not contravene (i) Assignor's
organizational documents, (ii) any law or (iii) any contractual
restriction binding on or affecting Assignor or the Principals and (y)
except as set forth on Schedule IV hereto, do not require the consent,
approval, permission or other authorization of any court, arbitrator
or governmental, administrative or self-regulatory authority or
consent under any material lease, license, agreement or other material
instrument of Assignor, the Principals or the Business and (z) do not
require any stockholder, director, partnership or other authorization
or action, other than authorizations that have been duly obtained and
actions that have been duly taken.
(d) Financial Statements. Assignor has delivered to
the Company all of its quarterly financial statements which include
all business activity conducted by its affiliate, Ultimate Software
Group of North Texas, Ltd. ("USG North Texas") for the years ended
December 31, 1996 and December 31, 1997 and, it will, on or before
February 4, 1998, deliver to the Company its financial statements,
which include all business activity conducted by USG North Texas, for
the fiscal year ended December 31, 1995, December 31, 1996 and
December 31, 1997, audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇") (the
"Audited Statements"), and such financial statements do and will
fairly present the financial position and results of operations of the
Assignor and USG North Texas, as combined, as of the dates and for the
periods indicated therein. Such financial statements were and will be
prepared in accordance with generally accepted accounting principles,
consistently applied.
(e) No Brokers. No broker, finder or any other third
party is entitled to any fee or commission in connection with the
transactions contemplated hereby.
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(f) Investor Certificates. Assignor has delivered on
the date hereof a certificate of each shareholder of Assignor in the
form attached hereto as Exhibit A.
(g) Investment Intent. Assignor (i) has such
knowledge, sophistication and experience in business and financial
matters that it is capable of evaluating the merits and risks of an
investment in the Shares and any interest therein, (ii) can bear the
economic risk of an investment in the Shares and any interest therein
for an indefinite period of time and can afford a complete loss of
such investment, and (iii) is acquiring the Shares and any interest
therein for its own account and not with a view to, or for a sale in
connection with, a distribution in violation of any applicable
securities laws of any jurisdiction.
(h) No Registration. Assignor understands that the
offering and the issuance of the Shares have not been and will not be
registered or qualified under the laws of any jurisdiction regarding
the offering or sale of securities, and that the Shares and any
interest therein may not be resold or otherwise transferred by
Assignor unless any such subsequent sale or transfer is duly
registered and qualified under the applicable securities laws or is
exempt from such registration and qualification.
(i) Access to Information. Assignor (i) has been
furnished with, and hereby acknowledges the receipt and review of, (a)
a copy of drafts of the Preliminary Prospectus of the Company dated
December 31, 1997 (the "12/31/97 Draft Prospectus") and February 13,
1998 (the "2/13/98 Draft Prospectus" and together with the 12/31/97
Draft Prospectus, the "Drafts of the Prospectus") and any attachments
thereto, (b) the audited financial statements of the Company for the
fiscal years ended December 31, 1995 and December 31, 1996,
respectively, and (c) unaudited financial statements of the Company as
of and for the period ended September 30, 1997, (ii) has been afforded
the opportunity to obtain such additional information from the Company
and its representatives as Assignor has deemed necessary in order to
evaluate the merits, risks and other considerations relating to an
acquisition of Shares and any interest therein, (iii) fully
understands the risks and other considerations relating to the
investment contemplated hereby, and (iv) with respect to tax, employee
benefits and other financial and economic considerations related to
the investment contemplated hereby, has relied solely on the advice of
Assignor's own professional advisors.
(j) Drafts of the Prospectus. Assignor understands
that (i) the Drafts of the Prospectus are preliminary drafts and that
future drafts may contain material changes from the Drafts of the
Prospectus and (ii) there can be no assurance that an initial public
offering of the Company's stock will be consummated in the near future
or ever or that the Registration Statement filed in connection
therewith will be declared effective by the SEC.
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(k) Assignor Information. All information which
Assignor has heretofore furnished or furnishes herewith to the Company
in connection with the transactions contemplated hereby is correct and
complete in all respects as of the date of this Agreement, and if
there should be any change in such information prior to the
consummation of the transactions contemplated hereby, Assignor will
immediately furnish such revised or corrected information to the
Company.
(l) Schedule of Contracts. Attached hereto as
Schedule V is a true and complete list of all oral and written
contracts and agreements entered into by Assignor through the date
hereof. Complete copies of all such written contracts and complete
descriptions of all such oral contracts have been delivered to the
Company.
(m) Certain Accounting Matters. Assignor has not
taken or agreed to take any action that would prevent the Company
from accounting for the transactions contemplated hereby as a
pooling of interest business combination.
(n) Shareholder Agreements. Assignor acknowledges
that it is the parties' intention that the transactions contemplated
by this Agreement be accounted for as a pooling of interests business
combination and that each of the shareholders of Assignor may be
deemed to be an "affiliate" of Assignor within the meaning of Rule 145
promulgated under the Securities Act. Accordingly, Assignor has
delivered on the date hereof an agreement of each shareholder of
Assignor wherein such shareholder covenants and agrees that he, she or
it will not (i) take any action after the date hereof to cause the
transactions contemplated hereby not to be accountable under the
pooling of interests method of accounting, or (ii) sell, transfer,
pledge, dispose of or otherwise part with any interest in or with
respect to, or in any other manner reduce his, her or its investment
risk with respect to, (A) any shares of capital stock of Assignor at
any time prior to the Closing Date, and (B) any shares of the
Company's stock received by such shareholder in connection with the
transactions contemplated hereby or otherwise until such time as the
Company publishes financial results covering at least 30 days of
combined operations of the Company and Assignor or (iii) from the
Closing Date until six months following the time the Company publishes
financial results covering at least thirty days of combined operations
of the Company and Assignor, directly or indirectly sell or purchase
or enter into any agreement, contract or arrangement to sell or
purchase any put or call options or other derivative securities
(including any short sales) with respect to shares of the Company's
stock or enter into any other agreements, contracts or arrangements
providing for the alteration of such shareholder's investment risk
with respect to any shares of the Company's stock.
(o) Reseller Agreement. To the knowledge of the
Assignor and the Principals, the Company is not in material breach of
any of its obligations under the Reseller Agreement as of the
date hereof.
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(p) Purchaser Representative. ▇▇▇▇▇▇ ▇▇▇▇▇ has
agreed to act as the purchaser representative of any Shareholders who
are not "accredited investors" as defined in Rule 501(a) of Regulation
D promulgated under the Securities Act of 1933, as amended.
5. Securities Laws. Assignor hereby acknowledges and agrees
that:
(a) the Shares must be held indefinitely unless
subsequently registered under the Securities Act and under any
applicable state securities laws or unless an exemption from such
registration is available.
(b) the Shares will not be registered under the
Securities Act on the grounds that the offering and sale thereof
contemplated by this Agreement will be exempt from registration under
the Securities Act, and that the Company's reliance upon such
exemption is predicated upon the representations of Assignor set forth
herein.
(c) "stop transfer" instructions shall be placed
against the Shares on the transfer books of the Company and that the
certificate(s) evidencing the Shares shall bear a legend, in addition
to any legend required by applicable state securities laws, in
substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE DISPOSED OF FOR VALUE UNLESS A REGISTRATION
STATEMENT HAS BECOME EFFECTIVE WITH RESPECT TO SUCH
SECURITIES UNDER THE SECURITIES ACT AND SUCH STATE SECURITIES
LAWS OR IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE CORPORATION THERE IS AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE
APPLICABLE STATE SECURITIES LAWS OR SUCH REGISTRATION IS NOT
OTHERWISE REQUIRED."
6. Due Diligence; Termination. Assignor shall afford any and
all authorized representatives of the Company access, during normal business
hours, to its employees, properties, books, contracts and records and shall
furnish promptly all information concerning its business, properties and
personnel and copies of any of its books, records or contracts as the Company
or its representatives shall request; provided,
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that no investigation pursuant to this Section 6 shall effect or be deemed to
modify any representation or warranty made in this Agreement by Assignor.
7. Closing. Subject to the satisfaction or waiver of the
conditions set forth in Section 9 hereof, consummation of the transactions
contemplated by Section 1 hereof (the "Closing") shall take place at the
offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ on the date hereof or such other date as may be mutually agreed upon
by the parties hereto (the "Closing Date").
8. Covenants.
(a) Interim Operations. Prior to the Closing Date,
unless the Company has consented in writing thereto, which consent
will not be unreasonably withheld, Assignor:
(i) shall conduct its operations according to its usual,
regular and ordinary course in substantially the same
manner as heretofore conducted;
(ii) shall use its reasonable efforts to preserve intact
its business organization and goodwill and maintain
satisfactory relationships with those persons having
business relationships with it;
(iii) shall promptly notify the Company of (x) any
material change in its condition (financial or
otherwise), business, properties, assets,
liabilities or the normal course of its business or
of its properties, (y) any material litigation or
material governmental complaints, investigations or
hearings (or communications indicating that the same
may be contemplated), or (z) the breach of any
representation or warranty contained herein;
(iv) shall not issue any shares of its capital stock or
securities;
(v) shall not (w) incur, create, assume or otherwise
become liable for borrowed money or assume,
guarantee, endorse or otherwise become responsible or
liable for the obligations of any other individual,
corporation or other entity, (x) make any loans or
advances to any other person, except in each case in
the ordinary course of business, (y) acquire
(including, without limitation, for cash or shares of
stock, by merger, consolidation, or acquisition of
stock or assets) any interest in any corporation,
partnership or other business organization or
division thereof or any assets, or make any
investment either by purchase of stock or securities,
contributions of capital or property transfer or,
except in the ordinary course of business, consistent
with past practice, purchase any property or assets
of any other person or (z) effect a sale or
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other disposition of any of the Assets or allow the
creation of any lien or encumbrance thereon;
(vi) shall not (x) declare, set aside or pay any dividend
or make any other distribution or payment with
respect to any shares of its capital stock or other
ownership interests or (y) directly or indirectly
redeem, purchase or otherwise acquire any shares of
its capital stock or make any commitment for any
such action;
(vii) shall not amend or otherwise change its articles of
incorporation or bylaws or equivalent organizational
documents
(viii) shall not increase the compensation payable or to
become payable to its officers or employees, pay any
employment related or other bonus to its
shareholder, or, except as presently bound to do,
grant any severance or termination pay to, or enter
into any employment or severance agreement with, any
of its directors, officers or other employees;
(ix) shall not take any action other than in the ordinary
course of business and in a manner consistent with
past practice with respect to accounting policies or
procedures; and
(x) shall not agree, in writing or otherwise, to take
any of the foregoing actions or take any action
which would make any representation or warranty in
this Agreement untrue or incorrect as of the Closing
Date.
(b) Trading in Company Stock. Except as otherwise
expressly consented to by the Company, from the date of this Agreement
until the Closing Date, Assignor will not directly or indirectly
purchase or sell (including short sales) any shares of the Company's
stock, or sell, transfer, pledge, dispose of or otherwise part with
any interest in or with respect to or in any other manner reduce its
investment risk with respect to any shares of the Company's stock to
be received pursuant to this Agreement.
(c) Confidentiality of Prospectus. Assignor
acknowledges and agrees that the Drafts of the Prospectus are highly
confidential, that they may not be photocopied, distributed or
otherwise communicated to persons other than Assignor and that upon
receipt by Assignor of a preliminary or final prospectus of the
Company, the 12/31/97 Draft Prospectus will be returned to the
Company.
(d) Custom Applications. Assignor shall provide on
the date hereof a Schedule VI which lists, by customer, all custom
applications, including, without limitation, custom programs, modules
and interfaces (other than software purchased by Assignor from the
Company) ("Custom Applications"), which have
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been provided to any customer of the Assignor. Assignor shall provide
source code with respect to all Custom Applications on or before the
Closing Date.
(e) Assignor's Name. From and after the Closing,
Assignor shall not use the name "The Ultimate Software Group" or any
expression containing the word "Ultimate" or "US Group" or expression
similar thereto or derivative in whole or in part therefrom. As
promptly as practicable (and in any event within thirty days)
following the Closing, Assignor will change its name to a name
complying with the immediately preceding sentence, and shall deliver
to the Company written evidence of such name change.
(f) Cooperation; Tax Schedule. Following the Closing
Date, Assignor shall promptly furnish the Company with such financial
and reporting data and other information with respect to the Assets
and Assumed Liabilities as the Company may from time to time
reasonably request, for any reasonable business purpose, including,
without limitation, the preparation of tax returns and financial
statements. Within sixty (60) days following the Closing Date,
Assignor shall prepare and deliver to the Company a schedule
indicating the federal income tax basis and state income tax basis, if
different, of each of the Assets and Assumed Liabilities.
(g) Options. The Company hereby agrees that from the
date hereof until May 14, 1998, the Company will not issue any options
to purchase shares of capital stock of the Company to any persons who
are officers of the Company as of the date hereof.
(h) Registration Rights Agreement. The Company
agrees that if at any time between the Closing Date and the first
anniversary of the Closing Date, the Company proposes to register any
shares of capital stock of the Company owned by ▇▇▇▇▇ ▇▇▇▇▇▇ and/or
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, other than on a Registration Statement on Form S-8,
Assignor shall have the right to register in such registration, on the
same terms as Messrs. ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇▇, a number of Shares
equal to the total number of Shares held by Assignor multiplied by a
fraction, the numerator of which is the total number of shares of
Messrs. ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇▇, as applicable, proposed to be
registered and the denominator of which is the total number of shares
of the Company's capital stock owned by Messrs. ▇▇▇▇▇▇ and/or
▇▇▇▇▇▇▇▇▇, as applicable, at the time of registration.
(i) Assignor Consents. Prior to Closing, Assignor
shall have obtained, made or given any and all consents required in
connection with the transactions contemplated by this Agreement and
such consents shall be in full force and effect, without the
imposition upon the Company of any material condition, restriction or
required undertaking.
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9. Conditions to Closing. (a) The obligations of the Company
under this Agreement are subject to the fulfillment or waiver on or before the
Closing Date of the following conditions:
(i) Representations and Warranties. The representations
and warranties of Assignor contained in Section 4
shall be true on and as of the Closing Date with the
same effect as though such representations and
warranties had been made on and as of the Closing
Date, except as would not have a material adverse
effect; provided, however, that any representation
or warranty which is qualified as to materiality
shall be true.
(ii) Performance. Assignor shall have performed and
complied with all agreements, obligations and
conditions contained in this Agreement, except where
Assignor's failure to perform shall not have a
material adverse effect.
(iii) No Material Adverse Change. There shall have been no
material adverse change in the condition of Assignor
or the Assets since the date hereof.
(iv) Pooling Letter. The Company shall have received from
▇▇▇▇▇▇▇▇, a letter dated the Closing Date,
confirming that the transactions contemplated
hereby, if consummated, can properly be accounted
for as a pooling of interests combination in
accordance with GAAP and the criteria of Accounting
Principles Board Opinion No. 16 and the regulations
of the SEC.
(v) Approvals. The Company shall have obtained all
requisite approvals of its Board of Directors and
stockholders for the transactions contemplated by
this Agreement.
(vi) Transfer of Assets and Assumed Liabilities. USG
North Texas shall have been liquidated and
terminated, the Assets and Assumed Liabilities of
USG North Texas shall have been transferred to the
Assignor and the Assignor shall have provided to the
Company such evidence of the same as the Company
shall reasonably request.
(vii) Balance Sheet. Assignor shall have delivered to the
Company a balance sheet of the Assignor, dated as of
the Closing Date, prepared in accordance with
generally accepted accounting principles,
consistently applied, and which shall be subject to
review or audit by ▇▇▇▇▇▇▇▇ at the sole discretion of
the Company. Such balance sheet shall demonstrate
that the assets of Assignor, other than the Reseller
Agreement and other intangible assets, have
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an aggregate value greater than the aggregate value
of the liabilities of Assignor.
(viii) Updated Schedules. Assignor shall have prepared and
delivered to the Company updated Schedules I, II, V
and VI which reflect, as of the Closing Date, the
information required to be stated therein.
(ix) Other Documents. The Company shall have received such
other documents as it shall reasonably request prior
to the Closing.
(b) The obligations of Assignor under this Agreement
are subject to the fulfillment or waiver on or before the Closing Date
of each of the following conditions:
(i) Representations and Warranties. The representations
and warranties of the Company contained in Section 3
shall be true on and as of the Closing Date with the
same effect as though such representations and
warranties had been made on and as of the date
thereof.
(ii) Delivery of Shares. The Company shall have delivered
the Shares specified in Section 1.
10. Certain Tax Matters. The parties to this Agreement intend
that the transactions contemplated hereby (and the distribution of the Shares
of the Company to the Assignor's shareholders) (collectively, the
"Transaction") will constitute a reorganization described in Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended (the "Code").
However, each of the parties to this Agreement acknowledges that it is relying
solely upon its respective advisors in determining the tax consequences of the
Transaction and will not rely on any representation or assurance of the other
party other than the representations and covenants set forth in this Agreement
or any other agreement or certificate delivered in connection herewith. None of
the Company, the Assignor or the shareholders of the Assignor will take any tax
reporting position or make any tax election inconsistent with the
characterization of the Transaction qualifying as a reorganization described in
Section 368(a)(1)(C) of the Code, except as may be required upon examination
(or as the result of a prior determination) by the Internal Revenue Service or
any other tax authority.
11. Waiver. (a) Subject to the consummation of the
transactions contemplated hereby, the Assignor and the Principals hereby
forever waive, release and discharge the Company, its partners, officers,
directors, employees, parents, subsidiaries, affiliates, successors and
assigns, from all actions, causes of action, suits, debts, judgments,
agreements, and demands whatsoever, in law or equity which the Assignor or the
Principals ever had, now have or hereafter can, shall or may have, for, upon or
by reason of any claim, whether known or unknown to the Assignor or the
Principals, relating to the Reseller Agreement and the relationship of the
parties thereunder.
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(b) Subject to the consummation of the transactions
contemplated hereby, the Company hereby forever waives, releases and discharges
the Assignor and the Principals, their partners, officers, directors,
employees, parents, subsidiaries, affiliates, successors and assigns, from all
actions, causes of action, suits, debts, judgments, agreements, and demands
whatsoever, in law or equity which the Company ever had or now has for, upon or
by reason of any claim known to the Company as of the date hereof relating to
the Reseller Agreement and the relationship of the parties thereunder.
12. Possible RMark Liability. (a) For purposes of clarity,
the parties hereto agree that the Company is not assuming any responsibility or
liability with respect to any dispute with or claim by RMark Services, Inc.,
its subsidiaries or affiliates, or officers, directors or employees of any of
the foregoing ("RMark").
(b) Assignor shall retain cash in the amount of
$40,000 which shall be used exclusively for the following purposes: (i) payment
of the reasonable expenses associated with its legal defense in respect of any
claim by RMark, (ii) payment to RMark in settlement of any such claim;
provided, that the Assignor shall first obtain the written consent of the
Company for any proposed settlement, which consent shall not be unreasonably
withheld, or (iii) payment to RMark in satisfaction of any court or arbitration
awarded judgment in favor of RMark.
(c) Not later than the first anniversary of this
Agreement, Assignor shall pay to the Company any portion of the $40,000
referred to in paragraph (b) above which has not been spent for any of the
purposes described in paragraph (b) above.
13. Indemnification. (a) Subject to the provisions of
paragraph (b) of this Section 13, Assignor and the Principals hereby jointly
and severally agree to indemnify and hold harmless the Company and any
fiduciary, officer, director, employee, agent or controlling person of the
Company (each, an "Indemnified Person") against any and all losses, claims,
damages, expenses and liabilities (or actions in respect thereof) whatsoever by
reason of or arising from (i) any breach of the representations and warranties
of this Agreement, (ii) any failure by the Assignor to comply with any covenant
in this Agreement and (iii) any liabilities whether known or unknown, fixed or
contingent (including contractual liabilities) of Assignor or any of its
affiliates, other than the Assumed Liabilities. Assignor will reimburse any
Indemnified Person for all expenses (including reasonable attorneys' fees) as
they are incurred by any such Indemnified Person in connection with
investigating, preparing or defending any such action or claim, whether or not
in connection with pending or threatened litigation in which any Indemnified
Person is a party.
(b) The aggregate amount of the liability of Assignor and the
Principals under this Agreement shall be limited to $4.6 million. Assignor and
the Principals shall first satisfy their indemnification obligations under this
Section 13 by
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transferring to the Company Shares then owned by them, free of liens and
encumbrances, with each such Share being valued for such purposes at $126. In
the event that Assignor and the Principals cannot fully satisfy such
indemnification obligations by transferring shares, they shall pay cash to the
Company, subject to the $4.6 million limit referred to above.
14. Miscellaneous. (a) Notices Any notices or other
communications required or permitted to be given or delivered under
this Agreement shall be in writing and shall be sufficiently given to
a party if delivered personally or mailed by registered or certified
mail, postage prepaid, return receipt requested, or by overnight
delivery by a nationally-recognized courier or by telecopier, as
follows (or to such other address or person as either party may from
time to time designate to the other in writing):
To Assignor or the Principals:
c/o ▇▇▇▇▇▇ ▇▇▇▇▇
Ultimate Investors Group, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company:
The Ultimate Software Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice or other communication shall be deemed to be given as
of the date it is personally delivered, five (5) days after being
deposited in the United States mail, one (1) day after being deposited
with a nationally recognized courier for overnight delivery or the
date it is transmitted via telecopier, answerback received (followed
promptly by delivery of such notice in accordance with one of the
other methods above).
(b) Binding Effect; Assignability. This Agreement
shall be binding upon and inure to the benefit of all of the parties
and their successors, legal representatives and assigns. Neither party
hereto may transfer its rights hereunder without the prior written
consent of the other party, which consent may be given or withheld for
any reason or no reason.
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(c) Severability. If any provision hereof is held to
be illegal or unenforceable, such provision shall be fully severable,
and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by such provision's
severance. Furthermore, in lieu of any such provision, there shall be
added automatically as part of this Agreement a legal and enforceable
provision as similar in terms to the severed provision as may be
possible.
(d) Counterparts. This Agreement may be executed in
any number of counterparts with the same effect as if all parties
hereto had signed the same document. All counterparts shall be
construed together and shall constitute one instrument.
(e) Integration. This Agreement constitutes the
entire agreement among the parties hereto pertaining to the subject
matter hereof and supersedes all prior agreements and understandings
pertaining thereto.
(f) Governing Law. This Agreement and the rights of
the parties hereunder shall be interpreted in accordance with the laws
of the State of Florida, and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws.
(g) State Securities Laws. The offer and sale of the
Shares is intended to be exempt from registration under the securities
laws of certain states. Assignor must note that there are restrictions
on transfer of the Shares, as agreed upon in Section 5 of this
Agreement.
(h) Survival. The representations, warranties and
indemnities of the parties set forth in this Agreement shall survive
for a period of one year from the Closing Date.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING
THE MERITS AND RISKS INVOLVED. THE SECURITIES OFFERED HEREBY HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT
CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS AGREEMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
APPLICABLE
14
STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be executed as of the day and year first above written.
THE ULTIMATE SOFTWARE GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
ULTIMATE INVESTORS GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
PRINCIPALS:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
INVESTOR CERTIFICATION
_______________________________________ hereby certifies that he or she EITHER:
(Check Box that Applies)
[ ] 1. meets one or more of the following criteria:
(A) He or she is a person having individual net
worth, or joint net worth with his or her
spouse, exceeding $1,000,000; or
(B) He or she is a person having an income in
excess of $200,000 in each of the two (2)
most recent years or a joint income with
his or her spouse in excess of $300,000 in
each of those years and having a reasonable
expectation of reaching the same income
level in the current year.
[ ] 2. does not meet either of the criterion described in
1(A) or (B) above and acknowledges that it has
appointed ▇▇▇▇▇▇ ▇▇▇▇▇ as its purchaser
representative.
---------------------------------
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[Exhibit B intentionally omitted]
[Schedules intentionally omitted.]
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