STOCK PURCHASE AGREEMENT
between
INSO CORPORATION
and
STRUCTURAL DYNAMICS RESEARCH CORPORATION
January 5, 2000
TABLE OF CONTENTS
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (hereinafter referred to as
the "Agreement") is made this 5th day of January, 2000 by and
between Inso Corporation, a Delaware corporation with principal
offices at ▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as "Seller" or "Inso"), and Structural
Dynamics Research Corporation, an Ohio corporation with principal
offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (hereinafter
referred to as "Purchaser" or "SDRC").
WITNESSETH:
WHEREAS, Purchaser wishes to purchase and Seller wishes to
sell the product data management software business conducted
through two of Seller's subsidiary corporations, Sherpa Systems
Corporation and Inso France Development, SA, on substantially the
terms and conditions set forth in this Agreement,
NOW, THEREFORE, and in consideration of the mutual promises
and covenants contained herein, the parties agree as follows:
ARTICLE I
Section 1.1 Certain General Definitions. In addition to all
other terms defined elsewhere in this Agreement, the following
terms shall have the meanings set forth below:
1.1.1 "actual knowledge", "have no actual knowledge of",
"do not actually know of" and similar phrases shall mean (i) in
the case of a natural person, the actual conscious awareness, or
not, as the context requires, of the particular fact by such
person, and (ii) in the case of an entity, the actual conscious
awareness, or not, as the context requires, of the particular
fact by any director or executive officer of such entity.
1.1.2 "Affiliate" with respect to any person shall mean
a person that directly or indirectly through one or more
intermediaries, controls, or is controlled by or is under common
control with, such person.
1.1.3 "best knowledge", "have no knowledge of", "do not
know of" or "to the knowledge of" and similar phrases shall mean
(i) in the case of a natural person, the particular fact was
known, or not known, as the context requires, to such person
after diligent investigation and inquiry by such person, and (ii)
in the case of an entity, the particular fact was known, or not
known, as the context requires, to any director or executive
officer of such entity after diligent investigation and inquiry.
1.1.4 "Confidential Information" shall mean all trade
secrets and other confidential and/or proprietary information of
the particular person, including information derived from
reports, investigations, research, work in progress, codes,
marketing and sales programs, financial projections, cost
summaries, pricing formulae, contract analyses, financial
information, projections, confidential filings with any state or
federal agency, and all other confidential concepts, methods of
doing business, ideas, materials or information prepared or
performed for, by or on behalf of such person by its employees,
officers, directors, agents, representatives, or consultants.
1.1.5 "Environmental Laws" shall mean any laws or
regulations pertaining to health or the environment, as in effect
on the date hereof and the Closing Date, including without
limitation (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Sec. 9601 et
seq.), as amended (including without limitation as amended
pursuant to the Superfund Amendments and Reauthorization Act of
1986), and regulations promulgated thereunder, (ii) the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Sec. 6901 et seq.,
as amended), and regulations promulgated thereunder, (iii)
statutes, rules or regulations, whether federal, state or local,
applicable to IFD's or SSC's assets or operations that relate to
asbestos or polychlorinated biphenyls, and (iv) the provisions
contained in any similar state statutes or regulations relating
to environmental matters applicable to IFD's or SSC's assets or
operations.
1.1.6 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.1.7 "GAAP" means United States generally accepted
accounting principles.
1.1.8 "Intellectual Property" shall be defined as
(a) all know-how, show-how, confidential or proprietary
information, trade secrets, designs, processes, computer software
or databases, research in progress, inventions or invention
disclosures (whether patentable or unpatentable) and drawings,
schematics, blueprints, flow sheets, designs and models ("Trade
Secrets"); (b) all copyrights, copyright registrations,
copyrights mask works and copyright applications (the
"Copyrights"); (c) all patents, patent applications, patents
pending, patent disclosures on inventions and all patents issued
upon said patent applications or based upon such disclosures (the
"Patents"); and (d) all registered and unregistered trade names,
trademarks, service marks, product designations, corporate names,
trade dress, logos, slogans, designs and general intangibles of
like nature, together with all registrations and recordings and
all applications for registration therefor and all translations,
adaptations, derivatives and combinations thereof (the
"Trademarks").
1.1.9 "Internal Revenue Code" shall mean the
Internal Revenue Code of 1986, as amended.
1.1.10 "IRS" shall mean the Internal Revenue Service
of the United States Department of the Treasury.
1.1.11 "Material Adverse Effect" shall mean a
material adverse effect on the applicable party's business,
operations, condition (financial or otherwise) or results of
operations, taken as a whole, in consideration of all relevant
facts and circumstances.
1.1.12 "ordinary course of business" shall mean the
usual and customary way in which the applicable party has
conducted its business in the past.
1.1.13 "person" shall mean any natural person,
corporation, partnership, joint venture, limited liability
company, association, group, organization or other entity.
1.1.14 "Tax Returns" shall include all federal,
state, local or foreign income, excise, corporate, franchise,
property, sales, use, payroll, withholding, provider,
environmental, duties, value added and other tax returns
(including information returns).
Section 1.2 Certain Specific Definitions. The following
terms shall have the meanings set forth below:
1.2.1 "Ancillary Assets" means any and all assets
or property, tangible or intangible, owned directly by Inso or
through one of its subsidiaries and not owned by SSC or IFD or
one of their respective subsidiaries or other owned business
entities, but which are used in or are necessary to the operation
of Seller's PDM Business, including but not limited to contract
rights and Intellectual Property.
1.2.2 "Anniversary Payment" shall mean the sum of
Qualifying Maintenance Revenues plus Qualifying License Revenues
less $6,000,000 and less any adjustments as are specifically
provided for in this Agreement, if necessary.
1.2.3 "Closing Date Balance Sheet" means the
balance sheet prepared for Seller's PDM Business as of the
Closing Date by Seller pursuant to Section 2.3 of this Agreement.
1.2.4 "Closing Payment" means $5,000,000 cash.
1.2.5 "Identified Customers" means the customers of
Seller's PDM Business listed on Exhibit 1.2.5 appended hereto but
only to the extent there was an existing customer relationship
(as defined in Section 1.2.12) at Closing.
1.2.6 "IFD" means Inso France Development, SA, a
French corporation which is a subsidiary of Inso France SARL, all
of its subsidiaries, and all of its branch offices and those of
its subsidiaries.
1.2.7 "IFD Stock" means all outstanding capital
stock of any class or series of IFD.
1.2.8 "Info Server" means the proprietary software
program known as Sherpa Information Server 1.0 and improvements
or successor products thereto.
1.2.9 "PDM" means product data management.
1.2.10 "Purchase Price" means the sum of the Closing
Payment, the Supplemental Closing Fund, and the Anniversary
Payment.
1.2.11 "Qualifying License Revenues" means 50% of
all license revenues (i.e., the license fees paid by or due from
a customer to initially acquire a software license) recognized by
SDRC as calendar year 2000 revenue under its established revenue
recognition policy (including appropriate provisions for doubtful
or uncollectible accounts) in accordance with GAAP, consistently
applied, with respect to sales of any product licenses in the
Seller's PDM Business (including Info Server) to Identified
Customers.
1.2.12 "Qualifying Maintenance Revenues" means the
total maintenance revenue (i.e., the revenue paid by or due from
existing software licensees for rights to receive maintenance,
technical support, software updates or services) received from
Identified Customers in connection with both the Sherpa PDM
software owned by SSC and with SDRC's Metaphase PDM software
which is recognized by SDRC as calendar year 2000 revenue under
its established revenue recognition policy (including appropriate
provisions for doubtful or uncollectible accounts), in accordance
with GAAP, consistently applied, (except that maintenance revenue
associated with Metaphase licenses sold by SDRC to any of the
Identified Customers to which SDRC can demonstrate that it had
bona fide outstanding proposals as of December 3, 1999, or with
which it has an existing customer relationship as of the Closing
Date, shall be excluded from such maintenance revenues). For
purposes hereof, a "customer relationship" shall be determined on
a divisional or other business unit level and not at a corporate
level, provided that in any division or business unit which is
both a Metaphase customer and an SSC customer as of the Closing
Date, additional sales of Metaphase shall not constitute
Qualifying Maintenance Revenues.
1.2.13 "Seller's Disclosure Schedules" means the
factual disclosures delivered by Seller to Purchaser which are
numbered to correspond with the numbers of the earliest relevant
sections of this Agreement.
1.2.14 "Seller's PDM Business" means the PDM
business presently conducted by Seller primarily through SSC, IFD
and their respective subsidiaries or other owned business
entities, which is to be acquired by Purchaser under this
Agreement.
1.2.15 "SSC" means Sherpa Systems Corporation, a
California corporation which is a wholly-owned subsidiary of
Seller, all of its subsidiaries, and all of its branch offices
and those of its subsidiaries.
1.2.16 "SSC Stock" means all outstanding capital
stock of any class or series of SSC.
1.2.17 "Supplemental Closing Fund" means the sum of
$1,000,000 cash less any adjustments as are specifically provided
for in this Agreement, if necessary.
ARTICLE II
Section 2.1 Purchase and Sale of SSC Stock and IFD Stock.
Upon the terms and conditions set forth herein, Seller agrees to
sell, and Purchaser agrees to purchase and pay the Purchase Price
for, all shares of SSC Stock and IFD Stock and any Ancillary
Assets.
Section 2.2 Closing. The closing of the transactions
contemplated herein (the "Closing") shall be effective at 12:01
a.m. Eastern Time on the date of this Agreement (the "Closing
Date"). The Closing Payment shall be made by SDRC to Inso at the
Closing by wire transfer or by delivery of a certified or
cashier's check. The parties recognize that because IFD is a
French corporation and because SSC has a number of non-U.S.
subsidiaries, one or more supplemental foreign closings,
including local documentation, may be necessary. The parties
agree to work together in good faith to effect any such foreign
closings or documentation that may be necessary to fully complete
the transactions contemplated in this Agreement, as may be
necessary before, on or after the Closing Date.
Section 2.3 Closing Date Balance Sheet.
2.3.1 Within 30 days after the Closing Date, Seller
shall deliver to SDRC a copy of the Closing Date Balance Sheet
prepared using the same principles as the October 31 Balance
Sheet (except as otherwise specifically provided in the following
subsections of this Section 2.3), in accordance with GAAP,
consistently applied. Within 30 days after receipt by SDRC of
the Closing Date Balance Sheet, SDRC shall conduct a review of
the Closing Date Balance Sheet to independently verify that the
Closing Date Balance Sheet as proposed by Seller accurately sets
forth the total shareholder's equity of the Seller's PDM Business
in accordance with GAAP. If SDRC concludes that the amount of
shareholder's equity set forth in the Closing Date Balance Sheet
is incorrect and the parties are unable to reach an agreement on
an acceptable number within 60 days of Seller's submission of the
Closing Date Balance Sheet, the matter shall be submitted to a
nationally recognized firm of independent accountants agreed upon
by the parties. The independent accountants shall have 30 days
following receipt of the Closing Date Balance Sheet and any
materials the parties choose to submit to them to determine the
total shareholder's equity, and such determination shall be final
and binding on both parties. The costs of such independent
accountants shall be shared equally by Seller and SDRC. In the
event such Closing Date shareholder's equity has decreased since
the October 31 Balance Sheet, the Seller shall promptly remit to
SDRC the difference. In the event such Closing Date
shareholder's equity has increased since the October 31 Balance
Sheet, SDRC shall promptly remit to Seller the difference.
2.3.2 The parties acknowledge that the Closing Date
Balance Sheet will reflect a liability in the total amount of
$1,420,000 relating to the costs of resolving certain known
customer disputes in connection with the Seller's PDM Business
(the "Existing Customer Claims"). The Seller's Disclosure
Schedules shall include a schedule itemizing each of these
Existing Customer Claims and indicating the specific dollar
amount of the total liability allocated to each Existing Customer
Claim.
2.3.3 The Closing Date Balance Sheet shall not
reflect any asset attributable to (i) pre-paid royalty costs, in
any amount, related to the product SherpaWorks 3i, or (ii)
prepaid royalty costs and sales taxes, in any amount, related to
the product Excalibur.
2.3.4 The Closing Date Balance Sheet shall reflect
100% of the fourth quarter bonus to be paid to SSC and or IFD
employees.
2.3.5 The Closing Date Balance Sheet shall not
include any liability that Inso specifically assumes from Sherpa
prior to the Closing Date or that Inso is otherwise required by
this Agreement to assume or discharge.
2.3.6 The Closing Date Balance Sheet shall include
appropriate accruals for personal, real property and other
appropriate taxes relating to the period on or prior to the
Closing Date but payable thereafter.
2.3.7 The Closing Date Balance Sheet shall not
reflect any positive or negative adjustment to the October 31
Balance Sheet for the change in value of any intangible asset.
2.3.8 The Closing Date Balance Sheet shall reflect
an allocation of SSC's accumulated net operating loss
carryfowards in accordance with Section 6.14 below.
Section 2.4 Supplemental Closings. Within 30 days after
the end of each fiscal quarter of SDRC ending prior to the first
anniversary of the Closing Date, SDRC shall determine the total
cumulative Qualifying License Revenues and Qualifying Maintenance
Revenues that have been booked through the end of such quarter.
To the extent the total of such revenues would result in an
obligation on the part of SDRC to make an Anniversary Payment to
Seller if such payment were then due (the "Putative Anniversary
Payment"), SDRC shall promptly pay an amount equal to the
Putative Anniversary Payment minus any such amount paid by SDRC
with respect to any prior quarter, provided that the total
Putative Anniversary Payments by SDRC shall not exceed
$1,000,000, and provided further, that SDRC shall not be required
to make any Putative Anniversary Payment(s) that would if paid
reduce the Supplemental Closing Fund below a total amount equal
to the sum of (i) the amount of any claims actually submitted by
SDRC as of the relevant date for which Seller shall be the
Indemnifying Party pursuant to Article VII of this Agreement, and
(ii) any amount due from Seller pursuant to Section 6.12 of this
Agreement. The Supplemental Closing Fund shall be reduced by an
amount equal to the total of any Putative Anniversary Payments
made by SDRC. Not later than 90 days after the first anniversary
of the Closing Date, SDRC shall pay Inso the balance of the
Supplemental Closing Fund, if any, after payment of any Putative
Anniversary Payments and any other adjustments specifically
provided for in this Agreement.
Section 2.5 Anniversary Payment. Not later than 90 days
after the first anniversary of the Closing Date, SDRC shall
calculate the Anniversary Payment and shall remit the net amount
thereof to Seller together with a written statement setting forth
the calculation of such net amount, including a detailed
explanation of the relevant product sales and of any setoffs or
other adjustments thereto. Within 60 days after receipt of the
Anniversary Payment from SDRC, Seller shall be permitted to
conduct a review of the Anniversary Payment and SDRC's working
papers used to determine the amount of the Anniversary Payment in
accordance with GAAP. If Seller and SDRC disagree as to the
correct amount of the Anniversary Payment, the matter shall be
submitted to a nationally recognized firm of independent
accountants agreed upon by the parties. The independent
accountants shall then have 30 days in which to determine the
correct Anniversary Payment, and such determination shall be
final and binding on both parties. The costs of such independent
accountants shall be borne equally by SDRC and the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Inso hereby represents and warrants to SDRC that, except as
may be set forth in the Seller's Disclosure Schedules, the
following are true and correct as of the date hereof:
Section 3.1 Seller's PDM Business. Seller conducts Seller's
PDM Business solely through SSC, IFD and their respective
subsidiaries or other owned business entities; all of which are
listed in Seller's Disclosure Schedules, as well as the Ancillary
Assets, if any, and there are no other material assets or other
components or elements of Seller's PDM Business whatsoever that
are not included therein.
Section 3.2 Corporate Power and Authorization . The
Board of Directors of Inso, by resolution adopted by a vote of
the directors at a meeting duly called and held in accordance
with applicable law, has duly authorized the transactions
contemplated by this Agreement, all in accordance with and as and
to the extent required by law and in accordance with the
Certificate of Incorporation and Bylaws of Inso. The execution,
delivery and performance by Inso of this Agreement and the other
agreements contemplated hereby, and the consummation of the
transactions contemplated hereby and thereby, have been duly
authorized by Inso. The approval of Inso's stockholders is not
required under applicable law or Inso's Certificate of
Incorporation or Bylaws. This Agreement has been duly executed
and delivered by Inso and constitutes the legal, valid and
binding obligation of Inso enforceable against Inso in accordance
with its terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors'
rights generally or the availability of equitable remedies.
Section 3.3 No violation- Inso. Neither the execution,
delivery or performance of this Agreement or the other agreements
contemplated hereby nor the consummation of the transactions
contemplated hereby or thereby will (a) conflict with, or result
in a violation or breach of the terms, conditions or provisions
of, or constitute a default under, the Certificate of
Incorporation or Bylaws of Inso or Inso France SARL, (b) conflict
with, or result in a violation or breach of the terms, conditions
or provisions of, or constitute a default under, any agreement,
indenture, right of first refusal, non-provisions of, or
constitute a default under, any agreement, indenture, right of
first refusal, non-competition agreement or other instrument
under which Inso or Inso France SARL is bound or to which any of
the assets of Inso or Inso France SARL are subject, in a manner
that will adversely affect the ability of Inso or Inso France
SARL to consummate the transactions contemplated hereby, or (c)
violate or conflict with any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or
regulatory agency or body.
Section 3.4 Organization and Good Standing; Qualification.
Except as set forth on Seller's Disclosure Schedules, each of
SSC, IFD and their respective subsidiaries or other owned
business entities is a corporation duly organized, validly
existing and, with respect to the entities organized in the
United States, in good standing under the laws of its state or
other jurisdiction of organization, with all requisite corporate
power and authority to carry on the business in which it is
engaged, to own the properties it owns, and each is duly
qualified and licensed to do business in any other jurisdiction
where failure to be so qualified would have a Material Adverse
Effect on the Seller's PDM Business. Seller's Disclosure
Schedules contain a complete list of all direct or indirect
subsidiaries or other owned business entities of SSC and IFD.
Section 3.5 Capitalization. A full and complete description
of the authorized, issued and outstanding equity capitalization
of SSC, IFD and each of their respective subsidiaries or other
owned business entities, is set forth in the Seller's Disclosure
Schedules. There are no outstanding options, warrants,
convertible debt or other instruments or any other rights of any
kind whatsoever granting any person or entity the right or
ability to acquire, directly or indirectly any capital stock or
other equity securities of SSC, IFD or any of their respective
subsidiaries or other owned business entities. Except as set
forth on the Seller's Disclosure Schedules, Inso owns all capital
stock of SSC and IFD, and SSC and IFD own all capital stock of
their respective subsidiaries or other owned business entities,
free and clear of all security interests, liens, pledges, adverse
claims, encumbrances, equities, proxies and shareholders'
agreements. Each outstanding share of capital stock of SSC, IFD
and their respective subsidiaries or other owned business
entities has been legally and validly issued and is fully paid
and nonassessable. None of such shares of capital stock has been
issued or disposed of in violation of the preemptive rights,
rights of first refusal or similar rights of any third party.
Section 3.6 Continuity of Business Enterprise. There has
not been any sale, distribution or spin-off of significant assets
of SSC or any of its Affiliates relating to the Seller's PDM
Business other than in the ordinary course of business since the
date Inso acquired SSC.
Section 3.7 Corporate Records. The copies of the
Certificates of Incorporation and Bylaws, and all amendments
thereto, or equivalent charter documents, of SSC, IFD and their
respective subsidiaries or other owned business entities that
have been delivered or made available to SDRC are true, correct
and complete copies thereof, as in effect on the date hereof.
Except to the extent set forth on the Seller's Disclosure
Schedules, the minute books of all such corporations or entities,
copies of which have been delivered or made available to SDRC,
contain accurate minutes of all meetings of, and accurate
consents to all actions taken without meetings by, the Boards of
Directors (and any committees thereof) and the stockholders
thereof since the date of acquisition by SSC and IFD by Inso.
Section 3.8 No violation- SSC or IFD. Neither the
execution, delivery or performance of this Agreement or the other
agreements contemplated hereby nor the consummation of the
transactions contemplated hereby or thereby will (a) conflict
with, or result in a violation or breach of the terms, conditions
or provisions of, or constitute a default under, the Certificate
of Incorporation or Bylaws or equivalent charter documents, of
SSC, IFD and/or their respective subsidiaries or other owned
business entities, (b) conflict with, or result in a violation or
breach of the terms, conditions or provisions of, or constitute a
default under, or give rise to a right of the other parties
thereto to terminate, any agreement, indenture, right of first
refusal, non-competition agreement or other instrument by which
any of SSC, IFD or their respective subsidiaries or other owned
business entities is bound or to which any of the assets thereof
are subject, or result in the creation or imposition of any
security interest, lien, charge or encumbrance upon any of the
assets of thereof in a manner that would have a Material Adverse
Effect on the Seller's PDM Business, or (c) violate or conflict
with any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or
body binding on SSC, IFD or any of their respective subsidiaries
or other owned business entities.
Section 3.9 Governmental Authorities; Third Party Consents.
Neither Inso, SSC, IFD nor their respective subsidiaries or other
owned business entities is required to submit any notice, report
or other filing with any governmental authority in connection
with the execution or delivery by it of this Agreement or the
consummation of the transactions contemplated hereby or thereby,
and no approval or authorization of any governmental or
regulatory authority or any other party or person is required to
be obtained by any of them in connection with the execution,
delivery and performance of this Agreement or the transactions
contemplated hereby.
Section 3.10 Financial Statements.
3.10.1 Inso has previously furnished SDRC with (a)
income statements for Seller's PDM Business for the nine-month
period ending October 31, 1999 (the "Income Statement") and (b) a
balance sheet dated October 31, 1999 (the "October 31 Balance
Sheet", and together with the Income Statement, the "Financial
Statements "). Such financial statements fairly present the
financial condition and results of operations for the Seller's
PDM Business for the dates and periods covered thereby in
compliance with GAAP. The October 31 Balance Sheet reflects all
liabilities of Seller's PDM Business, accrued, contingent or
otherwise that would be required to be reflected on a balance
sheet, or in the notes thereto, prepared in accordance with GAAP.
Except as set forth in the October 31 Balance Sheet, Seller's
PDM Business is not obligated in any way to provide funds in
connection with any guarantee of, or to assume, any debt,
obligation or dividend of any other person, corporation,
association, partnership, limited liability company, joint
venture, trust or other entity. Except as set forth on the
Seller's Disclosure Schedules, there exists no valid basis for
the assertion of any other claims against SSC, IFD or their
respective subsidiaries or other owned business entities or any
other liabilities of any nature or for any amount that would have
a Material Adverse Effect on the Seller's PDM Business.
3.10.2 All accounts receivable reflected on the
October 31 Balance Sheet are, and those to be reflected on the
Closing Date Balance Sheet will be, valid receivables subject to
no material setoffs or counterclaims and are current and
collectible (within 180 days after the date on which it first
became due and payable), net of the applicable reserve for bad
debts on such balance sheets.
Section 3.11 Employee Matters.
3.11.1 Cash Compensation. The Seller's Disclosure Schedules
contain a complete and accurate list of the names, titles and
annual cash compensation as of December 1, 1999, including
without limitation wages, salaries, bonuses (discretionary and
formula) and other cash compensation (the "Cash Compensation") of
all employees of SSC, IFD and their respective subsidiaries or
other owned entities, and of employees of Inso who work primarily
on the Seller's PDM business, and the amounts paid to each
independent contractor of any such entities, together with a
description of the material terms of any such independent
contractor's agreement or relationship, during the last twelve
months. In addition, the Seller's Disclosure Schedules reflect
(i) all increases in Cash Compensation of such employees and/or
independent contractors during the current fiscal year and (ii)
any promised increases in Cash Compensation of such employees
and/or independent contractors that have not yet been effected.
3.11.2 Compensation Plans. The Seller's Disclosure Schedules
contain a complete and accurate list of all employment
compensation plans, arrangements or practices other than those
required by law (the "Compensation Plans") sponsored by Inso,
SSC, IFD or their respective subsidiaries or other owned business
entities or to which they contribute on behalf of the employees
described in Section 3.11.1 above. The Compensation Plans
include, without limitation, all plans, arrangements or practices
that provide for severance pay, deferred compensation, incentive,
bonus or performance awards, and stock ownership or stock
options. Seller has provided or made available to SDRC a copy of
each written Compensation Plan and a written description of each
unwritten Compensation Plan. Each of the Compensation Plans can
be terminated or amended at will by the sponsor.
3.11.3 Employment Agreements. Except as set forth in Seller's
Disclosure Schedules, neither SSC, IFD nor any of their
respective subsidiaries or other owned business entities is a
party to any employment agreement ("Employment Agreements") with
respect to any of the employees described in Section 3.11.1
above. Employment Agreements include without limitation employee
leasing agreements, employee services agreements and
noncompetition agreements.
3.11.4 Employee Policies and Procedures. The Seller's Disclosure
Schedules contain a complete and accurate list of all employee
manuals and all material employment policies and procedures and
work-related rules (the "Employee Policies and Procedures") that
apply to the employees described in Section 3.11.1 above. Seller
has provided or made available to SDRC a copy of all written
Employee Policies and Procedures and a written description of all
material unwritten Employee Policies and Procedures.
3.11.5 Established Severance Policies. Seller's
Disclosure Schedules contain a complete and accurate list of and,
to the extent reduced to writing, a copy of any and all
established severance policies of Inso and SSC, IFD or any of
their respective subsidiaries or other owned business units
applicable to the employees of the Seller's PDM Business (the
"Established Severance Policies"). The Established Severance
Policies applicable to any foreign based employees of the
Seller's PDM Business are in compliance with any and all
applicable local laws, including any minimum severance
requirements.
3.11.6 Proprietary Rights Agreements. Except as set
forth in Seller's Disclosure Schedules, each employee of Seller's
PDM Business has entered into a confidentiality/assignment of
inventions agreement with SSC, IFD or one of their respective
subsidiaries or other owned business entities in substantially
the form previously supplied to Purchaser without any material
change to such form.
3.11.7 Employee Stability . To Seller's actual
knowledge, no key employee and no group of employees has any
plans to terminate employment with SSC, IFD or any of their
respective subsidiaries or other owned business entities.
3.11.8 Unwritten Amendments. No material unwritten amendments
have been made, whether by oral communication, pattern of conduct
or otherwise, with respect to any Compensation Plans or Employee
Policies and Procedures.
3.11.9 Labor Compliance. Each of SSC, IFD and other respective
subsidiaries or other owned business entities has been and is in
compliance with all material applicable laws, rules, regulations
and ordinances respecting employment and employment practices,
terms and conditions of employment and wages and hours. Neither
SSC, IFD nor any of their respective subsidiaries or other owned
business entities is liable for any material arrears of wages or
penalties for failure to comply with any of the laws, rules,
regulations and ordinances above-referenced in this Section
3.11.9. Neither SSC, IFD nor any of their respective
subsidiaries or other owned business entities has engaged in any
unfair labor practice within the meaning of applicable labor
relations law ("ULP") or discriminated on the basis of race,
color, religion, sex, national origin, age, disability or
handicap in its employment conditions or practices, which ULP or
discrimination could give rise to a material liability. There
are no (i) unfair labor practice charges or complaints or racial,
color, religious, sex, national origin, age, disability or
handicap discrimination charges or complaints pending or, to the
actual knowledge of Seller, threatened against SSC, IFD or any of
their respective subsidiaries or other owned business entities
before any federal, state or local court, board, department,
commission or agency (nor does any valid basis therefor exist) or
(ii) existing or threatened labor strikes, disputes, grievances,
controversies or other labor troubles affecting them (nor does
any valid basis therefor exist).
3.11.10 Unions. Except as set forth on the Seller's Disclosure
Schedules, (i) neither SSC, IFD nor any of their respective
subsidiaries or other owned business entities has ever been a
party to any agreement with any union, labor organization or
collective bargaining unit, (ii) no employees of SSC, IFD or any
of their respective subsidiaries or other owned business entities
are represented by any union, labor organization or collective
bargaining unit, and (iii) to Seller's knowledge, no such
employees have threatened to organize or join a union, labor
organization or collective bargaining unit.
3.11.11 Aliens. All employees of SSC, IFD or any of their
respective subsidiaries or other owned business entities are
citizens of, or are authorized in accordance with applicable
immigration laws to be employed in, the respective countries
where employed.
Section 3.12 Employee Benefit Plans.
3.12.1 Identification. The Seller's Disclosure Schedules contain
a complete and accurate list of all employee benefit plans
(within the meaning of Section 3(3) of ERISA) sponsored by SSC,
IFD or any of their respective subsidiaries or other owned
business entities, or by Inso with respect to them or their
employees or to which any of them or Inso contributes on behalf
of their employees and all employee benefit plans previously
sponsored or contributed to on behalf of its employees within the
three years preceding the date hereof (the "Benefit Plans").
Seller has provided or made available to SDRC copies of all
Benefit Plan documents, such as, to the extent applicable,
determination letters, pending determination letter applications,
trust instruments, insurance contracts, administrative services
contracts, annual reports, actuarial valuations, summary plan
descriptions, summaries of material modifications and
administrative forms. In addition, Seller has provided or made
available to SDRC a written description of all material existing
practices engaged in by SSC, IFD or any of their respective
subsidiaries or other owned business entities, or by Inso with
respect to them or their employees that have been determined to
constitute Benefit Plans. Subject to the requirements of the
Internal Revenue Code and ERISA, each of the Benefit Plans can be
terminated or amended at will. No unwritten amendment exists
with respect to any Benefit Plan.
3.12.2 Administration. Each Benefit Plan has been administered
and maintained in material compliance with all applicable laws,
rules and regulations. All necessary filings, reports and
disclosures with respect to all applicable Benefit Plans have
been made other than those which individually or in the aggregate
would not have a Material Adverse Effect on SSC, IFD or any of
their respective subsidiaries.
3.12.3 Examinations. Neither Inso, SSC, IFD nor any of their
respective subsidiaries or other owned business entities has
received any notice that any Benefit Plan is currently the
subject of an audit, investigation, enforcement action or other
similar proceeding conducted by any state or federal agency.
3.12.4 Prohibited Transactions. No prohibited transactions
(within the meaning of Section 4975 of the Internal Revenue Code
or Sections 406 and 407 of ERISA) that could give rise to any
material liability for SSC or IFD have occurred with respect to
any Benefit Plan.
3.12.5 Claims and Litigations. No pending or threatened claims,
suits or other proceedings exist with respect to any Benefit Plan
other than benefit claims filed by participants or beneficiaries
in the ordinary course.
3.12.6 Qualification. Except as set forth on the Seller's
Disclosure Schedules, none of the Benefit Plans is intended to be
qualified within the meaning of Section 401(a) of the Internal
Revenue Code and/or tax-exempt within the meaning of Section 501
(a) of the Internal Revenue Code.
3.12.7 Funding Status. Except as set forth on the Seller's
Disclosure Schedules, none of the Benefit Plans is subject to the
funding requirement of Section 412 of the Internal Revenue Code.
No Benefit Plan is a plan described in Section 501(c)(9) of the
Internal Revenue Code.
3.12.8 Excise Taxes. Neither SSC, IFD nor any of their
respective subsidiaries or other owned business entities has any
liability to pay excise taxes under the Internal Revenue Code,
including but not limited to Sections 4971, 4972, 4975, 4976,
4977, 4978, 4978B, 5979, 4979A, 4980 or 4980B thereof with
respect to any Benefit Plan.
3.12.9 Multiemployer Plans. Except as set forth on the Seller's
Disclosure Schedules, each of SSC, IFD and their respective
subsidiaries or other owned business entities is not and has
never been obligated to contribute to a multiemployer plan within
the meaning of Section 3(37) of ERISA.
3.12.10 PBGC. Except as set forth on the Seller's Disclosure
Schedules, none of the Benefit Plans is subject to the
requirements of Title IV of ERISA.
3.12.11 Retirees. Neither SSC, IFD nor any of their respective
subsidiaries or other owned business entities has any obligation
or commitment to provide medical, dental or life insurance
benefits to or on behalf of any of its employees who may retire
or any of its former employees who have retired except as may be
required pursuant to the continuation of coverage provisions of
Section 4980B of the Internal Revenue Code, Sections 601 through
608 of ERISA or state law.
Section 3.13 Absence of Certain Changes. Since October 31, 1999,
except as set forth on the Seller's Disclosure Schedules, neither
SSC, IFD nor any of their respective subsidiaries or other owned
business entities has:
3.13.1 contracted for the purchase of any capital
asset having a cost in excess of $10,000 or made any single
capital expenditure in excess of $10,000;
3.13.2 incurred any indebtedness for borrowed money
(other than short-term borrowing in the ordinary course of
business), or issued or sold any debt securities;
3.13.3 incurred or discharged any material
liabilities or obligations except in the ordinary course of
business;
3.13.4 paid any amount on any indebtedness prior to
the due date except in the ordinary course of business, forgiven
or canceled any claims or any debt in excess of $10,000, or
released or waived any rights or claims except in the ordinary
course of business;
3.13.5 mortgaged, pledged or subjected to any
security interest, lien, lease or other charge or encumbrance any
of its properties or assets (other than statutory liens arising
in the ordinary course of business or other liens that do not
materially detract from the value or interfere with the use of
such properties or assets);
3.13.6 suffered any damage or destruction to or loss
of any assets (whether or not covered by insurance) that has,
individually or in the aggregate, resulted in a Material Adverse
Effect;
3.13.7 acquired or disposed of any assets having an
aggregate value in excess of $10,000, except in the ordinary
course of business;
3.13.8 except to the extent reflected on the October
31 Balance Sheet, written up or written down the carrying value
of any of its assets, other than accounts receivable in the
ordinary course of business;
3.13.9 changed the costing system or
depreciation methods of accounting for its assets in any material
respect;
3.13.10 lost or terminated any employee,
customer or supplier that has, individually or in the aggregate,
resulted in a Material Adverse Effect;
3.13.11 increased the compensation of any
director, officer, key employee or consultant;
3.13.12 increased the compensation of any
employee (except for increases in the ordinary course of business
consistent with past practice) or hired any new employee who is
expected to receive annualized compensation of at least $15,000;
3.13.13 made any payments to or loaned any money
to any employee, officer, director or stockholder;
3.13.14 formed or acquired or disposed of any
interest in any corporation, partnership, joint venture or other
entity;
3.13.15 redeemed, purchased or otherwise
acquired, or sold, granted or otherwise disposed of, directly or
indirectly, any of its capital stock or securities or any rights
to acquire such capital stock or securities, or agreed to change
the terms and conditions of any such capital stock, securities or
rights;
3.13.16 entered into any agreement providing for
total payments by them in excess of $10,000 in any 12 month
period with any person or group, or modified or amended in any
material respect the terms of any such existing agreement, except
in the ordinary course of business;
3.13.17 entered into, adopted or amended any
Employee Benefit Plan, except as contemplated hereby or the other
agreements contemplated hereby; or
3.13.18 entered into any other commitment or
transaction or experienced any other event that would materially
interfere with its performance under this Agreement or any other
agreements or document executed or to be executed pursuant to
this Agreement, or otherwise has, individually or in the
aggregate, resulted in a Material Adverse Effect.
Section 3.14 Title; Leased Assets.
3.14.1 SSC Stock and IFD Stock. Except as
required by French law and set forth on the Seller's Disclosure
Schedules, Inso directly owns the SSC Stock and indirectly,
through its subsidiary Inso France SARL, owns the IFD Stock free,
clear and unencumbered by any pledge, lien, security interest or
other third party interest whatsoever and has the unrestricted
right and ability to transfer the SSC Stock and to cause the
transfer of the IFD Stock free of any such restriction or
encumbrance whatsoever.
3.14.2 Subsidiary Stock. Each of SSC and IFD
own 100% of the capital stock or equity securities of any and all
entities they purport to own as subsidiaries.
3.14.3 Real Property. Neither SSC, IFD nor any of their
respective subsidiaries or other owned business entities owns any
interest (other than leasehold interests described in Seller' s
Disclosure Schedules) in real property. The leased real property
described in Seller's Disclosure Schedules constitutes the only
real property necessary for the conduct of Seller's PDM business.
3.14.4 Personal Property. SSC, IFD and/or their respective
subsidiaries or other owned business entities have good, valid
and marketable title to all the personal property owned by them,
all of which is reflected, to the extent required in accordance
with GAAP, on the October 31 Balance Sheet (collectively, the
"Personal Property"). Seller and its subsidiaries have good,
valid and marketable title to the Ancillary Assets, if any. The
Personal Property, the Ancillary Assets, and any personal
property leased by SSC, IFD and any of their respective
subsidiaries or other owned business entities constitute the only
personal property necessary for the conduct of Seller's PDM
business. On the Closing Date, SSC's, IFD's and/or any of their
respective subsidiaries' or other owned business entities'
interests in the Personal Property, and Seller's interest in any
Ancillary Assets, shall be free and clear of all security
interests, liens, claims and encumbrances, other than statutory
liens arising in the ordinary course of business or other liens
that do not materially detract from the value or interfere with
the use of such properties or assets.
3.14.5 Leases. Seller's Disclosure Schedules set forth a list
and brief description of (i) all leases of real property and (ii)
leases of personal property involving rental payments within any
12 month period in excess of $10,000, in either case to which any
of SSC, IFD and/or any of their respective subsidiaries or other
owned business entities is a party, either as lessor or lessee.
All such leases are valid and enforceable in accordance with
their respective terms except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors'
rights generally or the availability of equitable remedies.
Section 3.15 Commitments.
3.15.1 Commitments; Defaults. Any of the following to which SSC,
IFD or their respective subsidiaries or other owned business
entities is a party or is bound by, or which any of the shares of
capital stock of SSC, IFD or their respective subsidiaries or
other owned business entities are subject to, or by which the
assets or the business of SSC, IFD or any of their respective
subsidiaries or other owned business entities are bound, whether
or not in writing, are listed in Seller's Disclosure Schedules
(collectively "Commitments"):
3.15.1.1 any partnership or joint venture
agreement;
3.15.1.2 any guaranty or suretyship,
indemnification or contribution agreement or performance bond;
3.15.1.3 any debt instrument, loan agreement or
other obligation relating to indebtedness for borrowed money or
money lent or to be lent to another;
3.15.1.4 any contract to purchase real property;
3.15.1.5 any agreement with dealers or sales or
commission agents, public relations or advertising agencies,
accountants or attorneys (other than in connection with this
Agreement and the transactions contemplated hereby) involving
total payments within any 12 month period in excess of $10,000
and which is not terminable on 30 days' notice or without
penalty;
3.15.1.6 any agreement relating to any material
matter or transaction in which an interest is held by a person or
entity that is an Affiliate of Seller;
3.15.1.7 any agreement for the acquisition of
services, supplies, equipment, inventory, fixtures or other
property involving more than $10,000 individually or $50,000 in
the aggregate;
3.15.1.8 any powers of attorney;
3.15.1.9 any contracts containing noncompetition
covenants;
3.15.1.10 any agreement providing for the purchase
from a supplier of all or substantially all of the requirements
of SSC, IFD or any of their respective subsidiaries or other
owned business entities of a particular product or service; or
3.15.1.11 any other agreement or commitment not
made in the ordinary course of business or that is material to
the business, operations, condition (financial or otherwise) or
results of operations of SSC, IFD or any of their respective
subsidiaries or other owned business entities.
True, correct and complete copies of all written Commitments, and
true, correct and complete written descriptions of all oral
Commitments, have heretofore been delivered or made available to
SDRC. Except as set forth on the Seller's Disclosure Schedules,
(i) there are no existing or asserted defaults, events of default
or events, occurrences, acts or omissions that, with the giving
of notice or lapse of time or both, would constitute defaults by
SSC, IFD or any of their respective subsidiaries or other owned
business entities or, to Seller's knowledge, any other party to a
Commitment, and no penalties have been incurred nor are
amendments pending with respect to the Commitments, and (ii) the
Commitments are in full force and effect and are valid and
enforceable obligations of SSC, IFD or any of their respective
subsidiaries or other owned business entities and, to Sellers's
knowledge, the other parties thereto, in accordance with their
respective terms, and no defenses, off-sets or counterclaims have
been asserted or, to Sellers's knowledge, may be made by any
party thereto (other than SSC, IFD or any of their respective
subsidiaries or other owned business entities, as the case may
be), nor have any of them waived any rights thereunder.
3.15.2 No cancellation or Termination of Commitment. Except as
set forth on the Seller's Disclosure Schedules, no notice of any
plan or intention of any other party to any Commitment to
exercise any right to cancel or terminate any Commitment has been
received. Except as set forth on the Seller's Disclosure
Schedules, no customer of Seller's PDM Business has notified
Inso, SSC, IFD or any of their respective subsidiaries or other
owned business entities that such customer intends to terminate
or discontinue use of any Sherpa licenses or related maintenance
services.
Section 3.16 Insurance. Seller's Disclosure Schedules set forth
a list of all claims under any Insurance Policy in excess of
$10,000 per occurrence filed during the one year prior to the
date of this Agreement.
Section 3.17 Intellectual Property.
3.17.1 Seller's Disclosure Schedules contain a
complete and accurate list of (i) all Copyrights, Patents and
Trademarks, each as defined herein, used in or related to
Seller's PDM Business, (ii) all third-party owned software
incorporated into any product which is part of Seller's PDM
Business, and (iii) all software products marketed or otherwise
distributed by SSC within the three year period prior to the date
of this Agreement, with the source or method of intellectual
property protection utilized or relied upon by SSC with respect
to each such product set forth thereon. Either SSC, IFD or one
of their respective subsidiaries or other owned business
entities, or Inso with respect to Ancillary Assets, owns all
right, title and interest in and to all Intellectual Property (as
defined herein) owned by it, and holds valid licenses for all
third-party owned Intellectual Property used by it, each as may
be necessary for the conduct of Seller's PDM Business.
3.17.2 Neither Inso, SSC, IFD or any of their
respective subsidiaries or other owned business entities, as the
case may be, has as of and since the date upon which it acquired
rights in or to any Intellectual Property, except in the ordinary
course of business in connection with the distribution of PDM
products directly or indirectly to end users, (i) transferred,
conveyed, sold, assigned, pledged, mortgaged or granted a
security interest in any such Intellectual Property to any third
party, (ii) entered into any license, franchise or other
agreement with respect to any such Intellectual Property with any
third person, or (iii) otherwise encumbered any such Intellectual
Property.
3.17.3 Seller's PDM Business as currently conducted
does not in any way conflict with, misappropriate or infringe on,
any intellectual property right of any third party that,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect on Seller's PDM Business. There
are no claims, suits, actions or proceedings pending or, to the
knowledge of Seller, threatened against any of Seller, SSC, IFD
or any of their respective subsidiaries or other owned business
entities (i) alleging that the use or license of any Intellectual
Property conflicts or infringes in any way with any third party's
intellectual property rights, (ii) challenging their ownership of
or right to use any Intellectual Property owned or used by them,
or (iii) challenging the validity of any of the Intellectual
Property. There are no conflicts, misappropriations,
infringements or other violations by any third party of any of
the Intellectual Property owned by, used by or licensed by or to
any of Seller, SSC, IFD or any of their respective subsidiaries
or other owned business entities.
3.17.4 Each Copyright, Patent and Trademark listed in
Seller's Disclosure Schedules is valid, subsisting and in proper
form, and has been duly maintained, including the submission of
all necessary filings in accordance with the legal and
administrative requirements of the appropriate jurisdictions, and
no Copyright, Patent or Trademark has lapsed, nor has there been
any cancellation or abandonment thereof. All of the proper
precautions to maintain the secrecy of the Intellectual Property
that constitutes Trade Secrets, and to protect such Trade Secrets
from disclosure to the full extent required under applicable law
have been taken, and there have been no failures in complying
with such requirements.
3.17.5 Neither Seller, SSC, IFD any of their
respective subsidiaries or other owned business entities, nor any
other person has granted any release, covenant not to ▇▇▇, or
non-assertion assurance or entered into any indemnification or
settlement agreement with any person with respect to any part of
the Intellectual Property or any licenses associated with the
Intellectual Property, except for indemnifications given in the
ordinary course of business, customary in the PDM Business
generally.
Section 3.18 Year 2000 Problem. Except as set forth in Seller's
Disclosure Schedules, Seller has reviewed (i) each of the
software products marketed or distributed as part of Seller's PDM
Business, and (ii) all computer applications used in the business
and operations of Seller's PDM Business, that could be adversely
affected by an inability to recognize and perform properly date
sensitive functions involving dates prior to and after December
31, 1999 (the "Year 2000 Problem"). The Year 2000 Problem will
not result in any Material Adverse Effect on Seller's PDM
Business, or affect the performance of any product sold through
or by Seller's PDM Business or used by Seller's PDM Business in
any manner which could reasonably be expected to result in a
Material Adverse Effect on Seller's PDM Business.
Section 3.19 Taxes.
3.19.1 Filing of Tax Returns. Except as set forth in Seller's
Disclosure Schedules, SSC, IFD and each of their respective
subsidiaries or other owned business entities has duly and timely
filed (in accordance with any extensions duly granted by the
appropriate governmental agency, if applicable) with the
appropriate governmental agencies all Tax Returns and reports
required to be filed by the United States or any state or any
political subdivision thereof or any foreign jurisdiction. All
such Tax Returns or reports are complete and accurate in all
material respects and properly reflect the taxes of the
respective entities for the periods covered thereby. True and
correct copies of such Tax Returns for the past five taxable
years have either heretofore been delivered to SDRC or will be
included with the assets of SSC, IFD and their respective
applicable subsidiaries.
3.19.2 Payment of Taxes. Except for such items as may be subject
to good faith disputes in proceedings in compliance with
applicable law, each of which is described in Seller's Disclosure
Schedules, (i) each of SSC, IFD and their respective subsidiaries
or other owned business entities has paid all taxes, penalties,
assessments and interest that have become due with respect to any
Tax Returns that it has filed and (ii) none of SSC, IFD or any of
their respective subsidiaries or other owned business entities is
delinquent in the payment of any tax, assessment or governmental
charge.
3.19.3 No Pending Deficiencies, Delinquencies, Assesments or
Audits. None of SSC, IFD or any of their respective subsidiaries
or other owned business entities has received any notice that any
tax deficiency or delinquency has been asserted against it.
There is no taxing authority audit of any of them pending or, to
Seller's knowledge, threatened, and the results of any completed
audits are properly reflected in the Financial Statements. To
Seller's knowledge, no such entity has violated any federal,
state, local or foreign tax law, except where failure to so
comply would not, individually or in the aggregate, have a
Material Adverse Effect.
3.19.4 No Extension or Limitation Period. None of SSC, IFD or
any of their respective subsidiaries or other owned business
entities has granted an extension to any taxing authority of the
limitation period during which any tax liability may be assessed
or collected.
3.19.5 Withholding Requirements Satisfied. All monies required
to be withheld by SSC, IFD or any of their respective
subsidiaries or other owned business entities and paid by them to
governmental agencies for all income, social security,
unemployment insurance, sales, excise, use, and other taxes have
been collected or withheld and paid to the respective
governmental agencies.
3.19.6 Tax Exempt Entity. None of the assets of SSC, IFD or any
of their respective subsidiaries or other owned business
entities, and none of the Ancillary Assets, are subject to a
lease to a "tax exempt entity" as such term is defined in Section
168(h)(2) of the Internal Revenue Code.
3.19.7 Collapsible Corporation. Neither SSC, IFD nor any of
their respective subsidiaries or other owned business entities
has at any time consented, and Inso will not permit them to
elect, to have the provisions of Section 341(f)(2) of the
Internal Revenue Code apply to it.
3.19.8 Boycotts. None of SSC, IFD or any of their respective
subsidiaries or other owned business entities has at any time
participated in or cooperated with any international boycott as
defined in Section 999 of the Internal Revenue Code.
Section 3.20 Compliance with Laws. Each of SSC, IFD and all of
their respective subsidiaries or other owned business entities
has complied with all applicable laws, and regulations and has
filed with the proper authorities all necessary statements and
reports except where the failure to so comply or file would not,
individually or in the aggregate, result in a Material Adverse
Effect. There are no existing violations by any of them of any
federal, state or local law or regulation that could reasonably
be expected to, individually or in the aggregate, result in a
Material Adverse Effect. Each of SSC, IFD and all of their
respective subsidiaries or other owned business entities
possesses all necessary licenses, franchises, permits and
governmental authorizations for the conduct of Seller's PDM
Business as now conducted, all of which are listed (with
expiration dates, if applicable) in the Seller's Disclosure
Schedules. The transactions contemplated by this Agreement will
not result in a default under or a breach or violation of, or
adversely affect the rights and benefits afforded by any such
licenses, franchises, permits or government authorizations,
except for any such default, breach or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
Since January 1, 1997, none of SSC, IFD or any of their
respective subsidiaries or other owned business entities has
received any notice from any federal, state or other governmental
authority or agency having jurisdiction over its properties or
activities, or any insurance or inspection body, that its
operations or any of its properties, facilities, equipment, or
business practices fail to comply with any applicable law,
ordinance, regulation, building or zoning law, or requirement of
any public or quasi-public authority or body, except where
failure to so comply would not, individually or in the aggregate,
have a Material Adverse Effect.
Section 3.21 Finders Fee. Seller has not incurred any obligation
for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
Section 3.22 Litigation. Except as set forth on the Seller's
Disclosure Schedules, there are no legal actions or
administrative proceedings or investigations instituted or, to
Seller 's knowledge, threatened against SSC, IFD and all of their
respective subsidiaries or other owned business entities, either
affecting or that could affect the outstanding shares of capital
stock of SSC, IFD or any of their respective subsidiaries or
other owned business entities, any of the assets of such entities
or the Ancillary Assets, or the operation, business, condition
(financial or otherwise), or results of operations of any aspect
of Seller's PDM Business which (i) if, successful, could,
individually or in the aggregate, have a Material Adverse Effect
or (ii) could adversely affect the ability of Seller to effect
the transactions contemplated hereby. Neither SSC, IFD nor any
of their respective subsidiaries or other owned business entities
is (a) subject to any continuing court or administrative order,
judgment, writ, injunction or decree applicable specifically to
any aspect of Seller's PDM Business or (b) in default with
respect to any such order, judgment, writ, injunction or decree.
Seller has no knowledge of any valid basis for any such action,
proceeding or investigation. All claims made or, to Seller's
knowledge, threatened against each of SSC, IFD and/or any of
their respective subsidiaries or other owned business entities
in excess of its deductible are covered under its Insurance
Policies.
Section 3.23 Condition of Fixed Assets. All of the structures
and equipment reflected in the Financial Statements and used in
Seller's PDM Business are in good condition and repair, subject
to normal wear and tear, and Seller has no actual knowledge of
any latent defects therein.
Section 3.24 Banking Relations. Set forth in Seller's Disclosure
Schedules is a complete and accurate list of all borrowing and
investing arrangements or other banking relationships that SSC,
IFD or any of their respective subsidiaries or other owned
business entities has with any bank or other financial
institution, indicating with respect to each relationship the
type of arrangement maintained (such as checking account,
borrowing arrangements, safe deposit box, etc.) and the person or
persons authorized in respect thereof.
Section 3.25 Ownership Interests of Interested Persons;
Affiliations. To Seller's knowledge, no officer, supervisory
employee or director of Seller or any of its Affiliates, or their
respective spouses, children or Affiliates, owns directly or
indirectly, on an individual or joint basis, any interest in, has
a compensation or other financial arrangement with, or serves as
an officer or director of, any customer or supplier of Seller's
PDM Business, except as a holder of less than 1% of the
outstanding shares of any entity with securities listed on any
national securities exchange or which have been registered under
Section 12(g) of the Securities Exchange Act of 1934.
Section 3.26 Environmental Matters. None of SSC, IFD or any of
their respective subsidiaries or other owned business entities,
nor any of their assets or any of the Ancillary Assets are
currently in violation of, or subject to any existing, pending
or, to Seller's knowledge, threatened, investigation or inquiry
by any governmental authority or to any remedial obligations
under, any Environmental Laws.
Section 3.27 Certain Payments. Neither Inso, SSC, IFD or any of
their respective subsidiaries or other owned business entities
nor any director, officer or employee thereof acting for or on
behalf of any of them or Seller's PDM Business, has paid or
caused to be paid, directly or indirectly, in connection with
Seller's PDM Business:
3.27.1 to any government or agency thereof or any
agent of any supplier or customer any bribe, kick-back or other
similar payment; or
3.27.2 any contribution to any political party or
candidate (other than from personal funds of directors, officers
or employees not reimbursed by their respective employers or as
otherwise permitted by applicable law).
Section 3.28 International Business Matters.
3.28.1 Each of SSC, IFD and their respective
subsidiaries or other owned business entities has complied in all
respects with all laws, regulations and ordinances of the foreign
jurisdictions in which they do business or propose to do
business.
3.28.2 All contracts and agreements between each of
SSC, IFD and their respective subsidiaries or other owned
business entities and any foreign parties are, to the extent
required, duly registered with or approved by the appropriate
regulatory authority in each foreign jurisdiction in which they
do business or propose to do business.
3.28.3 None of SSC, IFD or any of their respective
subsidiaries or other owned business entities has violated any
foreign law, regulation or ordinance or any U.S. laws pertaining
to business with foreign jurisdiction, including without
limitation the United States Foreign Corrupt Practices Act, and
there are no claims or litigation in any foreign jurisdictions
pending or threatened against any of them.
3.28.4 The international sales of Seller's PDM
Business are conducted in full compliance with all applicable
export laws and regulations, and Seller has provided SDRC with
all documents, records or other evidence related to the
classification of the software sold by Seller's PDM Business
under applicable United States export laws and regulations.
3.28.5 Each of SSC, IFD and their respective
subsidiaries or other owned business entities is current on all
material payments due to foreign distributors.
3.28.6 All revenues resulting from sales made in
foreign jurisdictions by SSC, IFD and their respective
subsidiaries or other owned business entities are reported on the
Financial Statements in accordance with United States generally
accepted accounting principles, consistently applied.
3.28.7 Seller does not know of any restrictions
imposed by foreign governments or governmental agencies on the
ability to terminate any distribution agreements or other
agreements with foreign entities selling products of Seller's PDM
Business.
Section 3.29 Maintenance and Enhancement Obligations. Except as
set forth in Seller's Disclosure Schedules, neither Inso, SSC,
IFD nor any of their respective subsidiaries or other owned
business entities has in any manner committed, or is in any way
subject to any commitment or obligation, to provide special
enhancements, releases (including but not limited to SherpaWorks
3i) or updates to any of the software products of Seller's PDM
Business for particular customers or to provide special or
increased maintenance obligations or any other services or
additional products of any kind to any of its customers. There
are no obligations to provide maintenance, service or support to
any of the existing products of Seller's PDM Business besides
those obligations pursuant to Seller's standard written
maintenance or service terms. All of Seller's outstanding
standard maintenance or service agreements are also listed in
Seller's Disclosure Schedules.
Section 3.30 Material Contracts. Seller's Disclosure Schedules
contain a complete and accurate list of any and all contracts of
the following types that have been entered into by SSC, IFD or
any of their respective subsidiaries or other owned business
entities and are executory as of the date of this Agreement:
3.30.1 Any and all contracts under
which any of them is authorized to distribute or resell products
owned or maintained by any third party;
3.30.2 Any and all contracts under which any
third party is authorized to distribute, resell or represent any
products of Seller 's PDM Business;
3.30.3 Any and all contracts providing for the
escrow of software, including source code, that is proprietary to
Seller' s PDM Business.
Seller further represents and warrants that a true and correct
copy of each such contract has been provided to SDRC.
Section 3.31 Product Warranty. No product manufactured,
sold, leased, licensed or delivered by SSC, IFD or any of their
respective subsidiaries or other owned business entities is
subject to any guaranty, warranty, right of return or other
indemnity beyond the applicable standard terms and conditions of
sale or lease, which are set forth in Seller's Disclosure
Schedules, which could reasonably be expected to have a Material
Adverse Effect on PDM Business. Seller's Disclosure Schedules
set forth the aggregate expenses incurred by SSC, IFD or any of
their respective subsidiaries or other owned business entities in
fulfilling their obligations under their guaranty, warranty,
right of return and indemnity provisions during fiscal year 1999.
Section 3.32 Full Disclosure. No representation or warranty
made by Seller in this Agreement or any Schedule or Exhibit
hereto and no statement or certificate or memorandum furnished or
to be furnished by Seller pursuant hereto or in connection with
the transactions covered hereby contains or will contain any
untrue statement of a material fact, or omit to state any
material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not
misleading.
Section 3.33 Approvals of Third Parties. Seller has
secured all necessary approvals and consents of third parties to
the consummation of the transactions contemplated hereby,
including, without limitation, all necessary approvals and
consents required under any real property and personal property
leases. Seller has obtained all necessary government approvals
and consents.
Section 3.34 Eliminate Intercompany Debts. Seller has
eliminated all intercompany payables (whether or not appearing on
the October 31 Balance Sheet) in a manner which shall (i)
preserve at least $2.5 million of net operating loss carry
forwards within SSC as contemplated in Section 6.14 below, and
(ii) not cause any adverse taxable effect to SSC or to SDRC
(except as may reduce SSC's net operating loss carryforwards to
no less than $2.5 million).
Section 3.35 Net Operating Losses. The allocation of net
operating losses provided for in Section 6.14 below will not
adversely affect SDRC's ability to utilize the net operating
losses allocated to SSC as contemplated in Section 3.34 above;
provided, however, that Inso makes no representation or warranty
that SDRC will in fact be able to utilize any such net operating
losses allocated to SSC.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SDRC
SDRC represents and warrants to Seller that the following
are true and correct as of the date hereof:
Section 4.1 Corporate Power and Authorization. The Board of
Directors of SDRC, by resolution adopted by a vote of the
directors at a meeting duly called and held in accordance with
applicable law, has duly approved this Agreement, all in
accordance with and as required by law and in accordance with the
Articles of Incorporation and Code of Regulations of SDRC. The
execution, delivery and performance by SDRC of this Agreement and
the other agreements contemplated hereby, and the consummation of
the transactions contemplated hereby and thereby, have been duly
authorized by SDRC. This Agreement has been duly executed and
delivered by SDRC and constitutes the legal, valid and binding
obligation of SDRC enforceable against SDRC in accordance with
its terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally
or the availability of equitable remedies.
Section 4.2 No violation. Neither the execution, delivery or
performance of this Agreement or the other agreements
contemplated hereby nor the consummation of the transactions
contemplated hereby or thereby will (a) conflict with, or result
in a violation or breach of the terms, conditions or provisions
of, or constitute a default under, the Articles of Incorporation
or Code of Regulations of SDRC, (b) conflict with, or result in a
violation or breach of the terms, conditions or provisions of, or
constitute a default under, any agreement, indenture, right of
first refusal, non-competition agreement or other instrument
under which SDRC is bound or to which any of the assets of SDRC
are subject, or result in the creation or imposition of any
security interest, lien, charge or encumbrance upon any of the
assets of SDRC or (c) violate or conflict with any judgment,
decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body.
Section 4.3 Governmental Authorities; Third Party Consents. SDRC
is not required to submit any notice, report or other filing with
any governmental authority in connection with the execution or
delivery by it of this Agreement or the consummation of the
transactions contemplated hereby or thereby, and no approval or
authorization of any governmental or regulatory authority or any
other party or person is required to be obtained by SDRC in
connection with its execution, delivery and performance of this
Agreement or the transactions contemplated hereby or thereby.
Section 4.4 Full Disclosure. No representation or warranty made
by SDRC in this Agreement or any exhibit hereto and no statement
or certificate or memorandum furnished or to be furnished by SDRC
pursuant hereto or in connection with the transactions covered
hereby contains or will contain any untrue statement of a
material fact, or omit to state any material fact necessary in
order to make the statements made, in light of the circumstances
under which they were made, not misleading.
Section 4.5 Finder's Fee. SDRC has not incurred any
obligation for any finder's, broker's or agent's fee in
connection with the transactions contemplated hereby.
Section 4.6 Financial Statements. SDRC's financial
statements, as filed with the Securities and Exchange Commission
from time to time pursuant to SDRC's quarterly and annual
reporting requirements, have been prepared in accordance with
GAAP and fairly present the financial condition of SDRC.
Section 4.7 Approvals of Third Parties. SDRC secured all
necessary approvals and consents of third parties to the
consummation of the transactions contemplated hereby.
ARTICLE V
CLOSING DELIVERIES
Section 5.1 Deliveries of Seller. At or prior to the Closing
Date, Seller shall deliver to SDRC, the following, all of which
shall be in a form satisfactory to SDRC and its counsel:
5.1.1 a certificate of the President or any Vice
President of Inso, dated the Closing Date, to the knowledge of
such officer, as to the truth and correctness in all material
respects of the representations and warranties of Inso contained
herein on and as of the Closing Date;
5.1.2 a certificate of the President or any Vice
President of Inso, dated the Closing Date, (i) as to the
performance of and compliance in all material respects by Inso
with all covenants contained herein to the knowledge of such
officer on and as of the Closing Date, and (ii) certifying that
all conditions precedent of Inso to the Closing have been
satisfied to the knowledge of such officer;
5.1.3 the minute books, stock transfer records,
corporate seal and other materials related to the corporate
administration of SSC, IFD and all of their respective
subsidiaries and other owned business entities, except for any
such documentation that remains in place at the premises of the
respective entities;
5.1.4 each of the certificates and instruments as to
corporate status set forth on Exhibit 5.1.4 appended hereto;
5.1.5 a copy of each of (i) the text of the
resolutions adopted by the board of directors of Seller
authorizing the execution, delivery and performance of this
Agreement, and (ii) to the extent they exist, the bylaws of each
of SSC, IFD and their respective subsidiaries or other owned
business entities; along with certificates executed by
appropriate corporate officers certifying to SDRC that such
copies are true, correct and complete copies of such resolutions
and bylaws, respectively, and that such resolutions and bylaws
were duly adopted and have not been amended or rescinded;
5.1.6 incumbency certificates executed on behalf of
Seller by its corporate secretary certifying the signature and
office of each officer executing this Agreement;
5.1.7 an opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Fish, LLP,
counsel to Seller, dated as of the Closing Date, in form and
substance reasonably satisfactory to SDRC;
5.1.8 all necessary authorizations, consents,
approvals, permits and licenses;
5.1.9 the resignations of the directors and officers
of SSC, IFD and each of the respective subsidiaries or other
owned business entities as requested by SDRC;
5.1.10 [Reserved]
5.1.11 stock certificates for all outstanding shares
of SSC capital stock, duly endorsed for transfer to Purchaser,
free and clear of any restrictions, liens, pledges or other
encumbrances, together with evidence of the transfer of ownership
to SDRC of the capital stock of IFD, to the reasonable
satisfaction of SDRC's French counsel;
5.1.12 such bills of sale, assignment agreements or
other instruments as may be necessary to properly convey any
Ancillary Assets to SDRC;
5.1.13 a list of all potential purchasers of Seller's
PDM Business other than SDRC who were given any Confidential
Information regarding Seller's PDM Business, a description of the
Confidential Information supplied to them, copies of the
confidentiality agreements they entered into in connection
therewith, and an instrument assigning to SDRC the right to
enforce such confidentiality agreements to the extent assignable;
and
5.1.14 such other instruments or documents as SDRC or
its counsel shall reasonably request to carry out and effect the
purpose and intent of this Agreement.
Section 5.2 Deliveries of SDRC. At or prior to the Closing Date,
SDRC shall deliver to Seller, the following, all of which shall
be in a form satisfactory to Seller and its counsel:
5.2.1 a certificate of an officer of SDRC dated the
Closing Date as to the truth and correctness in all material
respects of the representations and warranties of SDRC contained
herein on and as of the Closing Date;
5.2.2 a certificate of an officer of SDRC dated the
Closing Date, (i) as to the performance and compliance by SDRC
with all covenants contained herein on and as of the Closing Date
and (ii) certifying that all conditions precedent of SDRC to the
Closing have been satisfied;
5.2.3 a copy of the text of the resolutions adopted
by the board of directors of SDRC authorizing the execution,
delivery and performance of this Agreement and the consummation
of all of the transactions contemplated by this Agreement duly
certified by SDRC's corporate secretary;
5.2.4 incumbency certificates executed on behalf of
SDRC by its corporate secretary certifying the signature and
office of each officer executing this Agreement;
5.2.5 the Closing Payment;
5.2.6 an opinion of ▇▇▇▇▇▇▇▇ & Shohl, LLP, counsel to
SDRC as to the due authorization and enforceability of this
Agreement, dated as of the Closing Date, in form and substance
reasonably satisfactory to Inso; and
5.2.7 such other instruments or documents as Seller
and its counsel may reasonably request to carry out the purpose
and intent of this Agreement.
ARTICLE VI
POST CLOSING MATTERS
Section 6.1 Further Instruments of Transfer. Following the
Closing, at the request of SDRC and at SDRC's sole cost and
expense, Seller shall deliver any further instruments of transfer
and take all reasonable action as may be necessary or appropriate
to carry out the purpose and intent of this Agreement.
Section 6.2 Conduct of Business. Notwithstanding Inso's
right to participate in license and maintenance revenue after the
Closing by means of the Anniversary Payment, Inso shall have no
control over the conduct of Seller's PDM Business after the
Closing. SDRC shall, however, operate the business in good faith
with respect to the maintenance revenue stream of Seller's PDM
Business during the one year following the Closing.
Section 6.3 Future Sale of Info Server. SDRC shall not
sell or transfer the Info Server business unit which is included
in Seller's PDM Business to any third party other than Digital
Paper, Inc. for a period of 24 months following the Closing;
provided, however, that as a condition to any sale or transfer of
the Info Server business unit, assets or intellectual property to
Digital Paper, Inc., Buyer shall include a covenant, of which
Inso shall be an express third party beneficiary, prohibiting
any further sale or transfer of such Info Server business unit,
assets or intellectual property until the expiration of such
24-month period.
Section 6.4 Assigned Confidentiality Agreements To the extent
the confidentiality agreements referred to in Section 5.1.13
cannot be assigned to SDRC, Inso hereby agrees that at the
request of SDRC, Inso will enforce such agreements against any
alleged violators thereof, such enforcement to include the
prosecution of appropriate litigation, provided that SDRC shall
reimburse Inso for any and all costs or expenses incurred by it
to effect such enforcement.
Section 6.5 Tax Returns and Audits.
6.5.1 Seller shall cause to be prepared and timely
filed all tax returns of any kind required to be filed by or on
behalf of the SSC, IFD and all of their respective subsidiaries
and other owned business entities that relate to taxable periods
ending on or before the Closing Date. Such returns will be
prepared in a manner consistent with past practice, Seller shall
deliver the originals of those returns to SDRC, which shall
promptly cause each of the returns to be signed by an appropriate
officer of each entity. SDRC shall then cause the signed returns
to be returned to Seller within an appropriate amount of time so
as to permit the timely filing of such returns by Seller.
6.5.2 SDRC shall cause to be prepared and timely filed
all Tax Returns of SSC, IFD and their respective subsidiaries or
other owned business entities that relate to periods after the
Closing Date and SDRC will be responsible for the payment of any
taxes due with respect to these returns.
6.5.3 The current tax years of SSC, IFD and their
respective subsidiaries or other owned business entities shall
end on the Closing Date, and their books will be closed and tax
returns prepared based on such Closing Date.
6.5.4 Seller shall at its expense have the right to
control with respect to SSC, IFD and their respective
subsidiaries or other owned business entities any tax audit and
any administrative or court proceeding concerning taxes
(including penalties and interest) or tax returns for which
Seller could be held solely liable under Article VII hereof, and
Seller shall have the exclusive right to concede, compromise or
contest any assessment or assertion of liability with respect to
any such taxes and any adjustments with respect to such returns.
6.5.5 SDRC shall at its expense have the right to
control with respect to SSC, IFD and their respective
subsidiaries or other owned business entities any tax audit and
any administrative or court proceeding concerning taxes or tax
returns not covered by Section 6.5.4 for which SDRC bears sole
responsibility and to concede, compromise or contest any
assessment or assertion of liability with respect to any such
taxes.
6.5.6 With respect to any tax audit and any
administrative or court proceeding regarding SSC, IFD and their
respective subsidiaries or other owned business entities which
may result in liability for taxes (including penalties and
interest) to both Seller and SDRC, Seller and SDRC both shall
have the right to participate in such audit or administrative or
court proceeding at their own expense and neither Seller nor SDRC
shall have the right to concede, compromise or settle any such
audit or proceeding without the prior written consent of the
other.
6.5.7 Seller, on the one hand, and SDRC, on the other
hand, shall provide reasonable cooperation to each other in
connection with (i) the preparation of and filing of any Tax
Return, tax election, tax consent or certification, or any claim
for refund, (ii) any determination of liability for taxes, and
(iii) any audit, examination or other proceeding in respect of
taxes of SSC, IFD and their respective subsidiaries or other
owned business entities. Such cooperation shall include (i)
making available, on a reasonable basis, employees of Seller,
(ii) promptly forwarding all correspondence and other documents
received from taxing authorities with respect to a matter to the
party assigned in Section 6.5.4 or 6.5.5 hereof to control such
matter, (iii) executing powers of attorney and other authorizing
documents with respect to a matter so as to permit the party
assigned in Section 10.6.4 or 10.6.5 to control such matter, and
(iv) providing access to records and other information in the
possession or under the control of the party. The parties will
preserve all information, records or documents relating to the
liability for taxes of SSC, IFD and their respective subsidiaries
or other owned business entities until the expiration of any
applicable statute of limitations or extensions thereof.
Section 6.6 Nonsolicitation of Employees.
6.6.1 During the two year period following the Closing
Date, Inso shall not offer employment to any employees of
Seller's PDM Business who continue to be employed therein after
the Closing Date, or in any other way solicit, facilitate or
encourage any such employees to leave their employment with
Seller's PDM Business or its successor-in-interest.
6.6.2 During the two year period following the Closing
Date, SDRC shall not offer employment to any employees of the
Seller involved in the negotiation or consummation of the
transactions contemplated by this Agreement and who continue to
be employed by Seller after the Closing Date, or in any other way
solicit, facilitate or encourage any such employees to leave
their employment with the Seller or its successor-in-interest.
Section 6.7 Noncompetition. During the two year period
following the Closing Date, Seller shall not, directly or
indirectly, enter into the PDM Business or otherwise compete with
SDRC, or any subsidiary of SDRC, in connection with the Seller's
PDM Business as presently conducted.
Section 6.8 Effect of Seller's Disputes Regarding SSC.
Seller shall continue to have all obligations arising out of or
associated with its original acquisition of the Seller's PDM
Business, none of which have been assigned to or assumed by SDRC,
including but not limited to any costs incurred (except to the
extent of certain payments to current and former SSC and IFD
employees reflected on the October 31 Balance Sheet and to be
reflected on the Closing Date Balance Sheet) or recovery obtained
relating to the Shareholder Claims (as defined below).
Section 6.9 Termination of Employees. On or prior to April
30, 2000, SDRC shall initiate the process to terminate or cause
the termination of the employment of any employee of Seller's PDM
Business identified by SDRC as an employee not to be retained by
SDRC after the Closing Date. SDRC and Seller shall allocate the
aggregate out of pocket severance costs incurred by SDRC in
effecting such termination as follows:
6.9.1 Seller shall first be responsible for severance
costs in an aggregate amount equal to (i) the entire cost of
severance of the employees identified in Exhibit 6.9.1 plus (ii)
the Established Severance Cost per terminated employee (excluding
the employees named in item (i) above) multiplied by the lesser
of 12.5 or one-half the number of employees terminated, provided
however, that the terminations of these employees are initiated
on or before March 31, 2000. SDRC agrees that the severance of
the individuals listed in Exhibit 6.9.1 will be in accordance
with Established Severance Policies. Seller shall be responsible
for any payment required by an enforceable agreement or by
applicable law to a terminated employee in excess of the
Established Severance Cost for that employee. On or before April
30, 2000, SDRC shall determine the aggregate severance costs to
be allocated to Seller pursuant to this Section and submit an
invoice for such amount to Seller. Seller shall remit such
amount to SDRC within 30 days of receipt of the invoice from
SDRC.
6.9.2 Purchaser shall be responsible for all
Established Severance Costs in excess of the total costs to be
borne by Seller under Section 6.9.1. The Purchaser shall not be
responsible for any severance costs or any portion of any
severance costs that exceed the Established Severance Costs to
the extent required by an enforceable agreement or by applicable
law.
6.9.3 For purposes of this Section 6.9, Established
Severance Costs shall refer only to those payments to be made to
an employee pursuant to an applicable Established Severance
Policy in connection with the involuntarily termination without
cause of such employee ("Established Severance Costs").
6.9.4 For purposes of this Section 6.9, (i) the value
of any Inso stock options held by terminated employees and (ii)
any stay bonuses or other retention amounts payable to employees
of Seller's PDM Business which are not reflected on the October
31 Balance Sheet shall be disregarded and shall be solely at
Inso's cost.
Section 6.10 Retention Bonuses. SDRC may pay a bonus or
otherwise give consideration to an employee of the Seller 's PDM
Business for the purpose of securing that employee's continued
employment with the Seller's PDM Business (a "Retention Bonus").
To the extent SDRC pays any Retention Bonus prior to March 31,
2001, Seller shall reimburse SDRC in an amount equal to one-half
of any such Retention Bonus up to a maximum aggregate amount of
$250,000. Seller shall make such reimbursement in the form of a
reduction of the Anniversary Payment to the extent the
Anniversary Payment is sufficient to satisfy the Seller's
obligation or any part of the Seller's obligation pursuant to
this Section 6.10. Seller shall have no obligation to reimburse
SDRC pursuant to this section for any amount that cannot be
satisfied by a reduction of the Anniversary Payment.
Section 6.11 Accounts Receivable. Seller hereby guarantees
the collection of all accounts receivable net of amounts reserved
for doubtful accounts reflected on the Closing Date Balance Sheet
(the "Accounts Receivable") subject to the limitations set forth
in Section 7.2 of this Agreement and solely to the extent SDRC
has not sought indemnification under Article VII with respect to
Section 3.10.2 of this Agreement. SDRC shall use all
commercially reasonable efforts, including pursuit of legal
actions, to collect all Accounts Receivable within 180 days of
the date on which each Account Receivable first became due and
payable. In the event SDRC, having exercised such commercially
reasonable efforts, is unable to collect an Account Receivable
within such 180 day period, SDRC shall submit an invoice to
Seller within 30 days of the expiration of such 180 day period
for the amount that was not collected, along with an assignment
to Seller of such Account Receivable. Seller shall remit such
amount to SDRC within 30 days of receipt of the invoice from
SDRC.
Section 6.12 Existing Claims.
6.12.1 SDRC shall assume initial responsibility for
the settlement of all Existing Customer Claims scheduled by
Seller pursuant to Section 2.3.2. SDRC shall use commercially
reasonable efforts to settle each Existing Customer Claim for the
lowest amount. To the extent SDRC is able to resolve or settle
each Existing Customer Claim for an actual cost to SDRC that is
equal to or less than the specific dollar amount of the liability
allocated to each Existing Customer Claim according to Schedule
2.3.2, there shall be no adjustment to the Purchase Price. SDRC
shall use its commercially reasonable efforts to settle each
Existing Customer Claim for the lowest amount. If SDRC is able
to resolve or settle any Existing Customer Claim for an amount
less than the specific dollar amount scheduled on Schedule 2.3.2,
the difference shall be set aside and used to offset any other
Existing Customer Claim the ultimate resolution of which exceeds
the scheduled provision. If SDRC is unable to resolve or settle
any Existing Customer Claim for an amount equal to or less than
the specific dollar amount of liability allocated to each
Existing Customer Claim on Schedule 2.3.2, SDRC shall so notify
Seller. Seller shall then use commercially reasonable efforts,
acting in full cooperation with SDRC, to attempt to resolve such
Existing Customer Claim, and Seller shall be liable to SDRC for
the amount by which the actual cost of resolution (including
actual out-of-pocket expenses) exceeds the scheduled liability
amount. SDRC shall act in good faith (i) with respect to the
settlement of any Existing Customer Claim and (ii) in notifying
Seller of the resolution or settlement, or the inability to reach
a resolution or settlement, of any Existing Customer Claim. For
purposes of this Section 6.12, to the extent the settlement of
any Existing Customer Claim involves the provision by SDRC of
services or additional products in-kind, such service and/or
products shall be valued as agreed to by SDRC and Seller, SDRC
having no obligation to undertake such services or provide such
products at all or at a cost less than the published list prices
thereof.
6.12.2 Other than those claims that are listed on
Schedule 2.3.2, the treatment of which is provided for above in
Section 6.12.1, Seller is and shall remain responsible for
resolving all claims listed on Schedule 3.22 at its sole expense.
Section 6.13 European Leases. SDRC shall permit Inso
personnel located in any European leased premises to continue in
their current space for a period of 90 days following the Closing
Date in exchange for monthly payments by Inso to SDRC equal to
the monthly rental amounts for the applicable office space
pursuant to the primary lease for such location and pro-rated
according to the portion of the total square footage occupied by
Inso personnel.
Section 6.14 Elections under the Internal Revenue Code.
SDRC shall not make an election under Section 338 of the Internal
Revenue Code in connection with the acquisition of SSC Stock and
IFD Stock and the Ancillary Assets. The parties hereby agree to
attribute the accumulated net operating losses of SSC as between
SSC and Inso, pursuant to Treasury Regulation Section
1.1502-20(g)(5), such that a total of $2.5 million thereof shall
be retained within SSC after the Closing and all other net
operating loss carryforwards shall be reattributed to SSC's
parent corporation, Inso. Exhibit 6.14 identifies by the year
incurred and dollar amount exactly which net operating losses are
to be allocated to SSC, and the parties shall take such further
actions and execute such further instruments as may be reasonably
required to give effect to such allocation.
Section 6.15 Post-Closing Audit Assistance. The parties
acknowledge that ▇▇▇▇▇ ▇▇▇▇▇ will remain an Inso employee.
Following the Closing, Inso will permit SDRC to purchase the
services of ▇▇. ▇▇▇▇▇ on a per diem basis based on her current
base salary during the period ending March 31, 2000 for the
purpose of assisting SDRC with the transition of SSC ownership to
SDRC. The parties further acknowledge that ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇ will remain as SSC employees. Following the
Closing, SDRC will permit Inso to purchase the services of ▇▇.
▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ on a per diem basis based on their current
base salaries during the period ending March 31, 2000 for the
purpose of assisting Inso with the completion of its 1999
financial statements.
Section 6.16 Access to Information. SDRC acknowledges that,
in connection with Seller's purchase of SSC in December, 1998,
Seller is currently pursuing legal actions against the former
stockholders of SSC (collectively, the "Shareholder Claims"), and
in that regard Seller will require reasonable access to the
books, records and other information related to the Seller's PDM
Business following the Closing. SDRC agrees that it will and
that it will cause its affiliates and subsidiaries to cooperate
with Inso in pursuit of the Shareholder Claims and to provide
Inso with reasonable access to the books, records and other
information concerning the Seller's PDM Business which existed
prior to the Closing. In furtherance of the foregoing, without
limitation, SDRC agrees to deliver to Inso or to maintain for
review and duplication by Inso all e-mail tape back-ups of the
Seller's PDM Business which exist as of the date of the Closing.
SDRC shall not destroy any such records for a period of at least
three years after the Closing Date.
ARTICLE VII
INDEMNIFICATION
Section 7.1 Agreements to Indemnify.
7.1.1 As used in this Article VII:
(i) "Indemnified Claims" means assertions of
indemnification obligations hereunder made by an
Indemnified Party.
(ii) "Damages" means damages, liabilities, losses,
judgments, settlements, and expenses, including,
without limitation, all reasonable attorneys' fees;
provided that, in no event shall "Damages" mean
consequential, special or punitive damages (except
where an underlying cause of action giving rise to any
such Damages is fraud).
(iii) "Indemnified Party" means (a) with respect to the
Seller's obligations hereunder, SDRC and each of its
subsidiaries and affiliates, and (b) with respect to
SDRC's obligations hereunder, the Seller and each of
their subsidiaries and affiliates.
(iv) "Indemnifying Party" means (a) Seller with respect
to indemnity obligations owed by Inso on and after the
Closing, and (b) SDRC, with respect to indemnity
obligations owed by SDRC on and after the Closing.
7.1.2 On the terms and subject to the limitations set
forth in this Agreement, each Indemnifying Party shall indemnify,
defend and hold each Indemnified Party harmless from, against and
in respect of any and all Damages incurred by any Indemnified
Party arising from or in connection with (i) any material breach
of any representation, warranty or covenant made by the
Indemnifying Party and not known to the Indemnified Party as of
the Closing, (ii) the cost of remedying any deficiency described
on Schedule 3.4 of Seller's Disclosure Schedules, or (iii) the
result of any of the claims of third parties specified on
Schedule 3.22 included in Seller's Disclosure Schedules to the
extent any such claim is not covered by Section 6.12 of this
Agreement.
Section 7.2 Limitations of Indemnity Obligations.
7.2.1 The indemnity obligations of the Indemnifying
Party shall expire 90 days after the first anniversary of the
Closing Date, except that indemnity obligations with respect to
tax matters and with respect to claims under Sections 7.1.2 (ii)
and (iii) above shall survive until the expiration of any
applicable limitations period. The indemnification period
provided for herein shall be tolled for a particular claim for
the period beginning on the date the Indemnifying Party receives
written notice of such claim until the final resolution of such
claim.
7.2.2 The aggregate indemnity obligations of each of
the Seller and SDRC under this Agreement shall not in any event
exceed 100% of the Purchase Price.
7.2.3 An Indemnified Party shall be entitled to
indemnification only if the aggregate and collective Damages for
which it otherwise would be entitled to indemnification under
this Agreement exceed $50,000, in which event it shall be
entitled to indemnification of the full amount of Damages for
which it would be entitled to indemnification under this Article
VII exceeding such amount. In connection with any claim for
indemnification by SDRC hereunder, the procedure set forth below
shall be followed:
Section 7.3 Notice of Claim. An Indemnified Party shall
promptly notify the Indemnifying Party in writing (the "Claim
Notice") of any Indemnified Claim asserted by a third person that
might give rise to any indemnity obligation hereunder (a "Third
Party Claim"), specifying in reasonable detail the nature thereof
and indicating the amount (estimated if necessary) of the Damages
that have been or may be sustained by the Indemnified Party.
Failure of an Indemnified Party to promptly give such notice
shall not relieve the Indemnifying Party of its obligation to
indemnify under this Article VII, but as a result of such
failure, the Indemnifying Party shall not be liable to the
Indemnified Party for the amount of actual damages caused by such
failure. Together with or following such Claim Notice, the
Indemnified Party shall deliver to the Indemnifying Party copies
of all notices and documents received by such Indemnified Party
relating to the Third Party Claim (including court papers).
Notwithstanding such notice requirements, notice shall be deemed
to have already been effectively given with respect to the claims
referenced in Sections 6.12.1 and 6.12.2.
Section 7.4 Defense and Settlement of Third Party Claims.
An Indemnifying Party shall have the right (without prejudice to
the right of an Indemnified Party to participate at its own
expense through counsel of its own choosing) to defend against
any Third Party Claim at its expense and through counsel of its
own choosing and to control such defense if it gives written
notice of its intention to do so within 15 business days of its
receipt of a Claim Notice of such Third Party Claim. The
Indemnified Party shall cooperate fully in the defense of such
Third Party Claim and shall make available to the Indemnifying
Party or its counsel all pertinent information under its control
relating thereto. The Indemnified Party shall have the right to
elect to settle any Third Party Claim; provided, however, the
Indemnifying Party shall not have any indemnification obligation
with respect to any monetary payment to any third party required
by such settlement unless the Indemnifying Party shall have
consented in writing thereto. The Indemnifying Party shall have
the right to elect to settle any Third Party Claim subject to the
written consent of the Indemnified Party which consent shall not
be unreasonably withheld; provided, however, that if the
Indemnified Party fails to give such written consent within 15
business days of being requested to do so, the Indemnified Party
shall, at its or his expense, assume the defense of such Third
Party Claim and regardless of the outcome of such matter, the
Indemnifying Party's liability hereunder shall be limited to the
amount of any such proposed settlement.
Section 7.5 Remedies Exclusive. The remedies provided in
this Article VII shall be the sole and exclusive rights and
remedies available to one party against the other, either at law
or in equity, with respect to a breach of this Agreement.
Section 7.6 Tax Benefits; Insurance Proceeds. The total amount
of any indemnity payments pursuant to this Article VII shall be
reduced by any correlative tax benefit received by the
Indemnified Party or the net proceeds received by the Indemnified
Party with respect to recovery from third parties or insurance
proceeds, and such correlative insurance benefit shall be net of
the insurance premium, if any, that becomes due as a result of
such claim.
Section 7.7 Payment of Indemnification Obligation. In the event
that Seller has an indemnification obligation to SDRC hereunder,
SDRC may satisfy such obligation by setting off the amount in
question against SDRC's obligation to pay Inso the Supplemental
Closing Fund and/or to make the Anniversary Payment and thereby
reducing such payment obligation(s).
ARTICLE VIII
PUBLICITY
All notices to third parties and all other parties
concerning the transactions contemplated by this Agreement shall
be jointly planned and coordinated by and between the parties.
None of the parties shall cause or authorize any such notice or
publicity without the prior written approval of the other party;
provided, however, that in the case of an announcement which
either party may be required by law, by any governmental agency
or by the Nasdaq National Market to make, issue or release, such
action by such party without the prior approval by the other
parties shall not constitute a breach of this Article. In the
event a party is required by law, by any governmental agency or
by the Nasdaq National Market to make any disclosure as described
in the herein, it shall use commercially reasonable efforts to
provide prompt notice to the other party of such disclosure and
consult with the other party prior to making such disclosure.
The parties agree to coordinate their respective announcements of
this transaction for public issuance on January 6, 2000.
ARTICLE IX
NONDISCLOSURE OF COFIDENTIAL INFORMATION
Section 9.1 Nondisclosure. Seller and SDRC recognize and
acknowledge that they had in the past, currently have, and in the
future may possibly have, access to certain Confidential
Information (in such capacity, the "Receiving Party") of one or
more other parties (in such capacity, the "Disclosing Party")
that is valuable, special and unique assets of the Disclosing
Party or its businesses. Each Receiving Party agrees that it will
keep all Confidential Information it receives from a Disclosing
Party confidential and will not permit any of its directors,
officers employees, agents and representatives, including without
limitation attorneys, accountants, consultants and financial
advisors (collectively, "Advisors") to, without in each case the
prior written consent of the Disclosing Party, disclose the
Confidential Information in any manner whatsoever, in whole or in
part. Each Receiving Party further agrees that all Confidential
Information which it receives from any Disclosing Party will not
be used by the Receiving Party or its Advisors directly or
indirectly for any purpose other than evaluating the transactions
contemplated by this Agreement and agrees to transmit the
Confidential Information only to those Advisors who need to know
the Confidential Information for the purpose of evaluating such
transactions, who are informed by the Receiving Party of the
confidential nature of the Confidential Information and who are
provided with a copy of, and agree to be bound by, the provisions
of this Article IX. The Receiving Party shall be responsible for
any breach of the provisions of this Article IX by any of its
Advisors, and will indemnify and hold harmless the Disclosing
Party for any losses, damages, charges, fees or expenses,
including reasonable attorney's fees arising out of or resulting
from such breach.
Section 9.2 Control of Confidential Information. Each Receiving
Party shall keep a record of each location of any written
Confidential Information. Upon any termination of this
Agreement, all written Confidential Information and any copies
thereof will be returned by the Receiving Party to the Disclosing
Party or, at the option of the Disclosing Party, destroyed
immediately at the Disclosing Party's request.
Section 9.3 Limitations. The provisions of this Article IX shall
be inoperative as to such portions of the Confidential
Information which (i) are or become generally available to the
public other than as a result of a disclosure by the Receiving
Party or any of its Advisors; (ii) become available to the
Receiving Party on a nonconfidential basis from a source (other
than the Disclosing Party or one of its Advisors) which has
represented to the Receiving Party that such source is entitled
to disclose it; or (iii) were known to the Receiving Party on a
nonconfidential basis prior to its disclosure to the Receiving
Party by the Disclosing Party or one of its Advisors; or (iv) is
independently developed by the Receiving Party without
misappropriating Confidential Information of the Disclosing
Party.
Section 9.4 Legal Obligations. In the event that a Receiving
Party or anyone to whom a Receiving Party transmits the
Confidential Information is requested or becomes legally
compelled (by oral questions, interrogatories, requests for
information or documents, subpoena, criminal or civil
investigative demand or similar process) to disclose any of the
Confidential Information, or if a Receiving Party determines in
its good faith judgment that disclosure of Confidential
Information is required by federal securities laws or the rules
of the National Association of Securities Dealers, the Receiving
Party will provide the Disclosing Party with prompt written
notice so that the Disclosing Party may seek a protective order
or other appropriate remedy and/or waive compliance with the
provisions of this Article IX, and the Receiving Party will
cooperate with the Disclosing Party in any effort the Disclosing
Party undertakes to obtain a protective order or other remedy.
In the event that such a protective order or other remedy is not
obtained, or that the Disclosing Party waives compliance with the
provisions of this Article IX, the Receiving Party will furnish
only that portion of the Confidential Information which is
legally required and will exercise commercially reasonable
efforts to obtain reliable assurance that confidential treatment
will be accorded the Confidential Information.
Section 9.5 Remedies. Each Receiving Party agrees that a
Disclosing Party shall be entitled to equitable relief, including
temporary restraining orders, injunctions and specific
performance, in the event of any breach of the provisions of this
Article IX. Such remedies shall not be deemed to be the
exclusive remedies for a breach of this Article IX by a Receiving
Party or its Advisors but shall be in addition to all other
remedies available at law or equity.
ARTICLE X
MISCELLANEOUS
Section 10.1 Entire Agreement, Modification and Waiver. This
Agreement constitutes the entire agreement between the parties
pertaining to its subject matter and supersedes all prior and
contemporaneous agreements, representations and understandings of
the parties. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by all the
parties. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
Section 10.2 Consents. Where any consent or waiver of SDRC is
required or requested hereunder, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Vice
President, Secretary and General Counsel, shall be the authorized
person to provide any such consent or waiver. Where any consent
or waiver of Seller is required or requested hereunder, ▇▇▇▇▇
▇▇▇▇, Vice President-Business Development, shall be the
authorized person to provide any such consent or waiver. The
waiver of any of the terms and conditions of this Agreement shall
not be construed as a waiver of any other terms and conditions
hereof.
Section 10.3 Assignment. Neither this Agreement nor any right
created hereby or in any agreement entered into in connection
with the transactions contemplated hereby shall be assignable by
any party hereto, except by SDRC to a wholly owned subsidiary of
SDRC; provided that any such assignment shall not relieve SDRC of
its obligations hereunder.
Section 10.4 Parties in Interest; No Third Party Beneficiaries.
Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon
the respective heirs, legal representatives, successors and
assigns of the parties hereto. Except as contemplated by Section
6.3, neither this Agreement nor any other agreement contemplated
hereby shall be deemed to confer upon any person not a party
hereto or thereto any rights or remedies hereunder or thereunder.
Inso specifically agrees that SSC and/or SDRC may enforce the
terms of any employee confidentiality agreements of employees of
SSC after the Closing even if originally entered into by them
with Inso directly.
Section 10.5 Seller's Disclosure Schedules. Disclosure
appearing on the Seller's Disclosure Schedules with respect to
any particular representation and warranty shall be deemed
disclosure with respect to every other representation and
warranty, as applicable; provided, however, it must be clear from
the context of the representations and warranties and the
Seller's Disclosure Schedules that such treatment is appropriate.
Seller shall disclose in good faith any and all items to be
scheduled with respect to any particular representation and
warranty on the proper Seller's Disclosure Schedule.
Section 10.6 Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof, such provision
shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as
similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
Section 10.7 Survival of Representations, Warranties and
Covenants. The representations, warranties and covenants
contained herein shall survive the Closing Date and all
statements contained in any certificate, exhibit or other
instrument delivered by or on behalf of Seller or SDRC pursuant
to this Agreement shall be deemed to have been representations
and warranties by Seller or SDRC, as applicable, and,
notwithstanding any provision in this Agreement to the contrary,
the representations and warranties contained herein shall survive
until the first anniversary of the Closing Date except that the
representations and warranties set forth in this Agreement with
respect to tax matters shall survive until the expiration of any
applicable limitations period.
Section 10.8 Governing Law. This agreement and the rights and
obligations of the parties hereto shall be governed by and
construed and enforced in accordance with the substantive laws
(but not the rules governing conflicts of laws) of the State of
Ohio.
Section 10.9 Captions. The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect any of the terms or provisions hereof.
Section 10.10 Gender and Number. When the context requires, the
gender of all words used herein shall include the masculine,
feminine and neuter and the number of all words shall include the
singular and plural.
Section 10.11 Notice. Whenever this Agreement requires or
permits any notice, request, or demand from one party to another,
the notice, request, or demand must be in writing to be effective
and shall be deemed to be delivered and received (i) if
personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party
to whom notice is sent or (ii) if delivered by mail (whether
actually received or not), at the close of business on the third
business day next following the day when placed in the mail,
postage prepaid, certified or registered, addressed to the
appropriate party or parties, at the address of such party set
forth below (or at such other address as such party may designate
by written notice to all other parties in accordance herewith):
If to SDRC: Structural Dynamics Research Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
with a copy to: ▇▇▇▇▇▇▇▇ & Shohl LLP
1900 Chemed Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
If to Seller: Inso Corporation
▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Fish, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
General Counsel
Inso Corporation
▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 10.12 No Waiver, Remedies. No party hereto shall by any
act (except by written instrument pursuant to Section 10.1
hereof), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced
in any default in or breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on
the part of any party hereto, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. Except as specifically set
forth herein, no remedy set forth in this Agreement or otherwise
conferred upon or reserved to any party shall be considered
exclusive of any other remedy available to any party, but the
same shall be distinct, separate and cumulative and may be
exercised from time to time as often as occasion may arise or as
may be deemed expedient.
Section 10.13 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same
instrument.
Section 10.14 Costs, Expenses and Legal Fees. Whether or not the
transactions contemplated hereby are consummated, each party
hereto shall bear its own costs and expenses (including
attorneys' fees) incurred in connection with the transactions
contemplated herein. Seller's expenses shall not be expensed or
paid through SSC, IFD or any of their respective subsidiaries or
other owned business entities and shall be paid directly by
Seller.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first written above.
INSO CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: President and Chief Operating Officer
STRUCTURAL DYNAMICS RESEARCH CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its:
EXHIBITS
Exhibit Description
1.2.5 Identified Customers
6.9.1 Certain Employees to be Terminated
6.14 Attribution of Net Operating Losses
5.1.4 Corporate Status Documentation
9.3 Form of Opinion of Counsel to Seller
SELLER'S DISCLOSURE SCHEDULES
Schedule Description
1.2.1 Ancillary Assets
2.3.2 Existing Customer Claims
3.5 Capitalization
3.11.1 Employee Compensation
3.11.2 Compensation Plans
3.11.3 Employment Agreements
3.11.4 Employee Policies and Procedures
3.12.1 Employee Benefit Plans
3.15.1 Commitments
3.16 Insurance Policies and Claims
3.17 Intellectual Property
3.19 Taxes
3.22 Litigation
3.24 Banking Relations
3.29 Maintenance and Enhancements
3.30 Material Contracts
3.31 Product Warranty