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EXHIBIT 10.37
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ASSET PURCHASE AGREEMENT
among:
PRESCIENT TECHNOLOGIES, INC.,
a Delaware corporation;
STONE & ▇▇▇▇▇▇▇, INCORPORATED
A Delaware corporation
and
SPATIAL TECHNOLOGY INC.,
a Delaware corporation
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Dated as of June 28, 2000
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TABLE OF CONTENTS
PAGE
1. SALE OF ASSETS; RELATED TRANSACTIONS.....................................................................1
1.1 SALE OF ASSETS...........................................................................................1
1.1 Purchase Price..................................................................................2
1.2 Sales Taxes.....................................................................................4
1.3 Closing.........................................................................................4
2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER AND THE SELLER.........................................5
2.1 Due Organization; No Subsidiaries; Etc..........................................................5
2.2 Certificate of Incorporation and Bylaws; Records................................................5
2.3 Capitalization..................................................................................6
2.4 Financial Statements............................................................................6
2.5 Absence of Changes..............................................................................6
2.6 Title To Assets.................................................................................6
2.7 Bank Accounts...................................................................................6
2.8 Receivables.....................................................................................7
2.9 Customers; Distributors.........................................................................7
2.10 Equipment, Etc..................................................................................7
2.11 Real Property...................................................................................8
2.12 Proprietary Assets..............................................................................8
2.13 Contracts.......................................................................................9
2.14 Liabilities; Major Suppliers....................................................................9
2.15 Compliance with Legal Requirements.............................................................10
2.16 Tax Matters....................................................................................11
2.17 Employees......................................................................................11
2.18 Benefit Plans; ERISA...........................................................................11
2.19 Environmental Matters..........................................................................11
2.20 Performance Of Services........................................................................11
2.21 Insurance......................................................................................11
2.22 Related Party Transactions.....................................................................11
2.23 Proceedings; Orders............................................................................11
2.24 Authority; Binding Nature Of Agreements........................................................12
2.25 Non-Contravention; Consents....................................................................12
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TABLE OF CONTENTS
(CONTINUED)
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2.26 Brokers........................................................................................12
2.27 The Stockholder................................................................................12
2.28 Full Disclosure................................................................................13
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.........................................................13
3.1 Authority; Binding Nature Of Agreements........................................................13
3.2 Brokers........................................................................................13
4. COVENANTS...............................................................................................13
4.1 ACCESS AND INVESTIGATION................................................................................13
4.2 OPERATION OF BUSINESS...................................................................................14
4.2 Filings and Consents...........................................................................15
4.4 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE............................................................15
4.5 NONSOLICITATION.........................................................................................16
4.6 BEST EFFORTS............................................................................................16
4.6 COURT APPROVAL..........................................................................................16
4.8 CONFIDENTIALITY.........................................................................................16
4.3 Operations Following Closing...................................................................16
4.4 Further Actions................................................................................16
4.5 Publicity......................................................................................17
4.6 Change of Name.................................................................................17
4.7 Use of Premises................................................................................17
4.8 Restrictions on Transfer.......................................................................17
4.15 REGISTRATION RIGHTS.....................................................................................18
5. CONDITIONS TO CLOSING...................................................................................19
5.1 CONDITIONS APPLICABLE TO ALL PARTIES....................................................................19
5.2 ADDITIONAL CONDITION APPLICABLE TO THE PURCHASER'S OBLIGATIONS..........................................19
5.3 ADDITIONAL CONDITION APPLICABLE TO STOCKHOLDER'S AND SELLER'S OBLIGATIONS...............................20
6. INDEMNIFICATION, ETC....................................................................................20
6.1 Survival Of Representations And Covenants......................................................20
6.2 Indemnification By The Seller..................................................................21
6.3 Indemnification By Purchaser...................................................................22
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TABLE OF CONTENTS
(CONTINUED)
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6.4 Setoff.........................................................................................23
6.5 Nonexclusivity Of Indemnification Remedies.....................................................23
6.6 Limitations....................................................................................23
6.7 Escrow.........................................................................................23
6.8 Defense Of Third Party Claims..................................................................24
6.9 Exercise Of Remedies By Indemnitees Other Than Purchaser.......................................25
7. SECURITIES LAWS COMPLIANCE..............................................................................25
7.1 Investigation..................................................................................25
7.2 Accredited Investor............................................................................25
7.3 Purchase Entirely for Own Account..............................................................25
7.4 Restricted Securities..........................................................................25
8. MISCELLANEOUS PROVISIONS................................................................................25
8.1 Further Assurances.............................................................................25
8.2 Fees and Expenses..............................................................................26
8.3 Attorneys' Fees................................................................................26
8.4 Notices........................................................................................26
8.5 Time Of The Essence............................................................................27
8.6 Headings.......................................................................................27
8.7 Counterparts...................................................................................27
8.8 Governing Law; Venue...........................................................................28
8.9 Successors And Assigns; Parties In Interest....................................................28
8.10 Remedies Cumulative; Specific Performance......................................................29
8.11 Waiver.........................................................................................29
8.12 Amendments.....................................................................................29
8.13 Severability...................................................................................29
8.14 Entire Agreement...............................................................................30
8.15 Knowledge......................................................................................30
8.16 Construction...................................................................................30
8.17 Court Approval.................................................................................30
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TABLE OF CONTENTS
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Exhibits
Exhibit A - Certain Definitions
Exhibit B - Form of Escrow Agreement
Exhibit C - Form of Assumption Agreement
Exhibit D - Forms of Purchaser Noncompetition Agreements
Exhibit E - Excluded Assets
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT") is entered
into as of June 28, 2000, by and among PRESCIENT TECHNOLOGIES, INC. a Delaware
corporation (the "SELLER"), STONE & ▇▇▇▇▇▇▇, INCORPORATED, a Delaware
corporation (the "STOCKHOLDER"), and SPATIAL TECHNOLOGY INC., a Delaware
corporation (the "PURCHASER"). Certain capitalized terms used in this Agreement
are defined in Exhibit A.
RECITALS
A. The Stockholder is the sole shareholder of the Seller.
B. The Purchaser and the Seller wish to provide for the sale of
substantially all of the assets and certain of the liabilities of the Seller to
the Purchaser on the terms set forth in this Agreement.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
1. SALE OF ASSETS; RELATED TRANSACTIONS.
1.1 SALE OF ASSETS. The Stockholder and the Seller shall cause to be
sold, assigned, transferred, conveyed and delivered to the Purchaser, at the
Closing (as defined below), good and valid title to the Assets (as defined
below), free of any Encumbrances, on the terms and subject to the conditions set
forth in this Agreement. For purposes of this Agreement, "ASSETS" shall mean and
include: (a) all of the properties, rights, interests and other tangible and
intangible assets of the Seller (wherever located and whether or not required to
be reflected on a balance sheet prepared in accordance with GAAP), including any
assets acquired by the Seller during the Pre-Closing Period; and (b) any other
assets that are owned by the Stockholder or any other Related Party and that are
needed for the conduct of, or are useful in connection with, the business of the
Seller and which are specifically identified prior to Closing; provided,
however, that the Assets shall not include any Excluded Assets. Without limiting
the generality of the foregoing, the Assets shall include:
(a) all accounts receivable, notes receivable and
other receivables of the Seller identified in Part 2.8 of the
Disclosure Schedule;
(b) all inventories and work-in-progress of the
Seller, and all rights to collect from customers (and to retain) all
fees and other amounts payable, or that may become payable, to the
Seller with respect to products sold and/or services performed by or on
behalf of the Seller on or prior to the Closing Date;
(c) all equipment, materials, prototypes, tools,
supplies and other tangible assets of the Seller identified in Part
2.10 of the Disclosure Schedule;
(d) all advertising and promotional materials
possessed by the Seller;
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(e) all Proprietary Assets and goodwill of the Seller
(including the right to use the names "Prescient Technologies, Inc.,"
"DesignQA," "GeometryQA," "DriveQA," "CertifyQA," "AuditQA," and
"MyQualityQA" and any and all variations thereof, and the Proprietary
Assets identified in Part 2.12 of the Disclosure Schedule);
(f) all rights of the Seller under the Contracts
identified in Part 2.13 of the Disclosure Schedule);
(g) all Governmental Authorizations held by the
Seller;
(h) all claims (including claims for past
infringement of Proprietary Assets) and causes of action of the Seller
against other Persons (regardless of whether or not such claims and
causes of action have been asserted by the Seller), and all rights of
indemnity, warranty rights, rights of contribution, rights to refunds,
rights of reimbursement and other rights of recovery possessed by the
Seller (regardless of whether such rights are currently exercisable);
and
(i) all books, records, files and data of the Seller.
1.1 PURCHASE PRICE.
(A) The total potential consideration for the sale of the
Assets to the Purchaser shall be 350,000 shares of restricted common stock of
the Purchaser (the "COMMON STOCK") subject in part to the conditions set forth
below plus One Hundred Thousand Dollars ($100,000) payable as follows:
(I) at the Closing (as defined below), the Purchaser shall
transfer to the Seller 300,000 shares of its Common Stock;
(II) at the Closing, the Purchaser shall deposit 50,000
shares of Common Stock (the "ESCROW FUND") in an escrow account (the
"ESCROW ACCOUNT") to be established as of the Closing Date (as defined
below) pursuant to an Escrow Agreement among the Seller, the
Stockholder, the Purchaser and Norwest Bank Colorado, N.A. (the "ESCROW
AGENT"), substantially in the form of Exhibit B (the "ESCROW
AGREEMENT");
(III) at the Closing, Purchaser shall transfer to Seller's
designated bank account by wire transfer of immediately available funds
the amount of $100,000, provided, however, this payment shall only be
payable in the event that the obligations under the Northrop Grumman
Corporation Purchase Order (No. 114-D20097 AZ) dated May 4, 2000,
remain in effect as of the Closing Date and no shipment of product has
been made under that agreement; and
(IV) at the Closing, the Purchaser shall assume the
Assumed Liabilities by delivering to the Seller an Assumption Agreement
in substantially the form of Exhibit C (the "ASSUMPTION AGREEMENT");
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(B) The Escrow Fund shall be retained by the Escrow Agent for
not more than twelve (12) months following the Closing Date and shall be repaid
as follows:
(i) For a period of six months following the Closing
Date, the Escrow Fund shall be retained by the Escrow Agent to secure
the indemnity obligations of the Seller as set forth in Section 6
below.
(ii) Beginning six months after the Closing Date, if
a commercial agreement is or has been reached between the Purchaser and
General Motors Corporation ("GM") regarding the purchase by GM of
products comprising Assets in an amount not less than $250,000, the
Escrow Fund (less any amount previously released to Purchaser in
accordance with the terms of the Escrow Agreement and any amount
retained to honor any pending Claims (as defined in the Escrow
Agreement) shall be released to Seller.
(iii) If the criteria set forth in clause (ii) above
have not been met, then on the date that is twelve months after the
Closing Date, the entire remaining Escrow Fund shall be returned to the
Seller.
(C) For purposes of this Agreement "ASSUMED LIABILITIES" shall
mean only the obligations of the Seller under those contracts identified in Part
2.13 of the Disclosure Schedule, but only to the extent such obligations (A) do
not arise from or relate to any Breach by the Seller of any provision of any of
such Contracts, (B) do not arise from or relate to any event, circumstance or
condition occurring or existing on or prior to the Closing Date that, with
notice or lapse of time, would constitute or result in a Breach of any of such
Contracts, and (C) are ascertainable (in nature and amount) solely by reference
to the express terms of such Contracts;
provided, however, that notwithstanding the foregoing, and notwithstanding
anything to the contrary contained in this Agreement, the "Assumed Liabilities"
shall not include, and the Purchaser shall not be required to assume or to
perform or discharge:
(1) any Liability of the Stockholder or any other Person,
except for the Seller;
(2) any Liability of the Seller or the Stockholder
arising out of or relating to the execution, delivery or performance of
any of the Transactional Agreements, including any liabilities of the
type referred to in Section 9.2 hereof;
(3) any Liability of the Seller or the Stockholder
arising from or relating to any action taken by the Seller or the
Stockholder, or any failure on the part of the Seller to take any
action, at any time after the Closing Date;
(4) any Liability of the Seller or the Stockholder
arising from or relating to (x) any services performed by the Seller
for any customer, or (y) any claim or Proceeding against the Seller or
the Stockholder;
(5) any Liability of the Seller or the Stockholder for the
payment of any Tax;
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(6) any Liability of the Seller to any employee or
former employee of the Seller under or with respect to any employment
agreement, Employee Benefit Plan, profit sharing plan or medical or
dental plan or for severance pay;
(7) any Liability of the Seller to the Stockholder or any
other Related Party;
(8) any Liability under any Contract, if the Seller
shall not have obtained, prior to the Closing Date, any Consent
required to be obtained from any Person with respect to the assignment
or delegation to the Purchaser of any rights or obligations under such
Contract;
(9) any Liability that is inconsistent with or
constitutes an inaccuracy in, or that arises or exists by virtue of any
Breach of, (x) any representation or warranty made by the Seller or the
Stockholder in any of the Transactional Agreements, or (y) any covenant
or obligation of the Seller or the Stockholder contained in any of the
Transactional Agreements;
(10) any liability of the Seller or Stockholder to
the Parthenon Group described in Part 2.26 of the Disclosure Schedule;
or
(11) any other Liability that is not referred to
specifically as an Assumed Liability in this Section 1.2(b).
The Seller and the Stockholder acknowledge that, on May 1, 2000, in partial
consideration for the transactions contemplated by this Agreement and the
continued use by the Purchaser of Seller's office space located at the 8th Floor
of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ referred to in Section 4.7 hereof,
the Purchaser hired substantially all of the employees of the Seller. Seller and
Stockholder hereby expressly release any and all actions or claims either may
have against Purchaser with regard to the hiring of such employees and the
occupation of the office space at no cost to the Purchaser.
1.2 SALES TAXES. The Seller shall bear and pay, and shall reimburse the
Purchaser and the Purchaser's affiliates for, any sales taxes, use taxes,
transfer taxes, documentary charges, recording fees or similar taxes, charges,
fees or expenses that may become payable in connection with the sale of the
Assets to the Purchaser or in connection with any of the other Transactions.
1.3 CLOSING.
(A) The closing of the sale of the Assets to the Purchaser (the
"CLOSING") shall take place at the offices of ▇▇▇▇▇▇ Godward LLP in Boulder, CO,
at 10:00 a.m. local time on or before June 26, 2000, provided all of the
conditions set forth in Section 5 have been satisfied or waived by the party
entitled to bring such waiver. The date upon which the Closing occurs is
referred to as the "CLOSING DATE." In the event that the Closing has not
occurred as of June 26, 2000, this agreement shall be void and of no further
effect.
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(B) At the Closing:
(I) the Seller shall execute and deliver to the Purchaser such
bills of sale, endorsements, assignments and other documents as may (in
the reasonable judgment of the Purchaser or its counsel) be necessary
or appropriate to assign, convey, transfer and deliver to the Purchaser
good and valid title to the Assets free of any Encumbrances;
(II) the Purchaser shall transfer to the Seller any
consideration called for by Section 1.2(a)(i) through (a)(iv);
(III) the parties hereto shall execute and deliver the Escrow
Agreement, and the Purchaser shall deposit the consideration in the
Escrow Account as contemplated by Section 1.2(a)(ii); and
(IV) the Purchaser shall execute and deliver to the Seller the
Assumption Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER AND THE SELLER.
The Stockholder and the Seller, jointly and severally,
represent and warrant, to and for the benefit of the Indemnitees, as follows:
2.1 DUE ORGANIZATION; NO SUBSIDIARIES; ETC. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Seller does not have any subsidiaries, and does not own,
beneficially or otherwise, any shares or other securities of, or any direct or
indirect interest of any nature in, any other Entity. The Seller has never
conducted any business under or otherwise used, for any purpose or in any
jurisdiction, any fictitious name, assumed name, trade name or other name, other
than "Prescient Technologies, Inc." or "Stone and ▇▇▇▇▇▇▇ Advanced Systems
Development Services, Inc."
2.2 CERTIFICATE OF INCORPORATION AND BYLAWS; RECORDS. The Seller has
delivered to (or made available for inspection by) the Purchaser accurate and
complete copies of: (i) the certificate of incorporation and bylaws of the
Seller, including all amendments thereto; (ii) the stock records of the Seller;
and (iii) the minutes and other records of the meetings and other proceedings
(including any actions taken by written consent or otherwise without a meeting)
of the Stockholder of the Seller, the board of directors of the Seller and all
committees of the board of directors of the Seller. There have been no meetings
or other proceedings of the Stockholder of the Seller, the board of directors of
the Seller or any committee of the board of directors of the Seller that are not
fully reflected in such minutes or other records. The books of account, stock
records, minute books and other records of the Seller are accurate, up-to-date
and complete, and have been maintained in accordance with sound and prudent
business practices. All of the records of the Seller are in the actual
possession and direct control of the Seller.
2.3 CAPITALIZATION. The Stockholder is the sole stockholder of the
Seller. Other than as set forth in Part 2.3 of the Disclosure Schedule, there is
no: (a) outstanding subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire any shares of the capital stock or other
securities of the Seller; (b) outstanding security, instrument or obligation
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that is or may become convertible into or exchangeable for any shares of the
capital stock or other securities of the Seller; or (c) any agreement or
understanding pursuant to which the Seller is or may become obligated to sell or
otherwise issue any shares of its capital stock or any other securities. No
person other than the Stockholder has any right to vote with respect to the sale
of the Assets to the Purchaser or any of the other Transactions.
2.4 FINANCIAL STATEMENTS. The Seller has delivered to the Purchaser the
following financial statements (collectively, the "FINANCIAL STATEMENTS"): (a)
the unaudited balance sheets of the Seller as of December 31, 1999, December 31,
1998 and December 31, 1997, and the related statements of income and retained
earnings and cash flows for the years then ended; and (b) the unaudited balance
sheet of the Seller as of March 31, 2000 (the "UNAUDITED INTERIM BALANCE
SHEET"), and the related statements of income and retained earnings and cash
flows for the nine months then ended. The Financial Statements are accurate and
complete in all respects, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered (except that the financial statements referred to in clause (b)
of this Section 2.4 do not have notes) and present fairly the financial position
of the Seller as of the respective dates thereof and the results of operations
and cash flows of the Seller for the periods covered thereby.
2.5 ABSENCE OF CHANGES. Except as set forth in Part 2.5 of the
Disclosure Schedule, since the date of the Unaudited Interim Balance Sheet: (a)
there has not been any material adverse change in, and no event has occurred
that might have a material adverse effect on, the business, condition, assets,
liabilities, operations, financial performance, net income or prospects of
Seller; (b) there has not been any material loss, damage or destruction to, or
any interruption in the use of, any of the assets of Seller; (c) Seller has not
made any capital expenditure, purchased or otherwise acquired, sold or otherwise
transferred, or leased or licensed, any asset to any other Person; (d) Seller
has not entered into any transaction or taken any other action outside the
Ordinary Course of Business; and (e) Seller has not agreed, committed or offered
(in writing or otherwise) to take any of the actions referred to in clauses
"(c)" and "(d)" above.
2.6 TITLE TO ASSETS. The Seller owns, and has good and valid title to,
all of the all Assets. Except as set forth in Part 2.6 of the Disclosure
Schedule, all of such Assets are owned by the Seller free and clear of any
Encumbrances. Part 2.6 of the Disclosure Schedule identifies all of the assets
that are being leased or licensed to the Seller. Except as set forth in Section
2.6 of the Disclosure Schedule, the Assets will collectively constitute, as of
the Closing Date, all of the properties, rights, interests and other tangible
and intangible assets necessary to enable the Seller to conduct its business in
the manner in which such business is currently being conducted and in the manner
in which such business is proposed to be conducted.
2.7 BANK ACCOUNTS. Part 2.7 of the Disclosure Schedule accurately sets
forth, with respect to each account maintained by or for the benefit of the
Seller at any bank or other financial institution: (a) the name and location of
the institution at which such account is maintained; (b) the name in which such
account is maintained and the account number of such account; (c) a description
of such account and the purpose for which such account is used; (d) the current
balance in such account; and (e) the names of all individuals authorized to draw
on or
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make withdrawals from such account. There are no safe deposit boxes or similar
arrangements maintained by or for the benefit of the Seller.
2.8 RECEIVABLES. Part 2.8 of the Disclosure Schedule provides an
accurate and complete breakdown and aging of all accounts receivable, notes
receivable and other receivables of the Seller as of the Closing Date. Except as
set forth in Part 2.8 of the Disclosure Schedule, all existing accounts
receivable of the Seller (including those accounts receivable reflected on the
Unaudited Interim Balance Sheet that have not yet been collected and those
accounts receivable that have arisen since March 31, 2000 and have not yet been
collected): (i) represent valid obligations of customers of the Seller arising
from bona fide transactions entered into in the Ordinary Course of Business; and
(ii) are current and will be collected in full (without any counterclaim or
setoff) on or before June 30, 2000 (net of an allowance for uncollectible
accounts in an aggregate amount not to exceed $25,000).
2.9 CUSTOMERS; DISTRIBUTORS. Part 2.9 of the Disclosure Schedule
accurately identifies, and provides an accurate and complete breakdown of the
revenues received from, each customer or other Person that (together which such
customer's or other Person's affiliates) accounted for (i) more than $75,000 of
the gross revenues of the Seller in 1999, 1998, or 1997, or (ii) more than
$25,000 of the gross revenues of the Seller in the first three months of 2000.
Neither the Seller nor the Stockholder has received any notice or other
communication (in writing or otherwise), and neither the Seller nor the
Stockholder has received any other information, indicating that any customer or
other Person identified or required to be identified in Part 2.9 of the
Disclosure Schedule may cease dealing with the Seller or may otherwise reduce
the volume of business transacted by such Person with the Seller below
historical levels. Neither the Seller nor the Stockholder has received any
notice or other communication (in writing or otherwise), or has received any
other information, indicating that any distributor of any of the Seller's
products may cease acting as a distributor of such products or otherwise dealing
with the Seller.
2.10 EQUIPMENT, ETC. Part 2.10 of the Disclosure Schedule accurately
identifies all equipment, materials, prototypes, tools, supplies and other
tangible assets owned by the Seller, and accurately sets forth the date of
acquisition, original cost and book value of each of said assets. Part 2.10 of
the Disclosure Schedule also accurately identifies all tangible assets leased to
the Seller. Each asset identified or required to be identified in Part 2.10 of
the Disclosure Schedule: (i) is structurally sound, free of defects and
deficiencies and in good condition and repair (ordinary wear and tear excepted);
(ii) complies in all respects with, and is being operated and otherwise used in
full compliance with, all applicable Legal Requirements; and (iii) is adequate
and appropriate for the uses to which it is being put. The assets identified in
Part 2.10 of the Disclosure Schedule are adequate for the conduct of the
business of the Seller in the manner in which such business is currently being
conducted and in the manner in which such business is proposed to be conducted.
2.11 REAL PROPERTY. The Seller does not own any real property or any
interest in real property, except for the leaseholds created under the real
property leases identified in Part 2.11 of the Disclosure Schedule.
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2.12 PROPRIETARY ASSETS.
(A) Part 2.12(a)(1) of the Disclosure Schedule identifies and
provides a brief description of all Proprietary Assets owned by the Seller. Part
2.12(a)(2) of the Disclosure Schedule identifies and provides a brief
description of each Proprietary Asset that is owned by any other Person and that
is licensed to or used by the Seller (except for any Proprietary Asset that is
licensed to the Seller under any third party software license that (1) is
generally available to the public, and (2) imposes no future monetary obligation
on the Seller) and identifies the license agreement or other agreement under
which such Proprietary Asset is being licensed to or used by the Seller. The
Seller has good and valid title to all of the Proprietary Assets identified in
Part 2.12(a)(1) of the Disclosure Schedule, free of any Encumbrances, and has a
valid right to use and otherwise exploit, and to license others to use and
otherwise exploit, all Proprietary Assets identified in Part 2.12(a)(2) of the
Disclosure Schedule. Except as set forth in Part 2.12(a)(3) of the Disclosure
Schedule, the Seller is not obligated to make any payment to any Person for the
use or other exploitation of any Proprietary Asset. Except as set forth in Part
2.12(a)(4) of the Disclosure Schedule, the Seller is free to use, modify, copy,
distribute, sell, license or otherwise exploit each of the Seller Proprietary
Assets on an exclusive basis (other than Proprietary Assets consisting of
software licensed to the Seller under third party licenses generally available
to the public, with respect to which the Seller's rights are not exclusive).
(B) The Seller has taken all reasonable measures and precautions
necessary to protect and maintain the confidentiality and secrecy of all Seller
Proprietary Assets (except Seller Proprietary Assets whose value would be
unimpaired by public disclosure) and otherwise to maintain and protect the value
of all Seller Proprietary Assets. The Seller has not disclosed or delivered or
permitted to be disclosed or delivered to any Person, and no Person (other than
the Seller) has access to or has any rights with respect to, the source code, or
any portion or aspect of the source code, of any Seller Proprietary Asset.
(C) All patents, trademarks, service marks and copyrights that are
registered with any Governmental Body and held by the Seller are valid and
subsisting. None of the Seller Proprietary Assets infringes or conflicts with
any Proprietary Asset owned or used by any other Person. The Seller is not
infringing, misappropriating or making any unlawful use of, and the Seller has
not at any time infringed, misappropriated or made any unlawful use of, or
received any notice or other communication of any actual, alleged, possible or
potential infringement, misappropriation or unlawful use of, any Proprietary
Asset owned or used by any other Person. To the best of the knowledge of the
Seller and the Stockholder, no other Person is infringing, misappropriating or
making any unlawful use of, and no Proprietary Asset owned or used by any other
Person infringes or conflicts with, any Seller Proprietary Asset.
(D) The Proprietary Assets constitute all the Proprietary Assets
necessary to enable the Seller to conduct its business in the manner in which
such business is being conducted and in the manner in which such business is
proposed to be conducted. The Seller has not licensed any of the Seller
Proprietary Assets to any Person on an exclusive basis. The Seller has not
entered into any covenant not to compete or Contract limiting its ability to
exploit fully any of the Seller Proprietary Assets or to transact business in
any market or geographical area or with any Person. The Seller has, and the
Purchaser will acquire at the Closing, the right to use the
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name "PRESCIENT TECHNOLOGIES, INC." and variations thereof, and all the product
and service names referred to in Section 1.1(e) hereof.
(E) Except as set forth in Part 2.12(e) of the Disclosure
Schedule, the Seller has not entered into and is not bound by any Contract under
which any Person has the right to distribute or license any Proprietary Asset.
The Seller has not disclosed or delivered to any Person, or permitted the
disclosure or delivery to any Person, of the source code, or any portion or
aspect of the source code, or any proprietary information or algorithm contained
in any source code, of any Proprietary Asset. No event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or could reasonably be expected to, result in the disclosure or delivery
to any Person of the source code, or any portion or aspect of the source code,
or any proprietary information or algorithm contained in any source code, of any
Proprietary Asset.
2.13 CONTRACTS.
(A) Part 2.13 of the Disclosure Schedule identifies and provides
an accurate and complete description of each Seller Contract being assumed by
the Purchaser. The Seller has delivered to the Purchaser accurate and complete
copies of all Contracts identified in Part 2.13 of the Disclosure Schedule,
including all amendments thereto. Each Seller Contract is valid and in full
force and effect.
(B) Except as set forth in Part 2.13 of the Disclosure Schedule:
(i) no Person has violated or breached, or declared or committed any default
under, any Seller Contract; (ii) no event has occurred, and no circumstance or
condition exists, that might (with or without notice or lapse of time) (A)
result in a violation or breach of any of the provisions of any Seller Contract,
(B) give any Person the right to declare a default or exercise any remedy under
any Seller Contract, (C) give any Person the right to accelerate the maturity or
performance of any Seller Contract, or (D) give any Person the right to cancel,
terminate or modify any Seller Contract; (iii) the Seller has not received any
notice or other communication (in writing or otherwise) regarding any actual,
alleged, possible or potential violation or breach of, or default under, any
Seller Contract; and (iv) the Seller has not waived any right under any Seller
Contract.
(C) The Contracts identified in Part 2.13 of the Disclosure
Schedule collectively constitute all of the Contracts necessary to enable the
Seller to conduct its business in the manner in which such business is currently
being conducted and in the manner in which such business is proposed to be
conducted.
2.14 LIABILITIES; MAJOR SUPPLIERS.
(A) Except as set forth in Part 2.14 of the Disclosure Schedule,
the Seller has no Liabilities, except for: (i) liabilities identified as such in
the "liabilities" columns of the Unaudited Interim Balance Sheet; (ii) accounts
payable (of the type required to be reflected as current liabilities in the
"liabilities" column of a balance sheet prepared in accordance with GAAP)
incurred by the Seller in bona fide transactions entered into in the Ordinary
Course of Business since March 31, 2000; and (iii) obligations under the Seller
Contracts listed in Part 2.13
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of the Disclosure Schedule, to the extent that the existence of such obligations
is ascertainable solely by reference to such Seller Contracts.
(B) Part 2.14 of the Disclosure Schedule accurately identifies,
and provides an accurate and complete breakdown of the amounts paid to, each
supplier or other Person that (together which such Person's affiliates) received
(i) more than $75,000 in the aggregate from the Seller in 1999, 1998 or 1997, or
(ii) more than $25,000 in the aggregate from the Seller from January 1, 2000
through May 31, 2000.
(C) The Seller has not, at any time, (i) made a general assignment
for the benefit of creditors, (ii) filed, or had filed against it, any
bankruptcy petition or similar filing, (iii) suffered the attachment or other
judicial seizure of all or a substantial portion of its assets, (iv) admitted in
writing its inability to pay its debts as they become due, (v) been convicted
of, or pleaded guilty or no contest to, any felony, or (vi) taken or been the
subject of any action that may have an adverse effect on its ability to comply
with or perform any of its covenants or obligations under any of the
Transactional Agreements.
2.15 COMPLIANCE WITH LEGAL REQUIREMENTS. Seller is, and has at all
times been, in compliance with each Legal Requirement that is applicable to it
or to the conduct of its business or the ownership or use of any of its assets.
No event has occurred, and no condition or circumstance exists, that might (with
or without notice or lapse of time) constitute or result directly or indirectly
in a material violation by Seller of, or a failure on the part of Seller to
comply materially with, any Legal Requirement, and Seller has not received, at
any time, any notice or other communication (in writing or otherwise) from any
Governmental Body or any other Person regarding any actual, alleged, possible or
potential violation of, or failure to comply with, any Legal Requirement.
2.16 TAX MATTERS. Each Tax required to have been paid, or claimed by
any Governmental Body to be payable, by Seller has been duly paid in full on a
timely basis. Any Tax required to have been withheld or collected by Seller has
been duly withheld and collected; and (to the extent required) each such Tax has
been paid to the appropriate Governmental Body. Except as set forth in Part 2.16
of the Disclosure Schedule, no claim or other Proceeding is pending or has been
threatened against or with respect to Seller in respect of any Tax.
2.17 EMPLOYEES. Seller does not have any employees. Seller has no, and
Purchaser shall assume no, liability relating to any current or former employee
of Seller. Seller and Stockholder acknowledge that on May 1, 2000 substantially
all employees of the Seller were terminated by the Seller and subsequently hired
by Purchaser with the consent of Seller and Stockholder.
2.18 BENEFIT PLANS; ERISA. Seller does not operate or administer any
Employee Benefit Plans. Seller has no, and Purchaser shall assume no, liability
relating to any currently existing or former Employee Benefit Plan.
2.19 ENVIRONMENTAL MATTERS. The Seller is not liable or potentially
liable for any response cost or natural resource damages under Section 107(a) of
CERCLA, or under any other so-called "superfund" or "superlien" law or similar
Legal Requirement, at or with respect to any
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site. All property that is leased to, controlled by or used by the Seller, and
all surface water, groundwater, soil and air associated with or adjacent to such
property: (i) is in clean and healthful condition; (ii) is free of any Hazardous
Material and any harmful chemical or physical conditions; and (iii) is free of
any environmental contamination of any nature.
2.20 PERFORMANCE OF SERVICES. All services that have been performed on
behalf of the Seller were performed properly and in full conformity with the
terms and requirements of all applicable warranties and other Contracts and with
all applicable Legal Requirements. The Purchaser will not incur or otherwise
become subject to any Liability arising directly or indirectly from any services
performed by the Seller. There is no claim pending or being threatened against
the Seller relating to any services performed by the Seller, and, to the best of
the knowledge of the Stockholder and the Seller, there is no basis for the
assertion of any such claim.
2.21 INSURANCE. Seller maintains adequate insurance in accordance with
industry standards.
2.22 RELATED PARTY TRANSACTIONS. Except as set forth in Part 2.22 of
the Disclosure Schedule: (a) no Related Party has any direct or indirect
interest of any nature in any of the assets of the Seller; and (b) no Related
Party has any interest in any Contract being assigned hereunder.
2.23 PROCEEDINGS; ORDERS. Other than the bankruptcy proceeding
described in Section 2.27, there is no pending Proceeding and no Person has
threatened to commence any Proceeding that involves Seller or that otherwise
relates to or might affect the business of Seller or any of the Assets (whether
or not Seller is named as a party thereto) following the Closing, and no event
has occurred that could reasonably be expected to give rise to or serve as a
basis for the commencement of any such Proceeding. There is no order to which
Seller, or any of the assets owned or used by Seller, is subject; and no Related
Party is subject to any order that relates to Seller's business or to any of the
assets of Seller. There is no proposed order that, if issued or otherwise put
into effect, may have an adverse effect on the business, condition, assets,
liabilities, operations, financial performance, net income or prospects of
Seller or on the ability of Seller to effect the Transactions.
2.24 AUTHORITY; BINDING NATURE OF AGREEMENTS. Each of the Seller and
the Stockholder has the absolute and unrestricted right, power and authority to
enter into and to perform its obligations under each of the Transactional
Agreements to which it is or may become a party; and the execution, delivery and
performance by the Seller of the Transactional Agreements to which it is or may
become a party have been duly authorized by all necessary action on the part of
the Seller and its Stockholder, board of directors and officers. This Agreement
constitutes the legal, valid and binding obligation of the Seller, enforceable
against the Seller and the Stockholder, as applicable, in accordance with its
terms. Upon the execution of each of the other Transactional Agreements at the
Closing, each of such other Transactional Agreements to which the Seller is a
party will constitute the legal, valid and binding obligation of the Seller and
the Stockholder, as applicable, and will be enforceable against the Seller in
accordance with its terms.
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2.25 NON-CONTRAVENTION; CONSENTS. Neither the execution and delivery of
any of the Transactional Agreements, nor the consummation or performance of any
of the Transactions, will directly or indirectly (with or without notice or
lapse of time): (a) give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate or modify, any Governmental Authorization that is to
be included in the Purchased Assets; (b) give any Person the right to (i)
declare a default or exercise any remedy under any Contract being assigned
hereunder, (ii) accelerate the maturity or performance of any Contract being
assigned hereunder, or (iii) cancel, terminate or modify any Contract being
assigned hereunder; or (c) result in the imposition or creation of any
Encumbrance upon any of the Purchased Assets. Except as set forth in Part 2.15
of the Disclosure Schedule, Seller is not nor will it be required to make any
filing with or give any notice to, or to obtain any Consent from, any Person in
connection with the execution and delivery of any of the Transactional
Agreements or the consummation or performance of any of the Transactions.
2.26 BROKERS. Neither the Seller nor the Stockholder has agreed or
become obligated to pay, or has taken any action that might result in any Person
claiming to be entitled to receive, any brokerage commission, finder's fee or
similar commission or fee in connection with any of the Transactions other than
the arrangement with The Parthenon Group described in Part 2.26 of the
Disclosure Schedule.
2.27 THE STOCKHOLDER. As the Stockholder has previously disclosed
publicly, the Stockholder filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code (the "CHAPTER 11 CASE"). Other than the
Chapter 11 Case, (a) the Stockholder is not subject to any Order or bound by any
Contract that may have an adverse effect on its ability to comply with or
perform any of its covenants or obligations under any of the Transactional
Agreements; (b) there is no Proceeding pending, and no Person has threatened to
commence any Proceeding, that may have an adverse effect on the ability of the
Stockholder to comply with or perform any of its covenants or obligations under
any of the Transactional Agreements; and (c) no event has occurred, and no
claim, dispute or other condition or circumstance exists, that might directly or
indirectly give rise to or serve as a basis for the commencement of any such
Proceeding.
2.28 FULL DISCLOSURE. None of the Transactional Agreements contains or
will contain any untrue statement of a material fact; and none of the
Transactional Agreements omits or will omit to state any fact necessary to make
any of the representations, warranties or other statements or information
contained therein not misleading. All of the information set forth in the
Disclosure Schedule, and all other information regarding the Seller and its
business, condition, assets, liabilities, operations, financial performance, net
income and prospects that has been furnished to the Purchaser or any of the
Purchaser's Representatives by or on behalf of the Stockholder or the Seller or
by any Representative of the Stockholder or of the Seller, is accurate and
complete in all respects.
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3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants, to and for the benefit of the
Seller, as follows:
3.1 AUTHORITY; BINDING NATURE OF AGREEMENTS. The Purchaser has the
absolute and unrestricted right, power and authority to enter into and perform
its obligations under this Agreement, and the execution and delivery of this
Agreement by the Purchaser have been duly authorized by all necessary action on
the part of the Purchaser and its board of directors. The Purchaser has the
absolute and unrestricted right, power and authority to enter into and perform
its obligations under the Escrow Agreement and the Assumption Agreement, and the
execution, delivery and performance of the Escrow Agreement and the Assumption
Agreement by the Purchaser have been duly authorized by all necessary action on
the part of the Purchaser and its board of directors. This Agreement constitutes
the legal, valid and binding obligation of the Purchaser, enforceable against it
in accordance with its terms. Upon the execution and delivery of the Escrow
Agreement and the Assumption Agreement at the Closing, the Escrow Agreement and
the Assumption Agreement will constitute the legal, valid and binding
obligations of the Purchaser, enforceable against the Purchaser in accordance
with their terms.
3.2 BROKERS. The Purchaser has not become obligated to pay, and has not
taken any action that might result in any Person claiming to be entitled to
receive, any brokerage commission, finder's fee or similar commission or fee in
connection with any of the Transactions.
4. COVENANTS
4.1 ACCESS AND INVESTIGATION. The Stockholder and the Seller shall
ensure that, at all times during the Pre-Closing Period: (a) the Seller and its
Representatives provide the Purchaser and its Representatives with free and
complete access to the Seller's Representatives, personnel and assets and to all
existing books, records, Tax Returns, work papers and other documents and
information relating to the Seller and its business; (b) the Seller and its
Representatives provide the Purchaser and its Representatives with such copies
of existing books, records, Tax Returns, work papers and other documents and
information relating to the Seller and its business as the Purchaser may request
in good faith; and (c) the Seller and its Representatives compile and provide
the Purchaser and its Representatives with such additional financial, operating
and other data and information relating to the Seller and its business as the
Purchaser may request in good faith.
4.2 OPERATION OF BUSINESS. The Stockholder and the Seller shall ensure
that, during the Pre-Closing Period:
(A) the Seller conducts its operations in the Ordinary Course of
Business and in the same manner as such operations have been conducted
prior to the date of this Agreement;
(B) the Seller (i) preserves intact its current business
organization, (ii) maintains its relations and goodwill with all
suppliers, customers, landlords, creditors, licensors, licensees,
employees, independent contractors and other Persons having
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material business relationships with the Seller, and (iii) promptly
repairs, restores or replaces any material assets that are destroyed or
damaged;
(C) the officers of the Seller confer regularly with the Purchaser
concerning operational matters and otherwise report regularly to the
Purchaser concerning the status of the Seller's business, condition,
assets, liabilities, operations, financial performance and prospects;
(D) the Purchaser is notified immediately of any inquiry, proposal
or offer from any Person relating to any Acquisition Transaction;
(E) the Seller does not (i) declare, accrue, set aside or pay any
dividend or make any other distribution in respect of any shares of
capital stock or other securities, or (ii) repurchase, redeem or
otherwise reacquire any shares of capital stock or other securities;
(F) the Seller does not sell or otherwise issue any shares of
capital stock or any other securities;
(G) the Seller does not effect or become a party to any Acquisition
Transaction;
(H) the Seller does not form any subsidiary or acquire any equity
interest or other interest in any other Entity;
(I) the Seller does not make any capital expenditure, except for
capital expenditures that are made in the Ordinary Course of Business
and that, when added to all other capital expenditures made on behalf
of the Seller during the Pre-Closing Period, do not exceed $50,000 in
the aggregate;
(J) the Seller does not enter into or permit any of its material
assets to become bound by any Contract;
(K) the Seller does not incur, assume or otherwise become subject
to any material Liability, except for current liabilities (of the type
required to be reflected in the "liabilities" column of a balance sheet
prepared in accordance with GAAP) incurred in the Ordinary Course of
Business;
(L) the Seller does not change any of its methods of accounting or
accounting practices in any respect; and
(M) the Seller does not enter into any transaction or take any
other action that might cause or constitute a Breach of any
representation or warranty made by the Stockholder or the Seller in
this Agreement or in the Closing Certificate.
4.2 FILINGS AND CONSENTS. The Stockholder and the Seller shall ensure
that: (a) all filings, notices and Consents required to be made, given and
obtained in order to consummate
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the Transactions are made, given and obtained on a timely basis and (b) during
the Pre-Closing Period, the Stockholder and the Seller and their respective
Representatives cooperate with the Purchaser and with the Purchaser's
Representatives, and prepare and make available such documents and take such
other actions as the Purchaser may request in good faith, in connection with any
filing, notice or Consent that the Purchaser is required or elects to make, give
or obtain.
4.4 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE. During the
Pre-Closing Period, the Stockholder and the Seller shall promptly notify the
Purchaser in writing of: (a) the discovery by the Stockholder or the Seller of
any event, condition, fact or circumstance that occurred or existed on or prior
to the date of this Agreement and that caused or constitutes a Breach of any
representation or warranty made by the Stockholder or the Seller in this
Agreement; (b) any event, condition, fact or circumstance that occurs, arises or
exists after the date of this Agreement and that would cause or constitute a
Breach of any representation or warranty made by the Stockholder or the Seller
in this Agreement if (i) such representation or warranty had been made as of the
time of the occurrence, existence or discovery of such event, condition, fact or
circumstance, or (ii) such event, condition, fact or circumstance had occurred,
arisen or existed on or prior to the date of this Agreement; (c) any Breach of
any covenant or obligation of the Stockholder or the Seller; and (d) any event,
condition, fact or circumstance that may make the timely satisfaction of any of
the conditions set forth in Section 5 impossible or unlikely. If any event,
condition, fact or circumstance that is required to be disclosed pursuant to
this Section 4.4 requires any change in the Disclosure Schedule, or if any such
event, condition, fact or circumstance would require such a change assuming the
Disclosure Schedule were dated as of the date of the occurrence, existence or
discovery of such event, condition, fact or circumstance, then the Stockholder
and the Seller shall promptly deliver to the Purchaser an update to the
Disclosure Schedule specifying such change. No such update shall be deemed to
supplement or amend the Disclosure Schedule for the purpose of (i) determining
the accuracy of any representation or warranty made by any of the Stockholder or
the Seller in this Agreement or in the Closing Certificate, or (ii) determining
whether any of the conditions set forth in Section 6 has been satisfied.
4.5 NONSOLICITATION. The Stockholder and Seller hereby agree that
neither the Stockholder, Seller, nor any of their representatives shall directly
or indirectly solicit, initiate or encourage or enter into discussions or
negotiations regarding, or respond to any inquiries or proposals for, a
competitive bid or a proposal from a third party (a) to purchase all or any
substantial part of the assets to be acquired in the Transaction, whether in a
separate transaction or as part of a plan of reorganization of the Stockholder
or the Seller or (b) the whole for any merger, consolidation, liquidation,
dissolution or similar transaction involving the assets to be acquired in the
Transaction (a "Competing Proposal"). Notwithstanding the foregoing, after the
commencement of its Chapter 11 Case, the Stockholder, the Seller and their
representatives shall be permitted to respond to inquires or requests for
information from any third party interested in submitting a Competing Proposal
after such third party demonstrates to the Stockholder's satisfaction the
financial wherewithal to consummate the transaction contemplated by the
Competing Proposal.
4.6 BEST EFFORTS. During the Pre-Closing Period, all parties shall use
their Best Efforts to cause the conditions set forth in Section 5 to be
satisfied on a timely basis.
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4.6 COURT APPROVAL.. The Stockholder covenants and agrees that it will
promptly seek an order of the court in the Chapter 11 Case approving the sale,
assignment and transfer of the Acquired Assets pursuant to Sections 363 and 365
of the U.S. Bankruptcy Code (the "Sale Order").
4.8 CONFIDENTIALITY. The Stockholder and the Seller shall ensure that,
during the Pre-Closing Period: (a) neither the Seller nor the Stockholder, nor
any Representative of the Stockholder or of the Seller, issues or disseminates
any press release or other publicity or otherwise makes any disclosure of any
nature (to any supplier, customer, landlord, creditor or employee of the Seller
or to any other Person) regarding any of the Transactions or the existence or
terms of this Agreement, except to the extent that the Seller is required by law
to make any such disclosure; and (b) if the Seller is required by law to make
any such disclosure, the Stockholder and the Seller advise the Purchaser, at
least five business days before making such disclosure, of the nature and
content of the intended disclosure.
4.3 OPERATIONS FOLLOWING CLOSING. Seller agrees that Seller shall not
transact any business following the Closing Date except as necessary to wind up
its affairs and to be liquidated and dissolved. Prior to the liquidation and
dissolution of Seller, all of its Liabilities shall be fully discharged (other
than the Assumed Liabilities), including (i) all Liabilities to its current and
former employees, (ii) all accounts payable and all short-term and long-term
indebtedness relating to its business and (iii) all Taxes.
4.4 FURTHER ACTIONS. From and after the Closing Date, Seller shall
cooperate with Purchaser and Purchaser's affiliates and representatives, and
shall execute and deliver such documents and take such other actions as
Purchaser may reasonably request for the purpose of evidencing the Transactions
and putting Purchaser in possession and control of all of the Purchased Assets.
Without limiting the generality of the foregoing, from and after the Closing
Date, Seller shall promptly remit to Purchaser any funds that are received by
Seller under the Contracts being assigned hereunder. Seller hereby irrevocably
authorizes Purchaser to endorse in the name of Seller any check that is made
payable to Seller and that represents the payment of any amount due under any
such assigned Contract. Seller hereby irrevocably nominates, constitutes and
appoints Purchaser as the true and lawful attorney-in-fact of Seller (with full
power of substitution) and authorizes Purchaser, in the name of and on behalf of
Seller, to execute, deliver, acknowledge, certify, file and record any document,
to institute and prosecute any Proceeding and to take any other action that
Purchaser may deem appropriate for the purpose of (a) collecting, asserting,
enforcing or perfecting any claim, right or interest of any kind that is
included in or relates to any of the Purchased Assets, (b) defending or
compromising any claim or Proceeding relating to any of the Purchased Assets or
(c) otherwise carrying out or facilitating any of the Transactions. The power of
attorney referred to in the preceding sentence is coupled with an interest and
shall be irrevocable, and shall survive the liquidation and dissolution of
Seller.
4.5 PUBLICITY. Except for such disclosures as may be required to
Seller's employees and shareholders and their respective advisors, Seller shall
keep strictly confidential, and Seller shall not use or disclose to any other
Person, any non-public document or other information that relates directly or
indirectly to the business of Seller, Purchaser or any affiliate of Purchaser.
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4.6 CHANGE OF NAME. Immediately after the Closing, the Seller shall
change its name to a name that does not include the word "Prescient" or any
variation thereof and that is satisfactory to Purchaser.
4.7 USE OF PREMISES. For a period ending 60 days after the Closing
Date, the Seller and Stockholder shall permit the Purchaser to use, without
charge to the Purchaser, the premises located at the 8th Floor of ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
4.8 RESTRICTIONS ON TRANSFER. Seller agrees not to make any transfer or
disposition of all or any portion of the Common Stock issued as consideration
pursuant to this Agreement unless and until: (a) there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such registration
statement; or (b) (A) the transferee has provided a written representation
reasonably satisfactory to Seller that such transferee is an accredited
investor, as such term is defined in Rule 501 promulgated under the Securities
Act, and agrees to be bound by the terms of this Agreement, (B) the Seller shall
have notified Purchaser of the proposed disposition and shall have furnished
Purchaser with a reasonably detailed statement of the circumstances surrounding
the proposed disposition and (C) Seller shall have furnished Purchaser with an
opinion of counsel, reasonably satisfactory to Purchaser, that such disposition
will not require registration of such shares under the Securities Act; provided,
that, routine sales under Rule 144 promulgated under the Securities Act shall
not require the delivery of such an opinion by Seller; Purchaser shall, as soon
as reasonably practicable following receipt of notice of such sale, instruct its
transfer agent to effect such transactions. Each certificate or warrant
representing Securities shall (unless otherwise permitted by the provisions of
the Agreement) be stamped or otherwise imprinted with a legend substantially
similar to the following:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY AND
ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
4.15 REGISTRATION RIGHTS.
(A) PIGGYBACK REGISTRATIONS The Purchaser shall notify the Seller
in writing at least fifteen (15) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Purchaser (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to employee benefit plans, "universal
shelves" or with respect to corporate reorganizations or other transactions
under Rule 145 of the Securities Act) and, subject and subordinate to any
outstanding registration rights with respect to the Purchaser's capital stock,
will afford the Seller an opportunity to include in such registration statement
all or part of the shares of Purchaser's Common Stock received as consideration
pursuant to this Agreement (the "Common Stock"). If Seller desires to include in
any such registration statement
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all or any part of the Common Stock held by it shall, within fifteen (15) days
after the above-described notice from the Company, so notify the Purchaser in
writing. Such notice shall state the intended method of disposition of the
Common Stock by the Seller. If the Seller decides not to include all of its
Common Stock in any registration statement thereafter filed by the Company, the
Seller shall nevertheless continue to have the right to include any Common Stock
in any subsequent registration statement or registration statements as may be
filed by the Purchaser with respect to offerings of its securities, all upon the
terms and conditions set forth herein.
(B) UNDERWRITING. If the registration statement under which the
Purchaser gives notice under this Section 4.15 is for an underwritten offering,
the Purchaser shall so advise the Seller and, in such event, the right of the
Seller to be included in a registration pursuant to this Section 4.15 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of the Seller's Common Stock in the underwriting to the extent
provided herein. The Seller shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Purchaser. Notwithstanding any other provision of this
Section 4.15, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Purchaser; second, to any other stockholder of the Purchaser which desired
to include securities held by it in such offering and which hold registration
rights pursuant to written agreements entered into prior to the date hereof,
third, to the Seller; and fourth, to any remaining stockholder of the Purchaser
on a pro rata basis. No such reduction shall reduce the securities being offered
by the Purchaser for its own account to be included in the registration and
underwriting. If the Purchaser disapproves of the terms of any such
underwriting, then the Purchaser may elect to withdraw therefrom by written
notice to the Purchaser and the underwriter, delivered at least ten (10)
business days prior to the effective date of the registration statement. Any
shares of Common Stock excluded or withdrawn from such underwriting shall be
excluded and withdrawn from the registration.
(C) RIGHT TO TERMINATE REGISTRATION. The Purchaser shall have the
right to terminate or withdraw any registration initiated by it under this
Section 4.15 prior to the effectiveness of such registration whether or the
Seller has elected to include securities in such registration.
(D) TRANSFERABILITY. The Registration Rights granted by this
Section 4.15 shall not be transferable except to a successor in interest to
substantially all of Seller's or Stockholder's business and assets.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS APPLICABLE TO ALL PARTIES. The obligations of all of the
parties hereto to consummate the Transactions are subject to the satisfaction
(or the waiver by the Purchaser, Seller and the Stockholder) of the following
conditions at or prior to the Closing:
(a) Restraining Action. No judgment, order or decree shall have
been issued or rendered by any court or other governmental body to restrain or
prohibit the Transactions or any material portion of the transactions
contemplated hereby.
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(b) Statutory Requirements and Regulatory Approval. All statutory
requirements for the valid consummation of the Transactions shall have been
fulfilled and all appropriate orders, consents and approvals from all regulatory
agencies and other governmental authorities whose order, consent or approval is
required by law for the consummation of the Transactions shall have been
received.
(c) Entry of Sale Order. The court in the Chapter 11 Case shall
have entered the Sale Order, which order sale have become final and
nonappealable.
5.2 ADDITIONAL CONDITION APPLICABLE TO THE PURCHASER'S OBLIGATIONS. The
obligations of the Purchaser to consummate the Transactions are also subject to
the satisfaction (or waiver by the Purchaser) of the following condition at or
prior to the Closing:
(a) Representations, Warranties and Covenants. The representations
and warranties of Stockholder and the Seller contained in Section 2
that are qualified as to materiality shall be true and correct and such
representations and warranties that are not so qualified shall be true
and correct in all material respects on the Closing Date and
Stockholder and the Seller shall have performed in all material
respects all covenants required by this Agreement to be performed by it
at or prior to the Closing. Stockholder and the Seller shall have
delivered to the Purchaser on the Closing Date a certificate, dated the
Closing Date and duly executed by Stockholder and Seller, certifying to
the fulfillment of the conditions set forth in this paragraph.
(b) Material Adverse Change. There shall have been no material
adverse change to the business or assets of the Seller.
5.3 ADDITIONAL CONDITION APPLICABLE TO STOCKHOLDER'S AND SELLER'S
OBLIGATIONS. Stockholder's and Seller's obligations to consummate the
Transactions are also subject to the satisfaction (or the waiver by Stockholder
and the Seller) of the following condition at or prior to closing:
(a) Representations, Warranties and Covenants. The representations
and warranties of the Purchaser contained in Section 3 that are qualified as to
materiality shall be true and correct and such representations and warranties
that are not so qualified shall be true and correct in all material respects on
the Closing Date and the Purchaser shall have performed in all material respects
all covenants required by this Agreement to be performed by it at or prior to
the Closing. The Purchaser shall have delivered to the Stockholder on the
Closing Date a certificate, dated the Closing date and duly executed by the
Purchaser, certifying to the fulfillment of the conditions set forth in this
paragraph.
6. INDEMNIFICATION, ETC..
6.1 SURVIVAL OF REPRESENTATIONS AND COVENANTS.
(A) Except as set forth in Sections 6.1(a) and (c) and as limited
by Section 6.1(b), the representations, warranties, covenants and obligations of
each party to this Agreement
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shall survive (without limitation) the Closing and the sale of the Assets to the
Purchaser for six months following the Closing Date.
(B) Subject to Section 6.1(d), the representations and warranties
set forth in Section 2.16 shall expire on the fourth anniversary of the Closing
Date; provided, however, that if a Claim Notice (as defined below) relating to
any representation or warranty set forth in any of said Sections is given to the
Seller or the Stockholder on or prior to the fourth anniversary of the Closing
Date, then, notwithstanding anything to the contrary contained in this Section
6.1(c), such representation or warranty shall not so expire, but rather shall
remain in full force and effect until such time as each and every claim
(including any indemnification claim asserted by any Indemnitee under Section
6.2) that is based directly or indirectly upon, or that relates directly or
indirectly to, any Breach or alleged Breach of such representation or warranty
has been fully and finally resolved, either by means of a written settlement
agreement executed on behalf of the Seller or the Stockholder and the Purchaser
or by means of a final, non-appealable judgment issued by a court of competent
jurisdiction.
(C) Notwithstanding anything to the contrary contained in Section
6.1(c) (and without limiting the generality of anything contained in Section
6.1(a)), if the Stockholder or the Seller had knowledge, on or prior to the
Closing Date, of any circumstance that constitutes or that has given rise or
could be expected to give rise, directly or indirectly, to any Breach of any
representation or warranty set forth in Section 2, then such representation or
warranty shall not expire, but rather shall remain in full force and effect for
an unlimited period of time (regardless of whether any Claim Notice relating to
such representation or warranty is ever given).
(D) For purposes of this Agreement, a "CLAIM NOTICE" relating to a
particular representation or warranty shall be deemed to have been given if any
Indemnitee, acting in good faith, delivers to the Seller or the Stockholder a
written notice stating that such Indemnitee believes that there is or has been a
possible Breach of such representation or warranty and containing (i) a brief
description of the circumstances supporting such Indemnitee's belief that there
is or has been such a possible Breach, and (ii) a non-binding, preliminary
estimate of the aggregate dollar amount of the actual and potential Damages that
have arisen and may arise as a direct or indirect result of such possible
Breach.
(E) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made by
the Stockholder and the Seller in this Agreement.
6.2 INDEMNIFICATION BY THE SELLER.
(A) The Seller shall hold harmless and indemnify each of the
Indemnitees from and against, and shall compensate and reimburse each of the
Indemnitees for, any Damages that are directly or indirectly suffered or
incurred by any of the Indemnitees or to which any of the Indemnitees may
otherwise become subject at any time (regardless of whether or not such Damages
relate to any third-party claim) and that arise directly or indirectly from or
as a direct or indirect result of, or are directly or indirectly connected with:
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(I) any Breach of any of the representations or warranties made
by the Stockholder or the Seller in this Agreement (without giving
effect to any update to the Disclosure Schedule) or in the Closing
Certificate or any of the other Transactional Agreements;
(II) any Breach of any representation, warranty, statement,
information or provision contained in the Disclosure Schedule or in any
other document delivered or otherwise made available to the Purchaser
or any of its Representatives by or on behalf of the Stockholder, the
Seller or any Representative of the Stockholder or of the Seller;
(III) any Breach of any covenant or obligation of the
Stockholder or the Seller contained in any of the Transactional
Agreements;
(IV) any Liability of the Seller or of any Related Party, other
than the Assumed Liabilities;
(V) any Liability (other than the Assumed Liabilities) to which
the Purchaser or any of the other Indemnitees may become subject and
that arises directly or indirectly from or relates directly or
indirectly to (A) any product produced or sold or any services
performed by or on behalf of the Seller, (B) the operation by the
Seller of its business, or (C) any failure to comply with any bulk
transfer law or similar Legal Requirement in connection with any of the
Transactions;
(VI) any Proceeding relating directly or indirectly to any
Breach, alleged Breach, Liability or matter of the type referred to in
clause (i), (ii), (iii), (iv), or (v) above (including any Proceeding
commenced by any Indemnitee for the purpose of enforcing any of its
rights under this Section 6).
(B) Subject to Section 6.2(c), neither the Seller nor the
Stockholder shall be required to make any indemnification payment pursuant to
Section 6.2(a)(i) for any Breach of the representations and warranties made by
them in this Agreement or in the Closing Certificate until such time as the
total amount of all Damages (including the Damages arising from such Breach and
all other Damages arising from any other Breaches of any representations or
warranties) that have been directly or indirectly suffered or incurred by any
one or more of the Indemnitees, or to which any one or more of the Indemnitees
has or have otherwise become subject, exceeds $25,000. (If the total amount of
such Damages exceeds the $25,000, the Indemnitees shall be entitled to be
indemnified against and compensated and reimbursed for the entire amount of such
Damages, and not merely the portion of such Damages exceeding $25,000.)
(C) The limitation on the indemnification obligations of the
Stockholder and the Seller that is set forth in Section 6.2(b) shall not apply
to any Breach arising directly or indirectly from any circumstance of which any
of the Stockholder or the Seller had knowledge on or prior to the Closing Date.
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6.3 INDEMNIFICATION BY PURCHASER.
(A) The Purchaser shall hold harmless and indemnify the Seller from
and against, and shall compensate and reimburse the Seller for, any Damages that
are directly or indirectly suffered or incurred by the Seller or to which the
Seller may otherwise become subject at any time (regardless of whether or not
such Damages relate to any third-party claim) and that arise directly or
indirectly from or as a direct or indirect result of, or are directly or
indirectly connected with:
(I) any failure on the part of the Purchaser to perform and
discharge the Assumed Liabilities on a timely basis;
(II) any Breach of any representation or warranty made by the
Purchaser in this Agreement; or
(III) any Proceeding relating directly or indirectly to any
failure or Breach of the type referred to in clause (i) or (ii) above
(including any Proceeding commenced by the Seller for the purpose of
enforcing its rights under this Section 6.3).
(B) Subject to Section 6.3(c), the Purchaser shall not be required
to make any indemnification payment pursuant to Section 6.3(a) for any Breach of
any of its representations and warranties until such time as the total amount of
all Damages (including the Damages arising from such Breach and all other
Damages arising from any other Breaches of its representations or warranties)
that have been directly or indirectly suffered or incurred by the Seller, or to
which the Seller have otherwise become subject, exceeds $25,000 in the
aggregate. (If the total amount of such Damages exceeds $25,000 in the
aggregate, the Seller shall be entitled to be indemnified against and
compensated and reimbursed for the entire amount of such Damages, and not merely
the portion of such Damages exceeding $25,000.)
(C) The limitation on the indemnification obligations of the
Purchaser that is set forth in Section 6.3(b) shall not apply to any Breach
arising directly or indirectly from any circumstance of which the Purchaser had
knowledge on or prior to the Closing Date.
6.4 SETOFF. In addition to any rights of setoff or other rights that
the Purchaser or any of the other Indemnitees may have at common law or
otherwise, the Purchaser shall have the right to withhold and deduct any sum
that may be owed to any Indemnitee under this Section 6 from any amount
otherwise payable by any Indemnitee to the Seller or the Stockholder. The
withholding and deduction of any such sum shall operate for all purposes as a
complete discharge (to the extent of such sum) of the obligation to pay the
amount from which such sum was withheld and deducted.
6.5 NONEXCLUSIVITY OF INDEMNIFICATION REMEDIES. The indemnification
remedies and other remedies provided in this Section 6 shall not be deemed to be
exclusive. Accordingly, the exercise by any Person of any of its rights under
this Section 6 shall not be deemed to be an election of remedies and shall not
be deemed to prejudice, or to constitute or operate as a waiver of, any other
right or remedy that such Person may be entitled to exercise (whether under this
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Agreement, under any other Contract, under any statute, rule or other Legal
Requirement, at common law, in equity or otherwise).
6.6 LIMITATIONS. (a) The Seller shall have no liability under this
Section 6 unless a Claim Notice, or notice of facts as to which indemnifiable
Damages are expected to be incurred, shall have been given prior to the end of
the six month period following the Closing Date, except that after such date any
of the Indemnitees may give notice of and may make a claim at any time prior to
the fourth anniversary of the Closing Date relating to any inaccuracy of any
nature in any representations or warranties made by the Seller in either Section
2.6 or 2.16.
(b) The Seller shall have no liability under this Section 6 in
excess of the Escrow Fund; provided, however, that the Seller may have liability
up to but not in excess of the Purchase Price for any inaccuracy of the
representations and warranties set forth in Section 2.6 or 2.16.
6.7 ESCROW. The Escrow Fund shall be retained by the Escrow Agent in
accordance with the terms of the Escrow Agreement to reimburse Purchaser for any
Damages pursuant to the terms and conditions of this Section 6. Following any
final and binding determination (whether by non-objection, agreement or
arbitration) that Purchaser is entitled to indemnification or that the Seller is
entitled to the conditional consideration set forth in Section 1.2(b)(ii), the
Purchaser and the Seller shall promptly execute and deliver to the Escrow Agent
a disbursement request instructing the Escrow Agent to deliver the number of
shares of Common Stock of the Escrow Fund equal to Purchaser's Damages or the
contingent consideration comprising the Escrow Fund. The value of the shares of
Common Stock for purposes of indemnity shall be the average closing price for
the 30 trading days prior to the date that the distribution request is submitted
to the Escrow Agent pursuant to the Escrow Agreement.
6.8 DEFENSE OF THIRD PARTY CLAIMS. In the event of the assertion or
commencement by any Person of any claim or Proceeding (whether against the
Purchaser, against any other Indemnitee or against any other Person) with
respect to which any of the Stockholder or the Seller may become obligated to
indemnify, hold harmless, compensate or reimburse any Indemnitee pursuant to
this Section 6, the Purchaser shall have the right, at its election, to
designate the Seller or the Stockholder to assume the defense of such claim or
Proceeding at the sole expense of the Stockholder and the Seller. If the
Purchaser so elects to designate the Seller or the Stockholder to assume the
defense of any such claim or Proceeding:
(A) the Seller or the Stockholder shall proceed to defend such
claim or Proceeding in a diligent manner with counsel satisfactory to
the Purchaser;
(B) the Purchaser shall make available to the Seller or the
Stockholder, as appropriate, any non-privileged documents and materials
in the possession of the Purchaser that may be necessary to the defense
of such claim or Proceeding;
(C) the Seller or the Stockholder, as appropriate, shall keep the
Purchaser informed of all material developments and events relating to
such claim or Proceeding;
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(D) the Purchaser shall have the right to participate in the
defense of such claim or Proceeding;
(E) the Seller or the Stockholder shall not settle, adjust or
compromise such claim or Proceeding without the prior written consent
of the Purchaser; and
(F) the Purchaser may at any time (notwithstanding the prior
designation of the Seller or the Stockholder to assume the defense of
such claim or Proceeding) assume the defense of such claim or
Proceeding.
If the Purchaser does not elect to designate the Seller or the Stockholder to
assume the defense of any such claim or Proceeding (or if, after initially
designating the Seller or the Stockholder to assume such defense, the Purchaser
elects to assume such defense), the Purchaser may proceed with the defense of
such claim or Proceeding on its own. If the Purchaser so proceeds with the
defense of any such claim or Proceeding on its own:
(I) all expenses relating to the defense of such claim or
Proceeding (whether or not incurred by the Purchaser) shall be borne
and paid exclusively by the Stockholder and the Seller;
(II) the Stockholder and the Seller shall make available to the
Purchaser any documents and materials in the possession or control of
either of the Stockholder or the Seller that may be necessary to the
defense of such claim or Proceeding;
(III) the Purchaser shall keep the Seller informed of all
material developments and events relating to such claim or Proceeding;
and
(IV) the Purchaser shall have the right to settle, adjust or
compromise such claim or Proceeding with the consent of the Seller or
the Stockholder; provided, however, that such party shall not
unreasonably withhold such consent.
6.9 EXERCISE OF REMEDIES BY INDEMNITEES OTHER THAN PURCHASER. No
Indemnitee (other than the Purchaser or any successor thereto or assign thereof)
shall be permitted to assert any indemnification claim or exercise any other
remedy under this Agreement unless the Purchaser (or any successor thereto or
assign thereof) shall have consented to the assertion of such indemnification
claim or the exercise of such other remedy.
7. SECURITIES LAWS COMPLIANCE
7.1 INVESTIGATION. The Seller acknowledges that it has had an
opportunity to discuss the business, affairs and current prospects of the
Purchaser with the Purchaser personnel. The Seller further acknowledges having
had access to information about the Purchaser that it has requested or considers
necessary for purposes of purchasing the Purchaser's common stock.
7.2 ACCREDITED INVESTOR. The Seller is an "accredited investor" within
the meaning of Rule 501 of the rules and regulations promulgated under the
Securities Act of 1933, as amended.
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7.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with the
Seller in reliance upon the Seller's representation to the Purchaser, which by
the Seller's execution of this Agreement the Seller hereby confirms, that the
Purchaser's common stock issued as consideration pursuant to Section 1.2 hereof
will be acquired for investment for the Seller's own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part thereof,
and that the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same.
7.4 RESTRICTED SECURITIES. Seller understands that the shares of
Purchaser common stock it is acquiring are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from the Purchaser in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold
without registration under the Act, only in certain limited circumstances. In
this connection, Seller represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
8. MISCELLANEOUS PROVISIONS.
8.1 FURTHER ASSURANCES. Each party hereto shall execute and/or cause to
be delivered to each other party hereto such instruments and other documents,
and shall take such other actions, as such other party may reasonably request
(prior to, at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions.
8.2 FEES AND EXPENSES.
(A) The Stockholder and the Seller shall bear and pay all fees,
costs and expenses (including all legal fees and expenses payable to Jones,
Walker, Waechter, Poitevent, Carrere and ▇▇▇▇▇▇▇, L.L.P.) that have been
incurred or that are in the future incurred by, on behalf of or for the benefit
of the Stockholder or the Seller in connection with: (i) the negotiation,
preparation and review of any letter of intent or similar document relating to
any of the Transactions; (ii) the investigation and review conducted by the
Purchaser and its Representatives with respect to the business of the Seller
(and the furnishing of information to the Purchaser and its Representatives in
connection with such investigation and review); (iii) the negotiation,
preparation and review of this Agreement (including the Disclosure Schedule),
the other Transactional Agreements and all bills of sale, assignments,
certificates, opinions and other instruments and documents delivered or to be
delivered in connection with the Transactions; (iv) the preparation and
submission of any filing or notice required to be made or given in connection
with any of the Transactions, and the obtaining of any Consent required to be
obtained in connection with any of the Transactions; and (v) the consummation
and performance of the Transactions.
(B) Subject to the provisions of Section 9 (including the
indemnification and other obligations of the Seller thereunder), the Purchaser
shall bear and pay all fees, costs and expenses (including all legal fees and
expenses payable to ▇▇▇▇▇▇ Godward LLP) that have been incurred or that are in
the future incurred by or on behalf of the Purchaser in connection with: (i) the
negotiation, preparation and review of any letter of intent or similar document
relating to any of the Transactions; (ii) the investigation and review conducted
by the Purchaser and its
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Representatives with respect to the business of the Seller; (iii) the
negotiation, preparation and review of this Agreement, the other Transactional
Agreements and all bills of sale, assignments, certificates, opinions and other
instruments and documents delivered or to be delivered in connection with the
Transactions; and (iv) the consummation and performance of the Transactions.
8.3 ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to any of the Transactional Agreements or the enforcement of any
provision of any of the Transactional Agreements is brought against any party to
this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees, costs and disbursements (in addition to any other relief to
which the prevailing party may be entitled).
8.4 NOTICES. Any notice or other communication required or
permitted to be delivered to any party under this Agreement shall be in writing
and shall be deemed properly delivered, given and received when delivered (by
hand, by registered mail, by courier or express delivery service or by
facsimile) to the address or facsimile telephone number set forth beneath the
name of such party below (or to such other address or facsimile telephone number
as such party shall have specified in a written notice given to the other
parties hereto):
if to the Stockholder:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as agent of the Stockholder
Stone & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇
Jones, Walker, Waechter, Poitevent, Carrere
and ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
if to the Seller:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Stone & ▇▇▇▇▇▇▇, Incorporated
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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if to the Purchaser:
▇▇▇▇ ▇▇▇▇▇
Vice President of Administration and
Controller
Spatial Technology Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ Godward LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8.5 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
8.6 HEADINGS. The underlined headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
8.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
8.8 GOVERNING LAW; VENUE.
(A) This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of Colorado (without
giving effect to principles of conflicts of laws).
(B) Any legal action or other legal proceeding relating to this
Agreement or the enforcement of any provision of this Agreement may be brought
or otherwise commenced in any state or federal court located in the County of
Denver, Colorado. Each party to this Agreement:
(I) expressly and irrevocably consents and submits to the
jurisdiction of each state and federal court located in the County of
Denver, Colorado (and each appellate court located in the State of
Colorado) in connection with any such legal proceeding;
(II) agrees that each state and federal court located in the
County of Denver, Colorado shall be deemed to be a convenient forum;
and
(III) agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any state or
federal court located in the
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▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ any claim that such party is not subject
personally to the jurisdiction of such court, that such legal
proceeding has been brought in an inconvenient forum, that the venue of
such proceeding is improper or that this Agreement or the subject
matter of this Agreement may not be enforced in or by such court.
(C) The Stockholder and the Seller agree that, if any Proceeding is
commenced against any Indemnitee by any Person in or before any court or other
tribunal anywhere in the world, then such Indemnitee may proceed against the
Stockholder and the Seller in or before such court or other tribunal with
respect to any indemnification claim or other claim arising directly or
indirectly from or relating directly or indirectly to such Proceeding or any of
the matters alleged therein or any of the circumstances giving rise thereto.
(D) Nothing in this Section 8.8 shall be deemed to limit or
otherwise affect the right of any Indemnitee to commence any legal proceeding
against the Stockholder or the Seller in any forum or jurisdiction.
8.9 SUCCESSORS AND ASSIGNS; PARTIES IN INTEREST.
(A) This Agreement shall be binding upon: the Seller and its
successors and assigns (if any); the Stockholder and its successors and assigns
(if any); and the Purchaser and its successors and assigns (if any). This
Agreement shall inure to the benefit of: the Seller; the Stockholder; the
Purchaser; the other Indemnitees (subject to Section 6.6); and the respective
successors and assigns (if any) of the foregoing.
(B) Other than the obligation to deliver the Purchaser's Common
Stock, the Purchaser may freely assign any or all of its rights under this
Agreement (including its indemnification rights under Section 6), in whole or in
part, to any other Person without obtaining the consent or approval of any other
Person. Neither the Seller nor the Stockholder shall be permitted to assign any
of its rights or delegate any of its obligations under this Agreement without
the Purchaser's prior written consent.
(C) Except for the provisions of Section 6 hereof, none of the
provisions of this Agreement is intended to provide any rights or remedies to
any Person other than the parties to this Agreement and their respective
successors and assigns (if any). Without limiting the generality of the
foregoing, (i) no employee of the Seller shall have any rights under this
Agreement or under any of the other Transactional Agreements, and (ii) no
creditor of the Seller shall have any rights under this Agreement or any of the
other Transactional Agreements.
8.10 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). The Stockholder
and the Seller agree that: (a) in the event of any Breach or threatened Breach
by the Stockholder or the Seller of any covenant, obligation or other provision
set forth in this Agreement, the Purchaser shall be entitled (in addition to any
other remedy that may be available to it) to (i) a decree or order of specific
performance or mandamus to enforce the observance and performance of such
covenant, obligation or other provision, and (ii) an injunction restraining such
Breach or threatened Breach; and (b) neither the Purchaser nor any other
Indemnitee shall be required to provide any bond or
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other security in connection with any such decree, order or injunction or in
connection with any related action or Proceeding.
8.11 WAIVER.
(A) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(B) No Person shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
8.12 AMENDMENTS. This Agreement may not be amended, modified, altered
or supplemented other than by means of a written instrument duly executed and
delivered on behalf of the Purchaser, the Seller and the Stockholder.
8.13 SEVERABILITY. In the event that any provision of this Agreement,
or the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
8.14 ENTIRE AGREEMENT. The Transactional Agreements set forth the
entire understanding of the parties relating to the subject matter thereof and
supersede all prior agreements and understandings among or between any of the
parties relating to the subject matter thereof.
8.15 KNOWLEDGE. For purposes of this Agreement, a Person shall be
deemed to have "knowledge" of a particular fact or other matter if any
Representative of such Person has knowledge of such fact or other matter.
8.16 CONSTRUCTION.
(A) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
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(B) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(C) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(D) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Agreement and Exhibits to this Agreement.
8.17 COURT APPROVAL. This Agreement is subject to court approval in the
Chapter 11 Case and shall not be binding on either the Stockholder pr the
Purchaser until entry of the Sale Order.
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The parties to this Agreement have caused this Agreement to be executed
and delivered as of June 28, 2000.
PRESCIENT TECHNOLOGIES, INC.
a Delaware corporation
By:
Its:
STONE & ▇▇▇▇▇▇▇, INCORPORATED
a Delaware corporation
By:
Its:
SPATIAL TECHNOLOGY INC.,
a Delaware corporation
By:
Its:
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction involving: (a) the sale or other disposition of all or any portion
of the business or assets of the Seller (other than in the Ordinary Course of
Business); (b) the issuance, sale or other disposition of (i) any capital stock
or other securities of the Seller, (ii) any option, call, warrant or right
(whether or not immediately exercisable) to acquire any capital stock or other
securities of the Seller, or (iii) any security, instrument or obligation that
is or may become convertible into or exchangeable for any capital stock or other
securities of the Seller; or (c) any merger, consolidation, business
combination, share exchange, reorganization or similar transaction involving the
Seller.
AGREEMENT. "Agreement" shall mean the Asset Purchase Agreement to which
this Exhibit A is attached (including the Disclosure Schedule), as it may be
amended from time to time.
BEST EFFORTS. "Best Efforts" shall mean the efforts that a prudent
Person desiring to achieve a particular result would use in order to ensure that
such result is achieved as expeditiously as possible.
BREACH. There shall be deemed to be a "Breach" of a representation,
warranty, covenant, obligation or other provision if there is or has been (a)
any inaccuracy in or breach (including any inadvertent or innocent breach) of,
or any failure (including any inadvertent failure) to comply with or perform,
such representation, warranty, covenant, obligation or other provision, or (b)
any claim (by any Person) or other circumstance that is inconsistent with such
representation, warranty, covenant, obligation or other provision; and the term
"Breach" shall be deemed to refer to any such inaccuracy, breach, failure, claim
or circumstance.
CERCLA. "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act.
CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
COMPARABLE ENTITIES. "Comparable Entities" shall mean Entities (other
than the Seller) that are engaged in businesses similar to the business of the
Seller.
CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTRACT. "Contract" shall mean any written, oral, implied or other
agreement, contract, understanding, arrangement, instrument, note, guaranty,
indemnity, representation, warranty, deed, assignment, power of attorney,
certificate, purchase order, work order, insurance policy, benefit plan,
commitment, covenant, assurance or undertaking of any nature.
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DAMAGES. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, Liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including any legal fee, expert fee, accounting fee or
advisory fee), charge, cost (including any cost of investigation) or expense of
any nature.
DISCLOSURE SCHEDULE. "Disclosure Schedule" shall mean the schedule
(dated as of the date of the Agreement) delivered to the Purchaser on behalf of
the Stockholder and the Seller, a copy of which is attached to the Agreement and
incorporated in the Agreement by reference.
EMPLOYEE BENEFIT PLAN. "Employee Benefit Plan" shall have the meaning
specified in Section 3(3) of ERISA.
ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, equity, trust, equitable
interest, claim, preference, right of possession, lease, tenancy, license,
encroachment, covenant, infringement, interference, Order, proxy, option, right
of first refusal, preemptive right, community property interest, legend, defect,
impediment, exception, reservation, limitation, impairment, imperfection of
title, condition or restriction of any nature (including any restriction on the
transfer of any asset, any restriction on the receipt of any income derived from
any asset, any restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of ownership of any
asset).
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974.
ERISA AFFILIATE. "ERISA Affiliate" shall mean any Person that is, was
or would be treated as a single employer with any of the Specified Entities
under Section 414 of the Code.
EXCLUDED ASSETS. "Excluded Assets" shall mean the assets identified on
Exhibit E (to the extent owned by the Seller on the Closing Date).
GAAP. "GAAP" shall mean generally accepted accounting principles.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean
any: (a) permit, license, certificate, franchise, concession, approval, consent,
ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration, qualification or authorization
issued, granted, given or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement; or (b) right under
any Contract with any Governmental Body.
GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a) nation,
principality, state, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign or other government; (c) governmental or
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quasi-governmental authority of any nature (including any governmental division,
subdivision, department, agency, bureau, branch, office, commission, council,
board, instrumentality, officer, official, representative, organization, unit,
body or Entity and any court or other tribunal); (d) multi-national organization
or body; or (e) individual, Entity or body exercising, or entitled to exercise,
any executive, legislative, judicial, administrative, regulatory, police,
military or taxing authority or power of any nature.
HAZARDOUS MATERIAL. "Hazardous Material" shall include: (a) any
petroleum, waste oil, crude oil, asbestos, urea formaldehyde or polychlorinated
biphenyl; (b) any waste, gas or other substance or material that is explosive or
radioactive; (c) any "hazardous substance," "pollutant," "contaminant,"
"hazardous waste," "regulated substance," "hazardous chemical" or "toxic
chemical" as designated, listed or defined (whether expressly or by reference)
in any statute, regulation or other Legal Requirement (including CERCLA and any
other so-called "superfund" or "superlien" law and the respective regulations
promulgated thereunder); (d) any other substance or material (regardless of
physical form) or form of energy that is subject to any Legal Requirement which
regulates or establishes standards of conduct in connection with, or which
otherwise relates to, the protection of human health, plant life, animal life,
natural resources, property or the enjoyment of life or property from the
presence in the environment of any solid, liquid, gas, odor, noise or form of
energy; and (e) any compound, mixture, solution, product or other substance or
material that contains any substance or material referred to in clause (a), (b),
(c) or (d) above.
INDEMNITEES. "Indemnitees" shall mean the following Persons: (a) the
Purchaser; (b) the Purchaser's current and future affiliates; (c) the respective
Representatives of the Persons referred to in clauses (a) and (b) above; and (d)
the respective successors and assigns of the Persons referred to in clauses (a),
(b) and (c) above.
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, legislation, constitution,
principle of common law, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, ruling, directive,
pronouncement, requirement, specification, determination, decision, opinion or
interpretation issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Governmental Body.
LIABILITY. "Liability" shall mean any debt, obligation, duty or
liability of any nature (including any unknown, undisclosed, unmatured,
unaccrued, unasserted, contingent,indirect, conditional, implied, vicarious,
derivative, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with generally accepted accounting
principles and regardless of whether such debt, obligation, duty or liability is
immediately due and payable.
ORDER. "Order" shall mean any: (a) order, judgment, injunction, edict,
decree, ruling, pronouncement, determination, decision, opinion, verdict,
sentence, subpoena, writ or award issued, made, entered, rendered or otherwise
put into effect by or under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration panel; or (b) Contract
with any Governmental Body entered into in connection with any Proceeding.
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ORDINARY COURSE OF BUSINESS. An action taken by or on behalf of the
Seller shall not be deemed to have been taken in the "Ordinary Course of
Business" unless:
(a) such action is recurring in nature, is consistent with the
past practices of the Seller and is taken in the ordinary course of the
normal day-to-day operations of the Seller;
(b) such action is taken in accordance with sound and prudent
business practices;
(c) such action is not required to be authorized by the
Stockholder of the Seller, the board of directors of the Seller or
any committee of the board of directors of the Seller and does not
require any other separate or special authorization of any nature; and
(d) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in
the ordinary course of the normal day-to-day operations of Comparable
Entities.
PERSON. "Person" shall mean any individual, Entity or Governmental
Body.
PRE-CLOSING PERIOD. "Pre-Closing Period" shall mean the period from the
date of the Agreement through the Closing Date.
PROCEEDING. "Proceeding" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal proceeding), prosecution,
contest, hearing, inquiry, inquest, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or any arbitrator or arbitration panel.
PROPRIETARY ASSET. "Proprietary Asset" shall mean any patent, patent
application, trademark (whether registered or unregistered and whether or not
relating to a published work), trademark application, trade name, fictitious
business name, service ▇▇▇▇ (whether registered or unregistered), service ▇▇▇▇
application, copyright (whether registered or unregistered), copyright
application, maskwork, maskwork application, trade secret, know-how, customer
list, franchise, system, computer software, invention, design, blueprint,
engineering drawing, proprietary product, technology, proprietary right or other
intellectual property right or intangible asset.
RELATED PARTY. Each of the following shall be deemed to be a "Related
Party": (a) each individual who is, or who has at any time been, an officer of
the Seller; (b) each member of the family of each of the individuals referred to
in clause (a) above; and (c) any Entity (other than the Seller) in which any one
of the individuals referred to in clauses (a) and (b) above holds or held (or in
which more than one of such individuals collectively hold or held), beneficially
or otherwise, a controlling interest or a material voting, proprietary or equity
interest.
REPRESENTATIVES. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
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SELLER CONTRACT. "Seller Contract" shall mean any Contract: (a) to
which the Seller is a party; (b) by which the Seller or any of its assets is or
may become bound or under which the Seller has, or may become subject to, any
obligation; or (c) under which the Seller has or may acquire any right or
interest.
SELLER PROPRIETARY ASSET. "Seller Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Seller or otherwise used by the
Seller.
TAX. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, estimated tax, gross receipts tax, value-added tax, surtax,
excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, occupation tax, inventory tax, occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
toll, duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), that is, has been or
may in the future be (a) imposed, assessed or collected by or under the
authority of any Governmental Body, or (b) payable pursuant to any tax-sharing
agreement or similar Contract.
TAX RETURN. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that
is, has been or may in the future be filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.
TRANSACTIONAL AGREEMENTS. "Transactional Agreements" shall mean: (a)
the Agreement; (b) the Escrow Agreement; (c) the Assumption Agreement; (d) the
Purchaser Noncompetition Agreement referred to in Section 1.6(b)(iv) of the
Agreement; and (e) the Closing Certificate.
TRANSACTIONS. "Transactions" shall mean (a) the execution and delivery
of the respective Transactional Agreements, and (b) all of the transactions
contemplated by the respective Transactional Agreements, including: (i) the sale
of the Assets by the Seller to the Purchaser in accordance with the Agreement;
(ii) the assumption of the Assumed Liabilities by the Purchaser pursuant to the
Assumption Agreement; and (iii) the performance by the Seller, the Stockholder
and the Purchaser of their respective obligations under the Transactional
Agreements, and the exercise by the Seller, the Stockholder and the Purchaser of
their respective rights under the Transactional Agreements.
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