●
Earnings Feed
Filings
Companies
Insiders
Pricing
Blog
⌘
K
Login
Start Free
DIVINE INC
·
8-K
Jun 2, 5:12 PM ET
Share
DIVINE INC 8-K
Loading document...
Share
More
Contents
117
ARTICLE I
DEFINITIONS
ARTICLE II
PURCHASE AND SALE OF THE ASSETS; PURCHASE PRICE
(a) the Accounts Receivable, a recent summary schedule of which is attached hereto as Schedule 2.1(a) (it being understood that such schedule does not reflect Accounts Receivable as of the Closing Date that will be included in the Transferred Assets);
(b) the Equipment and Other Personalty whether located at the Transferred Facilities of the Sellers or elsewhere;
(c) the Intellectual Property primarily used in the Business, including, without limitation, the patented or registered Intellectual Property set forth on Schedule 2.1(c) and pending patent applications or other applications for the registration of Intellectual Property;
(d) all Inventory, a recent summary schedule of which is attached hereto as Schedule 2.1(d) (it being understood that such schedule does not reflect Inventory as of the Closing Date that will be included in the Transferred Assets);
(e) all rights of the Sellers under Assigned Contracts;
(f) originals or copies of all books, financial and other records and information which has been reduced to written, recorded or encoded form, in each case to the extent related to the Business (collectively, the “Books and Records”);
(g) licenses and permits primarily used in the operation of the Business, to the extent transferable;
(h) subject to the Purchaser’s right to reject any lease of Real Property in accordance with the terms of this Agreement, owned and leased Real Property primarily used in the operation of the Business, each parcel of which is set forth on Schedule 2.1(h);
(i) any warranties of third parties on any Transferred Assets;
(j) all prepaid expenses, security deposits and other credits owed to the Sellers from third parties, to the extent primarily related to the Transferred Assets;
(k) all rights and incidents under policies, contracts or arrangements related to insurance of any Seller to the extent related to Assumed Liabilities or Transferred Assets and to the extent transferable (it being understood that (i) such policies will be cancelled at Closing and the Sellers will be entitled to any refunds upon such cancellation and (ii) the Sellers’ directors and officers insurance policies will constitute Excluded Assets in all respects);
(l) all rights and claims of the Sellers of every kind and description under all non-disclosure, confidentiality, non-competition, non-solicitation, assignment of invention and other agreements of a comparable nature with (i) all present and former employees of the Sellers other than Eligible Employees who are hired by the Purchaser to the extent such agreements relate to the Transferred Assets and (ii) all Eligible Employees who are hired by the Purchaser whether or not such agreements relate to the Transferred Assets; and
(m) all other assets primarily related to the Business, other than any Excluded Assets.
(a) all cash, cash equivalents and marketable securities, including, but not limited to, any and all cash, check, money order, wire transfer or other deposits of the Sellers received prior to the Effective Time and deposited into the bank or other deposit accounts of the Sellers prior to the Effective Time, whether or not such deposits have cleared;
(b) any tangible or intangible assets of RoweCom, Inc., a Delaware corporation (“RoweCom”) and divine/Whittman-Hart, Inc., an Illinois corporation (“d/W-H”) and their respective direct or indirect subsidiaries;
(c) all Contracts that are not Assigned Contracts;
(d) all prepaid expenses, security deposits and other credits owed to the Sellers from third parties, to the extent not primarily related to the Transferred Assets;
(e) all intercompany rights or obligations between any Sellers;
(f) all rights and incidents under policies, contracts or arrangements other than as set forth in Section 2.1(k) above;
(g) all rights, demands, Claims, and Actions of Sellers (except to the extent related to a Transferred Asset or an Assumed Liability);
(h) all defenses, Claims, counter-Claims, rights or offset and other Actions against any Person asserting or seeking to enforce any Liability against the Sellers, to the extent such Liability is not assumed by the Purchaser pursuant to this Agreement;
(i) any intracompany or Affiliate receivables, advances or indebtedness of any Seller;
(j) any rights of any Seller under this Agreement;
(k) subject to Section 6.5 hereof, any avoidance or similar Actions, including but not limited to Actions under sections 544, 545, 547, 548, 550 and 553 of the Bankruptcy Code;
(l) any income tax refunds or credits arising out of the operation of the Business prior to the Closing Date;
(m) any bids received from any other Person in connection with the proposed sale of the Business or the Transferred Assets and any analyses prepared by or on behalf of Sellers of any bids for the Business or any materials relating to the negotiations with any potential bidder;
(n) any Books and Records related to the Sellers’ employees the Transfer of which would conflict with any confidentiality or privacy obligation of the Sellers under applicable Law;
(o) any assets of any employee benefit plan of any Seller and any rights under any such plan or any contract, agreement or arrangement between any employee or consultant and Sellers;
(p) all rights of the Sellers under the agreements set forth on Schedule 2.2(p) under which the counterparty or counterparties agree not to compete with the Business or agree to keep confidential information regarding the Business, but only to the extent such agreements are not assignable to the Purchaser as a matter of law under the Bankruptcy Code;
(q) except as set forth in Section 2.7 below, the capital stock of any subsidiary of any Seller;
(r) assets primarily relating to the Net Unlimited business of the Sellers;
(s) any professional retainer fees previously paid by the Sellers;
(t) the assets listed on Schedule 2.2(t) which includes (A) certain computers and related information technology necessary to wind-up the Bankruptcy Case and (B) certain non-core assets of the Sellers;
(u) all employment agreements to which any Seller is a party; provided that to the extent any benefit of a nature described in Section 2.1(l) arising under any such employment agreement is transferable to the Purchaser without the consent of the employee (notwithstanding the fact that such employment agreements will not be assumed by or assigned to the Purchaser, and are intended to be rejected by the Sellers in the Bankruptcy Case), then such benefit shall be included in the Transferred Assets;
(v) any monies escrowed by customers of RoweCom;
(w) all bank and other deposit accounts of the Sellers;
(x) all furniture, fixtures and equipment currently at or removed by the Sellers on or prior to the date hereof from the 302 Town Centre Drive, Markham, Ontario, Canada facility;
(y) the following servers:
(z) all assets of the Sellers other than those primarily related to the Business; and
(aa) the trade name “divine”.
(a) Subject to the terms and conditions of this Agreement, at and as of the Effective Time, the Purchaser shall assume and agree to pay, perform, discharge and satisfy when due in accordance with their terms the following Liabilities:
(i) Liabilities under any of the Assigned Contracts accruing, arising out of or relating to periods after the Effective Time;
(ii) any amount which may be payable pursuant to Section 365(b) of the Bankruptcy Code on account of the assumption and assignment of any Assigned Contract shall be borne 25% by the Purchaser and 75% by the Sellers;
(iii) those capital equipment lease obligations of the Business and debt obligations under outstanding promissory notes of the Business identified on Schedule 2.3(a)(iii) (excluding all amounts which may be payable pursuant to Section 365(b) of the Bankruptcy Code on account of the assumption and assignment of any such capital lease obligations and debt obligations and giving effect to any reduction to any such obligations occurring on or prior to the Effective Time) (the “MSB Liabilities”) (it being expressly understood that the Sellers may renegotiate the terms of or prepay any of the MSB Liabilities on or prior to the Effective Time (including with proceeds of the Purchase Price) so long as the payment terms of the MSB Liabilities after the Effective Time resulting from any such renegotiation or prepayment are no less favorable than those in existence as of the date hereof, and so long as (A) the weighted average interest rate and the weighted average life to maturity of the MSB Liabilities as of the Effective Time do not exceed the weighted average interest rate and the weighted average life to maturity of the MSB Liabilities as of the date hereof and (B) the restructuring of the MSB Liabilities will not require the Purchaser to make any additional cash payments in connection therewith (other than payments in respect of amounts which may be payable pursuant to Section 365(b) of the Bankruptcy Code on account of the assumption and assignment of any such capital lease or debt obligation in accordance with Section 2.3(a)(ii) hereof) other than with respect to the principal of, or interest on, such Liabilities which comply with the requirements of clause (A) above);
(iv) any Liabilities for accrued vacation with respect to Eligible Employees who are hired by the Purchaser at the Effective Time or within 30 days following the Closing Date;
(v) except for any items specifically excluded pursuant to Section 2.4 (iii) hereof, any unpaid post-Petition Date accounts payable of the Sellers incurred in the ordinary course of business in an amount not to exceed $1,200,000 in the aggregate designated by the Sellers, up to $1,000,000 of which will relate to the Business and up to $200,000 of which may relate to any expense of the Sellers; and
(vi) any Liabilities covered by warranties assigned to the Purchaser pursuant to Section 2.1(i) of this Agreement.
(b) From the date hereof through the Closing Date, Sellers shall use reasonable best efforts to obtain settlements or stipulations (but without any obligation of any Seller to pay any amount in respect of such settlements, except as specified in Section 2.3(a) hereof) with any party that objects to the assumption and assignment of an Assigned Contract or any related cure amount. Notwithstanding any provision contained herein to the contrary, from and after the date hereof through the Closing Date: (i) the Sellers will not reject, without the prior consent of the Purchaser, any Executory Contract other than (A) those Executory Contracts which are currently subject to motions pending before the Bankruptcy Court as of the date hereof and (B) Contracts that are Excluded Assets and (ii) the Sellers will consult with the Purchaser with respect to the restructuring of, and negotiations with respect to the amount of cure costs to be paid in respect of, any Assigned Contract (including, without limitation, any such Assigned Contract described in Section 2.3(a)(iii) hereof).
ARTICLE III
THE CLOSING
(a) Deliveries by Purchaser. At the Closing, the Purchaser shall deliver to the Sellers the following:
(i) a wire transfer of the Purchase Price (less the amount of the Deposit if the Deposit is wired by the Escrow Agent to an account designated by the Sellers on the Closing Date);
(ii) the Assignment and Assumption Agreement;
(iii) the Temporary Services Agreement;
(iv) the Transition Services Agreement;
(v) a certificate of an executive officer of the Purchaser to evidence compliance with the conditions set forth in Sections 10.1 through 10.2 hereof and any other certificates to evidence compliance with the conditions set forth in Article X hereof as may be reasonably requested by the Sellers or their counsel;
(vi) any cure costs advanced by the Sellers on or prior to the Closing Date that would otherwise have constituted Assumed Liabilities pursuant to Section 2.3(a)(ii) hereof; and
(vii) such other documents as Sellers’ counsel may reasonably request that are customary for a transaction of this nature and necessary to evidence or consummate the transactions contemplated by this Agreement.
(b) Deliveries by the Sellers. At the Closing, the Sellers (or their Affiliates, if applicable) shall deliver to the Purchaser the following:
(i) the Bill of Sale;
(ii) the Assignment and Assumption Agreement;
(iii) the Temporary Services Agreement;
(iv) the Transition Services Agreement;
(v) a certificate of an executive officer of each Seller to evidence compliance with the conditions set forth in Sections 9.1 through 9.2 hereof and any other certificates to evidence compliance with the conditions set forth in Article IX hereof as may be reasonably requested by the Purchaser or its counsel; and
(vi) such other documents as Purchaser’s counsel may reasonably request that are customary for a transaction of this nature and necessary to evidence or consummate the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
(a) As of the Closing and immediately after consummating the Proposed Transaction and the other transactions contemplated by the Acquisition Documents, the Purchaser will not (i) be insolvent (either because its financial condition is such that the sum of its debts is greater than the fair value of its assets or because the present fair value of its assets will be less than the amount required to pay its probable Liability on its debts as they become absolute and matured), (ii) have unreasonably small capital with which to engage in its business, including the Business or (iii) have incurred or plan to incur debts beyond its ability to repay such debts as they become absolute and matured.
(b) The Purchaser has cash available on hand, permitted borrowing capacity under existing facilities or firm financing commitments that together are sufficient funds to enable it to pay the Purchase Price in full at Closing and consummate the transactions contemplated under the Acquisition Documents.
COVENANTS OF THE SELLERS
ARTICLE VII
COVENANTS OF THE PURCHASER
ARTICLE VIII
AGREEMENTS OF PURCHASER AND SELLER
ARTICLE IX
CONDITIONS PRECEDENT TO THE PURCHASER’S OBLIGATIONS
ARTICLE X
CONDITIONS PRECEDENT TO THE SELLERS’ OBLIGATIONS
ARTICLE XI
COVENANTS AND AGREEMENTS SUBSEQUENT TO THE CLOSING
ARTICLE XII
TERMINATION
(a) by the mutual written consent of the Purchaser and the Sellers;
(b) by the Purchaser upon written notice in the event of a material breach of any covenant or agreement to be performed or complied with by the Sellers, or in the event of a material breach of any representation or warranties of the Sellers, pursuant to the terms of this Agreement or any of the Acquisition Documents, which breach would result in a condition to Closing set forth in Article IX hereof becoming incapable of fulfillment or cure (which condition has not been waived by the Purchaser in writing) prior to the Drop Dead Date;
(c) by the Sellers upon written notice in the event of a material breach of any covenant or agreement to be performed or complied with by the Purchaser, or in the event of a material breach of any representation or warranties of the Purchaser, pursuant to the terms of this Agreement or any of the Acquisition Documents, which breach would result in a condition to Closing set forth in Article X hereof becoming incapable of fulfillment or cure (which condition has not been waived by the Sellers in writing) prior to the Drop Dead Date;
(d) by either the Purchaser or the Sellers if any Governmental Authority having competent jurisdiction shall have issued a final, non-appealable order, decree, ruling or injunction (other than a temporary restraining order), or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement or the other Acquisition Documents; provided, however, that the right to terminate this Agreement under this Section 12.1(d) shall not be available to any party who shall not have complied with its obligations, if any, under Articles VI, VII or VIII, as the case may be, to avoid the entry of such order, decree, ruling or injunction; and
(e) by either the Sellers or the Purchaser if (i) the Bankruptcy Court has not entered the Sale Approval Order on or before May 9, 2003 or (ii) the Closing shall not have
occurred on or before May 30, 2003 (the “Drop Dead Date”); provided, however, that the right to terminate this Agreement under this Section 12.1(e) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date (for purposes of this subsection (e) the failure or refusal by any party to provide any waiver that under the terms hereof may be given or withheld in such party’s discretion shall not be deemed a failure to fulfill any obligation under this Agreement).
(a) In the event of the termination of this Agreement under Section 12.1, except with respect to this Section 12.2, Section 13.1, Section 13.2, Section 13.3, Section 13.4 and Sections 13.7 through 13.12 hereof, (i) this Agreement shall forthwith become void, and (ii) subject to the provisions of Section 12.2(b) below, there shall be no liability on the part of the Sellers, the Purchaser or any of their respective Representatives.
(b) Notwithstanding the provisions of Section 12.2(a) above, if this Agreement is terminated pursuant to Section 12.1(b) or 12.1(c), this Section 12.2 shall not relieve the breaching party from Liabilities to the non-breaching party(ies) arising from any breach of this Agreement.
ARTICLE XIII
MISCELLANEOUS
(a) All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and mailed or facsimiled or delivered by hand or courier service:
(i)
If to the Sellers, to:
(ii)
If to the Purchaser, to:
(b) All notices and other communications required or permitted under this Agreement which are addressed as provided in this Section 13.5 (i) if delivered personally against proper receipt or by confirmed facsimile transmission shall be effective upon delivery and (ii) if delivered (A) by certified or registered mail with postage prepaid shall be effective five (5) Business Days or (B) by Federal Express or similar courier service with courier fees paid by the sender, shall be effective two (2) Business Days following the date when mailed or couriered, as the case may be. Any party hereto may from time to time change its address for the purpose of notices to such party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the party sought to be charged with its contents.
(a) This Agreement and the legal relations among the parties hereto shall be governed by and interpreted in accordance with, the laws of the State of Illinois applicable to agreements made and to be performed entirely within such State.
(b) Until the entry of an order either closing or dismissing the Bankruptcy Case, each party hereto (i) irrevocably elects as the sole judicial forum for the adjudication of
any matters arising under or in connection with the Agreement, and consent to the exclusive jurisdiction of, the Bankruptcy Court; (ii) expressly waives any defense or objection to jurisdiction or venue based on the doctrine of forum non-conveniens; and (iii) stipulates that the Bankruptcy Court shall have in personam jurisdiction and venue over such party.
(c) After the entry of an order either closing or dismissing the Bankruptcy Case, each party to this Agreement hereby irrevocably submits to the exclusive jurisdiction of any Illinois state or federal court sitting or located in Cook County, Illinois (an “Illinois Court”) in any Action arising out of or relating to this Agreement or the other Acquisition Documents, and each such party hereby irrevocably agrees that all claims in respect of such Action shall be heard and determined in such Illinois Court. Each party, to the extent permitted by applicable Laws, hereby expressly waives any defense or objection to jurisdiction or venue based on the doctrine of forum non conveniens, and stipulates that any Illinois Court shall have in personam jurisdiction and venue over such party for the purpose of litigating any dispute or controversy between the parties arising out of or related to this Agreement or the other Acquisition Documents. In the event any party shall commence or maintain any Action arising out of or related to this Agreement in a forum other than an Illinois Court, the other party shall be entitled to request the dismissal or stay of such Action, and each such party stipulates for itself that such Action shall be dismissed or stayed. To the extent that any party to this Agreement has or hereafter may acquire any immunity from jurisdiction of any Illinois Court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) with respect to itself or its property, each such party hereby irrevocably waives such immunity.
(d) After the entry of an order either closing or dismissing the Bankruptcy Case, each party irrevocably consents to the service of process of any of the Illinois Courts in any such Action by any means permitted by the rules applicable in such Illinois Court including, if permissible, personal delivery of the copies thereof or by the mailing of the copies thereof by certified mail, return receipt requested, postage prepaid, to it as its address specified in accordance with Section 13.5 above, such service to become effective upon the earlier of (i) the date ten (10) calendar days after such mailing or (ii) any earlier date permitted by applicable Law.
(a) Guarantor hereby, unconditionally and irrevocably, guarantees (this “Guaranty”) by way of an independent obligation to the Sellers (each Seller referred to herein individually as a “Beneficiary” and collectively referred to herein as “Beneficiaries”) (i) the due, prompt and faithful performance by the Purchaser of all undertakings, obligations, required acts and performances of the Purchaser to such Beneficiaries under or arising out of this Agreement, and (ii) the due and punctual payment of all amounts due and payable by the Purchaser to such Beneficiaries under or arising out of this Agreement after the date hereof, when and as the same shall arise and become due and payable in accordance with the terms of and subject to the conditions contained in this Agreement (the “Guaranteed Obligations”).
(b) This is a guaranty of payment and performance and not of collection only. If for any reason whatsoever the Purchaser shall fail or be unable to perform or comply with any of its Guaranteed Obligations, Guarantor will promptly upon receipt of notice thereof from the Beneficiaries entitled to such performance or payment forthwith (i) pay or cause to
be paid in lawful money of the United States the unpaid Guaranteed Obligations then due and payable to each such Beneficiary (at the place specified and in the amounts and to the extent required of the Purchaser under this Agreement) and (ii) perform or comply with the Guaranteed Obligations for which performance or compliance is due or cause such Guaranteed Obligations to be performed or complied with (such performance or compliance as required of Purchaser under this Agreement).
(c) Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor and without notice to or further assent by Guarantor, any demand for payment of any of the Guaranteed Obligations made by the Beneficiaries may be rescinded by the Beneficiaries and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, if any, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Beneficiaries, and this Agreement and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part.
(d) Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Beneficiaries upon this Guaranty or acceptance of this Guaranty; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guaranty; and all dealings between the Purchaser and Guarantor, on the one hand, and the Beneficiaries, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guaranty. Guarantor agrees that (i) any notice provided under this Agreement to the Purchaser (including any demand for payment or notice of default or non payment) shall be deemed to constitute notice to Guarantor for purposes hereof and (ii) any knowledge of the Purchaser shall be deemed knowledge of Guarantor for purposes hereof. Nothing in this Section 13.13 shall be deemed to constitute a waiver of, or prevent Guarantor from asserting, any valid defense that may be asserted by the Purchaser. Guarantor waives any defense whatsoever to the performance of the Guaranteed Obligations that would not constitute a valid defense by the Purchaser. Guarantor understands and agrees that this Guaranty shall be construed as a continuing, absolute and unconditional guaranty of payment and performance without regard to (x) the validity or enforceability of this Section 13.13, or (y) any other circumstance whatsoever (with or without notice to or knowledge of the Purchaser or Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Purchaser for the Guaranteed Obligations, or of Guarantor under this Guaranty in bankruptcy or any similar proceedings. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against Guarantor, the Beneficiaries may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Purchaser or any other Person or against any collateral security or guaranty for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by the Beneficiaries to make any such demand, to pursue such other rights or remedies or to collect any payments from the Purchaser or any other Person or to realize upon any such collateral security or guaranty or to exercise any such
right of offset, or any release of the Purchaser or any other Person or any such collateral security, guaranty or right of offset, shall not relieve Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Beneficiaries against Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.
(e) This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the Beneficiaries upon any insolvency, bankruptcy, dissolution, liquidation or reorganization involving the Purchaser or Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Purchaser or Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.
(f) Guarantor shall pay reasonable out-of-pocket attorneys’ fees, reasonable out-of-pocket costs and other expenses of each of the Beneficiaries expended or incurred in enforcing this Guaranty against Guarantor with respect to any claim against the Purchaser in which the Beneficiaries are the prevailing party, whether or not legal action is instituted, including, without limitation, all fees, costs and expenses incurred in connection with any insolvency, bankruptcy, reorganization, arrangement or other similar proceedings involving the Purchaser or Guarantor which in any way affect the exercises by any Beneficiary of any of its rights and/or remedies hereunder.
(g) This Section 13.13 shall terminate at the Effective Time.
Contents
Share
More
Download PDF