Document:

Exhibit 10.17

 

EXECUTION COPY

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as
of June 11, 2004, is by and among SSA GLOBAL TECHNOLOGIES,
INC., a Delaware corporation (“Buyer US”), SSA GLOBAL
TECHNOLOGIES LIMITED, which is organized under the laws of England (“Buyer
UK”) BAAN FRANCE SA, which is organized
under the laws of France (“Buyer France”), BAAN GLOBAL BV,
which is organized under the laws of The Netherlands (“Buyer Netherlands”), BAAN HOLDING CENTRAL EUROPE GMBH, which is organized under
the laws of Germany (“Buyer Germany”) (Buyer US, Buyer UK, Buyer France, Buyer
Netherlands, and Buyer Germany, collectively “Buyers”), INVENSYS
SYSTEMS, INC., a Delaware corporation (“ISI”), INVENSYS
PRODUCTION SOLUTIONS LIMITED, which is organized under the laws of
England (“Marcam UK”), INVENSYS PRODUCTION
SOLUTIONS S.A., which is organized under the laws of France (“Marcam
France”), INVENSYS PRODUCTION SOLUTIONS BV, which
is organized under the laws of The Netherlands (“Marcam Netherlands”), and BAAN PROCESS SOLUTIONS GMBH, which is organized under the
laws of Germany (“Marcam Germany”)  (ISI, Marcam
UK, Marcam France, Marcam Netherlands, and Marcam Germany, collectively, the “Sellers”).

 

W I T N E S S E T H :

 

WHEREAS, Sellers own the
Invensys Marcam software business consisting of the entire business of each of
Marcam UK, Marcam France, Marcam Netherlands, and Marcam Germany and the
business of ISI conducted with and utilizing the Assets (defined below) (the “Business”).

 

WHEREAS, Buyers desire to purchase from the Sellers certain
assets of the Business and assume certain liabilities related to the Business;

 

NOW, THEREFORE,
in consideration of the mutual promises and covenants contained herein, the
parties hereto agree as follows:

 

1.             GENERAL PROVISIONS

 

1.1           DEFINITIONS.  Appendix A sets forth the definitions of certain terms used in this
Agreement.  Those terms have the meanings
set forth on Appendix A when used in this Agreement and identified with initial
capital letters.

 

1.2           OTHER DEFINITIONS AND MEANINGS;
INTERPRETATION.  For purposes of this Agreement, except when the
context otherwise requires:

 

1.2.1        The term “parties”
means all of the parties set forth in the introduction.

 

1.2.2        The term “person”
includes any natural person, firm, association, partnership, corporation,
limited liability company or partnership, governmental agency or other entity.

 

 

1.2.3        All
dollar amounts or “USD” designations are United States Dollars.

 

1.2.4        When
introducing a series of items, the term “including” is not intended to limit
the more general description that precedes the items listed; and

 

1.2.5        The
headings of the sections and subsections of the Agreement are included for
convenience only and are not intended to affect the meaning of the operative
provisions to which they relate.

 

2.             PURCHASE OF ASSETS AND ASSUMPTION
OF LIABILITIES.

 

2.1           PURCHASE OF THE ISI ASSETS.  Upon the terms and subject to the satisfaction or waiver, if
permissible, of the conditions hereof, at the Closing, ISI will sell, transfer
and assign to Buyer US free and clear of all liens and encumbrances except as
permitted herein, and Buyer US will purchase from ISI all right, title and
interest in and to all of the assets, privileges, rights, interests and claims,
real and personal, tangible and intangible (other than the Excluded Assets as
hereinafter defined) owned by ISI for use in or relating to the Business as
conducted on the Closing including, without limitation, the items listed below
(the “ISI Assets”):

 

2.1.1      All of the equipment, office
equipment, machinery, furniture, tools, supplies, and other tangible personal
property owned by ISI relating to the Business and located in the United States
(the “US Equipment”);

 

2.1.2      The
Business Intellectual Property of ISI and all Computer Hardware, Computer
Software, Data and Products (including all Business Intellectual Property in
respect of such Data and Products) with respect to the Business including,
without limitation, those rights set forth on Schedule 2.1.2;

 

2.1.3      The rights,
interests and obligations of ISI in, to and under all of the Intellectual
Property Contracts of ISI, and any and all bids and pending requests for
proposals;

 

2.1.4      The rights
and interests of ISI in, to and under the lease for real property for the
Business’ Newton, Massachusetts location, a summary of which is set forth on Schedule 2.1.4
(the “Newton Lease”);

 

2.1.5      The rights
and interests of ISI in, to and under the leases for personal property as
summarized on Schedule 2.1.5 (the “US Personal Property Leases”);

 

2.1.6      The
accounts receivable and notes receivable related to the operation of the

 

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Business (the “US Accounts Receivable”);

 

2.1.7      All of ISI’s
goodwill and going concern value with respect to the Business; and

 

2.1.8      The books,
records, sales literature, promotional literature, catalogues and similar
materials relating to the operation of the Business or the Assets, wherever
located (excluding, however, the minute book, stock ledger and similar
corporate documents).

 

2.2           PURCHASE OF THE MARCAM UK
ASSETS.  Upon the terms and subject to the satisfaction
or waiver, if permissible, of the conditions hereof, at the Closing, or as soon
as practicable thereafter after all applicable United Kingdom legal
requirements are satisfied, Marcam UK will sell, transfer and assign to Buyer
UK free and clear of all liens and encumbrances except as permitted herein, and
Buyer UK will purchase from Marcam UK all right, title and interest in and to all
of the assets, privileges, rights, interests and claims, real and personal,
tangible and intangible (other than the UK Lease, the transfer of which shall
be governed by the transfer deed attached hereto as Exhibit A (the “UK Deed”)
and other than the Excluded Assets as hereinafter defined) owned by Marcam UK
for use in or relating to the Business as conducted on the Closing Date
including, without limitation, the items listed below (the “UK Assets”):

 

2.2.1      All of the equipment, office
equipment, machinery, furniture, tools, supplies, and other tangible personal
property owned by Marcam UK (the “UK Equipment”);

 

2.2.2      All of the
Business Intellectual Property and all Computer Hardware, Computer Software,
Data and Products (including all Business Intellectual Property in respect of
such Data and Products) of Marcam UK;

 

2.2.3      The rights,
interests and obligations of Marcam UK in, to and under all of Intellectual
Property Contracts of Marcam UK, and any and all bids and pending requests for
proposals;

 

2.2.4      The rights
and interests of Marcam UK in, to and under the lease for real property dated 9 January 2004 between
(i) University of Warwick Science Park Business Innovations Centre Limited and
(ii) Marcam UK of property at Unit 6, Warwick Science Park Innovations Centre,
Warwick Technology Park, Gallows Hill, Warwick (the “UK Property”) for the Business’ Warwick location, a summary of which is set forth
on Schedule 2.2.4 (the “UK Lease”).

 

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2.2.5      The rights
and interests of Marcam UK in, to and under the leases for personal property as
summarized on Schedule 2.2.5 (the “UK Personal Property Leases”);

 

2.2.6      All of
Marcam UK’s accounts receivable and notes receivable (the “UK Accounts
Receivable”);

 

2.2.7      The rights, interest and obligations of
Marcam UK in, to and under all of the Customer Contracts to which Marcam UK is
a party (the “UK Customer Contracts”);

 

2.2.8      All of
Marcam UK’s goodwill and going concern value; and

 

2.2.9      The books,
records, sales literature, promotional literature, catalogues and similar
materials relating to the operation of the Business or the Assets, wherever
located (excluding, however, the minute book, stock ledger and similar
corporate documents).

 

At the Closing
and without prejudice to any other provision of this Agreement, Marcam UK and
Buyer UK shall enter into the UK Deed.

 

2.3           PURCHASE OF THE MARCAM FRANCE
ASSETS.  Upon the terms and subject to the
satisfaction or waiver, if permissible, of the conditions hereof, at the
Closing, or as soon as practicable thereafter after all applicable French legal
requirements are satisfied, Marcam France will sell, transfer and assign to
Buyer France free and clear of all liens and encumbrances except as permitted
herein, and Buyer France will purchase from Marcam France all right, title and
interest in and to all of the assets, privileges, rights, interests and claims,
real and personal, tangible and intangible (other than the Excluded Assets as
hereinafter defined) owned by Marcam France for use in or relating to the
Business as conducted on the Closing Date including, without limitation, the
items listed below (the “French Assets”):

 

2.3.1      All of the equipment, office
equipment, machinery, furniture, tools, supplies, and other tangible personal
property owned by Marcam France (the “French Equipment”);

 

2.3.2      All of the
Business Intellectual Property and all Computer Hardware, Computer Software,
Data and Products (including
all Business Intellectual Property in respect of such Products and Data) of Marcam France;

 

2.3.3      The rights,
interests and obligations of Marcam France in, to and under all of the
Intellectual Property Contracts of Marcam France, and any and all bids and
pending requests for proposals;

 

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2.3.4      The rights
and interests of Marcam France in, to and under the lease for real property for
the Business’ Puteaux location (the “French Property”), a summary of which is
set forth on Schedule 2.3.4 (the “French Lease”).  In connection with the transfer of the French
Lease, Buyers shall use commercially reasonable efforts to replace any
guarantor in respect of the French Lease;

 

2.3.5      The rights
and interests of Marcam France in, to and under the leases for personal
property as summarized on Schedule 2.3.5 (the “French Personal Property
Leases”);

 

2.3.6      All of
Marcam France’s accounts receivable and notes receivable (the “French Accounts
Receivable”);

 

2.3.7      The rights, interest and obligations of
Marcam France in, to and under all of the Customer Contracts to which Marcam
France is a party (the “French Customer Contracts”);

 

2.3.8      All of
Marcam France’s goodwill and going concern value; and

 

2.3.9      The books,
records, sales literature, promotional literature, catalogues and similar
materials relating to the operation of the Business or the Assets, wherever
located (excluding, however, the minute book, stock ledger and similar
corporate documents).

 

At
the Closing and without prejudice to any other provision of this Agreement,
Marcam France and Buyer France shall enter into a deed of transfer called the “cession
de fonds de commerce” to effect the transfer of the French Assets.  Such deed of transfer shall be substantially
in the form attached hereto as Exhibit B (the “French Deed”).  The parties acknowledge that the transfer of
the French Assets constitutes a sale of a “Going Concern” as regulated by
French laws as of March 17, 1909 and June 25, 1935.

 

2.4           PURCHASE OF THE MARCAM
NETHERLANDS ASSETS.  Upon the terms and subject to the satisfaction
or waiver, if permissible, of the conditions hereof, at the Closing, or as soon
as practicable thereafter after all applicable Dutch legal requirements are
satisfied, Marcam Netherlands will sell, transfer and assign to Buyer
Netherlands free and clear of all liens and encumbrances except as permitted
herein, and Buyer Netherlands will purchase from Marcam Netherlands all right,
title and interest in and to all of the assets, privileges, rights, interests
and claims, real and personal, tangible and intangible (other than the Excluded
Assets as hereinafter defined) owned by Marcam Netherlands for use in or
relating to the

 

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Business as conducted on the Closing Date including,
without limitation, the items listed below (the “Dutch Assets”):

 

2.4.1      All of the equipment, office
equipment, machinery, furniture, tools, supplies, and other tangible personal
property owned by Marcam Netherlands (the “Dutch Equipment”);

 

2.4.2      All of the
Business Intellectual Property and all Computer Hardware, Computer Software,
Data and Products (including
all Business Intellectual Property in respect of such Products and Data) of Marcam Netherlands;

 

2.4.3      The rights,
interests and obligations of Marcam Netherlands in, to and under all of the
Intellectual Property Contracts of Marcam Netherlands and any and all bids and
pending requests for proposals;

 

2.4.4      The rights
and interests of Marcam Netherlands in, to and under the lease for real
property for the Business’ Eindhoven location (the “Dutch Property”), a summary
of which is set forth on Schedule 2.4.4 (the “Dutch Lease” and
collectively with the Newton Lease, the UK Lease, and the French Lease, the “Real
Property Leases”).  In connection with
the transfer of the Dutch Lease, Buyers shall use commercially reasonable
efforts to replace any guarantor in respect of the Dutch Lease;

 

2.4.5      The rights
and interests of Marcam Netherlands in, to and under the leases for personal
property as summarized on Schedule 2.4.5 (the “Dutch Personal Property
Leases”);

 

2.4.6      All of
Marcam Netherlands’ accounts receivable and notes receivable (the “Dutch
Accounts Receivable”);

 

2.4.7      The rights, interest and obligations of
Marcam Netherlands in, to and under all of the Customer Contracts to which Marcam
Netherlands is a party (the “Dutch Customer Contracts”);

 

2.4.8      All of
Marcam Netherlands’ goodwill and going concern value; and

 

2.4.9      The books,
records, sales literature, promotional literature, catalogues and similar
materials relating to the operation of the Business or the Assets, wherever
located (excluding, however, the minute book, stock ledger and similar
corporate documents).

 

At
the Closing and without prejudice to any other provision of this Agreement,
Marcam Netherlands and Buyer Netherlands shall enter into a deed of transfer to
effect the transfer of the

 

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Dutch
Assets.  Such deed of transfer shall be
substantially in the form attached hereto as Exhibit C (the “Dutch Deed”).

 

2.5           PURCHASE OF THE MARCAM GERMANY
ASSETS.  Upon the terms and subject to the satisfaction
or waiver, if permissible, of the conditions hereof, at the Closing, or as soon
as practicable thereafter after all applicable German legal requirements are
satisfied, Marcam Germany will sell, transfer and assign to Buyer Germany free
and clear of all liens and encumbrances except as permitted herein, and Buyer
Germany will purchase from Marcam Germany all right, title and interest in and
to all of the assets, privileges, rights, interests and claims, real and
personal, tangible and intangible (other than the Excluded Assets as
hereinafter defined) owned by Marcam Germany for use in or relating to the
Business as conducted on the Closing Date including, without limitation, the items
listed below (the “German Assets”) (the ISI Assets, the UK Assets, the French
Assets, the Dutch Assets, and the German Assets, collectively, the “Assets”):

 

2.5.1      All of the equipment, office
equipment, machinery, furniture, tools, supplies, and other tangible personal
property owned by Marcam Germany (the “German Equipment”);

 

2.5.2      All of the
Business Intellectual Property and all Computer Hardware, Computer Software,
Data and Products (including
all Business Intellectual Property in respect of such Products and Data) of Marcam Germany;

 

2.5.3      The rights,
interests and obligations of Marcam Germany in, to and under all of the
Intellectual Property Contracts of Marcam Germany, and any and all bids and
pending requests for proposals;

 

2.5.4      The rights
and interests of Marcam Germany in, to and under the leases for personal
property as summarized on Schedule 2.5.4 (the “German Personal Property
Leases” and collectively with the US Personal Property Leases, the UK Personal
Property Leases, the French Personal Property Leases, the Dutch Personal
Property Leases, and the German Personal Property Leases, the “Personal
Property Leases”).

 

2.5.5      All of
Marcam Germany’s accounts receivable and notes receivable (the “German Accounts
Receivable”);

 

2.5.6      The rights, interest and obligations of
Marcam Germany in, to and under all of the Customer Contracts to which Marcam
Germany is a party (the “German Customer Contracts”)

 

2.5.6      The books,
records, sales literature, promotional literature, catalogues and

 

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similar materials relating to the operation of the Business or the
Assets, wherever located (excluding, however, the minute book, stock ledger and
similar corporate documents); and

 

2.5.7      The rights, interest and obligations of
Marcam Germany in, to and under all of the Customer Contracts to which Marcam
Germany is a party (the “German Customer Contracts”).

 

At
the Closing and without prejudice to any other provision of this Agreement,
Marcam Germany and Buyer Germany shall enter into a deed of transfer to effect
the transfer of the German Assets.  Such
deed of transfer shall be substantially in the form attached hereto as Exhibit
D (the “German Deed”).  Notwithstanding
anything to the contrary contained in the German Deed, if any accounts
receivables, notes receivables, or Assumed Liabilities that are described on
the exhibits to the German Deed are not included in the calculation of the
Final Working Capital (as finally determined pursuant to Section 3.3),
such accounts receivables, notes receivables or Assumed Liabilities shall be
deemed to be deleted from the exhibits to the German Deed.

 

2.6           ASSUMPTION OF LIABILITIES.  Upon
the terms and subject to the satisfaction or waiver, if permissible, of the
conditions hereof, at the Closing, Buyers will assume and hold the Sellers
harmless from all of the following liabilities and obligations of the Sellers:
(i) the items listed on Schedule 2.6, and (ii) the operation of the
Business or the Assets (excluding the UK Property in relation to which Section 2.9
shall apply) incurred on and after
the Closing Date (the “Assumed Liabilities”). 
Other than the Assumed Liabilities and except as otherwise provided for
herein, Buyers shall not assume any liabilities, obligations or undertakings of
the Sellers in connection with the Assets or the Business including, without
limitation, the Excluded Liabilities.

 

2.7           EXCLUDED LIABILITIES.  The Excluded Liabilities (as defined below) will remain the sole
responsibility of and will be retained, paid, performed and discharged solely
by the Sellers.  “Excluded Liabilities”
means all liabilities of the Sellers which are not Assumed Liabilities
including, without limitation, those items listed on Schedule 2.7.

 

2.8           LEASED EQUIPMENT.  The
Personal Property Leases shall be Assumed Liabilities, subject to obtaining the
necessary consents.  Without limiting the
generality of the foregoing and pursuant to Section 6.4.2.2 of this
Agreement, Buyers shall continue to perform all obligations under the Personal
Property Leases as if they were the direct lessees including, without
limitation, making lease payments (even if the necessary consent has not been
obtained), but only if, and only as long as, Buyers are able to enjoy the
property leased pursuant to the Personal Property Leases as it is currently
being enjoyed by the Sellers.  In the
event that the Sellers

 

8

 

are
forced to pay off any of the Personal Property Leases in their entirety to
avoid foreclosure or repossession by the lessor under such Personal Property
Lease, Buyers shall be liable to the Sellers for all of the monthly payments
that would have become due if the Sellers had not paid off the applicable
Personal Property Lease in its entirety, but only if, and only as long as,
Buyers are able to enjoy the benefits under such Personal Property Leases.

 

2.9           REAL PROPERTY LEASES.  At the Closing, the Real Property Leases shall be
Assumed Liabilities;
provided, that with respect to the French Lease, the Sellers shall have made a
request in writing for the consent of the landlord for the assignment of such
French Lease to the applicable Buyer (or Nominated Purchaser) prior to the
Closing; and provided further, that with respect to the UK Lease, the terms relating
to the assignment and assumption thereof shall be governed in accordance with
the UK Deed.

 

2.10         NO FUNDING LOAN BALANCE.  Notwithstanding
anything to the contrary contained herein, Buyers and the Sellers acknowledge
that Buyers’ purchase of the Assets and assumption of the Assumed Liabilities
does not, with respect to any funding loan arrangement: (i) entitle any Buyer
to receive any receivables owed to the Sellers by any of its Affiliates, or
(ii) create any liability on the part of any Buyer to assume any payables owed
by the Sellers to any of its Affiliates (the “Funding Loan Balance”).  Such Funding Loan Balance shall be an
Excluded Asset and an Excluded Liability. 
The foregoing shall not apply to trade receivables or trade payables
with respect to the Business which shall be handled as provided in Section 8.1.

 

2.11         EXCLUDED ASSETS.  Buyers acknowledge that
they are not purchasing or receiving any assets other than the Assets.  Without limiting the generality of the
foregoing and notwithstanding any other provision of this Agreement to the
contrary, Buyers acknowledge that they are not purchasing the following assets:
(i) cash of the Sellers including cash relating to the Business, (ii) any
assets of a Seller that are not related to the Business, (iii) any assets of
any Employee Benefit Plan, and (iv) those additional items listed on Schedule 2.11
(the “Excluded Assets”).

 

2.12         VEHICLES.  The leases for the vehicles set
forth on Schedule 2.12 hereto (the “Vehicles”) shall be Assumed
Liabilities, subject to obtaining the necessary consents.  The Sellers and Buyers shall use their best
efforts to effect, on or prior to but in any event within ninety (90) days of
the Closing, assignments of the leases for the Vehicles from the applicable
Seller (or its Affiliates) to the applicable Buyer.  Without limiting the generality of the
foregoing and pursuant to Section 6.4.2.2 of this Agreement, Buyers shall
continue to perform all obligations with respect to the Vehicles including,
without limitation, making lease payments

 

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(even
if the necessary consent has not been obtained), but only if, and only as long
as, that Buyers are able to enjoy the benefit of the Vehicles as they are
currently being enjoyed by the Sellers. 
In the event that the Sellers are forced to pay off any of the Vehicle
leases in their entirety to avoid foreclosure or repossession by the lessor
under such Vehicle lease, Buyers shall be liable to the Sellers for all of the
monthly payments that would have become due if the Sellers had not paid off the
applicable Vehicle lease in its entirety but only if, and only as long as,
Buyers are able to enjoy the benefit of the Vehicles.  Buyer may
elect to return and surrender any of the Vehicles that it wishes not to assume,
subject to the terms of the lease agreements for such Vehicles; provided
however, that Buyers shall be responsible for any loss or penalty associated
with the return of such Vehicles.  Buyers
shall also have the benefit of any gain associated with the surrender of such
Vehicles.

 

2.13         TRANSFER DEEDS.  In the event of any
conflict and/or ambiguity between this Agreement and any provision of the UK
Deed, the French Deed, the Dutch Deed, and the German Deed attached as Exhibits
A, B, C and D, respectively, the provisions of this Agreement shall prevail
between the Parties, except in relation to the UK Lease in respect of which the
UK Deed shall prevail.

 

3.             PURCHASE PRICE, ADJUSTMENTS AND
ALLOCATION.

 

3.1           PURCHASE PRICE.  The consideration to be paid by Buyers shall
be $23,800,000 (the “Headline Price”), as adjusted at the Closing pursuant to Section 3.2
(the “Purchase Price”), and as further adjusted after the Closing pursuant to Section 3.3
(the “Final Purchase Price”).  Pursuant
to Section 3.2, the consideration to be paid at the Closing shall be the
Headline Price minus the amount by which the Estimated Working Capital (defined
below) is less than the Target Working Capital (defined below) and shall be
paid in immediately available funds and wired as follows (or to such other
account that the Sellers notify Buyers of in writing within five (5) business
days of Closing):

 

	
  Bank:

  	
  Fleet Bank, N.A. (Boston, MA USA)

  
	
  ABA Transit #:

  	
  011-000-138

  
	
  SWIFT Address:

  	
  FNBBUS33

  
	
  Account Name:

  	
  Invensys Systems, Inc.

  
	
  Account Number:

  	
  5098-9542

  
	
  Reference:

  	
  Proceeds from sale of Marcam

  

 

3.2           ADJUSTMENT AT THE CLOSING.  The target working capital of
the Sellers with respect to the Business is zero (i.e., $0.00) (the “Target
Working Capital”).  The estimated working
capital of the Sellers with respect to the Business is negative
$4,400,000.  Schedule 3.2 sets forth
the line items to be used in calculating the

 

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Final Working Capital (defined below) and, for illustrative
purposes only, a sample working capital calculation with respect to the
Business.

 

3.2.1        Pursuant to Section 3.2,
the Purchase Price to be delivered at Closing shall be $19,400,000 (i.e.,
$23,800,000 minus $4,400,000).

 

3.2.2        The Headline Price, the
Purchase Price, and the Final Purchase Price shall all be exclusive of VAT.

 

3.3           POST CLOSING PURCHASE PRICE ADJUSTMENT.

 

3.3.1        On or before the 15th day
after the Closing Date, the Sellers will provide (or cause to be provided)
Buyers with the information necessary (including, without limitation,
information relating to any liabilities to be used to calculate the Final
Working Capital) to prepare a balance sheet of the Business as of the Closing
(the “Closing Balance Sheet”).  Within 45
days of Buyers’ receipt of such information, Buyers will deliver to the Sellers
the Closing Balance Sheet, setting forth the final working capital with respect
to the Business as of the Closing (as agreed upon pursuant to Sections 3.3.2
and 3.3.3, the “Final Working Capital”). 
The Final Working Capital: (i) will reflect the items indicated on Schedule 3.2,
as calculated in accordance with Appendix B; and (ii) will be prepared using
accounting principles consistent with those used to prepare the March 31,
2004 management accounting statements consistently applied.  In the case of any conflict between
subsections (i) and (ii) above, subsection (i) shall override subsection (ii).  The Closing Balance Sheet is subject to
Sections 3.3.2 and 3.3.3.

 

3.3.2        On or prior to the 45th day
after the Sellers’ receipt of the Closing Balance Sheet, the Sellers may give
Buyers a written notice stating in reasonable detail its objections (an “Objection
Notice”) to the Closing Balance Sheet. 
Any Objection Notice shall specify in reasonable detail the dollar
amount of any objection and the basis therefor and shall be executed by the
Sellers.  Any determination expressly set
forth on the Closing Balance Sheet which is not objected to in the Objection Notice
shall be deemed final and binding upon the parties hereto upon delivery of the
Objection Notice.  If the Sellers do not
give Buyers an Objection Notice within such 30-day period, then the Closing
Balance Sheet and the Final Working Capital calculated thereunder will be
conclusive and binding upon the parties hereto.

 

3.3.3        If the Sellers give a timely Objection
Notice as described in Section 3.3.2 above, then Buyers and the Sellers
will negotiate in good faith to resolve

 

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their disputes regarding the Closing Balance Sheet and the Final
Working Capital calculated thereunder. 
If Buyers and the Sellers are unable to resolve all disputes regarding
the Closing Balance Sheet and the Final Working Capital calculated thereunder
on or prior to the 30th day after the Objection Notice is given, then Buyers
and the Sellers will jointly retain a national and reputable accounting firm
(the “Independent Accounting Firm”) to resolve the dispute as soon as
practicable, and in any event within 30 days. 
Notwithstanding the foregoing, an Independent Accounting Firm may not
have been retained by any party within five (5) years from the date of the
selection relating to the such dispute and to the extent that the parties
cannot agree on a national accounting firm, an Independent Accounting Firm may
be a mutually acceptable reputable regional accounting firm.  The Independent Accounting Firm shall only
decide the specific items under dispute by the parties and its decision for
each such disputed item must be within the range of values assigned to each
such item in the Closing Balance Sheet and the Objection Notice,
respectively.  Each party shall promptly
provide the Independent Accounting Firm with such supporting documentation as
such party deems necessary or appropriate and as the Independent Accounting
Firm may further request.  All
determinations by the Independent Accounting Firm shall be conclusive and
binding on the parties hereto and such determination shall be non-appealable.  The fees and expenses of the Independent
Accounting Firm in connection with its review of the Closing Balance Sheet
shall be allocated to Buyers and to the Sellers in proportion to the difference
between the increase or decrease in the Closing Purchase Price based upon the
Independent Accounting Firm’s determinations, on the one hand, and Buyers’ and
Sellers’ determinations, on the other hand. 
For example, if Buyers calculated the increase in the Closing Purchase
Price to be $200,000, the Sellers calculate it to be $300,000, and the Independent
Accounting Firm determines it to be $260,000, then the fees and expenses shall
be borne 60% by Buyers and 40% by the Sellers. 
Notwithstanding anything to the contrary in this Section 3.3, to
the extent that any portion of the adjustment is undisputed, the parties agree
that such undisputed amount will paid to the other party as soon as reasonably
practicable after the determination of such undisputed amount.

 

3.3.4        The parties hereto shall make available to
Buyers, the Sellers and, if applicable, the Independent Accounting Firm, such
books, records, personnel and other information (including work papers) as any
of the foregoing may reasonably request to prepare or review the Closing
Balance Sheet, provided that Buyers and the Sellers and if applicable, the
Independent Accounting Firm, shall agree to maintain the confidentiality of all
such books, records and information.

 

12

 

3.3.5        If the
Estimated Working Capital is less than the Final Working Capital, Buyers will
pay to the Sellers such difference within fifteen (15) days after the
determination of the Final Working Capital, plus interest thereon calculated at
six percent (6%) per annum from the Closing Date to the actual date of payment.  If Buyers have not paid such difference
within the fifteen (15) day period, the interest rate shall be increased
thereafter to ten percent (10%) per annum until the actual date of payment.

 

3.3.6        If the
Estimated Working Capital is greater than the Final Working Capital, the
Sellers will pay to Buyers such difference within fifteen (15) days after the
determination of the Final Working Capital, plus interest thereon calculated at
six percent (6%) per annum from the Closing Date to the actual date of payment.  If the Sellers have not paid such difference
within the fifteen (15) day period, the interest rate shall be increased
thereafter to ten percent (10%) per annum until the actual date of payment.

 

3.3.7        The
Purchase Price, as adjusted pursuant to this Section 3.3, will be the “Final
Purchase Price.”  Notwithstanding
anything to the contrary in this Section 3.3., the Final Purchase Price
shall not exceed $20,400,000 less the sum of the Identified Receivables Amount
and the Accounts Receivable Amount.

 

3.4           ALLOCATION OF PURCHASE PRICE.  The
Purchase Price shall be allocated among the Sellers and the Assets as set forth
on Appendix C.  If the Purchase Price is
adjusted after the Closing pursuant to Section 3.3 above, then the
allocation set forth on Appendix C will be restated to reflect the amount of
such adjustment against the Assets to which such adjustment relates to arrive
at the allocation of the Final Purchase Price. 
For the purposes of the Purchase Price adjustment pursuant to Section 3.3,
if it is not possible to identify to which Assets the adjustment relates, then
the adjustment shall be made proportionately (among the Sellers and the Assets)
consistent with the allocation set forth on Appendix C.  Thereafter, all other adjustments to the
Purchase Price, if any, will be allocated by the respective Buyer (or Nominated
Purchaser) and Seller first to Intellectual Property, second to goodwill and
finally to other assets.  Such
allocation, as so restated, will be adopted by the parties for all purposes,
including purposes of taxation (including any stamp duties).

 

3.5           ACCOUNTS RECEIVABLE
GUARANTEE.  If any accounts receivables related to the
sales of Software licenses for Products invoiced during the month of June 2004,
but excluding any portion of an invoice for maintenance and consulting services
(the “Guaranteed Receivables”) are not collected in cash by Buyers by the
earlier of (i) 120 days after the Closing Date and (ii) the date of settlement
of the working

 

13

 

capital
adjustment pursuant to Section 3.2 hereof, then Buyers may elect to assign
to the Sellers any such uncollected Guaranteed Receivables up to a maximum of
$600,000, in which case such uncollected Guaranteed Receivables shall be 100%
provided for in the calculation of the Final Working Capital, such that the
Final Working Capital shall be reduced by such amount.  Buyers covenant to the Sellers that they
shall use commercially reasonable efforts to collect the Guaranteed Receivables
and perform services in the ordinary course with respect to the licenses
underlying the Guaranteed Receivables to the extent the commitment to the
applicable customer were made in the ordinary course.

 

4.             REPRESENTATIONS AND WARRANTIES OF
THE SELLERS. The Sellers
hereby make the following representations and warranties to Buyers:

 

4.1           CORPORATE STATUS.  Except
for matters set forth on Schedule 4.1 which would not, individually or in
the aggregate constitute a Material Adverse Event with respect to the Seller,
the Business, or the Assets, the Sellers are duly organized, validly existing,
and in good standing under the laws of their respective jurisdictions of
organization, and have the corporate power to own their properties and carry on
their business as now being conducted. 
Except for matters set forth on Schedule 4.1, which would not,
individually or in the aggregate constitute a Material Adverse Event with
respect to the Sellers, the Business, or the Assets, the Sellers are duly qualified or licensed to
do business and in good standing in each jurisdiction in which the ownership or
use of their assets or conduct of their businesses requires them to be so
qualified or licensed, and are in good standing except where any such failure
to be so qualified or licensed and in good standing would not inhibit any
Seller’s ability to transfer the Assets to Buyers free and clear of any and all
liens and encumbrances.

 

4.2           POWER AND AUTHORITY.  Except as set forth on Schedule 4.2, the
Sellers have the legal right, power and authority to enter into this Agreement,
to carry out the transactions contemplated by this Agreement and all other
agreements and instruments contemplated hereby to which they are party.  This Agreement and the transactions contemplated
hereby to which the Sellers are party has been duly authorized by all necessary
action by the Sellers’ stockholders and board of directors.  Except as set forth on Schedule 4.2, all corporate or other proceedings
and actions on the part of each of the Sellers required by law, its certificate
of incorporation, bylaws (or any comparable charter document), this Agreement
and any other agreements and instruments contemplated by this Agreement to
which it is or will be a party, the performance of the obligations hereunder
and thereunder to be performed by it and the consummation of the transactions
contemplated hereby and thereby have been duly taken, and no other corporate or
other proceedings or actions on the part of such Seller, its board of directors
or its stockholders is necessary.

 

14

 

4.3           AUTHORIZATION; NO BREACH.  This
Agreement and all other agreements or instruments contemplated hereby to which
any Seller is a party, when executed and delivered by such Seller in accordance
with the terms hereof, shall each constitute a valid and binding obligation of
such Seller, enforceable in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and similar laws relating
to or affecting creditors generally or by general equity principles.  In
particular, the signatories for Marcam German executing this Agreement and the
German Deed have the requisite power and authority to execute the Agreement and
the German Deed on behalf of Marcam Germany. 
Except as set forth on Schedule 4.3, the execution, delivery and
performance by the Sellers of this Agreement and all other agreements
contemplated hereby to which the Sellers are party, and the fulfillment of and
compliance with the respective terms hereof and thereof by the Sellers, do not
and shall not in any material respect (a) conflict with or result in a breach
of any terms, conditions or provisions of, (b) constitute a default under
(whether with or without the passage of time, the giving of notice or both),
(c) result in the creation of any encumbrance upon the Assets pursuant to, (d)
give any third party the right to modify, terminate or accelerate any
obligation under, (e) result in a violation of, or (f) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any third party or Governmental Authority
pursuant to, (i) any law to which the Sellers or the Assets are subject, (ii)
any material agreement, instrument, order, judgment or decree to which the
Sellers or the Assets are subject, or (iii) the charter documents of any Seller
without; provided, that none of the foregoing shall be qualified as to
materiality with respect to the charter documents of any Seller.

 

4.4           OWNERSHIP OF THE ASSETS.  Except as disclosed on Schedule 4.4, the Sellers own the Assets
free and clear of any and all liens, pledges, options, security
interests, claims, charges, third party rights or any other restriction or
encumbrance of any nature whatsoever.

 

4.5           NO BROKERS.  No
broker, finder or financial advisor acting or who has acted on behalf of the
Sellers is entitled to receive any brokerage or finder’s or financial advisory
fee from any party in connection with the transactions contemplated by this Agreement.

 

4.6           FINANCIAL STATEMENTS.  Except as otherwise disclosed on Schedule 4.6
or as reflected in the notes to the unaudited financial statements contained on
Schedule 4.6 (the “Financial Statements”): (i) the Financial Statements
have been prepared consistently in accordance with the Sellers’ standard and
customary principles and policies for the preparation of the Business’
management statements and accounting; and (ii) based on (i) above, the Financial
Statements reasonably

 

15

 

reflect, in all material respects, the financial
condition and the results of operations of the Business as of the Financial
Statements Date.

 

4.7           EVENTS SUBSEQUENT TO FINANCIAL
STATEMENTS DATE.  Since the Financial Statements Date, no
Material Adverse Event has occurred with respect to the Business.  Without limiting the generality of the
foregoing, since the Financial Statements Date, the Sellers have conducted the
Business only in the ordinary course of business consistent with past custom
and practice, and, except as set forth on Schedule 4.7, none of the
Sellers, with respect to the Business, have:

 

4.7.1        issued
any notes, bonds or other debt securities or any capital stock or other equity
securities or any securities or rights convertible, exchangeable or exercisable
into any capital stock or other equity securities;

 

4.7.2        discharged
or satisfied any lien or paid any obligation or liability (absolute, accrued,
contingent or otherwise), other than current liabilities paid in the ordinary
course of business consistent with past custom and practice;

 

4.7.3        mortgaged
or pledged any of the Assets, or subjected them to any lien, except Permitted
Liens;

 

4.7.4        sold,
assigned, transferred, leased, licensed, sublicensed or abandoned any of the
Business’ assets, tangible or intangible (including, without limitation, any
Business Intellectual Property), except licenses of its Products to end user
customers in the ordinary course of business consistent with past custom and
practice;

 

4.7.5        made or
granted any bonus or any wage or salary increase to any Employee or group of
Employees (other than wage increases in the ordinary course of business
consistent with past custom and practice) or made or granted any increase in
any employee benefit plan or arrangement, or amended or terminated any existing
employee benefit plan or arrangement or adopted any new employee benefit plan
or arrangement, or made or granted any severance or termination pay or entered
into or amended any employment, consulting, or severance arrangement (other
than in the ordinary course of business consistent with past custom and
practice);

 

4.7.6        made
capital expenditures or commitments therefor with respect to the Business in
excess of
$100,000 individually, or $250,000 in the aggregate;

 

4.7.7        suffered any damage, destruction or casualty
loss exceeding $100,000 in the aggregate, whether or not covered by insurance,
or experienced any material changes in the amount and scope of insurance
coverage;

 

16

 

4.7.8        directly or indirectly engaged in any
transaction or entered into any arrangement that was not an arm’s length
transaction or arrangement;

 

4.7.9        changed their accounting methods, principles
or practices;

 

4.7.10      effected any amendment,
cancellation or termination of any contract, agreement or other instrument
which is material to the Business;

 

4.7.11      incurred any liability, except
liabilities incurred in the ordinary course of business consistent in both kind
and amount with past practice to the extent such liabilities do not exceed
$50,000 in the aggregate;

 

4.7.12      effected payment, discharge or
satisfaction of any claims, liabilities or obligations (absolute, accrued,
contingent or otherwise) other than in the ordinary course of business and
consistent with past practice;

 

4.7.13      except with respect to borrowing
activity pursuant to the Funding Loan Balance, borrowed money or guaranteed any
indebtedness of others;

 

4.7.14      except with respect to lending activity
pursuant to the Funding Loan Balance, lent any money or otherwise pledged the credit of the Sellers to any
party;

 

4.7.15      failed to operate the Business in
the ordinary course so as to preserve the Business intact, to keep available to
the Sellers the services of key personnel, and to preserve for the Buyers the
goodwill of the suppliers, customers and others having business relations with
the Sellers;

 

4.7.16      cancelled or failed to continue,
insurance coverages of the Business;

 

4.7.17      failed to pay any current obligations
in accordance with the general practices of the Sellers; or

 

4.7.18      agreed, whether orally or in writing, to do any
of the foregoing.

 

4.8           REAL PROPERTY.  No Seller owns real property related to the Business.  Schedule 4.8
sets forth the address of the Real Property Leases and a description of each such lease
(including all amendments, extensions, renewals, guaranties and other
agreements with respect thereto).  Except
as disclosed on Schedule 4.8, the property leased under the Real Property
Leases are the only real property interests used by the Sellers in conducting
the Business.  Each respective Seller has
a valid and binding leasehold interest in, free and clear of all encumbrances,
and there

 

17

 

exists no
material default under the Real Property Leases.  The Sellers have not received any notice of
default under, the Real Property Leases. 
With respect to the Real Property Leases and except as disclosed on Schedule 4.8:
(a) each Seller is in exclusive possession thereof and of all easements,
licenses or rights required by applicable law for use and occupancy as are
necessary to conduct the Business thereon; (b) no portion thereof is subject to
any pending condemnation proceeding or other proceeding by any public or
quasi-public authority materially adverse to the Real Property Leases and, to
each Seller’s knowledge, there is no threatened condemnation or other
proceeding with respect thereto materially adverse to the Real Property Leases;
(c) none of the Sellers are parties to any written or oral agreements or
undertakings with owners or users of properties adjacent to any facility
located on any parcel of the Real Property Leases relating to the use,
operation or maintenance of such facility or any adjacent Real Property Leases
which would reasonably be expected to have a material adverse effect on the
Real Property Leases; (d) none of the Sellers are a lessor or sublessor under
or otherwise a party to any lease, sublease, license, concession or other agreement,
whether written or oral, pursuant to which any Seller has granted to any person
the right to use or occupy all or any portion of the Real Property Leases; and
(e) each Seller enjoys peaceful and undisturbed possession of the Real Property
Leases.  No instrument of record,
easement, license, use restriction, grant or applicable zoning, building or
urban redevelopment law or other impediment of any kind prohibits or materially
limits, impairs or interferes with, the operation of any Seller’s business in
the ordinary course consistent with past practice, or materially affects the
value of, the Real Property Leases or any item of personal property related
thereto.

 

4.9           TANGIBLE PERSONAL PROPERTY.  Except
for items disclosed on Schedule 4.9, each Seller (a) owns all of its
personal property assets free and clear of any liens or encumbrances except for
Permitted Liens; or (b) has valid and subsisting leases for all of its personal
property and there are no material defaults thereunder.  Such assets and property taken as a whole are
free from defects that are material to the Business Condition and the manner in
which they are used is commercially reasonable. 
All items underlying Personal Property Leases are in the possession of
the Sellers and will be available to Buyers after the Closing, subject to
consents of lessor that may need to be obtained; provided, however, that that
the Sellers shall use commercially reasonable efforts to make such items
available to Buyers (whether or not the necessary consents have been obtained).

 

4.10         SUFFICIENCY OF THE
ASSETS.  Except for (i) the services that are referred
to (as available or unavailable) in the Transition Services Agreement, and (ii)
the Seller Group Policies
described on Schedule 8.5, the Assets constitute all of the material property and material assets
used or held for use in operating the Business and are

 

18

 

adequate to conduct the Business as it is currently being conducted in
the ordinary course consistent with past practice.

 

4.11         INTELLECTUAL PROPERTY.

 

4.11.1      Schedule 4.11 contains a
complete list of all (a) patented and registered Owned Intellectual Property
with respect to the Business (b) pending patent applications and applications
for registration of other Owned Intellectual Property filed by or on behalf of
the Sellers, (c) trade or corporate names utilized in operating the Business,
(d) unregistered trademarks, service marks and copyrights that are material to
the Business Condition, and (e) Licensed Intellectual Property (the “Business
Intellectual Property”).

 

4.11.2      Except as otherwise set forth on Schedule 4.11,
the Sellers own all right, title and interest to, or have a valid, enforceable
and effective written license to use, free and clear of all liens and
encumbrances, all of the Business Intellectual Property.

 

4.11.3      All material items of Owned
Intellectual Property are presumed to be and to the knowledge of the Sellers
are valid, enforceable, are not subject to any outstanding order, judgment or
decree restricting its use or adversely affecting the Sellers’ rights thereto,
and have been used with all patent, trademark, copyright, confidential,
proprietary, and other intellectual property notices and legends in a
commercially reasonable manner.  To the
knowledge of the Sellers, all Licensed Intellectual Property is valid,
subsisting and enforceable, and is not subject to any outstanding order,
judgment or decree restricting its use or adversely affecting or reflecting the
Sellers’ rights thereto.

 

4.11.4      Except as otherwise set forth on Schedule 4.11,
(a) there are no claims against the Sellers that are pending or, to the
knowledge of the Sellers, threatened, asserting the invalidity, misuse or
unenforceability of any of the Business Intellectual Property, and, to the
knowledge of the Sellers, there is no basis for any such claim, (b) to the
knowledge of the Sellers, the operation of the Business as currently conducted
does not infringe, misappropriate or conflict with, any Intellectual Property
of other Persons, and (c) to the knowledge of the Sellers, no third party has
infringed, misappropriated or otherwise conflicted with any of the Business
Intellectual Property.  The transactions
contemplated by this Agreement will not impair the right, title or interest of
the Sellers in and to the Business Intellectual Property in any way that is
material to the Business Condition.

 

19

 

4.11.5      To the knowledge of the Sellers:
(i) no person other than the Sellers (or their Affiliates prior to Closing)
have any ownership interest in, or a right to receive a royalty or similar
payment with respect to, any of the owned Intellectual Property, and (ii) no
person is entitled to a royalty or similar payment with respect to Intellectual
Property not owned by the Sellers, except for royalties paid to Third Party
Software companies in connection with the sale of the Products pursuant to
Customer Contracts.

 

4.11.6      The Sellers (or their Affiliates)
have timely made all filings and payments with the appropriate foreign and
domestic agencies required to maintain in subsistence all registered Business
Intellectual Property.  All documentation
necessary to confirm and effect the Sellers’ (or their Affiliates’) ownership
of the registered Owned Intellectual Property, if acquired from other persons,
has been recorded in the United States Patent and Trademark Office, the United
States Copyright Office and other official offices.

 

4.11.7      There are no suits or claims
pending, decided, or, to the knowledge of the Sellers, threatened or asserted
concerning any Intellectual Property Contract, including any suit concerning a
claim or position that the Sellers or another Person has breached any
Intellectual Property Contract or that any Intellectual Property Contract is
invalid or unenforceable.  The Sellers
are in compliance with, and have conducted its business so as to comply with,
all terms of all Intellectual Property Contracts in all material respects.

 

4.11.8      The Sellers have taken all
commercially reasonable measures to protect the secrecy, confidentiality and
value of all trade secrets used in the Business (collectively, “Business Trade
Secrets”), including, but not limited to, entering into appropriate
confidentiality agreements with all officers, directors, employees, and other
persons with access to the Business Trade Secrets.  To the knowledge of the Sellers, no
unauthorized disclosure of any Business Trade Secrets has been made.

 

4.11.9      To the knowledge of the Sellers,
no current or former Employee is or was a party to any confidentiality
agreement and/or agreement not to compete that restricts or forbids, or
restricted or forbade at any time during such Employee’s employment by the
Sellers such Employee’s performance of the Sellers’ Business, or any other
activity that such Employee was hired to perform or otherwise performed on
behalf of or in connection with such Employee’s employment by the Sellers.

 

20

 

4.12         COMPUTER HARDWARE AND COMPUTER
SOFTWARE.  Except as disclosed on Schedule 4.12:

 

4.12.1      The Computer Hardware and Computer
Software is adequate for the operation of the Business as currently conducted.

 

4.12.2      The Sellers’ Hardware is in good
working condition (normal wear and tear excepted).  There has not been any material malfunction
with respect to the Computer Hardware since the Financial Statements Date that
has not been remedied or replaced in all material respects.

 

4.12.3      All of the Computer Software,
Computer Hardware and Data is either owned solely and exclusively by the
Sellers free and clear of all liens and does not infringe upon or violate any
Intellectual Property rights or is used by or on behalf of the Sellers pursuant
to a valid and enforceable contract or lease. 
There are no suits or claims pending, decided, or, to the knowledge of
the Sellers, threatened or asserted by or against the Sellers concerning any
Computer Software, Computer Hardware or Data, including any suit or claim
concerning a claim or position that the Seller or another party thereto has
breached any contract relating thereto, and, to the knowledge of Seller, there
is no valid basis for any such suits or claims. 
To the knowledge of the Sellers, there exists no event, condition or
occurrence which, with the giving of notice or lapse of time, or both, would
constitute a breach or default by the Sellers or another party under any such
contract.  No party to any such contract
has given the Sellers notice of its intention to cancel, terminate or fail to
renew any such contract.

 

4.12.4      All Computer Software (i) performs
in all material respects in accordance with the documentation or other written
material used in connection with it; (ii) is in machine readable form and
contains all current revisions; (iii) is free of material defects in
operations; and (iv) does not contain any Disabling Devices.

 

4.12.5      To the knowledge of the Sellers,
the use of the Data by the Sellers prior to the Closing Date does not infringe
or violate the rights of any person or otherwise violate any law or regulation.

 

4.13         PRODUCTS.  Except as disclosed on Schedule 4.13:

 

4.13.1      The Sellers are the sole and
exclusive owners of the Products and all constituent parts thereof (excluding
any Third Party Software contained therein) free and clear of all liens and, to
the knowledge of the Sellers, the Products do not infringe upon or violate any
Intellectual Property rights.

 

21

 

There are no suits or claims pending, decided, or to the Sellers
knowledge, threatened or asserted by or against the Sellers concerning any
Products, including any suit or claim that the Products (excluding any Third
Party Software contained therein) (i) are not owned exclusively, by the
Sellers; or (ii) contesting the right of the Sellers to use or exploit the
Products, and, to the knowledge of the Sellers, there is no valid basis for any
such suits or claims.

 

4.13.2      Schedule 4.13.2 contains a
true and complete list of all Third Party Software, separated into the
following categories and sub-categories: (i) Third Party Software that is
embedded in one or more Products; and (ii) Third Party Software that is
separate from the Products (i.e., an add-on Product) that is sold or licensed
(bundled) together with one or more Products.

 

4.13.3      In all material respects, the
Products perform in accordance with the Ancillary Product Materials, meet all
contractual terms and written warranties provided to any customers who purchase
or license, or have purchased or licensed, such Products from the Sellers.  The Products do not contain any Disabling
Devices.

 

4.13.4      In all material respects, the
source code for the Products (i) will compile into executable object code and
such executable object code is capable of performing the functions described in
the Ancillary Product Materials; and (ii) is sufficiently documented to enable
a computer software developer of reasonable skill to understand, modify,
repair, maintain, compile and otherwise use the material aspects of the Products
without reference to other sources of information.

 

4.13.5      Schedule 4.13.5 contains (i)
true and complete copies of the Sellers’ current versions of its standard
Customer Contracts; (ii) a true and complete list of active customer names for
all Customer Contracts; and (iii) a true and complete list of all other
agreements pursuant to which the Sellers are obligated to provide support
services with respect to the Products.

 

4.13.6      Except as disclosed on Schedule 4.13,
the Sellers have not granted to any person, and, to the knowledge of the
Sellers, no person other than the Sellers (including any independent
contractors who have performed services for the Sellers) holds any rights in,
or licenses to produce, support, maintain, modify, distribute, license,
sublicense, sell, decompile, disassemble or reverse engineer, use in
development or otherwise use, any of the Products.  There are no exclusive arrangements between
the Sellers and any other person to license, sublicense, sell, use or
distribute any of

 

22

 

the Products.  Schedule 4.13.6
sets forth a true and complete list of all Reseller Agreements.

 

4.13.7      No person has a license to use or
the right to acquire a license to use any future update or upgrade of the
Products, except for customer rights to obtain licenses to future updates or
upgrades of the Products that are generally provided to customers receiving
support and/or maintenance services with respect to the Products, pursuant to
existing Customer Contracts, and nothing restricts the Sellers’ ability to
charge its customers for any such new update or upgrade, other than such
Customer Contracts or an applicable Reseller Agreement.

 

4.13.8      No agreement pursuant to which the
Sellers have licensed the use of the Products to any third party obligates the
Sellers to develop and provide any specific improvement, enhancement, change in
functionality or other alteration in the performance of the Products beyond the
Sellers’ current Products.

 

4.14         DEFAULTS.  The
Sellers are not in Default under any note, bond, debenture, mortgage,
indenture, security agreement, guaranty, or other instrument of Indebtedness in
any manner materially adverse to the Business Condition.

 

4.15         LITIGATION.  Except
as otherwise disclosed on Schedule 4.15, (a) there exists no
litigation, proceedings (including any arbitration proceedings), actions,
causes of action, suits, pleadings, charges, complaints, demands, claims, or
investigations at law or in equity pending or, to the knowledge of the Sellers,
threatened against the Business; and (b) the Sellers are not in violation
of any writ, injunction, order, or decree of any court, agency, or other
Governmental Authority or settlement agreement, or which seek to enjoin the consummation of
the transactions contemplated hereby.  No
Seller is a party to any commitment letter or similar undertaking to, or is
subject to any order, directive, writ, judgment, award, injunction or decree
by, or has adopted any board resolutions at the request of, any Governmental
Authority affecting the Assets or the Business.

 

4.16         MATERIAL CONTRACTS.  Schedule 4.16 sets forth a list of all material (i.e., contracts
with annual revenue or expenditures exceeding $150,000 in the last 12 months,
(except for employment agreements or arrangements disclosed on Schedules 4.17.1
or 4.18 or arrangements with Employees without contracts receiving in excess of
$150,000 per annum) contracts relating to the Business (the “Material Contracts”).  Except as set forth on Schedule 4.16,
(a) each such Material Contract relating to the Business is a valid, binding
and enforceable obligation of the Sellers, and, to their knowledge, of the
other party or parties thereto in accordance with their respective terms in all
material respects; (b) the

 

23

 

Sellers,
and to their knowledge, any other party to a Material Contract are not in
Default under, in breach of or in receipt of any claim of Default or breach
under any Material Contract in any material respect; (c) none of the Material
Contracts contain an “anti-assignment,” “change in control,” “potential
change in control” or similar provision, which would be triggered by the
transactions contemplated hereby; (d) none of the Sellers is a party to any agreement (other than this
Agreement) for the acquisition, sale, lease, pledge or other disposition of any
of the Assets (by merger, purchase, syndication or sale of assets or
otherwise); and (e) none of the Sellers are a party to or bound by any material
contract or side letter relating to the Assets.

 

4.17         UNITED STATES EMPLOYEES, EMPLOYEE
BENEFITS AND LABOR LAWS.

 

4.17.1      With respect to employees of ISI employed in the Business (the “U.S.
Employees”), Schedule 4.17.1 sets forth an accurate and complete list of
any employment, severance, retention, change in control, or other similar
agreement, arrangement, or policy and employee benefit plan (as such term is
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”)) and any other employee benefit plan, program or
arrangement of any kind (a) that is currently maintained, sponsored, or
contributed to by the Business with respect to U.S. Employees, (b) that is
currently maintained, sponsored, or contributed to by any entity which is
considered a single employer with respect to the Business for purposes of Section 414(b),
(c), (m) or (o) of the Internal Revenue Code of 1986, as amended (the “Code”)
or Section 4001(a)(14) of ERISA (each such entity, an “ERISA Affiliate”)
on behalf of any U.S. Employee or former U.S. Employee of the Business, or (c)
with respect to which the Business currently has any liability or potential
liability (the “U.S. Employee Benefit Plans”). 
There are no consulting or independent contractor agreements or
arrangements that are material to the Business Condition, or that would result
in any costs or expenses for Buyer US at the Closing or upon their termination
by Buyer US.

 

4.17.2      Schedule 4.17.2 sets forth an accurate and complete list of the
U.S. Employees as of the date indicated on such schedule (the “U.S.
Personnel List”).  On June 11, 2004
the Sellers e-mailed to Buyers an accurate and complete list, as of the date
specified in the e-mail, of the U.S. Employees, their respective location, date
of hire, current annual base salary, bonus payment for 2003, and any bonus
opportunity for 2004.  Schedule 4.17.2
identifies the U.S. Employees who are not actively at work for any reason other
than regular vacation as of the date hereof. 
Schedule 4.17.2 also identifies any U.S. Employee who is on visa.  There are no outstanding

 

24

 

loans to any
U.S. Employees other than participant loans made from, and under the terms of,
the Invensys 401(k) plan.

 

4.17.3      With respect to the Business, neither ISI nor any of its ERISA
Affiliates has any obligation to contribute to (or any other obligation or
liability, including current or potential withdrawal liability, with respect
to) any “multiemployer plan” (as defined in Section 3(37) of ERISA).

 

4.17.4      To the knowledge of the Sellers, each U.S. Employee Benefit Plan
which is subject to the health care continuation requirements of Part 6 of
Subtitle B of Title I of ERISA or Section 4980B of the Code (“COBRA”) has
been administered in compliance in all material respects with such
requirements, and no ERISA Affiliate has any liability under COBRA that is or
could become a liability of the Sellers. 
Neither ISI nor any of its ERISA Affiliates has any obligations to
provide health or life insurance or other welfare-type benefits for their
current or future retired or terminated U.S. Employees, except under COBRA or
as required under applicable state law.

 

4.17.5      Except as disclosed on Schedule 4.17.1, with respect to each
U.S. Employee Benefit Plan, all required payments, premiums, contributions,
distributions, reimbursements or accruals for all periods ending prior to or as
of the Closing shall have been timely made or properly accrued.  None of the U.S. Employee Benefit Plans has
any unfunded liabilities which are not reflected on the appropriate balance
sheet to the extent required to be accrued by the foregoing.

 

4.17.6      Except as disclosed on Schedule 4.17.1, the U.S. Employee
Benefit Plans have been maintained, funded and administered in compliance in
all material respects with their terms, the terms of any applicable collective
bargaining agreement, and with the applicable provisions of ERISA, the Code and
other applicable laws, and there has been no “prohibited transaction”
(including without limitation as a result of any of the transactions
contemplated hereby) within the meaning of Section 4975(c) of the Code or Section 406
of ERISA involving the assets of any U.S. Employee Benefit Plan after giving
effect to the exemptions set forth in Section 4975(d) of the Code and Section 408(b)
of ERISA or any other exemption applicable to the transactions contemplated by
this Agreement.  To the knowledge of the
Sellers, (a) no actions, suits or claims with respect to the U.S. Employee
Benefit Plans (other than routine claims for benefits) are pending or
threatened which could result in or subject the Sellers to any material
liability and (b) there are no circumstances which

 

25

 

would give
rise to or be expected to give rise to any such actions, suits or claims.

 

4.17.7      The U.S. Employee Benefit Plans and their related trusts that are
intended to qualify under Section 401 of the Code have been determined by
the IRS to qualify under such Section and, to the knowledge of the
Sellers, nothing has occurred since the time of such favorable determination to
cause the loss of such qualified status.

 

4.17.8      The Sellers have delivered or made available to Buyers complete and
correct copies of each U.S. Employee Benefit Plan, or written summaries of any
unwritten U.S. Employee Benefit Plan, any employee handbook applicable to U.S.
Employees, and with respect to each U.S. Employee Benefit Plan, if applicable,
the current summary plan description, related trust agreements or insurance
contracts, the latest Internal Revenue Service (IRS) determination letter, and
the most recent annual reports on IRS Form 5500 (including all required
schedules and accountant’s opinions).

 

4.17.9      No union is the bargaining representative of any ISI employee with
respect to the Business.  With respect to
the Business, ISI is not a party to or bound by any collective bargaining
agreement, nor, in the past three (3) years, has it experienced any strikes,
grievances, claims of unfair labor practices, or other collective bargaining
disputes.  To the knowledge of ISI, it
has not committed any unfair labor practice in the past three (3) years. To the
knowledge of ISI, there are no organizational efforts presently being made or
threatened by or on behalf of any labor union with respect to the Business,
except as disclosed on Schedule 4.18 with respect to the Non-U.S.
Business.

 

4.17.10    There
are no complaints, charges, claims or grievances against ISI (with respect to
the Business) pending or, to the knowledge of ISI, threatened to be brought or
filed with any Governmental Authority, arbitrator or court based on or arising
out of the employment by ISI of its officers, directors, employees, independent
contractors, or agents.

 

4.17.11    No
U.S. Employee has suffered an “employment loss” as defined in the Workers
Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et. seq.,
during the 90-day period ending on the date hereof.

 

4.17.12    With
respect to any “defined benefit plan” within the meaning of Section 3(35)
of ERISA, maintained or contributed to by ISI with respect to the Business and
subject to ERISA: (a) no liability to the Pension Benefit Guaranty Corporation
(“PBGC”) has been incurred (other than for

 

26

 

premiums not
yet due); (b) no notice of intent to terminate has been filed with the PBGC
within the last six years and no proceeding to terminate any such plan has been
instituted by the PBGC within the past six years; (c) no “accumulated funding
deficiency,” within the meaning of Section 302 of ERISA or Section 412
of the Code, whether or not waived, has been incurred within the last six
years; (d) no “reportable event” within the meaning of Section 4043 of
ERISA (for which the 30-day notice requirement has not been waived by the PBGC)
has occurred within the last six years; and (e) no lien has arisen under ERISA
or the Code within the last six years on the Assets.

 

4.17.13    Except
as disclosed on Schedule 4.17.1, the consummation of the transactions
contemplated by this Agreement, either alone or in combination with another
event, will not materially increase any benefits or result in the acceleration
or creation of any rights of any person to benefits under any U.S. Employee
Benefit Plan (including, without limitation, the acceleration of the vesting or
exercisability of any stock options, the acceleration of the vesting of any
restricted stock, the acceleration of the accrual or vesting of any benefits
under any U.S. Employee Benefit Plan or the acceleration or creation of any
rights under any severance or change in control agreement).  No payment or series of payments that would
constitute a “parachute payment” (within the meaning of Section 280G of
the Code) has been made or will be made to any “disqualified individual” (as
defined in Section 280G(c) of the Code) in connection with the
consummation of the transactions contemplated by this Agreement, either alone
or in combination with another event.

 

4.18         NON-UNITED STATES EMPLOYEES,
EMPLOYEE BENEFITS AND LABOR LAWS.

 

4.18.1      The Sellers have
disclosed to Buyers, or to their non-UK advisers, copies of the
contracts of employment of each of the Non-U.S. Employees which are full and
accurate in every respect as of the date hereof.

 

4.18.2      Schedule 4.18:

 

(a)           sets forth an accurate and complete list of the Non-U.S. Employees
as of the date indicated on such schedule (the “Non-U.S. Personnel List”).  On June 11, 2004 the Sellers e-mailed to
Buyers an accurate and complete list, as of the date specified in the e-mail,
of the Non-U.S. Employees, their respective location, date of hire, current
annual base salary, bonus payment for 2003, any bonus opportunity for 2004, and
the health status of two (2) particular Non-U.S. Employees.  Schedule 4.18 identifies the Non-U.S.
Employees who are not actively at work for any reason other than regular

 

27

 

vacation as of
the date specified in the e-mail.  Schedule 4.18
also identifies any Non-U.S. Employee who is on visa;

 

(b)           identifies each retirement, pension, savings, profit sharing,
welfare benefit, share incentive, share option, bonus, incentive, deferred
consideration, severance (including redundancy policies, practices or arrangements),
retention, or other employee benefit plan, fund,
program, agreement or arrangement of any kind that is maintained inside or outside of the
United States and which is maintained,
sponsored or entered into by the Sellers, or with respect to which Seller has
any liability, for the benefit of Non-U.S. Employees (the “Non-U.S.
Plans” and collectively with the U.S. Benefit Plans, the “Employee Benefit
Plans”);

 

(c)           identifies all current recognition, procedural, collective or other agreements
between the Sellers and any trade union, works council or other body
representing the Non-U.S. Employees;

 

4.18.3      With respect to each Non-U.S.
Plan, all employer and employee contributions required by law or by the terms
of such Non-U.S. Plan have been made, or, if applicable, accrued in accordance
with normal practices of the Sellers (or their Affiliates) and each Non-U.S.
Plan required to be registered has been registered and has been maintained in
good standing with applicable regulatory authorities.

 

4.18.4      Except as disclosed in Schedule 4.18,
the Sellers do not recognise to any extent any trade
union, works council or other body representing the Non-U.S. Employees and  are not a
party to or bound by any collective bargaining agreement, nor, in the past
three (3) years, have they experienced any strikes, grievances, claims of
unfair employment practices, or other collective bargaining disputes.  To the knowledge of the Sellers, they have
not committed any unfair employment practice in the past three (3) years and the Sellers have complied in all material respects with all
obligations owed to the Non-U.S. Employees including under legislation, codes
of practice, collective agreements, terms and conditions of employment and in
respect of health and safety obligations. To the knowledge of
the Sellers, there are no organizational efforts presently being made or
threatened by or on behalf of any trade union, works council or other body
representing the Non-US Employees with respect to the Business.

 

4.18.5      All personnel whose
services are wholly or mainly utilised in the Non U.S. Business are employed by
the Sellers.

 

28

 

4.18.6      There are
no consulting or independent contractor agreements or arrangements that are
material to the Business Condition, or that would result in any costs or
expenses for the Buyers upon their termination by the Buyers.

 

4.18.7      All the Non-U.S.
Employees are employed wholly or mainly in the Non-U.S. Business.

 

4.18.8      Except as set forth
on Schedule 4.18, the Sellers have not made any redundancies within the
Non-U.S. Business in the last two (2) years and have no current plans to make
any such redundancies.

 

4.18.9      There are
no outstanding loans to any Non-U.S. Employees.

 

4.18.10    Each Non-U.S.
Employee’s contract of employment can be terminated in accordance with the
notice period contained in that contract of employment (and in any event by 3
months’ notice or less) without giving rise to a claim for damages, severance
pay or compensation other than a statutory redundancy payment or statutory
compensation for unfair dismissal.

 

4.18.11    The Sellers warrant
that:

 

(a)        the HBR Dobbin Pension Plans are personal pension schemes within the
meaning given in section 630 of the Income and Corporation Taxes Act 1988;

 

(b)        they have provided to the Buyers details of the current employer and
employee contributions payable to the HBR Dobbin Pension Plans, which
contributions are set out in Schedule 4.18;

 

(c)        the Sellers’ liability to contribute to the HBR Dobbin Pension Plans is
limited to matching the contributions paid by each of the Non-U.S. Employees
listed on Schedule 8.2.12 to the HBR Dobbin Pension Plans subject to a
minimum 3% and maximum of 5% of each of those Non-U.S Employees’ gross
pensionable remuneration;

 

(d)        save
for the
contributions which are payable by any of the
Sellers to or in respect of the HBR Dobbin Pension Plans as referred to in Section 4.18.11(c)
above, none of the Sellers has any liability or obligation to or in respect of
the HBR Dobbin Pension Plans.

 

4.19         ENVIRONMENTAL MATTERS.  Except as otherwise disclosed on Schedule 4.19, in all material
respects (a) the conduct of the Business has been in compliance with all
required environmental permits and Environmental Laws applicable to the

 

29

 

Business or
the Assets; and (b) the Sellers have not treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled, or released any
substance, or owned or operated the Business or any property or facility (and
no such property or facility is contaminated by any such substance) in a manner
that has given or would give rise to any liabilities or investigative,
corrective or remedial obligations pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act (“CERCLA”) or any other Environmental
Laws applicable to the Business or the Assets. 
The Sellers have not received any notice, report or other information
regarding any unresolved violation of, or liability under, Environmental Laws
with respect to the operations, properties or facilities of the Business

 

4.20         COMPLIANCE WITH OTHER LAWS.  Except
as otherwise disclosed on Schedule 4.20 and insofar as is material to the
Business Condition, the conduct of the Business has been in compliance with
have with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings and charges thereunder) of any
Governmental Authority, and no action, suit, proceeding, hearing, investigations,
charge, complaint, claim, demand, or notice has been served against any of them
alleging any failure so to comply.

 

4.21         TAXES.  Except  as otherwise disclosed on Schedule 4.21,
(a) all Taxes owed with respect to the Business have been or will be paid when
required by law; and (b) the assets of the Business are not encumbered by
and will not be subject to the filing of any liens arising out of unpaid taxes
which are due and payable or liability for taxes incurred with respect to the
Business prior to Closing.

 

4.22         DEFERRED REVENUE.  Schedule 4.22 reasonably
reflects in all material respects all deferred revenue of the Business and,
except as specified on such schedule, such deferred revenue does not include
any amounts for pre-paid maintenance or support beyond the one year anniversary
of the date hereof and does not include any amounts subject to SOP 81.1 or “block-time”
service or consulting contracts.

 

4.23         CONSENTS.  Except
as set forth on Schedule 4.23, no approval or authorization of any
Governmental Authority or of any third party is required in connection with the
execution and delivery of this Agreement or any instrument contemplated hereby
or the consummation of any of the transactions contemplated hereby.

 

4.24         GOVERNMENTAL PERMITS.  Each Seller owns, holds or possesses all material licenses, franchises,
permits, privileges, immunities, approvals and other authorizations from
Governmental Authorities which are necessary to entitle such Seller to own,
lease or possess, and operate and use its assets and to carry on and conduct
the Business substantially as currently conducted.  Each Seller has fulfilled and performed its
obligations under each of such permits in all material

 

30

 

respects and no suspension or cancellation of any of such permit is
pending or, to the knowledge of such Seller, threatened and each of the permits
is valid, subsisting and in full force and effect.

 

4.25         NO KNOWLEDGE OF BUYERS’ DEFAULT.  If,
prior to the date hereof, any Seller (i) has actual knowledge of any facts or
circumstances that such Seller believes to be a possible material breach of any
of the representations and warranties of Buyers contained in this Agreement,
and (ii) such Seller reasonably expects any such material breach to cause
damage in excess of $500,000, such Seller shall assert its claims with respect
to such matters before the Closing so that the parties can attempt to resolve
them at that time.  Claims with respect
to such matters, if not asserted before the Closing, may not be brought after
the Closing.

 

4.26         SCOPE OF REPRESENTATIONS AND
WARRANTIES.  The representations and warranties stated in
this Section 4 are the only representations and warranties the Sellers
have given to Buyers in connection with the transactions contemplated by this
Agreement.  Except as set forth in this Section 4,
the Sellers have not made, and hereby expressly disclaims, any other or further
representation or warranty, either express or implied, concerning the subject
matter of this Agreement.  THE WARRANTIES
GIVEN IN THIS SECTION 4 ARE IN LIEU OF ALL OTHER WARRANTIES THE SELLERS
MIGHT HAVE GIVEN TO BUYERS, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND
IMPLIED WARRANTIES OF FITNESS FOR INTENDED USE. 
All other warranties the Sellers or anyone purporting to represent the
Sellers gave or might have given, or which might be provided or implied by law
or commercial practice, ARE HEREBY EXCLUDED.

 

4.27         DISCLOSURE.  The representations and warranties contained in this Section 4 (and
the schedules attached hereto) do not contain any untrue statement of material
fact or omit to state any material fact reasonably necessary in order to make
the statements and information contained in this Section 4, in light of the circumstances
under which they were made, (and
the schedules attached hereto) not misleading. 
The Sellers do
not have knowledge of any fact that has specific application to any aspect of
the Business (other than general economic or industry conditions) that may materially
adversely affect the assets, business, prospects, financial condition or
results of operations of the Business taken as a whole that has not been set
forth in this Agreement (or any schedule or exhibit hereto).

 

4.28         INSOLVENCY.  No procedure relating to bankruptcy, insolvency, moratorium or
equivalent procedure (provided that the term “equivalent procedure” shall not
apply to Marcam Germany) in relating to any of the Sellers in the various
jurisdictions governing the Sellers has been commenced and the Sellers are not
aware of any circumstances which may give rise to any right to commence such

 

31

 

proceedings.

 

4.29         BASIS OF REPRESENTATIONS AND
WARRANTIES. Where a statement
contained in this Agreement is said to be to the “Sellers’ knowledge” (or words
of similar import) such expression means that the persons listed on Schedule 4.29
believe the statement to be true, accurate, and complete based on their actual
knowledge after making reasonable inquiry.

 

5.             REPRESENTATIONS
AND WARRANTIES OF BUYERS. Buyers hereby makes the following representations and warranties to
the Sellers:

 

5.1           CORPORATE STATUS.  Buyers
are duly organized, validly existing, and in good standing under the laws of
their respective jurisdictions of organization, and have the corporate power to
own their properties and to carry on their businesses as now being conducted.

 

5.2           POWER AND AUTHORITY.  Buyers
have the legal right, power and authority to enter into this Agreement, and the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the necessary
corporate action of Buyers.

 

5.3           NO BROKER.  Except
as set forth on Schedule 5.3, no broker, finder or financial advisor
acting or who has acted on Buyers’ behalf is entitled to receive any brokerage
or finder’s or financial advisory fee from any party in connection with the
transactions contemplated by this Agreement.

 

5.4           AUTHORIZATION; NO BREACH.  The execution, delivery and performance of this Agreement and all other
agreements or instruments contemplated hereby to which Buyers are a party or by
which Buyers are bound have been duly authorized by Buyers.  This Agreement and all other agreements
contemplated hereby to which Buyers are a party, when executed and delivered by
Buyers in accordance with the terms hereof, shall each constitute a valid and
binding obligation of Buyers, enforceable in accordance with its terms in all
material respects, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally or by
general equity principles.  Except as set forth on Schedule 5.4, the
execution, delivery and performance by Buyers of this Agreement and all other
agreements contemplated hereby to which Buyers are a party, and the fulfillment
of and compliance with the respective terms hereof and thereof by Buyers, do
not and shall not in any material respect (a) conflict with or result in a
breach of any terms, conditions or provisions of, (b) constitute a default
under (whether with or without the passage of time, the giving of notice or
both), (c) give any third party the right to modify, terminate or accelerate
any obligation under, (d) result in a

 

32

 

violation
of, or (e) require any authorization, consent, approval, exemption or other
action by or notice or declaration to, or filing with, any Governmental
Authority pursuant to, (i) the organizational documents of Buyers, (ii) any law
to which Buyers are subject, or (iii) any material agreement, instrument,
order, judgment or decree to which Buyers are subject.

 

5.5           NO LAWSUITS; CONSENTS.  There
is no lawsuit, proceeding or investigation pending or, to the knowledge of
Buyers, threatened against Buyers which might prevent the consummation of any
of the transactions contemplated by this Agreement and, except as otherwise
described in Section 6 of this Agreement, no approval or authorization of
any governmental authority or of any third party on the part of Buyers is
required in connection with the execution and delivery of this Agreement or any
instrument contemplated hereby or the consummation of any of the transactions
contemplated hereby.

 

5.6           NO KNOWLEDGE OF SELLERS’ DEFAULT.  If,
prior to the date hereof, any Buyer (i) has actual knowledge of any facts or
circumstances that such Buyer believes to be a possible material breach of any
of the representations and warranties of the Sellers contained in this
Agreement, and (ii) such Buyer reasonably expects any such material breach to
cause damage in excess of $500,000, such Buyer shall assert its claims with
respect to such matters before the Closing so that the parties can attempt to
resolve them at that time.  Claims with
respect to such matters, if not asserted before the Closing, may not be brought
after the Closing.

 

5.7           BASIS OF REPRESENTATIONS AND
WARRANTIES. Where a statement
contained in this Agreement is said to be to “Buyers’ knowledge” (or words of
similar import) such expression means that the persons listed on Schedule 5.7
believe the statement to be true, accurate, and complete based on their actual
knowledge after making reasonable inquiry.

 

6.             ACTIONS BEFORE THE CLOSING.

 

6.1           GENERAL.  Each of the parties hereto shall use its commercially reasonable
efforts, in good faith, to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the transactions
contemplated by this Agreement.

 

6.2           INTERIM CONDUCT OF THE
BUSINESS.  The Sellers covenant to Buyers that, from the
date hereof until the Closing, except as contemplated by this Agreement or as
otherwise agreed by Buyers, they shall:

 

6.2.1        carry on
the operation of the Business in the ordinary course consistent with past
practice (including, without limitation, the payment of creditors

 

33

 

and the making
of capital expenditures in accordance with past practice); provided, however,
that the Sellers shall not make capital expenditures in excess of $100,000 in
the aggregate, without the prior written consent of Buyers;

 

6.2.2        use
reasonable endeavours to preserve and retain the goodwill and organization, and
the Business Intellectual Property and the Products of the Business and
existing relationships with customers and suppliers, employees and other
persons having business relations with the Business;

 

6.2.3        maintain
all licenses, franchises, and permits that are currently held by any Seller;

 

6.2.4        maintain
all property and equipment consistent with past practices;

 

6.2.5        manage,
incur obligations in respect of, or settle Intra-Group Trading Accounts in the
ordinary course, consistent with past practice;

 

6.2.6        use
commercially reasonable efforts to make all insurance claims, if any, with
respect to the Seller Group Policies prior to the Closing;

 

6.2.7        use
reasonable best efforts to hold the shareholder meeting with respect to Marcam
France as specified on Schedule 4.2;

 

6.2.8        not do,
suffer or permit to be done or agree to do any of the following:

 

6.2.8.1     the disposal, reorganization, change or discontinuance of any
material part of the Assets or the Business;

 

6.2.8.2     any entry into, modification or termination of any Material Contract
or Intellectual Property Contract;

 

6.2.8.3     make any amendment to the organizational or charter documents of any
Seller;

 

6.2.8.4     other than in the ordinary course consistent with past practice,
enter into any transactions with Affiliates that would survive the Closing;

 

6.2.8.5     make any changes to management personnel;

 

6.2.8.6     any change to its accounting principles;

 

34

 

6.2.8.7     increase the compensation or fringe benefits of any Employee,
officer or director, grant any severance, termination, retention or change in
control payment, or enter into any agreement or arrangement with respect to the
foregoing; enter into or amend any employment or consulting agreement with any
Employee, officer or director; establish, materially amend, or increase
benefits under, any employee benefits plan; pay or agree to pay any pension,
retirement, or other benefit that is not required by any plan or agreements
existing as of the date of this Agreement; or

 

6.2.8.8     enter into any agreement or arrangement in contradiction of the
foregoing.

 

6.3           GOVERNMENT APPROVALS.  On or
before the Closing, the parties shall have prepared and filed all governmental
notifications or filings necessary in order to consummate the transactions
contemplated by this Agreement and shall have obtained any required
governmental approvals.

 

6.4           CONSENTS.  From
the date hereof until the Closing or such later time for acquiring consents as
specified in this Agreement:

 

6.4.1        the parties will use all reasonable
efforts to obtain all consents necessary for the transfer of the Assets to
Buyers (or effective waivers thereof); and

 

6.4.2        if the
parties are unable to obtain any such consent, approval, or waiver, by the
Closing date then:

 

6.4.2.1     this Agreement
shall not constitute or be deemed to be a contract to assign the same if an
attempted assignment without such consent, approval, or waiver would constitute
a breach of such item or create in the issuer or any party thereto the right or
power to cancel or terminate such item;

 

6.4.2.2     the Sellers shall
cooperate with Buyers to provide Buyers with the benefit of the Sellers’ rights
under the Contracts and Customer Contracts, including enforcement (at Buyers’
expense) of any and all rights of the Sellers against such person as Buyers may
reasonably request and to provide for Buyers to perform all post-Closing
performance obligations of the Sellers under such Contract or Customer
Contract.  As between Buyers and the Sellers,
the Sellers shall be deemed to hold such Contract or Customer Contract in trust
for and on behalf of and to the benefit of Buyers as of and from the Closing
Date and any proceeds derived from a

 

35

 

Contract or Customer Contract shall be payable to
Buyers and any obligation thereunder shall be performed or paid by Buyers; and

 

6.4.2.3     nothing
contained in this Section 6.4 shall be construed to negate or diminish, as
between the Sellers and Buyers, the Sellers’ covenants and obligations to transfer
and deliver the Assets to Buyers as provided in this Agreement.

 

6.5           ACCESS.

 

6.5.1        The Sellers shall afford, and cause their, officers, directors,
attorneys, accountants, advisors and other agents (the “Personnel”) to afford,
to Buyers and their accounting, legal and other representatives, as well as
their respective officers, employees, affiliates and other agents, upon
reasonable request of Buyers, full and complete access during reasonable
business hours to all premises, properties, Personnel, and customers of the
Sellers and to all business, financial, legal, tax, compensation and other data
and information (including, but not limited to all books, records (including
tax records), contracts, customer lists and other documents and records (including
any working papers of the Personnel)) concerning the Business and its affairs
and operations; provided, however, that such access by Buyers shall not
materially and adversely interfere with the business of the Sellers.

 

6.5.2        After the
Closing and with respect to the Business, Buyers will use commercially
reasonable efforts to prepare and send to the Sellers a set of management
accounts in customary Invensys group format for the month of June 2004
and, if necessary, an interim period from July 1, 2004 through the Closing
Date.

 

7.             CLOSING AND CONDITIONS TO CLOSING.

 

7.1           CLOSING. 
Subsequent to the execution of this Agreement and subject to the
satisfaction of the conditions set forth in Sections 7.2 and 7.3 below, the
closing hereunder (the “Closing”) will occur on June 30, 2004, or such
other date as the parties may agree to in writing (the “Closing Date”).  The Closing will be deemed to be effective as
of 11:59 PM eastern time on the Closing Date (the “Effective Time”).  The parties will make the following
deliveries and take the following actions at the Closing:

 

7.1.1        BUYERS’
DELIVERIES.  Buyers, as applicable, will deliver to the
Sellers:

 

36

 

7.1.1.1     a sum in US
Dollars equal in amount to the Purchase Price by wire transfer of immediately
available funds to an account or accounts designated by the Sellers; and

 

7.1.1.2     the
agreements, documents, certificates, and other items referred to in Appendix D.

 

7.1.2        SELLERS’
DELIVERIES.  The Sellers, as applicable, will deliver to
Buyers:

 

7.1.2.1     an acknowledgement of the
Sellers’ receipt of the Purchase Price, when delivered; and

 

7.1.2.2     the
agreements, documents, certificates, and other items referred to in Appendix E.

 

7.2           CONDITIONS TO OBLIGATIONS OF
BUYERS.  The obligations of Buyers to complete the
purchase of the Assets at the Closing are subject only to the following
conditions:

 

7.2.1        The
Sellers shall have taken all corporate and other steps reasonably required to
be taken by them in connection with the transactions contemplated by this
Agreement and the Sellers shall have performed in all material respects all of
the covenants required to be performed by them hereunder prior to the Closing.

 

7.2.2        The representations and warranties of the Sellers
contained in Section 4 shall be true and correct at and as of the Closing
as though then made and as though the Closing Date was substituted for the date
of this Agreement throughout such representations and warranties (except to the extent that such
representations and warranties speak as of another date), other than such failures to be
true and correct that would not reasonably be expected to (i) constitute,
individually, or in the aggregate, a Material Adverse Event on the Business, or
(ii) result in an indemnification claim in excess of $3,000,000.  For the purposes of this Section 7.2.2
only, the
amount of any liabilities, damages, claims, costs or expenses related to a
breach of any Seller representation or warranty shall be considered without
regard to any materiality qualification set forth therein.

 

7.2.3        All
requisite governmental approvals and authorizations necessary for consummation
of the transactions contemplated by this Agreement shall have been duly issued
or granted.

 

37

 

7.2.4        There
shall not have been issued and in effect any injunction or similar legal order
prohibiting or restraining consummation of any of the transactions contemplated
in this Agreement and no legal action or governmental investigation or inquiry
which might reasonably be expected to result in any such injunction or order
shall be pending or threatened.

 

7.2.5        The
Sellers shall have obtained the consent form Deutsche Bank to the sale of
Assets contemplated by this Agreement, and Deutsche Bank shall have released
any and all liens and encumbrances with respect to the Assets.  The Sellers will deliver to Buyers written
confirmation of the foregoing at the Closing.

 

7.2.6        The
Sellers shall have procured the necessary shareholder resolution of BTR France,
SAS, adopting and approving the sale of the French Assets.

 

7.2.7        The sale
of the German Assets shall have been approved by the Federal Cartel Office
located in Germany.

 

7.3           CONDITIONS TO OBLIGATIONS OF THE
SELLERS.  The obligations of the Sellers to complete
the sale of the Assets at the Closing are subject only to the following
conditions:

 

7.3.1        Buyers
shall have taken all corporate and other steps reasonably required to be taken
by it in connection with the transactions contemplated by this Agreement;

 

7.3.2        All
representations and warranties of Buyers contained in Section 5 shall be
true and correct in all material respects at and as of the Closing as though
then made and as though the Closing Date was substituted for the date of this
Agreement throughout such representations and warranties, except as
contemplated herein;

 

7.3.3        All requisite governmental
approvals and authorizations necessary for consummation of the transactions
contemplated by this Agreement shall have been duly issued or granted; and

 

7.3.4        There
shall not have been issued and in effect any injunction or similar legal order
prohibiting or restraining consummation of any of the transactions contemplated
in this Agreement and no legal action or governmental investigation or inquiry
which might reasonably be expected to result in any such injunction or order
shall be pending or threatened.

 

8.             CERTAIN COVENANTS.

 

38

 

8.1           INTRA-GROUP TRADING
ACCOUNTS.  With respect to the operation of the Business,
Buyers covenant to the Sellers and the Sellers covenant to Buyers that, after
the Closing, all Intra-Group Trading Accounts outstanding as of the Closing
will be paid in accordance with terms in effect as of the Closing or, if no
such terms are specified, then within 30 days after the Closing.  For the avoidance of doubt, the Funding Loan
Balance shall not apply to the payment of the Intra-Group Trading Accounts
under this Section 8.1.

 

8.2           EMPLOYEE MATTERS.

 

8.2.1        ISI shall retain all
liabilities and obligations (including without limitation all reporting
obligations on Form 5500) under all Employee Benefit Plans for benefits accrued
or attributable to and claims incurred during all periods on or before the
Closing Date with respect to all US Employees and former US Employees
(including retirees) of the Business (and any eligible dependants
thereof).  A claim or expense is deemed
incurred when the services that are the subject of the claim are performed,
when the disability occurs (in the case of disability benefits), when the death
occurs (in the case of life insurance), and based on the date services are
provided in the case of a hospital stay. 
For the avoidance of doubt, the provisions under this Section 8.2.1
shall create no liability on the Sellers in respect of any wages, salaries or
other benefits regularly payable to any Employee (i.e., U.S. Employees and
Non-U.S. Employees) after the Closing Date.

 

US EMPLOYEE MATTERS

 

8.2.2        As soon
as practicable after the date of this Agreement, Buyer US and the Sellers shall
mutually agree upon the timing and method of contacting the persons listed on
the U.S. Personnel List (including the form of any written communications)
regarding the transactions contemplated by this Agreement.  Subject to the procedures established
pursuant to the immediately preceding sentence, Buyer US shall have the right,
prior to the Closing Date, to contact such listed persons, as Buyer US deems
appropriate in its discretion, for the purpose of making offers of employment
with Buyer US effective as of the Closing Date, which shall be contingent upon
the occurrence of the Closing and the consummation of the transactions
contemplated by this Agreement.  Any U.S.
Employee who receives and accepts an offer of employment from Buyer US is
hereinafter referred to as a “Transferred U.S. Employee.”  At the Closing, the Sellers shall terminate
each Transferred U.S. Employee and the offers of employment from Buyer US shall
become effective immediately upon such termination by the Sellers.

 

39

 

8.2.3        Buyer US shall assume all
liabilities and obligations arising under any claims for workers compensation
and related benefits made by or incurred by the US Employees after the Closing
Date.

 

8.2.4        For a period of at least six (6)
months immediately following the Closing Date, Buyer US agrees to provide, or
Buyer US shall cause its Affiliates to provide, each Transferred US Employees
with: (a) while so employed, a base salary or wage rate with respect to such
Employee being employed by Buyer US (or its Affiliates) that is not less than
his or her base salary or wage rate in effect immediately prior to the Closing
Date; and (b) while so employed, cash incentive opportunities (including, but
not limited to, gainsharing, sales incentives and merit bonuses), employee
benefit plans, programs and arrangements (other than stock-based or similar
equity incentive plans) that are substantially similar in the aggregate to the
cash incentive opportunities, employee benefit plans, programs and arrangements
in effect immediately prior to the Closing Date.  Buyer US shall have
sole responsibility for all liabilities and obligations arising after the
Closing Date related to the Transferred US Employees (and their eligible
dependents as appropriate), including COBRA obligations.  The Sellers shall have responsibility for
satisfying the continuation coverage requirements of COBRA and any applicable
similar laws of any state (but not to any extent beyond the requirements of
COBRA and such other applicable state laws), arising in connection with any “qualifying
event” occurring with respect to any U.S. Employee terminated by the Sellers as
a result of the transactions contemplated by this Agreement; provided, however,
that Buyer US shall reimburse the Sellers for the costs and expenses incurred
by the Sellers in satisfying such continuation coverage requirements.  Subject to the provisions of this Section 8.2
and all applicable laws, on and after the Closing Date, Buyer US shall have the
right to dismiss any or all Transferred US Employees at any time, with or
without cause, and to change the terms and conditions of their employment
(including compensation and employee benefits provided to them).

 

8.2.5        To the extent
that Buyer US (or an Affiliate of Buyers) terminates the employment of a
Transferred US Employee during the six (6) months immediately following the
Closing Date, Buyer US agrees to provide (or cause its Affiliates to provide),
severance benefits substantially similar in the aggregate to the benefits
provided under the standard severance guidelines of ISI (with respect to the
Business) in effect immediately prior to the Closing Date, which require the
terminated U.S. Employee to sign a release in order to receive severance
benefits beyond the minimum benefits provided to any terminated Employee under
such guidelines.  A

 

40

 

copy of the
applicable, general severance guidelines of the Sellers was e-mailed to Buyer
US on June 11, 2004.  In addition,
in accordance with Section 8.2.6, Buyer US shall reimburse the Sellers for
all reasonable and ordinary out of pocket costs and expenses actually incurred
by the Sellers in terminating any US Employees of the Business that are not
Transferred US Employees.

 

8.2.6        As soon
as reasonably practicable, but in no event later than 12:00 p.m. e.d.t. on June 21,
2004, Buyer US may deliver to ISI a schedule of the U.S. Employees that it
may not wish to hire following the Closing Date (the “Non-Hire Notice”).  As soon as reasonably practicable, but in no
event later than 12:00 p.m. e.d.t. on June 25, 2004, ISI shall provide
Buyer US with an estimate of the approximate costs and expenses associated with
severing each U.S. Employee listed on the Non-Hire Notice, together with the
assumptions used to arrive at each such amount (the “Severance Schedule”).  ISI shall use its commercially reasonable
efforts in good faith (i) to adhere to ISI’s standard severance guidelines,
which require the terminated U.S. Employee to sign a release in order to
receive severance benefits beyond the minimum benefits provided to any
terminated Employee under such guidelines and, (ii) to minimize the costs and
expenses associated with severing those U.S. Employees listed on the Non-Hire
Notice.  In the event that the actual
cost of severing any U.S. Employee will exceed the amount listed on the
Severance Schedule, ISI, at the direction of Buyer US, shall either (i)
terminate such U.S. Employee and pay the excess amount, which shall be
reimbursed to ISI by Buyer US, (ii) terminate such U.S. Employee and pay only
the amount listed on the Severance Schedule, in which case any and all
liabilities arising out of the severance of such U.S. Employee (including any
severance liabilities arising out of post-Closing claims and litigation) shall
be the sole responsibility of Buyer US, or (iii) not sever such U.S. Employee,
in which case Buyer US shall offer such U.S. Employee employment with Buyer US.  ISI and Buyer US shall consult with one
another with respect to the Severance Schedule, and Buyer US shall submit its
final determination of which U.S. Employees it wishes not to hire after the
Closing Date no later than 9:00 a.m. e.d.t. on June 28, 2004.

 

8.2.7        Buyer US agrees to honor (or to
take such corporate action as may be necessary to cause its Affiliates to
honor), in all material respects, the obligations of the Sellers under the
provisions of any employment, retention, severance (whether pursuant to
individual contract, company policy or mandated by law), indemnification, or
collective bargaining agreement between and among any of the Sellers and the US
Employees.  Anything herein to the
contrary notwithstanding, any U.S. Employee who

 

41

 

is terminated by the Sellers and offered employment by Buyer US on
terms and conditions (including location of employment) substantially similar
to the terms and conditions (including location of employment) in effect
immediately prior to the Closing Date, under the employment with the Sellers,
shall not be entitled to any severance payments from either the Sellers or
Buyer US.

 

8.2.8        In accordance with the terms of
the Transition Services Agreement dated as of the Closing Date, for a period of
up to three (3) months after the Closing Date, each Transferred U.S. Employee
may continue to participate in the health and welfare benefit plans of the
Business in which he or she participated immediately before the Closing Date.  Thereafter, Buyer US agrees to provide (or
cause its Affiliates to provide) such health benefits to the Transferred U.S.
Employees so as to ensure uninterrupted health coverage of all Transferred U.S.
Employees.  The health plans of Buyer US
shall grant credit for amounts paid by the Transferred U.S. Employees under the
U.S. Employee Benefit Plans during the plan year (including applicable
deductibles and annual out-of-pocket limits) and waive any pre-existing
condition exclusions, evidence of insurability provisions, waiting period
requirements or any similar provision. 
On the first day of employment of each Transferred U.S. Employee, Buyer
US shall allow each Transferred U.S. Employee to apply for coverage under the
welfare benefit plans of Buyer US.  The
Sellers shall provide the Transferred U.S. Employees with timely notice of
their rights, if any, under the U.S. Employee Benefit Plans to continue or
convert to individual coverage.

 

8.2.9        As soon
as practicable following the Closing Date, Buyer US shall adopt and maintain a
defined contribution plan or shall amend an existing defined contribution plan
(in either case, “Buyer US’ DC Plan”) intended to be qualified under Section 401(a)
of the Code.  As soon as practicable
following the Closing Date, the Sellers shall cause or permit, as applicable,
the account balances of the Transferred US Employees in the Invensys 401(k)
Plan to be distributed in accordance with the terms of such plan, and Buyer US
shall permit Transferred US Employees who are participants in such plan to roll
over such distributions (excluding a rollover of outstanding participant loans,
and any after-tax employee contributions) into Buyer US’ DC Plan.  Buyer US and the Sellers shall cooperate
reasonably in good faith to effect such transfers or distributions as soon as
practicable after the Closing Date.

 

8.2.10      Buyer US agrees that, with respect
to all of their employee benefit plans, programs and arrangements covering or
otherwise benefiting any of the Transferred US Employees on or after the Closing
Date, service with the

 

42

 

Sellers shall be counted for purposes of eligibility to participate,
vesting and, solely for purposes of vacation and severance, level of benefits
(but, in the case of any defined benefit pension plan, or portion thereof for
which Buyer US is not receiving a transfer of assets and past service
liabilities, not for purposes of benefit accrual or other rights or
entitlements inapplicable to newly hired similarly situated employees of Buyer
US) to the same extent such service was counted under the corresponding
employee benefit plans, programs, or arrangements of the Sellers prior to the
Closing Date.

 

8.2.11      The Sellers shall have no
obligation to cause any Employee to be fully vested under the Invensys 401(k)
plan, except as otherwise may be required by applicable law or by the terms of
such plan.

 

NON-US EMPLOYEE MATTERS

 

8.2.12      With
respect to the three (3) Employees listed on Schedule 8.2.12, the Buyers
shall assume the liability to contribute to the HBR Dobbin Pension Plans as
specified in Section 4.18.11(c) and facilitate the payment of employer and
employee contributions to the relevant HBR Dobbin Pension Plans provider for as
long as such Employees are employed by the applicable Buyer.

 

8.2.13      Buyer UK shall: (a)
establish with effect from a date no later than the Closing Date (or become a
party to) a retirement benefits scheme which is approved or capable of approval
under Chapter I or Chapter IV of Part XIV of the Taxes Act as an exempt
approved scheme (“Buyer UK’s Scheme”), and (b) as soon as reasonably
practicable after the Closing Date, send to all Pensionable Employees a notice,
in a form agreed by the Sellers, setting out the particulars of the Buyers UK’s
Scheme and offering membership of the Buyer UK’s Scheme with effect on and from
the Closing Date on terms as to contributions and benefits which are reasonable
and in line with market practice.

 

8.2.14      With
respect to the Non-U.S. Employees, the parties to this Agreement acknowledge
that the Regulations in the United Kingdom, France, the Netherlands and Germany
implementing the Council Directive 2001/23/EC on the approximation of laws of
the Member States relating to the safeguarding of employee’s rights in the
event of transfers of undertakings, businesses or parts of undertakings or
business (the “Transfer
Regulations”) apply to the sale of the
Non-U.S. Assets from the Sellers to the Buyers.

 

43

 

8.2.15      The Buyers shall indemnify
the Sellers from and against any and all losses, liabilities, costs, claims,
charges, demands, actions, damages, fines, penalties, compensation awards or
expenses, including those of their legal advisers, which arise from the
employment by any Buyer of the Non-U.S. Employees on or after the Closing Date
or are attributable to any act or omission (whether before or after the Closing
Date) by any Buyer in relation to any of the Non-U.S. Employees or any person
who would have been a Non-U.S. Employee but for such act or omission of any
Buyer and whether the act or omission takes place before or after the Closing
Date. This shall include any liability arising out of the termination or
dismissal by the Buyers of any Non-U.S. Employee or such other person, any
failure by any Buyer to offer terms and conditions of employment and working
conditions which are no less favourable than those which apply to the Non-U.S.
Employees up to the Closing Date, and any failure by any of the Buyers to
comply with its obligations (collectively referred to as the “Buyers’
Information Obligations”) to inform the Sellers in a timely fashion prior to
the Closing Date of any measures that the relevant Buyer intends to take with
regard to Non-U.S. Employees after the Closing Date in order to allow the
Sellers properly to notify the relevant Non-U.S. Employees (or their
representatives, as the case may be) of such measures pursuant to any
obligation that the Sellers may have to that effect under any applicable law,
including any failure by any Buyer to (i) comply with its obligations under
regulation 10(3) of the Transfer of Undertakings (Protection of Employment)
Regulations 1981 (UK); (ii) give Marcam Germany such information at such a time
as will enable Marcam Germany to perform the duty imposed on it by virtue of
sec. 613 a para 5 German Civil Code; or (iii) give Marcam Netherlands such
information at such a time as will enable Marcam Netherlands to perform the
duty imposed on it by virtue of article 7: 665a of the Netherlands Civil
Code

 

8.2.16      The Sellers shall
indemnify the Buyers from and against any losses, costs, claims, charges,
demands, actions, damages, fines, penalties, liabilities, compensation awards or
expenses (including those of their legal advisers)
incurred by the Buyers which are attributable to any breach or default (or
alleged breach or default) by the Sellers prior to the Closing Date in relation to any of the Non-U.S. Employees or any former employee
of the Sellers and which the Buyers may incur or suffer
as a result of the application of the Transfer Regulations.  This shall include but not be limited to any
liability arising out of the termination or dismissal of any Non-U.S. Employee
or any former employee of the Sellers or any failure by the Sellers to comply
with their information and consultation obligations under the Transfer
Regulations, save that this Section 8.2.16

 

44

 

shall
not apply where such failure by the Sellers to comply with their information and
consultation obligations under the Transfer Regulations, or any liability
incurred as a result of that failure, is a direct result of any non-compliance
by the Buyers with the Buyers’ Information Obligations).  Sections 11.3 and 11.4 of the Agreement shall
apply in respect of claims under this Section 8.2.16 as if they were
Claims for the purpose of Section 11 of the Agreement.

 

8.2.17      If any contract of employment
of a person who is not a Non-U.S. Employee has effect or is alleged to have
effect as if originally made between any of the Buyers and such person as a
result of the Transfer Regulations, then:

 

(a)           the relevant Buyer may, within
two months of the Closing Date notify the Sellers of such person and if the
relevant Buyer provides such notification, it shall give the Sellers a total
period of 28 days from the date of such notification in which to offer
employment to such person and for such person to accept that offer of
employment;

 

(b)           if any of the Sellers make
such an offer of employment, the Buyers shall give the relevant Seller all
reasonable assistance to procure that such person accepts such offer of
employment;

 

(c)           if, on the expiry of the 28
day period referred to in Section 8.2.17(a), such person has not accepted
the relevant Seller’s offer of employment or if none of the Sellers has made an
offer of employment to such person, the relevant Buyer may terminate the
employment of such person forthwith; and

 

(d)           the Sellers shall indemnify
the relevant Buyer from and against any liabilities, losses, costs, claims, charges, demands, actions, damages, fines,
penalties, compensation awards or expenses (including those of its legal advisers), arising out of or in
connection with such termination and from and against any sums payable to or in
relation to such person under his contract of employment from the Closing Date
to the date of such termination.

 

For the
avoidance of doubt, if the relevant Buyer shall not terminate the employment of
such person in accordance with this Section 8.2.16, such person shall be
deemed to be and at all relevant times to have been a Non-U.S. Employee.

 

45

 

8.2.17      This Section 8.2 shall not
create any third-party beneficiary rights nor shall it inure to the benefit of
nor shall it be enforceable by any employee nor any person representing the
interests of employees and no person who is not a party
to this Agreement shall have any right under, inter alia, the Contracts (Rights of
Third Parties) Act 1999 (UK) to enforce any of its terms.

 

8.3           TRANSITION SERVICES AGREEMENT.  The
parties shall enter into a Transition Services Agreement in the form attached
hereto as Exhibit E.

 

8.4           MARCAM AGREEMENT.  Prior to the Closing, Invensys plc and Buyer US shall negotiate in good
faith to enter into an agreement for the resale of the Products.

 

8.5           INSURANCE MATTERS.

 

8.5.1        Schedule 8.5 provides a list
of insurance policies maintained by the Sellers’ group in respect of the
Business, except for such policies related to employee benefits (the “Seller
Group Policies”).

 

8.5.2        Upon Closing, all Seller Group
Policies (whether such policies are maintained with third party insurers or
covered by the Sellers’ group) shall cease and no further coverage shall be
available to any of the Buyers or Affiliates of Buyers under any such policies;
provided, however, that Buyers shall retain the benefit of any claims that are
insured on a “claims made” basis if any such claims have been notified to the
Sellers’ group insurance department by the Sellers prior to the Closing Date.

 

8.5.3        Subject to the terms of any
relevant policy, Buyers shall receive the benefit of “occurrence” based
policies of insurance in relation to events occurring prior to the Closing Date
but in respect of which no claim has yet arisen as of the Closing Date;
provided, however, that in respect of such “occurrence” based policies Buyers
shall be required to make the claim within 18 months of the Closing Date.

 

8.5.4        Buyers and the Sellers agree that any claims made under the insurance
policies referred to in Section 8.5.1 in respect of the Business shall be
administered and collected by the Sellers (or by a claims handler appointed by
the Sellers) on behalf of Buyers.  Buyers
shall cooperate fully with the Sellers to enable the Sellers to comply with the
requirements of the relevant insurer, and Buyers shall provide such information
and assistance as the Sellers may reasonably request in connection with any
such claim.  Any monies received by the
Sellers as a result of such claims shall be paid over to Buyers, net of all
reasonable costs and expenses of recovery

 

46

 

(including, without limitation, all reasonable
handling and collection charges by any claims handler appointed by the
Sellers).

 

8.5.5        In respect of all claims under
the insurance policies referred to in Section 8.5.1 notified to insurers
as of the date of this Agreement and all claims subsequently brought under such
insurance policies and relating to the Business, Buyers acknowledge that they
shall be responsible for the deductible of $500,000 per claim for each
insurance policy and will not be entitled to seek reimbursement of such
deductible from the Sellers.  Buyers
shall reimburse the Sellers within twenty (20) business days after receipt
of the invoice for any deductible paid by the Sellers (including evidence of
such payment) after the Closing Date with respect to claims made under the
insurance policies referred to in Section 8.5.1 to the extent such
deductible has been paid by the Sellers or their Affiliates or, if Buyers are
invoiced directly by the insurance company for such deductible amount, it shall
pay or cause such invoice to be paid within twenty (20) business days.

 

8.6           TAXES.

 

8.6.1        Buyers hereby acknowledge that the
Sellers shall retain any and all Tax losses incurred related to the operation
of the Business prior to the Closing Date for the purposes of Tax reporting to
any Governmental Authority.  The Purchase Price
shall be exclusive of any applicable Value Added Taxes (“VAT”), if any.  The parties to this agreement agree to
cooperate to ensure that the transactions contemplated by this Agreement are
exempt from any VAT, which shall be payable in addition by Buyer to the Seller,
if applicable.  In the event that a Governmental
Authority imposes VAT with respect to the transactions contemplated by this
Agreement, the parties hereto further agree to cooperate reasonably in
defending or appealing such Governmental Authority’s imposition of VAT.

 

8.6.2        The Sellers shall: (i) preserve the VAT records
(the “VAT Records”) in each of the relevant jurisdictions in which the Sellers
operate for such period as may be required by law in such jurisdictions; and
(ii) so long as it preserves the VAT Records, permit Buyers reasonable access
to them to inspect or make copies of them.

 

8.7           STAMP DUTIES AND TRANSFER
TAXES.  Buyers shall pay and
be responsible for the first $10,000 of stamp duties and transfer taxes in
connection with the transactions contemplated hereby.  The Sellers shall be responsible for stamp
duties and transfer taxes, if any, in excess of $10,000.  In the event of an

 

47

 

assignment pursuant to Section 29 of this
Agreement, any incremental increase in stamp duties caused by such assignment
shall be borne by Buyers.

 

8.8           TRUST ARRANGEMENT.  If, after the Closing Date, any party receives
any money, documents or other items related to the purchased Assets, the
Assumed Liabilities, the Excluded Assets or the Excluded Liabilities, such
party shall hold such item in trust for the benefit of the other party, and
shall deliver such item to the applicable party as promptly as is reasonably
practicable to do so.

 

8.9           FICA/FUTA.  ISI will use commercially reasonable efforts to
provide to Buyer US complete and accurate records of all withholding and other
payments made by it in respect of FICA and FUTA taxes in respect of payments
made to Transferred US Employees since January 1, 2004, it being
understood that Buyer US will rely on such records for purposes of withholding
such Taxes for the remainder of 2004 in accordance with Treasury Regulation Section 1.3121(a)(1)-1.

 

8.10         COOPERATION.  The Sellers hereby agree, at the sole expense of Buyers, to execute,
deliver and file all such instruments, applications and documents, and take
such actions as may reasonably be required by Buyers to enable Buyers to enjoy
the full benefit of the Business Intellectual Property, including without
limitation becoming registered owner of any registered Intellectual Property
rights.  The Sellers also agree, at the
sole expense of Buyers, to provide such information, documents, materials, or
access to person as should be reasonably required by Buyers to establish, register,
uphold or prove subsistence or ownership of any of the Business Intellectual
Property or to enforce any such Business Intellectual Property.

 

8.11         COSTS OF
INTELLECTUAL PROPERTY RECORDATION.  The Sellers shall be liable for
all of the costs and expenses associated with updating, if necessary, all
records (i.e., evidencing chain of title to the applicable Seller or Seller
Affiliate) with the U.S. Patent and Trademark Office (or an applicable foreign
office) with respect to the registered Owned Intellectual Property.  Thereafter, Buyers shall be responsible for
all costs and expenses associated with recording the registered Owned
Intellectual Property into the name of the respective Buyer.

 

9.             SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of the
parties in this Agreement shall survive the Closing until the eighteen (18)
month anniversary of the Closing Date, except that (i) the representations and
warranties as to Taxes (i.e. Section 4.21) and Employees and Employee
Benefits (i.e., Sections 4.17 and 4.18) will survive until 60 days after the
expiration of the applicable statute of limitations, including extensions, (ii)
the representations and warranties as to Environmental Matters set forth in Section 4.17
will survive until the third anniversary of the Closing Date, and (iii) the
representations and warranties as to Intellectual Property,

 

48

 

Computer
Hardware, Computer Software and Products set forth in Sections 4.11, 4.12, and
4.13 will survive until the second anniversary of the Closing Date; provided,
that any claim for indemnity for which notice as required hereunder has been
given before the expiration of the applicable representation or warranty shall
survive until it is resolved.

 

10.          DISPUTE RESOLUTION.  If the
parties have a dispute involving their respective rights and obligations under
this Agreement, then the parties will resolve such dispute as follows:

 

10.1         DISPUTE NOTICE.  Either
Buyers or the Sellers may at any time deliver to the other a written dispute
notice setting forth, in reasonable detail, a brief description of the issues
in dispute.  Such dispute notice shall
also specify the provision or provisions of this Agreement and the facts or
circumstances that are the subject matter of the dispute.

 

10.2         ARBITRATION.  The
parties hereto agree to endeavor to settle all disputes, controversies or
claims in good faith within ninety (90) days, or such longer period as may be
mutually agreed upon, from the date that either party has given a dispute notice
pursuant to Section 10.1 hereof.  If
the parties are not able to reach a settlement, either party may submit the
dispute, controversy or claim for settlement by binding arbitration in
accordance with the American Arbitration Association’s rules in effect as of
the date of this Agreement, or such other rules as the parties hereto may
mutually agree in writing.  The place of
arbitration shall be Boston, Massachusetts, or such other place as the parties
agree to in writing.

 

10.3         EQUITABLE RELIEF.  Notwithstanding
any other provision of this Section 10, either party may seek from a court
of competent jurisdiction interim injunctive relief in order to maintain the
status quo or protect such party’s rights under this Agreement pending
resolution of a dispute pursuant to this Section 10.

 

11.          INDEMNIFICATION.

 

11.1         INDEMNIFICATION OF THE SELLERS. 
Subject to the limitations in this Section 11, Buyers will
indemnify and defend (in the case of third party claims) the Sellers and their
Affiliates, shareholders, partners, officers, directors, employees, agents,
representatives, successors and permitted assigns (collectively, the “Seller
Indemnified Parties”), and hold the Seller Indemnified Parties harmless, from
and against the actual amount of any and all liabilities, damages, claims,
costs, and expenses (including reasonable attorneys’ fees and costs incurred in
enforcing the indemnity provided in this Section 11) which the Seller
Indemnified Parties may suffer, sustain or become subject to, arising out of or
resulting from each of the following:

 

49

 

11.1.1      any
misrepresentation or breach of warranty by Buyers for which notice is given by
the Sellers within the periods specified in Section 9;

 

11.1.2      non-performance by Buyers of
any obligations or covenants to be performed on the part of Buyers under this
Agreement;

 

11.1.3      the Assumed Liabilities;

 

11.1.4      any and all VAT arising as a
result of the consummation of the transactions contemplated by this Agreement;

 

11.1.5      any severance payments or
expenses arising under Sections 8.2.5 and 8.2.6;

 

11.1.6      any claims or expenses arising
under Section 16; and

 

11.1.7      the operation of the Business
and the Assets (including the Vehicles) with
respect to liabilities arising, occurring or accruing after the Effective Time.

 

If and to the extent any provision of this Section 11.1
is unenforceable for any reason, Buyers hereby agree to make the maximum
contribution to the payment and satisfaction of any liability, damage, claim,
cost or expense for which indemnification is provided for in this Section 11.1
which is permissible under applicable law.

 

11.2         INDEMNIFICATION OF BUYERS. 
Subject to the limitations in this Section 11, the Sellers will
indemnify and defend (in the case of third party claims) Buyers and their
Affiliates, shareholders, partners, officers, directors, employees, agents,
representatives, successors and permitted assigns (collectively, the “Buyer
Indemnified Parties”), and hold the Buyer Indemnified Parties harmless, from
and against the actual amount of any and all liabilities, damages, claims,
costs, and expenses (including reasonable attorneys’ fees and costs incurred in
enforcing the indemnity provided in this Section 11) which the Buyer
Indemnified Parties may suffer, sustain or become subject to, arising out of or
resulting from each of the following:

 

11.2.1      any
misrepresentation or breach of warranty by the Sellers for which notice is
given by Buyers within the periods specified in Section 9;

 

11.2.2      any Taxes
accruing with respect to the Business prior to the Closing Date;

 

11.2.3      the
Retained Litigation;

 

50

 

11.2.4      the
Excluded Liabilities;

 

11.2.5      non-performance
by the Sellers of any obligations or covenants to be performed on the part of
the Sellers under this Agreement; or

 

11.2.6                  except as otherwise contemplated by this
Agreement, the operation of the Business and the Assets with respect to liabilities
arising, occurring or accruing prior to the Effective Time.

 

If
and to the extent any provision of this Section 11.2 is unenforceable for
any reason, the Sellers hereby agrees to make the maximum contribution to the
payment and satisfaction of any liability, damage, claim, cost or expense for
which indemnification is provided for in this Section 11.2 which is
permissible under applicable law.

 

11.3         CLAIMS.  If
either Buyers or the Sellers desire to make a claim under Section 11.1 or
11.2 which does not involve a claim by any person other than the parties, then
such party shall make such claim by delivering written notice to the
other.  If either Buyers or the Sellers
(the “Claimant”) desire to make a claim against the other (the “Indemnitor”)
under Section 11.1 or 11.2 which involves a claim by a person other than
the parties, then such claim will be made in the following manner and be
subject to the following terms and conditions:

 

11.3.1      NOTICE.  The
Claimant will give prompt notice to the Indemnitor of any demand, claim,
litigation, action, suit, or proceeding (collectively, a “Claim”) at any time
served on or to the knowledge of Claimant, instituted against the Claimant with
respect to which the Claimant believes it would have a right of indemnification
under Section 11.1 or 11.2; provided, that the failure to so notify an
Indemnitor shall not relieve the Indemnitor of its obligations hereunder unless
and to the extent the Indemnitor shall be actually prejudiced by such failure
to so notify.  In providing such notice,
the Claimant shall only state the existence of such Claim and shall not admit
or deny the validity of the facts or circumstances out of which such Claim
arose.  Solely for purposes of
determining whether the Claimant is entitled to indemnification under Section 11.1
or 11.2, the alleged facts or circumstances on which such Claim is based shall
be treated as if they were true pending final resolution of the facts and
circumstances out of which such Claim arose.

 

11.3.2      RESPONSIBILITY
FOR DEFENSE.  Within 30 days after receipt of any such
notice, the Indemnitor will, except as provided below, by giving written notice
to the Claimant, have the right to assume responsibility for the defense of the
Claim (at the Indemnitor’s own expense) in the name of the

 

51

 

Claimant
or otherwise as the Indemnitor may elect; provided that the Indemnitor also
agrees that it has responsibility to indemnify the Claimant with respect to
such Claim.  The Indemnitor shall not be
entitled to assume control of such defense (unless Claimant waives its rights
hereunder) if (a) the claim for indemnification relates to or arises in
connection with any criminal proceeding, action, indictment, allegation or
investigation, (b) the Claimant reasonably believes an adverse determination
with respect to the proceeding giving rise to such claim for indemnification
would be detrimental to or injure the Claimant’s reputation or future business
prospects, (c) the claim seeks an injunction or equitable relief against the
Claimant, (d) a conflict of interest exists between the Indemnitor and the
Claimant, or (e) the Indemnitor failed or is failing to vigorously prosecute or
defend such claim.  In such event, the
Claimant may take responsibility for the defense of the Claim with such counsel
to be reasonably satisfactory to the Indemnitor and except for the case of
clause (e), it shall do so at its own expense. 
Subject to the provisions of Sections 11.3.3 and 11.3.4 below, the party
having responsibility for defense of a Claim (the “Defending Party”) will have
the full authority to defend, cure, adjust, compromise, or settle such Claim or
appeal any judgement or ruling of a court or other tribunal in connection with
such Claim in its own name and/or in the name of the other party.

 

11.3.3      RIGHT
TO PARTICIPATE.  Notwithstanding a Defending Party’s
responsibility for the defense of a Claim, the other party shall have the right
to participate, at its own expense (other than any fees and expenses that are
incurred prior to the date the Indemnitor effectively assumes control of such
defense which, notwithstanding the foregoing, shall be borne by the Indemnitor)
and with its own counsel, in the defense of a Claim and the Defending Party
will consult with the other party from time to time on matters relating to the
defense of such Claim.

 

11.3.4      SETTLEMENT.  A
Defending Party will provide the other party with timely written notice of any
proposed adjustment, compromise, or other settlement, including equitable or
injunctive relief, of a Claim which the Defending Party intends to propose or
accept.  If the Indemnitor is the
Defending Party, the Indemnitor shall obtain the prior written consent of the
Claimant before entering into any settlement of a claim or ceasing to defend
such claim if, pursuant to or as a result of such settlement or cessation,
injunctive or other equitable relief will be imposed against the Claimant or if
such settlement does not expressly and unconditionally release the Claimant
from all liabilities and obligations with respect to such claim, without
prejudice.

 

52

 

11.4         MONETARY LIMITATION ON
INDEMNIFICATION.  Notwithstanding the provisions of Section 11.2,
the Sellers will not be obligated to indemnify, defend, or hold Buyers harmless
from or against any liability, damage, claim, cost, or expense (including
reasonable attorneys’ fees) pursuant to Section 11.2.1, (i) unless and
until the aggregate of all liabilities, damages, claims, costs or expenses
(including reasonable attorney’s fees) suffered by Buyers exceeds $400,000
(after which, the excess amount of liabilities, damages, claims, costs or
expenses (including reasonable attorney’s fees) shall be payable in excess of
the initial $400,000), and (ii) to the extent Buyers’ aggregate liability for all
such liabilities, damages, claims, costs or expenses (including reasonable
attorney’s fees) would exceed $3,000,000; provided, that this Section 11.4 shall not apply to (i) any
fraudulent breach of any representation or warranty (ii) claims for
indemnification for the Excluded Liabilities or the Retained Litigation, or
(iii) any items that
should have been disclosed, but were not, pursuant to any of Sections 4.15,
4.20, or 4.21.  For the purposes of determining whether the
amounts in this Section 11.4 have been reached, the amount of any
liabilities, damages, claims, costs or expenses (including reasonable attorney’s
fees) related to a breach of a representation or warranty shall be considered
without regard to any materiality qualification set forth therein; provided,
however, that no claim shall be made under Section 11 or considered under
this Section 11.4 unless such claim (or series of related claims) is
greater than $25,000.

 

11.5         EXCLUSIVE REMEDIES.  Except
for fraud and equitable remedies, the remedies provided in this Section 11
will be the parties’ exclusive remedies for claims arising out of or resulting
from any misrepresentation, breach of warranty, breach of covenant, or
non-performance of any obligation to be performed on the part of either party
under this Agreement. UNDER NO CIRCUMSTANCES (EXCEPT WITH RESPECT TO
INDEMNIFICATION OBLIGATIONS FOR THIRD PARTY CLAIMS) WILL EITHER PARTY BE
RESPONSIBLE FOR ANY EXEMPLARY OR PUNITIVE DAMAGES OR DAMAGES RESULTING FROM
LOST BUSINESS OR LOSS OF PROFITS.

 

11.6         PAYMENT.  Any
indemnification pursuant to this Section 11 shall be effected by wire
transfer of immediately available funds to an account designated in writing by
the Buyer Indemnified Party or Seller Indemnified Party, as the case may be,
within 15 days after the final determination thereof.

 

12.          FURTHER ASSURANCES AND
ASSISTANCE.  The parties hereto each agree to execute such
other documents or agreements as may be necessary or desirable for the
implementation of this Agreement and the consummation of the transactions
contemplated hereby.  In addition parties
agree to cooperate reasonably with one another, at the requesting party’s sole
cost, to the extent that such party reasonably requests access to documents,
employees or data including, without limitation: (i) in the event that the
either becomes

 

53

 

the
subject of an audit or investigation by a Governmental Authority, (ii) with
respect to insurance claims and recoveries in accordance with Section 8.5,
or (iii) in order for either party to be able to prepare Tax returns (including
VAT) and payroll items.  Such requested
information and documents shall be provided timely, so that the requesting
party may meet any applicable filing deadlines.

 

13.          COVENANT NOT TO COMPETE.  For a
period of two (2) years from and after the Closing
Date, none of the Sellers or their Affiliates will, directly or indirectly,
own, operate, lease, manage, control, engage in, or invest in (alone or in
association with any person, firm, corporate or other business organization)
any business activity anywhere in the world in competition with the Business as
conducted as of the Closing Date; provided, however, that no business activity
currently engaged in by the Sellers or their Affiliates shall be prohibited by
this Section 13 including, without limitation, the Avantis and Wonderware
businesses, and the ownership by the Sellers or their Affiliates of less than
5% of the outstanding stock of any publicly-traded corporation shall by itself
not be deemed to be in contradiction of this Section 13.  If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 13 is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.

 

14.          EMPLOYEE NON-SOLICITATION.

 

14.1         The Sellers agree that during the period beginning
on the date of this Agreement and ending on the third (3rd)
anniversary of the Closing Date (the “Seller Non-Solicitation Period”), none of
the Sellers or their Affiliates will directly or indirectly contact, approach
or solicit for the purpose of offering employment to or hiring (whether as an
employee, consultant, agent, independent contractor or otherwise) or actually
hire any person who is employed in the Business either on the date of this
Agreement or on the Closing Date; provided, however, that the Sellers shall be
allowed to contact and hire any Employee terminated by Buyers after the Closing or not
hired by Buyers at the Closing Date.  In
addition, this Section 14.1 shall not apply to an offer of employment resulting solely from
an Employee’s unsolicited response to a general publicly available
advertisement or a executive search performed by third parties that is not
intended to circumvent this Section 14.1, provided that the Sellers do not
violate the non-hire covenants of this Section 14.1.

 

14.2         Except as set forth in Section 8.2.2 of
this Agreement, Buyers agree that during the period beginning on the date of
this Agreement and ending on the first (1st)

 

54

 

anniversary
of the Closing Date (the “Buyer Non-Solicitation Period”), none of Buyers or
their Affiliates will directly or indirectly contact, approach or solicit for
the purpose of offering employment to or hiring (whether as an employee,
consultant, agent, independent contractor or otherwise) or actually hire any
person who is employed by ISI; provided, however, that Buyers shall be allowed
to contact and hire any employee of ISI terminated by ISI after the Closing
Date.  In addition, this Section 14.2
shall not apply to an
offer of employment resulting solely from an Employee’s unsolicited response to
a general publicly available advertisement or a executive search performed by
third parties that is not intended to circumvent this Section 14.2,
provided that Buyers do not violate the non-hire covenants of this Section 14.2.

 

14.3         If the final judgment
of a court of competent jurisdiction declares that any term or provision of
this Section 14 is invalid or unenforceable, the parties agree that the
court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.

 

15.          NO DISPARAGEMENT.  Neither the Sellers nor any of their officers, directors, employees,
agents or Affiliates shall intentionally disparage, holdup to public ridicule
or otherwise reflect unfavorably upon Buyers, the Business, the Assets or any
of the products and services related to the Business.

 

16.          POST CLOSING CLAIMS WITH RESPECT
TO THE BUSINESS.  If, after the Closing, Buyers
receive any claim from a third party with respect to the Business (including
any product warranty claim arising under any valid and not expired product
warranty included in the Customer Contracts) arising out of or in connection
with any services performed by the Sellers prior to the Closing or additional
services with respect to any service performed by the Sellers prior to the
Closing, Buyers will satisfy such claim at Buyers’ expense.  In the event that Buyers reasonably believe
that any claim (or group of related claims) is likely to result in costs and
expenses in excess of $50,000, Buyers will give prompt notice to the Sellers to
discuss the proper administration of such claim (or group of related
claims).  Buyers will provide the Sellers
with a written invoice for all actual and direct out-of-pocket costs and
expenses (without profit or burden) incurred by Buyers in connection with their
satisfaction of such claim (or group of related claims) arising out of or in
connection with any services performed by the Sellers, but only in the event
that Buyers’ costs exceed $50,000, and then only as to the amount in excess of
$50,000.  Within 30 days after its
receipt of an invoice from Buyers as set forth above, the Sellers

 

55

 

will pay the properly invoiced amount. 
Notwithstanding the foregoing, the Sellers’ obligations under this Section 16
shall not exceed the Purchase Price.

 

17.          NOTICES.  Any
notices or other communications required or permitted hereunder shall be
sufficiently given if in writing and personally delivered or sent by registered
or certified mail, return receipt requested, postage prepaid, or by facsimile
(confirmed by one- or two-day courier service) or by one- or two-day courier
service, addressed as follows or to such other address as the parties shall
have given notice of pursuant hereto.

 

	
  If
  to Buyers:

  	
   

  	
  SSA
  Global Technologies, Inc.

  
	
   

  	
   

  	
  500
  West Madison

  
	
   

  	
   

  	
  Chicago,
  Illinois 60661

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Facsimile:
  312.474.7500

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  Schulte
  Roth & Zabel LLP

  
	
   

  	
   

  	
  919
  Third Avenue

  
	
   

  	
   

  	
  New
  York, New York 10022

  
	
   

  	
   

  	
  Attention:
  Robert B. Loper, Esq.

  
	
   

  	
   

  	
  Facsimile:
  212.593.5955

  
	
   

  	
   

  	
   

  
	
  If
  to the Sellers:

  	
   

  	
  Company
  Secretary

  
	
   

  	
   

  	
  Invensys plc

  
	
   

  	
   

  	
  Carlisle Place

  
	
   

  	
   

  	
  London SW1P 1BX

  
	
   

  	
   

  	
  United Kingdom

  
	
   

  	
   

  	
  Facsimile: 44.207.821.3806

  
	
   

  	
   

  	
   

  
	
  with
  copies to:

  	
   

  	
  Bryce
  D. Jewett III, Esq.

  
	
   

  	
   

  	
  McGuireWoods
  LLP

  
	
   

  	
   

  	
  One
  James Center

  
	
   

  	
   

  	
  901
  East Cary Street

  
	
   

  	
   

  	
  Richmond,
  Virginia 23219

  
	
   

  	
   

  	
  Facsimile:
  804.698.2249

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  David
  E. Morris, Esq.

  
	
   

  	
   

  	
  Invensys
  Law Department

  
	
   

  	
   

  	
  33
  Commercial Street, B52-2K

  
	
   

  	
   

  	
  Foxboro,
  Massachusetts 02035

  
	
   

  	
   

  	
  Facsimile:
  508.549.6698

  

 

56

 

18.          PRESS RELEASE. Neither Buyers nor the Sellers shall issue
any press release or public announcement concerning this Agreement or the
transactions contemplated hereby without the prior consent of the other party
hereto, unless required by law.

 

19.          CONFIDENTIALITY.  With
respect to documents, information, or data of ISI that does not relate to the
Assets or the Business, Buyers shall (i) maintain the confidentiality of such
information, (ii) not disclose such information to a third party without ISI’s
written consent, except as required by applicable law, and (iii) not make
commercial use of such information.

 

20.          TERMINATION OF THIS AGREEMENT.

 

20.1         TERMINATION.  This Agreement may be
terminated at any time prior to the date of Closing:

 

20.1.1      By the mutual written consent of the parties hereto;

 

20.1.2      By the Sellers if any condition to Closing which Buyers must meet
becomes impossible to fulfill, unless such impossibility is the fault of a
material breach hereunder by the Sellers;

 

20.1.3      By Buyers if any condition to Closing which the Sellers must meet
becomes impossible to fulfill unless such impossibility is the fault of a
material breach hereunder by Buyers; or

 

20.1.4      By Buyers, on the one hand, or the Sellers, on the other hand, if
the Closing has not occurred on or before June 30, 2004, provided that the
terminating party or parties are not then in material breach hereunder.

 

20.2         EFFECT
OF TERMINATION. 
In the event of termination under Section 20.1.1, no claim
hereunder shall survive termination and each of the parties shall be
responsible for its own expenses.  In the
event of termination under Sections 20.1.2, 20.1.3 or 20.1.4, claims for
damages hereunder, if any, shall survive such termination.

 

21.          ENTIRE AGREEMENT.  This
Agreement, the Appendices, Exhibits and Schedules hereto represent the entire
understanding and agreement and supersede all prior agreements, understandings
or arrangements among the parties hereto with respect to the subject matter
hereof and can be amended, supplemented or changed, and any provision hereof
can be waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of such amendment,
supplement, modification or waiver is sought.

 

57

 

22.          SECTION HEADINGS.  The section headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.

 

23.          APPLICABLE LAW.  This
Agreement shall be governed by and construed and enforced in accordance with
the law of the State of New York without regard to its choice of law
provisions.

 

24.          EXPENSES.  Except
as otherwise provided herein, whether or not the transactions contemplated
hereby are consummated, the parties hereto shall pay their own respective
expenses.

 

25.          WAIVER.  Any
party may, by written notice to another party: 
(a) extend the time for the performance of any of the obligations or
other actions of such other party; (b) waive any inaccuracies in the
representations of such other party contained in this Agreement; or (c) waive
compliance with any of the agreements of such other party contained in this
Agreement or waive or consent to the modification of performance of any of the
obligations of such other party.  No
other action taken pursuant to this Agreement, including without limitation,
any investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, condition, or agreement contained herein.

 

26.          SEVERABILITY.  If any
provision of this Agreement shall finally be determined to be unlawful, then
such provision will be deemed to be severed from this Agreement and replaced by
a lawful provision which carries out, as closely as possible, the intention of
the parties and preserves the economic bargain contemplated by this Agreement
and, in such case, each and every other provision of this Agreement will remain
in full force and effect.

 

27.          INCORPORATION BY REFERENCE.  The
Appendices, Exhibits and Schedules to this Agreement constitute integral parts
of this Agreement and are hereby incorporated into this Agreement by this
reference.

 

28.          COUNTERPARTS.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.

 

29.          ASSIGNMENT.  Subject to the final sentence of this Section 29, it is
acknowledged and agreed by the Sellers that any of the Buyers may assign and
transfer any or all of their rights or obligations under this Agreement to any
Nominated Purchaser at any time, provided that Buyers provide the Sellers with
written notice of any such assignment on or before June 23, 2004.  Accordingly, the Sellers agree that the
benefit and obligations of this Agreement may be assigned and transferred in
whole or in part by any such Buyer

 

58

 

without
the consent of the Sellers to a Nominated Purchaser.  Upon execution and delivery by such Nominated
Purchaser and the Sellers of an instrument of accession (pursuant to which the
Nominated Purchaser gives to the Sellers representations and warranties substantially
the same in all respects to those contained in Section 5 in respect of
itself as at the date thereof and agrees to observe and be bound by all of the
provisions of this Agreement as if the Nominated Purchaser were a party to this
Agreement) such Nominated Purchaser shall have the benefit of the provisions of
this Agreement and shall be bound by the obligations of this Agreement as if it
were a party to this Agreement. 
Notwithstanding any assignment pursuant to this Section 29, Buyer
US shall remain jointly and severally liable for any and all obligations of any
Buyer or Nominated Purchaser under Section 11.1 of this Agreement.

 

30.          NOTIFICATIONS.  To the
extent that a notice requirement or other deadline falls on a Saturday, Sunday
or a bank holiday in the United States, such notice requirement or deadline
shall be automatically extended to the first business day that is not a
Saturday, Sunday or bank holiday in the United States.

 

59

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective as
of the day and year first above written.

 

	
  SSA GLOBAL TECHNOLOGIES, INC.

  	
  INVENSYS SYSTEMS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kirk J. Isaacson

  	
   

  	
  By:

  	
  /s/ Nathan Blackwell

  	
   

  
	
  Name:

  	
  Kirk J. Isaacson

  	
  Name:

  	
  Nathan Blackwell

  
	
  Title

  	
  Executive Vice President & General Counsel

  	
  Title:

  	
  Attorney In Fact

  
	
   

  	
   

  	
   

  	
   

  
	
  BAAN GLOBAL BV

  	
  INVENSYS PRODUCTION SOLUTIONS BV

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kirk Isaacson

  	
   

  	
  By:

  	
  /s/ Nathan Blackwell

  	
   

  
	
  Name:

  	
  Kirk Isaacson

  	
  Name:

  	
  Nathan Blackwell

  
	
  Title

  	
  Legal Representative

  	
  Title:

  	
  Attorney In Fact

  
	
   

  	
   

  	
   

  	
   

  
	
  SSA GLOBAL TECHNOLOGIES LIMITED

  	
  INVENSYS PRODUCTION SOLUTIONS LIMITED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Brian Kite

  	
   

  	
  By:

  	
  /s/ Nathan Blackwell

  	
   

  
	
  Name:

  	
  Brian Kite

  	
  Name:

  	
  Nathan Blackwell

  
	
  Title

  	
  Vice President

  	
  Title:

  	
  Attorney In Fact

  
	
   

  	
   

  	
   

  	
   

  
	
  BAAN HOLDING CENTRAL EUROPE GMBH

  	
  BAAN PROCESS SOLUTIONS GMBH

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ ILLEGIBLE

  	
   

  	
  By:

  	
  /s/ Nathan Blackwell

  	
   

  
	
  Name:

  	
  ILLEGIBLE

  	
  Name:

  	
  Nathan Blackwell

  
	
  Title

  	
  ILLEGIBLE

  	
  Title:

  	
  Attorney In Fact

  
	
   

  	
   

  	
   

  	
   

  
	
  BAAN FRANCE SA

  	
  INVENSYS PRODUCTION SOLUTIONS S.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Philip D. Gray

  	
   

  	
  By:

  	
  /s/ Nathan Blackwell

  	
   

  
	
  Name:

  	
  Philip D. Gray

  	
  Name:

  	
  Nathan Blackwell

  
	
  Title

  	
  Regional President

  	
  Title:

  	
  Attorney In Fact

  
							

 

60

 

Index
of Schedules

 

	
  Schedule 2.1.2 – ISI Intellectual Property

  	
   

  
	
  Schedule 2.1.4 – Newton Lease

  	
   

  
	
  Schedule 2.1.5 – US Personal Property Leases

  	
   

  
	
  Schedule 2.2.4 – UK Lease

  	
   

  
	
  Schedule 2.2.5 – UK Personal Property Leases

  	
   

  
	
  Schedule 2.3.4 – French Lease

  	
   

  
	
  Schedule 2.3.5 – French Personal Property Leases

  	
   

  
	
  Schedule 2.4.4 – Dutch Lease

  	
   

  
	
  Schedule 2.4.5 – Dutch Personal Property Leases

  	
   

  
	
  Schedule 2.5.4 – German Personal Property Leases

  	
   

  
	
  Schedule 2.6 – Assumed Liabilities

  	
   

  
	
  Schedule 2.7 – Excluded Liabilities

  	
   

  
	
  Schedule 2.11 – Excluded Assets

  	
   

  
	
  Schedule 2.12 – Vehicles

  	
   

  
	
  Schedule 3.2 – Working Capital Items

  	
   

  
	
  Schedule 4.1 – Corporate Status

  	
   

  
	
  Schedule 4.2 – Power and Authority

  	
   

  
	
  Schedule 4.3 – Sellers’ Non-Contravention

  	
   

  
	
  Schedule 4.4 – Ownership of Assets

  	
   

  
	
  Schedule 4.6 – Financial Statements

  	
   

  
	
  Schedule 4.7 – Events Subsequent to Financial Statements Date

  	
   

  
	
  Schedule 4.8 – Real Property

  	
   

  
	
  Schedule 4.9 – Tangible Personal Property

  	
   

  
	
  Schedule 4.11 – Business Intellectual Property

  	
   

  
	
  Schedule 4.12 – Computer Hardware and Software

  	
   

  
	
  Schedule 4.13 – Products

  	
   

  
	
  Schedule 4.13.2 – Third Party Software

  	
   

  
	
  Schedule 4.13.5 – Customer Contracts

  	
   

  
	
  Schedule 4.13.6 – Reseller Agreements

  	
   

  
	
  Schedule 4.15 – Litigation

  	
   

  
	
  Schedule 4.16 – Material Contracts

  	
   

  
	
  Schedule 4.17.1 – U.S. Employee Benefits

  	
   

  
	
  Schedule 4.17.2 – U.S. Personnel List

  	
   

  
	
  Schedule 4.18 – Non-U.S. Employee Benefits

  	
   

  
	
  Schedule 4.19 – Environmental Matters

  	
   

  
	
  Schedule 4.20 – Compliance with Laws

  	
   

  
	
  Schedule 4.21 – Taxes

  	
   

  
	
  Schedule 4.22 – Deferred Revenue

  	
   

  
	
  Schedule 4.23 – Consents

  	
   

  
	
  Schedule 4.29 – Sellers’ Knowledge

  	
   

  
	
  Schedule 5.3 – Buyers’ Brokers

  	
   

  

 

61

 

	
  Schedule 5.4 – Buyers’ Non-Contravention

  	
   

  
	
  Schedule 5.7 – Buyers’ Knowledge

  	
   

  
	
  Schedule 8.2.12 – HBR Dobbin Pension Plans

  	
   

  
	
  Schedule 8.5 – Insurance

  	
   

  

 

62

 

	
  Index of Exhibits

  
	
   

  
	
  Exhibit A – UK Deed

  
	
  Exhibit B – French Deed

  
	
  Exhibit C – Dutch Deed

  
	
  Exhibit D – German Deed

  
	
  Exhibit E – Transition Services Agreement

  
	
   

  
	
  Index of Appendices

  
	
   

  
	
  Appendix A –
  Definitions

  
	
  Appendix B – Accounting Principles

  
	
  Appendix C – Purchase Price Allocation

  
	
  Appendix D – Buyer’s Deliveries

  
	
  Appendix E – Sellers’ Deliveries

  

 

63

 

Appendix A

 

CERTAIN DEFINITIONS

 

The
following terms have the meanings set forth below where used in the Asset
Purchase Agreement dated June 11, 2004 between the Sellers and Buyers and
identified with initial capital letters:

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  	
   

  
	
  120
  Day Rule

  	
   

  	
  As defined
  in Appendix B to the Agreement.

  
	
   

  	
   

  	
   

  
	
  Accounts
  Receivable Amount

  	
   

  	
  Any
  adjustment to the Final Working Capital made pursuant to the 120 Day Rule.

  
	
   

  	
   

  	
   

  
	
  Affiliate

  	
   

  	
  With respect
  to any party, any person which or who directly or indirectly controls, is
  controlled by, or is under common control with such party. (For purposes of
  this definition, “control” will be inferred conclusively from power to vote
  more than 50% of the voting shares or comparable voting interests.)

  
	
   

  	
   

  	
   

  
	
  Agreement

  	
   

  	
  As
  defined in the preamble to the Asset and Share Purchase Agreement.

  
	
   

  	
   

  	
   

  
	
  Ancillary
  Product Materials

  	
   

  	
  All
  documentation, materials, designs, methodologies, flow charts and file
  layouts of all procedures used in the coding, operation or maintenance of, or
  customer support with respect to, the Products, any and all Data contained in
  the customer support organization computer system of the Sellers, and
  marketing materials relating to the Products, including sales presentation
  materials, white papers, performance benchmark reports, and customer and
  sales training materials.

  
	
   

  	
   

  	
   

  
	
  Assets

  	
   

  	
  As
  defined in Section 2.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Assumed
  Liabilities

  	
   

  	
  As
  defined in Section 2.6 of the Agreement.

  
				

 

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  	
   

  
	
  Business

  	
   

  	
  As
  defined in the preamble to the Agreement.

  
	
   

  	
   

  	
   

  
	
  Business
  Condition

  	
   

  	
  The
  condition of the Business and its assets and liabilities, taken as a whole
  without giving effect to the Closing.

  
	
   

  	
   

  	
   

  
	
  Business
  Intellectual Property

  	
   

  	
  As
  defined in Section 4.11.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Business
  Trade Secretes

  	
   

  	
  As
  defined in Section 4.11.8 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Buyer,
  Buyers, Buyer US, Buyer UK, Buyer France, Buyer Netherlands, and Buyer
  Germany

  	
   

  	
  As
  defined in the preamble to the Agreement.

  
	
   

  	
   

  	
   

  
	
  Buyer
  Non-Solicitation Period

  	
   

  	
  As
  defined in Section 14.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Buyer
  UK’s Scheme

  	
   

  	
  As
  defined in Section 8.2.13 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Buyer
  US’ DC Plan

  	
   

  	
  As
  defined in Section 8.2.9 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Buyer
  Indemnified Parties

  	
   

  	
  As
  defined in Section 11.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Buyers’
  Information Obligations

  	
   

  	
  As
  defined in Section 8.2.15 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Buyers’
  Knowledge

  	
   

  	
  As
  defined in Section 5.7 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Cash

  	
   

  	
  Money
  or its equivalent.

  
	
   

  	
   

  	
   

  
	
  CERCLA

  	
   

  	
  As
  defined in Section 4.19 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Claim

  	
   

  	
  As
  defined in Section 11.3.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Claimant

  	
   

  	
  As
  defined in Section 11.3 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Closing,
  Closing Date and Effective Time

  	
   

  	
  As
  defined in Section 7.1 of the Agreement.

  
				

 

ii

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing
  Balance Sheet

  	
   

  	
  As
  defined in Section 3.3.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  COBRA

  	
   

  	
  As
  defined in Section 4.17.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Code

  	
   

  	
  As
  defined in Section 4.17.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Computer
  Hardware

  	
   

  	
  Any computer
  hardware, equipment and peripherals of any kind and of any platform,
  including desktop and laptop personal computers, handheld computerized
  devices, servers, mid-range and mainframe computers, process control and
  distributed control systems, and all network and other communications and
  telecommunications equipment owned or leased by the Sellers in connection
  with the operation of the Business.

  
	
   

  	
   

  	
   

  
	
  Computer
  Software

  	
   

  	
  Any and all
  computer programs, including operating system and applications software,
  implementations of algorithms, and program interfaces, whether in source code
  or object code form (including, but not limited to, all of the foregoing that
  is installed on the Computer Hardware) and all documentation, including user
  manuals relating to the foregoing, used in connection with the operation of
  the Business.

  
	
   

  	
   

  	
   

  
	
  Contracts

  	
   

  	
  The Real
  Property Leases, the Personal Property Leases, the Customer Contracts, and
  the Intellectual Property Contracts.

  
	
   

  	
   

  	
   

  
	
  Customer
  Contract

  	
   

  	
  An agreement
  between the Sellers and customers of the Business with respect to a Product.

  
	
   

  	
   

  	
   

  
	
  Data

  	
   

  	
  All
  information and data, whether in printed or electronic form and whether
  contained in a database or otherwise.

  
				

 

iii

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Default

  	
   

  	
  An
  occurrence which constitutes a breach or default under a contract, order, or
  other commitment, after the expiration of any grace period provided without
  cure.

  
	
   

  	
   

  	
   

  
	
  Defending
  Party

  	
   

  	
  As
  defined in Section 11.3.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Disabling
  Devices

  	
   

  	
  Computer
  software viruses, time bombs, logic bombs, Trojan horses, trap doors, back
  doors, or other computer instructions, intentional devices or techniques that
  are designed to threaten, infect, assault, vandalize, defraud, disrupt,
  damage, disable, maliciously encumber, hack into, incapacitate, infiltrate or
  slow or shut down a computer system or any component of such computer system,
  including any such device affecting system security or compromising or
  disclosing user data.

  
	
   

  	
   

  	
   

  
	
  Dutch
  Accounts Receivable

  	
   

  	
  As
  defined in Section 2.4.6 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Dutch
  Assets

  	
   

  	
  As
  defined in Section 2.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Dutch
  Customer Contracts

  	
   

  	
  As
  defined in Section 2.4.7 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Dutch
  Deed

  	
   

  	
  As
  defined in Section 2.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Dutch
  Equipment

  	
   

  	
  As
  defined in Section 2.4.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Dutch
  Lease

  	
   

  	
  As
  defined in Section 2.4.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Dutch
  Personal Property Leases

  	
   

  	
  As
  defined in Section 2.4.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Dutch
  Property

  	
   

  	
  As
  defined in Section 2.4.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Employees

  	
   

  	
  US
  Employees and Non U.S. Employees.

  
	
   

  	
   

  	
   

  
	
  Employee
  Benefit Plans

  	
   

  	
  As
  defined in Section 4.18.2 of the Agreement.

  

 

iv

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Environmental
  Claims

  	
   

  	
  The
  (a) liability for the cost of Remedial Measures taken with respect to any
  environmental conditions at the Real Properties (“Remedial Claims”), (b)
  losses relating to Hazardous Materials shipped by the Business on or prior to
  the Closing Date, (c) liability for the cost of constructing, repairing or
  altering any facility or other improvements of the Business in existence on
  the Closing Date in order to comply with Environmental Laws (“Compliance
  Claims”), or (d) claims by third parties, including Governmental Authorities,
  for losses or damages relating to environmental conditions with respect to
  the Real Property Leases.

  
	
   

  	
   

  	
   

  
	
  Environmental
  Laws

  	
   

  	
  The
  provisions of all laws and regulations of the United States, the United
  Kingdom, the Netherlands, and France, as applicable to the Real Property and
  the Real Property Leases in question, with respect to protection of the environment,
  including any civil laws which may impose tort or other liability for environmental
  damages in force as of the Closing.

  
	
   

  	
   

  	
   

  
	
  ERISA
  and ERISA Affiliate

  	
   

  	
  As
  defined in Section 4.17.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Estimated
  Working Capital

  	
   

  	
  As
  defined in Section 3.2.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Excluded
  Assets

  	
   

  	
  As
  defined in Section 2.11 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Excluded
  Liabilities

  	
   

  	
  As
  defined in Section 2.7 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Final
  Purchase Price

  	
   

  	
  As
  defined in Section 3.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Final
  Working Capital

  	
   

  	
  As
  defined in Section 3.3.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Financial
  Statements

  	
   

  	
  As
  defined in Section 4.6 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Financial
  Statements Date

  	
   

  	
  March 31,
  2004.

  

 

v

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  French
  Accounts Receivable

  	
   

  	
  As
  defined in Section 2.3.6 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  French
  Assets

  	
   

  	
  As
  defined in Section 2.3 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  French
  Customer Contracts

  	
   

  	
  As
  defined in Section 2.3.7 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  French
  Deed

  	
   

  	
  As
  defined in Section 2.3 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  French
  Equipment

  	
   

  	
  As
  defined in Section 2.3.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  French
  Lease

  	
   

  	
  As
  defined in Section 2.3.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  French
  Personal Property Leases

  	
   

  	
  As
  defined in Section 2.3.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  French
  Property

  	
   

  	
  As
  defined in Section 2.3.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Funding
  Loan Balance

  	
   

  	
  As
  defined in Section 2.10 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  German
  Accounts Receivable

  	
   

  	
  As
  defined in Section 2.5.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  German
  Assets

  	
   

  	
  As
  defined in Section 2.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  German
  Customer Contracts

  	
   

  	
  As
  defined in Section 2.5.6 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  German
  Deed

  	
   

  	
  As
  defined in Section 2.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  German
  Equipment

  	
   

  	
  As
  defined in Section 2.5.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  German
  Personal Property Leases

  	
   

  	
  As
  defined in Section 2.5.4 of the Agreement.

  

 

vi

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Governmental
  Authority

  	
   

  	
  Collectively,
  the United States of America or any other nation, any state or other
  political subdivision thereof, or any entity exercising executive,
  legislative, judicial, regulatory or administrative functions of government,
  including any court, in each case having jurisdiction over the Sellers, any
  Affiliate of the Sellers, with respect to the Business.

  
	
   

  	
   

  	
   

  
	
  Guaranteed
  Receivables

  	
   

  	
  As
  defined in Section 3.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  HBR
  Dobbin Pension Plans

  	
   

  	
  The
  two personal pension plans in respect of Alan Aldred and Craig Urquhart provided
  by the Prudential and the personal pension plan in respect of Rachel Jones
  provided by Skandia and to which any of the Sellers are required to
  contribute.

  
	
   

  	
   

  	
   

  
	
  Headline
  Price

  	
   

  	
  As
  defined in Section 3.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Identified
  Receivables

  	
   

  	
  As
  defined in Appendix B to the Agreement.

  
	
   

  	
   

  	
   

  
	
  Identified
  Receivables Amount

  	
   

  	
  The
  amount of any cash collected (including any already collected) with respect
  to such Identified Receivables prior to Closing.

  
	
   

  	
   

  	
   

  
	
  ISI

  	
   

  	
  As
  defined in the preamble to the Agreement.

  
	
   

  	
   

  	
   

  
	
  ISI
  Assets

  	
   

  	
  As
  defined in Section 2.1 to the Agreement.

  

 

vii

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  	
   

  
	
  Indebtedness

  	
   

  	
  At
  a particular time, without duplication, (a) any indebtedness for borrowed
  money or issued in substitution for or exchange of indebtedness for borrowed
  money, (b) any indebtedness or other liability evidenced by any note, bond,
  debenture or other debt security, (c) any indebtedness for the deferred
  purchase price of property or services with respect to which a person is
  liable, contingently or otherwise, as obligor or otherwise (other than trade
  payables and other current liabilities incurred in the ordinary course of
  business which are not more than ninety (90) days past due), (d) any
  commitment by which a person assures a creditor against loss (including,
  without limitation, contingent reimbursement obligations with respect to
  letters of credit), (e) any indebtedness or other liability guaranteed in any
  manner by a person (including, without limitation, guarantees in the form of
  an agreement to repurchase or reimburse), (f) any obligations under
  capitalized leases with respect to which a person is liable, contingently or
  otherwise, as obligor, guarantor or otherwise, or with respect to which
  obligations a person assures a creditor against loss, (g) any indebtedness or
  other liability secured by a lien on a person’s assets, (h) any income or
  capital stock tax liabilities, and (i) any unsatisfied obligation for “withdrawal
  liability” to a “multiemployer plan” as such terms are defined under ERISA.

  
	
   

  	
   

  	
   

  
	
  Indemnitor

  	
   

  	
  As
  defined in Section 11.3 of the Agreement

  
	
   

  	
   

  	
   

  
	
  Independent
  Accounting Firm

  	
   

  	
  As
  defined in Section 3.3.3 of the Agreement.

  
				

 

viii

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Intellectual
  Property Contracts

  	
   

  	
  All
  agreements concerning the Business Intellectual Property, including without
  limitation agreements granting the Sellers rights to use the Licensed
  Intellectual Property, agreements granting rights to use owned Intellectual
  Property (including Customer Contracts), Reseller Agreements, collaboration
  agreements, distributor agreements, confidentiality agreements, technology
  related consulting and services agreements, trademark coexistence agreements,
  trademark consent agreements and nonassertion agreements.

  
	
   

  	
   

  	
   

  
	
  Intellectual
  Property

  	
   

  	
  All (i)
  patents, patent applications, patent disclosures and inventions as well as
  any reissues, continuations, continuations-in-part, divisions, extensions or
  reexaminations thereof, (ii) trademarks, service marks, trade dress, trade
  names, slogans, logos, internet domain names, and corporate names and
  registrations and applications for registration thereof, together with all of
  the goodwill associated therewith, (iii) copyrights and copyrightable works
  and registrations and applications for registration thereof, (iv) mask works
  and registrations and applications for registration thereof, (v) computer
  software (including source code and object code), data, data bases and
  documentation thereof, and (vi) trade secrets and other confidential
  information (including, ideas, formulas, compositions, inventions (whether
  patentable or unpatentable and whether or not reduced to practice), know-how,
  manufacturing and production processes and techniques, research and
  development information, drawings, specifications, designs, plans, proposals,
  technical data, financial and marketing plans and customer and supplier lists
  and information). Intellectual Property Rights shall not include any matters
  dedicated to the public and free for use by any person or entity.

  

 

ix

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Intra-Group
  Trading Account

  	
   

  	
  All
  trading accounts between the Sellers with respect to the Business, on the one
  hand, and an Affiliate of the Sellers on the other hand.

  
	
   

  	
   

  	
   

  
	
  Invensys
  Marcam

  	
   

  	
  The
  specialized, operational-level software solutions designed for process ERP
  manufacturers.

  
	
   

  	
   

  	
   

  
	
  Invensys
  Pension Plan

  	
   

  	
  The Invensys
  Pension Scheme established by a trust deed dated 31 March 1988 and made
  between BTR plc, BTR Group Pension Trustee Limited and BTR Pension Trust
  Limited (previously known as the BTR Group Pension Scheme). Where the context
  so requires the Invensys Scheme includes its trustee or trustees.

  
	
   

  	
   

  	
   

  
	
  Investment

  	
   

  	
  As
  applied to any person means (a) any direct or indirect purchase or other
  acquisition by such person of any notes, obligations, instruments, stock,
  securities or ownership interest (including partnership interests and joint
  venture interests) of any other person and (b) any capital contribution by such
  person to any other person.

  
	
   

  	
   

  	
   

  
	
  Licensed
  Intellectual Property

  	
   

  	
  Intellectual
  Property that the Sellers are licensed or otherwise permitted by other
  persons to use.

  
	
   

  	
   

  	
   

  
	
  Marcam
  France

  	
   

  	
  As
  defined in the preamble to the Agreement.

  
	
   

  	
   

  	
   

  
	
  Marcam
  Germany

  	
   

  	
  As
  defined in the preamble to the Agreement.

  
	
   

  	
   

  	
   

  
	
  Marcam
  Netherlands

  	
   

  	
  As
  defined in the preamble to the Agreement.

  
	
   

  	
   

  	
   

  
	
  Marcam
  UK

  	
   

  	
  As
  defined in the preamble to the Agreement.

  

 

x

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Material
  Adverse Event

  	
   

  	
  With
  respect to the Business, any event, condition, circumstance, or occurrence
  which has had or could reasonably be expected to have a material and adverse
  effect on the Business Condition, including any of the following events
  having such an effect, including the same arising out of an Act of God,
  flood, windstorm, earth-quake, accident, fire, explosion, casualty, riot,
  requisition or taking of property by governmental authority, war, embargo, or
  other event outside the Sellers’ control.

  
	
   

  	
   

  	
   

  
	
  Material
  Contracts

  	
   

  	
  As
  defined in Section 4.16 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Nominated
  Purchaser

  	
   

  	
  Any entity
  that, directly or indirectly, is controlled by, controls or is under common
  control with Buyer US.

  
	
   

  	
   

  	
   

  
	
  Non-Hire
  Notice

  	
   

  	
  As defined
  in Section 8.2.6 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Non-U.S.
  Assets

  	
   

  	
  The Marcam
  UK Assets, the Marcam France Assets, the Marcam Netherlands Assets and the
  Marcam Germany Assets.

  
	
   

  	
   

  	
   

  
	
  Non-U.S.
  Business

  	
   

  	
  The business
  of each of Marcam UK, Marcam France, Marcam Netherlands and Marcam Germany.

  
	
   

  	
   

  	
   

  
	
  Non-U.S.
  Employees

  	
   

  	
  The
  Sellers’ employees who are engaged in the Business immediately prior to the
  Closing and who are not US Employees, the names of whom are set out on Schedule 4.18
  to the Agreement.

  
	
   

  	
   

  	
   

  
	
  Non-U.S.
  Personnel List

  	
   

  	
  As
  defined in Section 4.18.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Non-U.S.
  Plans

  	
   

  	
  As
  defined in Section 4.18.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Newton
  Lease

  	
   

  	
  As
  defined in Section 2.1.4 of the Agreement.

  

 

xi

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Objection
  Notice

  	
   

  	
  As
  defined in Section 3.3.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Owned
  Intellectual Property

  	
   

  	
  Intellectual
  Property owned by the Sellers.

  
	
   

  	
   

  	
   

  
	
  Owns
  or Ownership

  	
   

  	
  Such
  ownership as confers upon the party or person having it good and marketable
  title to and control over the thing or right owned, free and clear of any and
  all encumbrances except as disclosed in the Schedules.

  
	
   

  	
   

  	
   

  
	
  PBGC

  	
   

  	
  As
  defined in Section 4.17.12 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Pensionable
  Employee

  	
   

  	
  Employees of
  the Business at the Closing Date who are then active members of the Invensys
  Pension Plan and who are employed by Buyers immediately after the Closing
  Date (including any members entitled to benefits on death in service only).

  

 

xii

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Permitted
  Liens

  	
   

  	
  (a)
  Liens for Taxes or assessments and similar charges, which either are (i) not
  delinquent or (ii) being contested in good faith and by appropriate
  proceedings, and (in each case) as to which adequate reserves (as determined
  in accordance with the generally accepted accounting principles applied in a
  manner consistent with past practices) have been established on the Sellers’
  books with respect thereto, and (b) with respect to leased real property
  only, (i) mechanics’, materialmen’s or contractors’ liens or encumbrances or
  any similar statutory lien or restriction for amounts not yet due and
  payable, (ii) zoning, entitlement, building and other land use regulations
  imposed by governmental agencies having jurisdiction over the leased property
  which are not violated by the current use and operation of the leased
  property and (iii) covenants, conditions, restrictions, easements and other
  similar matters of record affecting title to the leased property which do not
  materially impair the occupancy or use of the leased property for the
  purposes for which it is currently used in connection with the Business.

  
	
   

  	
   

  	
   

  
	
  Personal
  Property Leases

  	
   

  	
  As
  defined in Section 2.5.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Personnel

  	
   

  	
  As
  defined in Section 6.5.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Premises

  	
   

  	
  All
  locations owned, leased or used by the Sellers in carrying out the operation
  of the Business.

  

 

xiii

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Products

  	
   

  	
  The computer
  software products marketed, sold, licensed, supported, serviced or maintained
  by the Business, together with the inventory of the Products, the Ancillary
  Product Materials, any and all computer software related to, comprising or
  constituting such products, any and all supplements, modifications, updates,
  corrections and enhancements to past and current versions of such products,
  shipping versions of such products, versions of such products currently under
  development, and any and all English and foreign language versions of current
  and past versions of such products, and any and all back-up and archival
  storage (on tapes, disks or any other medium) relating to the foregoing.

  
	
   

  	
   

  	
   

  
	
  Purchase
  Price

  	
   

  	
  As
  defined in Section 3.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Real
  Property Leases

  	
   

  	
  As
  defined in Section 2.4.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Reseller
  Agreement

  	
   

  	
  All
  agreements by the Sellers with resellers of the Products and all agreements
  pursuant to which the Sellers are a reseller of products.

  
	
   

  	
   

  	
   

  
	
  Retained
  Litigation

  	
   

  	
  The
  items listed on Schedule 4.15.

  
	
   

  	
   

  	
   

  
	
  Seller
  and Sellers

  	
   

  	
  As
  defined in the preamble of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Seller
  Group Policies

  	
   

  	
  As
  defined in Section 8.5.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Seller
  Indemnified Parties

  	
   

  	
  As
  defined in Section 11.1 of the Agreement

  
	
   

  	
   

  	
   

  
	
  Sellers’
  knowledge

  	
   

  	
  As
  defined in Section 4.28 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Seller
  Non-Solicitation Period

  	
   

  	
  As
  defined in Section 14.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Severance
  Schedule

  	
   

  	
  As
  defined in Section 8.2.6 of the Agreement.

  

 

xiv

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Target
  Working Capital

  	
   

  	
  As
  defined in Section 3.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Tax
  or Taxes

  	
   

  	
  Federal,
  state, county, local, foreign or other income, gross receipts, ad valorem,
  VAT, franchise, profits, sales or use, transfer, registration, excise,
  utility, environmental, communications, real or personal property, capital
  stock, license, payroll, wage or other withholding, employment, social
  security, severance, stamp, occupation, alternative or add-on minimum,
  estimated and other taxes of any kind whatsoever (including deficiencies,
  penalties, additions to tax, and interest attributable thereto) whether
  disputed or not.

  
	
   

  	
   

  	
   

  
	
  Taxes
  Act

  	
   

  	
  The Income
  and Corporation Taxes Act 1988 of the United Kingdom.

  
	
   

  	
   

  	
   

  
	
  Third
  Party Software

  	
   

  	
  All Computer
  Software used or held for use, sale, distribution or license by the Sellers
  (as a separate Product or as a component of a Product) that none of the
  Sellers owns.

  
	
   

  	
   

  	
   

  
	
  Transfer
  Regulations

  	
   

  	
  As
  defined in Section 8.2.14 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Transferred
  U.S. Employees

  	
   

  	
  As
  defined in Section 8.2.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Accounts Receivable

  	
   

  	
  As
  defined in Section 2.2.6 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Assets

  	
   

  	
  As
  defined in Section 2.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Customer Contracts

  	
   

  	
  As
  defined in Section 2.2.7 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Deed

  	
   

  	
  As
  defined in Section 2.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Employees

  	
   

  	
  As
  defined in Section 8.2.10 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Equipment

  	
   

  	
  As
  defined in Section 2.2.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Lease

  	
   

  	
  As
  defined in Section 2.2.4 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Personal Property Leases

  	
   

  	
  As
  defined in Section 2.2.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  UK
  Property

  	
   

  	
  As
  defined in Section 2.2.4 of the Agreement.

  

 

xv

 

	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  US
  Accounts Receivable

  	
   

  	
  As
  defined in Section 2.1.6 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  U.S.
  Employee Benefit Plans

  	
   

  	
  As
  defined in Section 4.17.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  U.S.
  Employees

  	
   

  	
  As
  defined in Section 4.17.1 of the Agreement, the names of whom are set
  forth on Schedule 4.17.2.

  
	
   

  	
   

  	
   

  
	
  US
  Equipment

  	
   

  	
  As
  defined in Section 2.1.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  U.S.
  Personal Property Leases

  	
   

  	
  As
  defined in Section 2.1.5 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  U.S.
  Personnel List

  	
   

  	
  As
  defined in Section 4.17.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  VAT

  	
   

  	
  As
  defined in Section 8.6.1 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  VAT
  Records

  	
   

  	
  As
  defined in Section 8.6.2 of the Agreement.

  
	
   

  	
   

  	
   

  
	
  Vehicles

  	
   

  	
  As
  defined in Section 2.12 of the Agreement.

  

 

xviExhibit 10.18

 

STOCK
APPRECIATION RIGHTS AGREEMENT

 

STOCK APPRECIATION RIGHTS
AGREEMENT (this “Agreement”), dated as of May 27, 2004 between SSA
GLOBAL TECHNOLOGIES, INC. (the “Company”) and BLI-8787, LTD. (the “Recipient”).

 

RECITALS

 

A.  The Company, the Recipient and EXE
Technologies, Inc. are parties to a Settlement Agreement (the “Settlement
Agreement”), dated as of May 27, 2004.

 

B.  Pursuant to the Settlement Agreement, the
Company agreed to issue to the Recipient SARs (as defined below) with respect
to 8,778 shares of Common Stock (as defined below).

 

C.  The Company and the Recipient now wish to
grant the Recipient such SARs pursuant to this Agreement.

 

AGREEMENT

 

In consideration of the
premises and the mutual covenants and the agreements herein set forth, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:

 

Section 1.  Definitions.  For purposes of this Agreement, capitalized
terms used but not otherwise defined herein shall have the following meanings:

 

“Affiliate”
of a Person means any other Person that directly or indirectly controls, is
controlled by or is under common control with, the Person or any of its
subsidiaries.  The term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.  With respect to a natural person, such
natural person’s Affiliates shall also include such natural person’s spouse,
and their siblings, parents and lineal descendants.

 

“Asset
Liquidity Event” means a Transfer, lease, event, transaction or occurrence
described in clause (b) of the definition of “Liquidity Event”.

 

“Common
Stock” means the common stock, par value $0.01 per share, of the Company,
or such other capital stock or other equity interests into which such common
stock, par value $0.01 per share, of the Company may be converted, exchanged,
recapitalized or reclassified.

 

“Convertible
Securities” means any stock or securities convertible into or exchangeable
for shares of Common Stock.

 

 

“Fair
Market Value” means the fair market value of one share of Common Stock of the
Company as determined in the reasonable good faith business judgment of a
majority of the independent directors of the Company.

 

“Fully-Diluted
Shares of Common Stock” means, as of the time of determination, all issued
and outstanding shares of Common Stock and all shares of Common Stock issuable
upon conversion or exercise of all issued and outstanding Convertible
Securities and Options.

 

“IPO”
means an underwritten initial public offering by the Company of shares of
Common Stock.

 

“IPO
Date” means the date on which the IPO is consummated.

 

“Liquidity
Event” means (a) any Transfer, directly or indirectly, in one or more
transactions, whether by sale, merger, consolidation, recapitalization,
reorganization, restructuring or other similar business combination, of any of
the outstanding shares of Common Stock to a Person that is not an Affiliate of
the Company or any of its shareholders, or (b) any dividend, distribution or
other payment to the holders of the Common Stock of any cash or assets derived
from or relating to the Transfer or lease, directly or indirectly, in one or
more transactions to a Person that is not an Affiliate of the Company or any of
its shareholders, of 90% or more of the assets of the Company and its
subsidiaries taken as a whole; provided, however, that for
purposes of this Agreement, an IPO shall not constitute a Liquidity Event.

 

“Options”
means any rights to subscribe for or to purchase, or any warrants or options
for the purchase of, shares of Common Stock or any Convertible Security.

 

“Permitted
Transferees” means with respect to (a) an entity, its Affiliates, partners,
retired partners, managers, retired managers, members, retired members and
shareholders and the immediate family members of any such partners, managers,
members and shareholders and (b) an individual, his or her Affiliates and
immediate family members.

 

“Person”
means any individual, partnership, corporation, limited liability company,
trust or other entity of any kind, whether domestic or foreign.

 

“Restricted
Shares Restricted Period” means with respect to the IPO only, the period
beginning on the IPO Date and ending on the first anniversary of the IPO Date.

 

“SARs
Restricted Period” means, with respect to a SAR, the period beginning on
the date of this Agreement and ending on the date on which such SAR is sold to
the Company pursuant to Sections 5, 7 or 8 of this Agreement.

 

“Shareholders”
means General Atlantic Partners 76, L.P., GAP Coinvestment Partners II, L.P.,
GapStar, LLC, GAPCO GmbH & Co. KG, SSA Investor, LLC, SSA

 

 

Warrant Holdings, LLC,
Ableco, L.L.C., Cerberus Partners, L.P., Cerberus Institutional Partners, L.P.
and Madeleine, L.L.C.

 

“Stock
Liquidity Event” means a Transfer, event, transaction or occurrence
described in clause (a) of the definition of “Liquidity Event”.

 

“Transfer”
means any sale, assignment, transfer, exchange, pledge, grant of security
interest in, hypothecation, encumbrance or other disposition or conveyance of
any interest in.

 

Section 2.  Grant of SARs; Restrictions on Transferability.

 

(a)  Grant of SARs.  Upon the terms and subject to the conditions
set forth in this Agreement, effective as of the date of this Agreement, in
consideration for entering into the Settlement Agreement and the consideration
referred to therein, the Company hereby grants to the Recipient 8,778 stock
appreciation rights (each, a “SAR”). 
The number of SARs granted hereunder shall be subject to adjustment as
provided in Section 9 hereof.  Each
SAR shall represent the equivalent of one share of Common Stock.

 

(b)  Restrictions on Transferability.  The Recipient understands, acknowledges and
agrees that during the SARs Restricted Period, the Recipient may not sell,
assign, transfer, convey, pledge, hypothecate or otherwise dispose of the SARs
or any interest therein; provided, however, that the Recipient
may sell, assign, transfer, convey, distribute and deliver the SARs to one or
more Permitted Transferees, so long as such Permitted Transferees agree to be
bound by the terms and provisions of this Agreement.  Any attempted sale, assignment, transfer,
conveyance, pledge, hypothecation or other disposition of the SARs contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the SARs shall be void ab initio.

 

Section 3.  Issuance of Restricted Shares In
Connection with an IPO.

 

(a)  Issuance and Sale of the Restricted Shares.  Upon the terms and subject to the conditions
set forth in this Agreement, in the event that an IPO shall occur, effective as
of the IPO Date, the Company hereby issues to the Recipient a number of shares
of Common Stock equal to the number of SARs as of such IPO Date (the “Restricted
Shares”), and the Recipient, hereby purchases, acquires and accepts from
the Company the Restricted Shares, in exchange for the SARs issued to the
Recipient pursuant to Section 2.

 

(b)  Delivery of Certificates; Legend.  Upon the terms and subject to the conditions
of this Agreement, on the IPO Date, the Company will deliver to the Recipient,
original certificates representing all of the Restricted Shares registered in
the name of the Recipient, duly executed and delivered by the Company.  The Recipient understands that the stock
certificates representing the Restricted Shares, except as set forth below,
shall bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock certificates):

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.

 

 

THEY MAY NOT BE OFFERED OR
TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE ACT IS IN EFFECT OR (II) AN EXEMPTION
FROM SUCH REGISTRATION UNDER THE ACT IS AVAILABLE.

 

The legend set forth above
shall be removed and any stop transfer instructions with respect to such legend
shall be removed, and the Company shall issue the certificates representing the
Restricted Shares without such legend to the holder of the Restricted Shares,
if (A) such Restricted Shares are registered for resale under the Securities
Act of 1933, as amended (the “Securities Act”) and are transferred or
sold pursuant to such registration, (B) such Restricted Shares are sold to the
public in a transaction satisfying the requirements of Rule 144, or (C) if the
Recipient satisfies the requirements of Rule 144(k), provided that in the case
of clauses (B) and (C) above, if reasonably requested by the Company, the
Recipient shall provide the Company with an opinion of counsel for the
Recipient, reasonably satisfactory to the Company, to the effect that either
(x) such sale meets the requirements of Rule 144, or (y) the Recipient meets
the requirements of Rule 144(k), as the case may be.

 

(c)  Restrictions on Transferability.  The Recipient understands, acknowledges and
agrees that during the Restricted Shares Restricted Period, the Recipient may
not sell, assign, transfer, convey, pledge, hypothecate or otherwise dispose of
the Restricted Shares or any interest therein; provided, however,
that the Recipient may sell, assign, transfer, convey, distribute and deliver
the Restricted Shares to one or more Permitted Transferees, so long as such
Permitted Transferees agree to be bound by the terms and provisions of this
Agreement.  Any attempted sale,
assignment, transfer, conveyance, pledge, hypothecation or other disposition of
the Restricted Shares contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the Restricted Shares shall be void
ab initio.

 

(d)  Cancellation of SARS.  Effective upon the receipt by the Recipient
of the original certificates representing all of the Restricted Shares as
provided in Section 3(b) above, all of the SARs shall be terminated and of
no further force or effect.

 

Section 4.  Liquidity Events.

 

(a)  Event Notices.  (i)  In
the event that the Company or any of its shareholders proposes to engage  in a Liquidity Event (other than a
Liquidity Event involving the Transfer of 50% or less of the Common Stock which
are dealt with in clause (ii) below), the Company shall deliver a written Event
Notice (as defined below) to the Recipient at least 5 calendar days prior to
the anticipated date of such Liquidity Event.

 

(ii)  In the event that the Company or any of its
shareholders proposes to engage in a Liquidity Event that involves the Transfer
of 50% or less of the Common Stock, or an Asset Sale (as defined below), the
Company shall deliver a written Event Notice to the Recipient as promptly as
possible (but in no event later than 5 business days after such Liquidity Event
or Asset Sale) after such Liquidity Event or Asset Sale.

 

(iii)  Notwithstanding any provision of this
Agreement to the contrary, so long as the Recipient shall have timely received
in cash all amounts payable to the Recipient under this

 

 

Agreement in connection with
a Liquidity Event or Asset Sale, the Company shall not have any further
liability to the Recipient for failing to deliver an Event Notice in connection
with such Liquidity Event or Asset Sale.

 

(b)  Event Notices.  The term “Event Notice” means a
written notice that provides a brief description of the Liquidity Event or
Asset Sale, as the case may be, including, without limitation, the material
terms and conditions of the Liquidity Event or Asset Sale, and whether or not
such Liquidity Event is a Stock Liquidity Event or an Asset Liquidity
Event.  In addition, in an Event Notice,
the Company shall represent and warrant to the Recipient and its Permitted
Transferees (i) that the prospective transferee in the Liquidity Event or Asset
Sale is not an Affiliate of the Company or any of the Shareholders, (ii) the
type and amount of consideration to be paid in connection with such Liquidity
Event or Asset Sale, (iii) if such Liquidity Event is a Stock Liquidity Event,
(A) the number of shares of Common Stock being Transferred (including, without
limitation, all shares of Common Stock issuable upon conversion or exercise of
all Convertible Securities and Options being Transferred in such Stock Liquidity
Event), (B) the aggregate number of Fully-Diluted Shares of Common Stock then
held by the Shareholders and their Affiliates and the Applicable Percentage and
(iv) the Value per share of Common Stock in such Liquidity Event or Asset Sale.

 

(c)  Value. 
For purposes of this Agreement, the “Value” of one share of
Common Stock in connection with a Liquidity Event means the aggregate amount of
cash and the value (as determined in the reasonable good faith business
judgment of a majority of the independent directors of the Company) of any
non-cash consideration received or to be received by the holders of the Common
Stock for or with respect to one share of Common Stock.

 

(d)  Payments.  The Company shall not, and shall not permit
its shareholders to, consummate any Liquidity Event without either (i)
simultaneously making the payments required to be made to the Recipient under
this Agreement, or (ii) making reasonable and adequate provision for the making
of the payments required to be made to the Recipient under this Agreement
immediately following such Liquidity Event.

 

Section 5.  Stock Liquidity Events.

 

(a)  Right of Recipient to Elect.  Subject to the provisions of clause (b)
below, in the case of a Stock Liquidity Event, the Recipient will have a period
of 15 calendar days following the date on which the Recipient actually receives
the Event Notice in which to elect to sell to the Company up to the Applicable
Percentage (as defined below) of the then outstanding SARs (regardless of
whether the Company has elected to repurchase a lesser number pursuant to
clause (b) below) for a purchase price per SAR equal to the Value of one share
of Common Stock in such Stock Liquidity Event. 
The Recipient shall within such 15 calendar day period deliver to the
Company a written notice (the “Recipient Election Notice”) stating the
number of SARs that the Recipient wishes to sell to the Company in connection
with such Stock Liquidity Event.

 

(b)  Right of Company to Repurchase.  In the case of a Stock Liquidity Event, the
Company shall have the option to elect, by stating that it wishes to purchase
the number of SARs (up to the Applicable Percentage of the SARs) specified in
the Event Notice, to repurchase from

 

 

the Recipient such number of
SARs for a purchase price per SAR equal to the Value of one share of Common
Stock in such Stock Liquidity Event.

 

(c)  Applicable Percentage.  The “Applicable Percentage” with
respect to a Stock Liquidity Event means a percentage calculated by dividing
(i) the number of shares of Common Stock being Transferred in such Stock
Liquidity Event (including, without limitation, all shares of Common Stock
issuable upon conversion or exercise of all Convertible Securities and Options
being Transferred in such Stock Liquidity Event), by (ii) the aggregate number
of Fully-Diluted Shares of Common Stock then held by the Shareholders and their
Affiliates.

 

(d)  Payment of SAR Value.  If the Company has received a Recipient
Election Notice or delivered a demand to repurchase SARs in an Event Notice,
the Company shall, either simultaneously with the consummation of the Stock
Liquidity Event, if possible, or as promptly thereafter as possible, pay to the
Recipient, by wire transfer of immediately available funds in accordance with
the wire transfer instructions for the Recipient set forth on Annex I
hereto, an amount in cash equal to the product of (i) the Value of one share of
Common Stock in the Stock Liquidity Event, multiplied by (ii) the number of
SARs sold back to the Company as set forth in the Recipient Election Notice or
the Event Notice, as the case may be.

 

Section 6.  Asset Liquidity Events.  In the event that an Asset Liquidity Event
shall occur, the Company shall, either simultaneously with the consummation of
the Asset Liquidity Event, if possible, or as promptly thereafter as possible,
pay to the Recipient, by wire transfer of immediately available funds in
accordance with the wire transfer instructions for the Recipient set forth on Annex
I hereto, an amount in cash equal to the product of (i) the Value that
would be received in respect of one share of Common Stock in the Asset
Liquidity Event, multiplied by (ii) the number of then outstanding SARs.

 

Section 7.  Drag-Along Right.

 

(a)  Drag-Along Notice.  If the Liquidity Event described in an Event
Notice involves the sale (whether by sale, merger, consolidation,
recapitalization, reorganization, restructuring or other business combination)
of more than 50% of the outstanding Common Stock (such a sale being the “Proposed
Sale”) to a Person (other than an Affiliate of the Company or any
Shareholder), and the Company elects, the Event Notice shall (in addition to
the information described in Section 4(a) above) state (i) that the
Company wishes to cause the Recipient to sell all of its SARs to the Company in
connection with the Proposed Sale, and (ii) the aggregate purchase price for
the SARs hereunder.

 

(b)  Payment of SAR Value.  The Company shall, either simultaneously with
the consummation of the Proposed Sale, if possible, or as promptly thereafter
as possible, pay to the Recipient, by wire transfer of immediately available
funds in accordance with the wire transfer instructions for the Recipient set
forth on Annex I hereto, an amount in cash equal to the product of (i)
the Value of one share of Common Stock in the Proposed Sale, multiplied by (ii)
the aggregate number of SARs outstanding on the date of such Proposed Sale.

 

 

Section 8.  Company Repurchase Obligation.

 

(a)  Second Anniversary.  On the second anniversary of the date of this
Agreement (or if such date is not a business day, the first business day after
such second anniversary), in the event that on such date any SARs remain
outstanding, the Company shall repurchase all of the outstanding SARs for a
cash purchase price equal to the product of (i) the number of SARs then
outstanding, multiplied by (ii) $284.80 (as such amount shall appropriately be
adjusted in the case of stock splits, stock dividends, recapitalizations,
reorganizations and other similar events), less the Value per share actually
received by the Recipient pursuant to Section 6 hereof (the amount
referred to in clause (ii) being the “SAR Repurchase Price”), payable by
wire transfer of immediately available funds to the account set forth on Annex
I hereto.

 

(b)  Certain Asset Sales.  In the event that the Company shall at any
time or from time to time after the date of this Agreement, make any dividend,
distribution or other payment to the holders of the Common Stock of any cash or
assets derived from or relating to the Transfer or lease, directly or
indirectly, in one or more transactions to a Person that is not an Affiliate of
the Company or any of its shareholders, of assets of the Company and its
subsidiaries having a value (as determined in the reasonable good faith
business judgment of a majority of the independent directors of the Company) of
$120,000,000 or more (an “Asset Sale”), then from and after the date on
which such Asset Sale shall occur, the Recipient shall have the right, but not
the obligation, by delivering a written notice to the Company (the “Put
Notice”), to cause the Company to repurchase all of the outstanding SARs
for a cash purchase price equal to the product of (i) the number of outstanding
SARs, multiplied by (ii) the SAR Repurchase Price, payable by wire transfer of
immediately available funds to the account set forth on Annex I
hereto.  The Company shall repurchase all
of the outstanding SARs and pay the purchase price for the SARs in full as
provided in this Section 8(b) within 5 business days after the Company’s
receipt of the Put Notice.

 

Section 9.  Anti-Dilution Protection.

 

(a)  Dividends or Distributions Payable in
Common Stock and Changes in Common Stock. 
In the event the Company shall, at any time or from time to time after the
date of this Agreement (x) issue any shares of Common Stock as a dividend or
distribution to the holders of any of the Company’s equity securities or (y)
split, subdivide or combine any outstanding shares of Common Stock into a
greater or lesser number of shares (any such event in (x) or (y) being referred
to herein as a “Change of Securities”), then, in each case, the number
of SARs granted to the Recipient hereunder shall automatically be increased to
equal the number of shares of Common Stock that a holder of a number of shares
of Common Stock equal to the number of SARs outstanding immediately prior to
such Change of Securities would hold or be entitled to hold immediately
following such Change of Securities.  For
example, if after the date of this Agreement, the Company consummates a two for
one split of the Common Stock, then from and after the date of such stock
split, the number of SARs granted to the Recipient hereunder shall be 17,556.

 

(b)  Issuances of Shares of Common Stock to
Affiliates.  In the event the Company
shall, at any time or from time to time after the date of this Agreement,
issue, sell or otherwise distribute (including by way of deemed issuances or
distributions pursuant to Section 9(c) below)

 

 

any shares of Common Stock
(other than pursuant to a Change of Securities or the exercise or conversion of
any Option or Convertible Security) to an Affiliate of the Company or any of
the Shareholders (any such event, including any deemed issuances or
distributions described in Section 9(c) below, being herein called an “Issuance”),
for a consideration per share less than 85% of the Fair Market Value per share
of Common Stock on the date of such Issuance, then, effective upon each such
Issuance the number of SARs granted to the Recipient hereunder shall
automatically be increased to equal the product of (i) the number of SARs
outstanding immediately prior to such Issuance, multiplied by (ii) a fraction
(A) the numerator of which shall be the total number of Fully-Diluted Shares of
Common Stock outstanding immediately after such Issuance, and (B) the
denominator of which is the sum of (I) the total number of Fully-Diluted Shares
of Common Stock outstanding immediately prior to such Issuance, plus (II) the
number of shares of Common Stock which the aggregate consideration received by
the Company would purchase at the Fair Market Value per share of Common Stock.

 

(c)  Grant of Options or Convertible Securities.  For purposes of Section 9(b) above, the
grant, issuance, sale or other distribution by the Company to an Affiliate of
the Company or any of its Shareholders of (x) Options (whether or not such
Options (or in the case of Options to acquire Convertible Securities, the right
to convert or exchange such Convertible Securities) are immediately
exercisable), or (y) Convertible Securities (whether or not the right to
convert or exchange such Convertible Securities are immediately exercisable),
in each case, shall be deemed to be an Issuance (i) effective as of the date of
the grant, issuance, sale or other distribution of such Options or Convertible
Securities, (ii) of the maximum number of shares of Common Stock issuable upon
exercise of the Options or conversion or exercise of the Convertible
Securities, and (iii) for a consideration per share equal to the sum of (A) the
consideration per Option or Convertible Security received by the Company upon
the issuance of such Options or Convertible Securities, plus (B) the per-share
exercise price of such Options or the per-share conversion or exercise price of
such Convertible Securities, as the case may be.  No additional adjustment of number of SARs
shall be made upon the actual exercise of such Options or upon the actual
conversion or exchange of such Convertible Securities; provided, however,
to the extent any Options or Convertible Securities are cancelled or expire
without being exercised or converted, as the case may be, appropriate
adjustment shall be made to the number of SARs.

 

(d)  Changes in Options or Convertible
Securities.  If the per-share
exercise price of any outstanding Option or per-share conversion or exercise
price of any outstanding Convertible Security shall change at any time, the
number of SARs then in effect shall forthwith be readjusted to the number of
SARs that would then be in effect had the adjustment made under Sections 9(b)
and (c) hereunder upon the initial issuance, sale, distribution or granting of
such Options or Convertible Securities been made based upon such changed
exercise price, conversion price or conversion rate, as the case may be, but
only with respect to such Options and Convertible Securities as then remain
outstanding.

 

(e)  Certain Distributions.  If the Company shall pay a dividend or make
any other distribution payable in Options or Convertible Securities to an
Affiliate of the Company or any of its Shareholders, then, for purposes of
Section 9(b) above (by operation of Section 9(c)), such Options or
Convertible Securities shall be deemed to have been issued or sold without
consideration except for such amounts of consideration as shall have been
deemed to have been received by the Company pursuant to Section 9(c)
above, as appropriate.

 

 

Section 10.  Covenants of the Company.

 

(a)  No Impairment.  The Company will not, by amendment of its
charter documents, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale or transfer of assets or any
other voluntary or involuntary action, (i) avoid or seek to avoid the
observance or performance of any of the terms of this Agreement to be observed
or performed by the Company, (ii) materially and adversely affect the rights of
the Recipient in respect of this Agreement, or (iii) directly or indirectly,
create or otherwise cause or suffer to exist or become effective, any restriction
or encumbrance on the ability of the Company to perform and comply with its
obligations under this Agreement.  The
Company will at all times in good faith assist in the carrying out of all of
the terms and provisions of this Agreement and in the taking of all such action
as may be necessary or appropriate in order to protect the rights of the
Recipient under this Agreement.

 

(b)  Listing Requirements.  If and so long as the Common Stock is listed
on any national securities exchange, the Company will, if permitted by the
rules of such exchange, list and keep listed on such exchange, upon official
notice of issuance, all of the Restricted Shares issuable under this Agreement.

 

(c)  Notice of Certain Transactions.  In the event that (i) the Company takes any
action that would require an adjustment in the number of SARs or Restricted
Shares hereunder, or (ii) proposes to engage in any reorganization,
restructuring, recapitalization, reclassification of capital stock or other
similar transaction affecting the equity capitalization of the Company, then in
each case, the Company shall, not later than 5 calendar days prior to the
earliest of the record or effective date, as the case may be, give the
Recipient a written notice stating (A) a brief description of the event, and
(B) such record or effective date, as the case may be.  With respect to an IPO of the Company, the
Company shall promptly give the Recipient notice of (i) the initial filing of
the registration statement in connection therewith and (ii) the effectiveness
of such registration statement.

 

(d)  Reservation of Common Stock.  The Company shall reserve and keep available
out of its authorized but unissued shares of Common Stock for issuance under
this Agreement, free from preemptive rights, a number of shares of Common Stock
equal to the number of Restricted Shares to be issued hereunder.

 

 Section 11.  Representations and Warranties of the
Company.  The Company hereby
represents and warrants to the Recipient as follows:

 

(a)  Existence and Power.  The Company (i) is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified under the laws of each jurisdiction in
which qualification is required to own, lease or license their assets and
properties or to carry on their business, except where the failure to be so
qualified would not reasonably be expected to result in a material adverse
effect on the Company and its subsidiaries, taken as a whole, and (iii) has all
necessary power and authority required to execute and deliver this Agreement
and to consummate the transactions contemplated herein.  Each of the Company’s “significant
subsidiaries,” as such term is defined in Regulation S-X under the Code of
Federal

 

 

Regulations, is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and is duly qualified under the laws of each
jurisdiction in which qualification is required to own, lease or license their assets
and properties or to carry on their business, except where failure to be in
good standing would not reasonably be expected to result in a material adverse
effect on the Company and its subsidiaries, taken as a whole.

 

(b)  Authorization; Binding Effect.  The execution and delivery by the Company of
this Agreement, the performance by the Company of its obligations under this
Agreement and the consummation of the transactions contemplated herein has been
duly authorized by all necessary action on the part of the Company.  This Agreement is the legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except that such enforcement (i) may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting creditors’ rights generally
and (ii) is subject to the availability of equitable remedies, as determined in
the discretion of the court before which such a proceeding may be brought.

 

(c)  Contravention.  Neither the execution, delivery and performance
of this Agreement by the Company nor the consummation of the transactions
contemplated herein will (with or without notice or lapse of time or both) (i)
violate or breach any provision of the Company’s or any of its subsidiaries’
organizational or governing documents, (ii) violate or breach any statute, law,
rule, regulation or order by which the Company, any of its subsidiaries or any
of their assets or properties may be bound or affected, or (iii) breach or
result in a default under, any material contract or agreement to which the
Company or any of its subsidiaries is a party or by which the Company, any of
its subsidiaries or any of their assets or properties, including, without
limitation, the Restricted Shares may be bound or affected.

 

(d)  Consents.  No approval, consent, authorization or order
of, notice to or registration or filing with, or any other action by, any
governmental authority or Person is required in connection with (i) the due
execution and delivery by the Company of this Agreement and the performance of
the Company’s obligations hereunder, and (ii) the consummation of the
transactions contemplated herein, including, without limitation, the issuance,
sale, transfer, assignment, conveyance and delivery of the Restricted Shares to
the Recipient.

 

(e)  Litigation.  As of the date hereof, there is no lawsuit,
action, claim or proceeding pending, or to the Company’s knowledge threatened,
that questions the validity of this Agreement or that involves or relates to
any of the transactions contemplated herein.

 

(f)  The Restricted Shares.  Upon delivery to the Recipient of the
certificates representing the Restricted Shares for the issuance, sale,
transfer, assignment, conveyance and delivery to the Recipient, (i) the
Recipient will become the sole record owner of all of the Restricted Shares and
good and marketable title to all of the Restricted Shares will pass to the
Recipient, free and clear of any liens, claims, encumbrances, security
interests, options, charges, preemptive rights and transfer restrictions of any
kind, except for those

 

 

created by this Agreement,
and (ii) all of the Restricted Shares will be duly authorized, validly issued,
fully paid and nonassessable.

 

(g)  Sufficient Shares.  The Company has as of the date of this
Agreement, and will have, as of the IPO Date, a sufficient number of authorized
but unissued shares of Common Stock so that the Company will at all times have
a sufficient number of authorized but unissued shares of Common Stock to issue
to the Recipient pursuant to this Agreement.

 

(h)  Capitalization.

 

(i)  Authorized, Issued and Outstanding Shares.  As of the date of this Agreement, the
authorized equity securities of the Company consists of (i) 12,000,000 shares
of Common Stock, of which 330,000 shares are issued and outstanding, and (ii)
4,000,000 shares of Preferred Stock, of which 3,000,000 shares are designated
as Series A Convertible Preferred Stock, of which 3,000,000 shares are issued
and outstanding.  All of the issued and
outstanding shares of capital stock of the Company have been duly authorized,
validly issued and are fully paid and nonassessable.  As of the date of this Agreement, except as
set forth above and as set forth on Schedule 4(h)(ii), the Company
does not have any equity securities issued and outstanding.

 

(ii)  Rights, Options, Warrants, Etc.  As of the date of this Agreement, there are
no statutory or contractual preemptive or similar rights on the part of any
holder of any securities of the Company with respect to the issuance and sale
of the Restricted Shares which have not been effectively and validly waived as
of the date of this Agreement, and except as described on Schedule 4(h)(ii),
no securities, options, warrants, conversion or other rights or contracts of
any kind are outstanding that obligate the Company, contingently or otherwise,
to issue, sell, purchase or redeem any of their equity securities or any
securities exercisable or exchangeable for or convertible into any such equity
securities and no authorization therefor has been given.

 

(i)  Financial Information.

 

(i)  Balance Sheets.  The unaudited consolidated balance sheets of
the Company and its subsidiaries dated as of July 31, 2003 and
January 31, 2004 (the “Balance Sheet”), copies of which are
attached hereto as Schedule 4(i)(i), were prepared by management of
the Company in accordance with U.S. generally accepted accounting principles
applied on a consistent basis in accordance with the past practice of the
Company consistently applied and fairly present the financial position of the
Company and its subsidiaries as of such periods, subject to possible
adjustments relating to the Baan transaction, as  specified in more detail in the cover letter
attached to the financial statements, and, subject further, in the case of
internally prepared unaudited interim financial statements dated
January 31, 2004, to normal recurring year-end adjustments which are not
expected to be material in amount.

 

(ii)  Other Financial Statements.  The unaudited consolidated statements of operations,
statements of changes in shareholder’s equity and statements of cash flows of

 

 

the Company and its
subsidiaries for the 12-month period ended on July 31, 2003, and for the
six-month period ended on January 31, 2004, copies of which are attached
hereto as Schedule 4(i)(ii), were prepared by management of the
Company in accordance with U.S. generally accepted accounting principles
applied on a consistent basis in accordance with the past practice of the
Company consistently applied and fairly present the results of operations,
changes in shareholder’s equity and cash flows of the Company and its
subsidiaries for such periods, subject to adjustments relating to the Baan
transaction specified in more detail in the cover letter attached to the financial
statements, and, subject further, in the case of internally prepared unaudited
interim financial statements dated January 31, 2004, to normal recurring
year-end adjustments which are not expected to be material in amount.

 

Section 12.  Representations and Warranties of the
Recipient.  The Recipient hereby
represents and warrants to the Company as follows:

 

(a)  Existence and Power.  The Recipient (i) is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and (ii) has all necessary power and
authority required to execute and deliver this Agreement and to consummate the
transactions contemplated herein.

 

(b)  Authorization; Binding Effect.  The execution and delivery by the Recipient
of this Agreement, the performance by the Recipient of its obligations under
this Agreement and the consummation of the transactions contemplated herein has
been duly authorized by all necessary action on the part of the Recipient.  This Agreement is the legal, valid and
binding obligation of the Recipient enforceable against the Recipient in
accordance with its terms, except that such enforcement (i) may be limited by
bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights
generally and (ii) is subject to the availability of equitable remedies, as
determined in the discretion of the court before which such a proceeding may be
brought.

 

(c)  Contravention.  Neither the execution, delivery and
performance of this Agreement by the Recipient nor the consummation of the
transactions contemplated herein will (with or without notice or lapse of time
or both) (i) violate or breach any provision of the Recipient’s organizational
or governing documents, (ii) violate or breach any statute, law, rule,
regulation or order by which the Recipient or any of its assets or properties
may be bound or affected, or (iii) breach or result in a default under, any
material contract or agreement to which the Recipient is a party or by which
the Recipient or any of its assets or properties may be bound or affected.

 

(d)  Consents.  No approval, consent, authorization or order
of, notice to or registration or filing with, or any other action by, any
governmental authority or Person is required in connection with (i) the due
execution and delivery by the Recipient of this Agreement and the performance
of the Recipient’s obligations hereunder, and (ii) the consummation of the
transactions contemplated herein, including, without limitation, the issuance,
sale, transfer, assignment, conveyance and delivery of the Restricted Shares to
the Recipient.

 

 

(e)  Securities Representations.  The Recipient is acquiring the Restricted
Shares for investment and not with a view to the distribution or other
distribution of any part thereof in violation of applicable securities
laws.  As of the date hereof, the
Recipient is, and as of the IPO Date, the Recipient will be, an “accredited
investor” as defined in Rule 501(a) of the Securities Act of 1933, as amended
(the “1933 Act”), and the Recipient was not organized for the specific
purpose of acquiring the Restricted Shares.

 

(f)  Reliance on Exemptions.  The Recipient understands that the SARs are
being, and the Restricted Shares will be, offered and sold to it in reliance on
specific exemptions from the registration requirements of the United States
federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Recipient’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Recipient set forth herein in order to determine the availability of such
exemptions and the eligibility of the Recipient to acquire the Restricted
Shares.

 

(g)  Information.  The Recipient (i) can bear the economic risk
of an investment in the SARs and the Restricted Shares, (ii) has such knowledge
and experience in business and financial matters so as to enable it to
understand the risks of and form an investment decision with respect to its
investment in the SARs and the Restricted Shares and to protect its interest in
connection with such investment, and (iii) has reviewed the information that it
considers necessary to make an informed investment decision with respect to the
SARs and the Restricted Shares.

 

(h)  Transfer or Resale.  The Recipient understands that (i) neither
the SARs nor the Restricted Shares have been nor are they being registered
under the 1933 Act or any state securities laws, and may not be offered for
sale, sold, assigned or transferred unless (A) subsequently registered
thereunder, or (B) pursuant to an exemption from such registration, (ii) any
sale of the Restricted Shares made in reliance on Rule 144 promulgated under
the 1933 Act (or a successor rule thereto) (“Rule 144”) may be made only
in accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Restricted Shares may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the
Securities Exchange Commission thereunder, and (iii) neither the Company nor
any other person is under any obligation to register the SARs or the Restricted
Shares under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder.

 

Section 13.  Miscellaneous.

 

(a)  Notices.  All notices, requests, demands and other
communications to any party or given under this Agreement shall be in writing
and delivered personally, by overnight delivery or courier, by registered mail
or by telecopier (with confirmation received) to the parties at the address or
telecopy number specified for such parties set forth on the signature pages
hereof (or at such other address or telecopy number as may be specified by a
party in writing given at least five business days prior thereto).  All notices, requests, demands and other
communications will be deemed delivered when actually received.

 

 

(b)  Counterparts.  This Agreement may be executed simultaneously
in one or more counterparts, and by different parties hereto in separate
counterparts, each of which when executed will be deemed an original, but all
of which taken together will constitute one and the same instrument.

 

(c)  Amendments.  This Agreement may not be amended, modified
or waived except by an instrument in writing signed on behalf of each of the
parties hereto.

 

(d)  Successors and Assigns.  This Agreement will be binding upon and
inures to the benefit of and is enforceable by the respective successors and
permitted assigns of the parties hereto.

 

(e)  Governing Law.  This Agreement will be governed by, and
construed in accordance with, the laws of the state of New York applicable to
contracts executed in and to be performed entirely within that state, without
reference to conflicts of laws provisions.

 

(f)  Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
will nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party.  Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto will negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.

 

(g)  Ambiguities.  This Agreement was negotiated between legal
counsel for the parties and any ambiguity in this Agreement shall not be
construed against the party who drafted this Agreement.

 

(h)  No Third-Party Rights.  This Agreement is not intended, and will not
be construed, to create any rights in any parties other than the Company and
the Recipient, and no Person may assert any rights as third-party beneficiary
hereunder.

 

(i)  Submission to Jurisdiction.  Each of the Company and the Recipient hereby
(i) agrees that any lawsuit, action, claim or proceeding with respect to this
Agreement may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, (ii) accepts
for itself and in respect of its property, generally and unconditionally, the
jurisdiction of such courts, (iii) irrevocably waives any objection, including,
without limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any lawsuit, action, claim or proceeding in those jurisdictions,
and (iv) irrevocably consents to the service of process of any of the courts
referred to above in any lawsuit, action, claim or proceeding by the mailing of
copies of the process to the parties hereto as provided in
Section 13(a).  Service effected as
provided in this manner will become effective ten calendar days after the
mailing of the process.

 

 

(j)  Waiver of Jury Trial.  Each of the Company and the Recipient hereby
waives any right to a trial by jury in any lawsuit, action, claim or proceeding
to enforce or defend any right under this Agreement or any amendment,
instrument, document or agreement delivered or to be delivered in connection
with this Agreement and agrees that any lawsuit, action, claim or proceeding
will be tried before a court and not before a jury.

 

(k)  Further Assurances.  Promptly upon the reasonable request by the
Recipient, the Company shall (i) correct any defect or error that may be
discovered in this Agreement or in the execution or delivery of this Agreement,
and (ii) execute, acknowledge, deliver, record, file and register, any and all
such further agreements, documents, acts, certificates, assurances and other
instruments, in each case, as the Recipient may reasonably require from time to
time.

 

(l)  Rights As Stockholder.  The Recipient shall not have any rights as a
stockholder of the Company with respect to the SARs.  In addition, the Recipient shall not have any
rights as a stockholder of the Company unless and until the Recipient is
entitled to receive the Restricted Shares pursuant to Section 3 hereof.

 

 

In witness whereof, the
parties have executed this Stock Appreciation Rights Agreement on the day and
year first above written.

 

COMPANY:

 

	
  Address for Notices:

  	
   

  	
  SSA GLOBAL TECHNOLOGIES,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: 

  	
   

  	
   

  	
   

  
	
  Facsimile No.:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  RECIPIENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for Notices:

  	
   

  	
   

  	
  BLI-8787, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
   

  
	
  Facsimile No.:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
										

 

 

ANNEX I

to

STOCK
APPRECIATION RIGHTS AGREEMENT

 

Wire
Transfer Instructions for Recipient

 

	
  Bank:

  	
   

  	
  Benchmark Bank

  
	
   

  	
   

  	
  Plano, Texas 75024

  
	
  ABA #:

  	
   

  	
  111902055

  
	
  For Credit to:

  	
   

  	
  BLI 8787, Ltd.

  
	
  Account No.:

  	
   

  	
  0142-1113-2

  
	
  Further Credit

  	
   

  	
   

  
	
  Notify:

  	
   

  	
  Mike McCain

  
	
   

  	
   

  	
  972-673-4081

  

 

 

Schedule 4(h)(ii)

 

As of the date hereof,
610,000 options have been authorized under the Company’s option plan, of which
604,166 options have been granted.

 

Dividends on the shares of
Series A Convertible Preferred Stock accrete at a rate of 9% per annum,
compounding quarterly as of each March 31, June 30, September 30
and December 31.  The Series A
Convertible Preferred Stock, as of March 31, 2004, is convertible into
3,279,250 shares of Common Stock.

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