Document:

exv4w2

 

Exhibit 4.2

TAG ALONG AGREEMENT

by and among

EAGLE ROCK PIPELINE, L.P.

EAGLE ROCK PIPELINE GP, LLC

EAGLE ROCK HOLDINGS, L.P.

AND

THE PURCHASERS SET FORTH ON THE SIGNATURE PAGES HERETO

 

 

TAG ALONG AGREEMENT

     THIS TAG ALONG AGREEMENT (this “Agreement”) is made and entered into as of March 27,
2006, by and among EAGLE ROCK PIPELINE GP, LLC, a Delaware limited liability company (the
“General Partner”), EAGLE ROCK PIPELINE, L.P., a Delaware limited partnership (the
“Company”), EAGLE ROCK HOLDINGS, L.P, a Texas limited partnership (the “Initial Limited
Partner”) and each of the parties set forth on the signature pages hereto (the
“Purchasers”). Capitalized terms used herein without definition shall have the meanings
given to them in the Purchase Agreement, as defined below.

RECITALS

     WHEREAS, the Company, the Purchasers and the other parties thereto have entered into a
Purchase Agreement, dated as of March 27, 2006 (the “Purchase Agreement”);

     WHEREAS, in connection with the Purchase Agreement, the Company has agreed to sell Common
Units to the Purchasers and to convert the Initial Limited Partner’s limited partner interest into
Subordinated Units;

     WHEREAS, in connection with the Purchase Agreement, the Company has agreed to provide the tag
along and other rights set forth in this Agreement for the benefit of the Purchasers pursuant to
the Purchase Agreement;

     WHEREAS, the Initial Limited Partner will own 33,582,918 Subordinated Units following the
execution and delivery of the Partnership Agreement;

     NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by
each party hereto, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01 Definitions. The terms set forth below are used herein as so
defined: 

     “Affiliate” means, with respect to a specified Person, any other Person, directly or
indirectly controlling, controlled by or under direct or indirect common control with such
specified Person. For purposes of this definition, “control” (including, with correlative
meanings, “controlling,” “controlled by” and “under common control with”) means the power to direct
or cause the direction of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.

     “Affiliate Transfer” means any transfer of Common Units (and/or the rights granted to
the Purchasers by the Company under this Agreement) from any Purchaser to an Affiliate of such
Purchaser and any successive Affiliate Transfers.

     “Business Day” means any day other than a Saturday, Sunday, or a legal holiday for
commercial banks in New York, New York.

1

 

     “Commission” means the United States Securities and Exchange Commission.

     “Common Units” shall have the meaning set forth in the Purchase Agreement.

     “Company” has the meaning specified therefor in the introductory paragraph of this
Agreement.

     “Drag-Along Notice” has the meaning set forth in Section 2.01(a).

     “Drag-Along Right” has the meaning set forth in Section 2.01(a).

     “Holder” means the record holder of any limited partner interest in the Company.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended

     “IPO” means the initial public offering and sale of Common Units or other equity
securities issued in exchange therefore in connection with any merger, consolidation or other
business combination involving the Company to the public pursuant to a Registration Statement on
form S-1 that has been declared effective under the Securities Act by the Securities and Exchange
Commission.

     “Partnership Agreement” has the meaning set forth in the Purchase Agreement.

     “Participation Offer” has the meaning set forth in Section 2.01(a).

     “Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated organization,
government or any agency, instrumentality or political subdivision thereof, or any other form of
entity.

     “Purchase Agreement” has the meaning specified in the Recitals.

     “Purchased Securities” shall have the meaning set forth in the Purchase Agreement.

     “Purchasers” has the meaning specified in the introductory paragraph hereto.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

     “Subordinated Units” has the meaning set forth in the Partnership Agreement.

     “Tag Along Notice” has the meaning set forth in Section 2.01(a).

     “Tag Along Units” has the meaning set forth in Section 2.01(a).

     “Transfer” (including the correlative terms “Transfers,” “Transferring” or
“Transferred”) means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation
or other encumbrance, or any other disposition (whether voluntary or involuntary or by operation of
law), of limited partner interests in the Company, including Common Units and Subordinated Units
(or

2

 

any interest (pecuniary or otherwise) therein or right thereto), including derivative or
similar transactions or arrangements whereby a portion or all of the economic interest in, or risk
of loss or opportunity for gain with respect to, limited partner interests are transferred or
shifted to another Person; provided, however, that (i) a Transfer by the Initial Limited Partner to
an Affiliate shall not be deemed a Transfer, (ii) an exchange, merger, recapitalization,
consolidation or reorganization involving the Company as contemplated by Article X of the
Partnership Agreement shall not be deemed a Transfer and (iii) an exchange, merger,
recapitalization, consolidation or reorganization involving the Company in which securities of the
Company or any other Person and/or cash are issued in respect of all limited partner interests
shall not be deemed a Transfer if all limited partner interests are treated identically in any such
transaction (other than (A) differences resulting from the treatment of fractional interests that
would otherwise result from such transaction, (B) the cancellation for no consideration of limited
partner interests held by any Party that has consented to such cancellation, and/or (C) differences
resulting from any election made by the Parties so long as all Parties have an equal opportunity to
make such an election).

“Units” shall have the meaning set forth in the Partnership Agreement.

ARTICLE II

TRANSFER RIGHTS

Section 2.01 Tag Along Right.

     (a) Any Transfer for value by the Initial Limited Partner of Subordinated Units (the
“Tag Along Units”) prior to an IPO shall be subject to this Section 2.01. In
connection with any proposed Transfer that is subject to this Section 2.01, the Initial
Limited Partner shall give written notice to each Purchaser (the “Tag Along
Notice”) at least fifteen (15) Business Days prior to any proposed Transfer that is
subject to this Section 2.01. The Tag Along Notice shall specify the proposed transferee,
whether such proposed transferee is willing to purchase Common Units then held by the
Purchasers and, if so, the maximum number of Common Units such proposed transferee is
willing to purchase from such Purchasers, the number of Tag Along Units to be Transferred by
the Initial Limited Partner to such proposed transferee, the amount and type of
consideration to be received therefor, and the place and date on which the Transfer is
expected to be consummated. The Tag Along Notice shall include an offer (the
“Participation Offer”) by the Initial Limited Partner to include in the proposed
Transfer on the terms described in Section 2.01(c) a number of Common Units designated by
any of the Purchasers, not to exceed, in respect of any such Purchaser, the product of (A)
the sum of the aggregate number of Tag Along Units to be sold by the Initial Limited Partner
to the proposed transferee and (B) a fraction with a numerator equal to the number of Common
Units held by such other Purchaser and a denominator equal to the number of Units held by
the Initial Limited Partner and all Purchasers on the date of the Transfer.

     (b) Except as set forth herein and in Section 2.01(a) above, the per unit consideration
to be received for any Common Units included in a proposed Transfer hereunder shall be the
same per unit consideration to be received by the Initial Limited Partner as set forth in
the Participation Offer. Each Purchaser who wishes to include

3

 

Common Units in the proposed Transfer in accordance with the terms set forth in the
Participation Offer shall so notify the Initial Limited Partner not more than ten (10)
Business Days after the date of the Tag Along Notice, failing which such Purchaser shall not
be entitled to participate in the proposed Transfer.

     (c) The Participation Offer shall be conditioned upon the Initial Limited Partner’s
Transfer of Tag Along Units pursuant to the transactions contemplated in the Tag Along
Notice with the transferee named therein. If any other Purchasers have accepted the
Participation Offer, the Initial Limited Partner shall reduce to the extent necessary the
number of Tag Along Units it otherwise would have Transferred in the proposed Transfer so as
to permit the Purchasers who have accepted the Participation Offer to sell the number of
Common Units that they are entitled to sell under this Section 2.01, and the Initial Limited
Partner and such Purchasers shall sell the number of Units specified in the Participation
Offer to the proposed transferee in accordance with the terms of such sale as set forth in
the Tag Along Notice; provided, however, that if the proposed transferee deals solely with
the Initial Limited Partner and refuses to purchase from the Purchasers who have accepted
the Participation Offer the number of Units that they are entitled to sell under this
Section 2.01, then (i) the Initial Limited Partner shall be entitled to sell up to the
number of Common Units specified in the Participation Offer to the proposed transferee in
accordance with the terms of such sale as set forth in the Tag Along Notice and (ii) the
Initial Limited Partner shall then purchase from such Purchasers who have accepted the
Participation Offer, on the terms set forth in the Tag Along Notice, up to the number of
Common Units that they would have been entitled to sell under this Section 2.01 had the
proposed transferee purchased such Common Units directly from such Purchasers in accordance
with the terms of this Section 2.01. Any Purchaser who participates in a Transfer under
this Section 2.01 shall not be liable for any transaction costs associated with such a
Transfer other than the legal costs incurred by that Purchaser and, if the Initial Limited
Partner is obligated to pay selling commissions, then a pro-rata portion of such selling
commissions.

     (d) The closing of such purchase by the transferee shall be on the same date that the
transferee acquires Tag Along Units from the Initial Limited Partner; provided that such
Purchaser have been given ten (10) days advance notice of such closing; provided further,
however, that any such closing shall be delayed, to the extent required, until the next
succeeding Business Day following the expiration of any required waiting periods under the
HSR Act and the obtaining of all other governmental approvals reasonably deemed necessary by
a party to the Transfer.

Section 2.02 Drag-Along Right. 

     (a) Prior to an IPO, in connection with any Transfer for value (whether by sale, merger
or otherwise) of all of the Subordinated Units beneficially owned by the Initial Limited
Partner to any Person, the Initial Limited Partner shall have the right to require all of
the Purchasers to sell all, but not less than all, of their Common Units on the terms
described in Section 2.02(b) below (the “Drag-Along Right”).

4

 

     (b) In connection with any proposed Transfer subject to this Section 2.02, the Initial
Limited Partner shall give written notice to each Purchaser at least twenty (20) days prior
to such Transfer, which notice shall specify the amount of consideration to be received by
the Initial Limited Partner for its Subordinated Units in connection with such Transfer and
the place and date on which the Transfer is expected to be consummated (a “Drag-Along
Notice”). Until the first anniversary of the date of this Agreement, the Drag-Along
Right shall be limited such that the amount of consideration to be received by the
Purchasers for their Common Units must be equal to or greater than $18.02 per unit.
Following the first anniversary of the date of this Agreement, the per unit consideration to
be received by Purchasers in a Transfer governed by this Section 2.02 shall be equal to the
per unit consideration to be received by the Initial Limited Partner as reflected in the
Drag-Along Notice.

     (c) The closing of such purchase by the transferee shall be on the same date that the
transferee acquires securities from the Initial Limited Partner (it being acknowledged that
(i) in no event shall the Initial Limited Partner be obligated to Transfer any securities
and (ii) the Purchasers shall not be obligated to Transfer any securities unless and until
the Initial Limited Partner Transfers securities hereunder), provided that the Purchasers
have been given twenty (20) days’ advance notice of such closing; provided further, however,
that any such closing shall be delayed, to the extent required, until the next succeeding
Business Day following the expiration of any required waiting periods under the HSR Act and
the obtaining of all other governmental approvals reasonably deemed necessary by a party to
such Transfer.

     (d) The Initial Limited Partner shall have the right to require the Company to
cooperate fully with potential acquirors of the Company in a prospective transaction
pursuant to this Section 2.02 by taking all customary and other actions reasonably requested
by such Persons or such potential acquirors, including without limitation, making the
Company’s properties, books and records, and other assets reasonably available for
inspection by such potential acquirors and making its employees reasonably available for
interviews.

Section 2.03 Representations and Warranties. The Initial Limited Partner and each
Purchaser who Transfers Common Units pursuant to this Agreement shall not be required to make any
representations or warranties in connection with such Transfer other than representations and
warranties as to (and the Initial Limited Partner and each such Purchaser shall execute an
agreement for the benefit of the proposed transferee providing for representations and warranties
as to) (i) such unitholder’s ownership of the Tag Along Units or Common Units, as the case may be,
to be Transferred free and clear of all liens, claims and other encumbrances other than those
arising under this Agreement, (ii) such unitholder’s power and authority to effect such Transfer,
and (iii) such matters pertaining to compliance with securities laws as are relevant to determining
whether an exemption from registration is available in connection with such Transfer; provided,
however, for the avoidance of doubt, the parties acknowledge that the consideration to be received
by the Initial Limited Partner and such Purchaser may consist of, among other things, an interest
in an escrow account, a security or other consideration, the ultimate value of which may be
dependent upon, among other things, the accuracy of representations and warranties relating to the
Company and its business or the future

5

 

performance of the Company. Neither the Initial Limited Partner or the Purchasers shall be
required to provide any indemnification for losses or claims other than with respect to a breach of
such representations and warranties.

     Section 2.04 Additional Acts. Each Purchaser who participates in a Transfer pursuant
to this Agreement shall promptly perform, at the sole cost and expense of the requesting party
(except for attorneys’ fees and expenses, which shall be borne by the party incurring such costs),
whether before or after any such closing, such additional acts (including, without limitation,
executing and delivering additional documents, the terms and conditions of which shall be no more
burdensome to such Purchaser than the terms and conditions of the documents executed by the Initial
Limited Partner in connection with such Transfer) as are reasonably required to effect more fully
the transactions contemplated by this Agreement. 

ARTICLE III

MISCELLANEOUS

     Section 3.01 Communications. All notices and other communications provided for or
permitted hereunder shall be made in writing by facsimile, courier service or personal delivery:

     (a) if to the Purchasers, at the most current address given by the Purchasers to the
Company in accordance with the provisions of this Section 3.01, which address initially is,
with respect to the Purchasers, the addresses set forth in the Purchase Agreement,

     (b) if to a permitted transferee of a Purchaser, to such Holder at the address
furnished by such permitted transferee, and

     (c) if to the Company, at 14950 Heathrow Forest Parkway, Suite 111, Houston, Texas
77032, notice of which is given in accordance with the provisions of this Section 3.01.

     All such notices and communications shall be deemed to have been received at the time
delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or
sent via Internet electronic mail; and when actually received, if sent by any other means.

     Section 3.02 Successor and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties, including subsequent Holders of
Purchased Securities to the extent permitted herein.

     Section 3.03 Transfer or Assignment of Tag Along Rights. The rights granted to the
Purchasers by the Company under this Agreement may be transferred or assigned by any Purchaser to
one or more transferee(s) or assignee(s) of such Purchaser so long as: (a) following such transfer
or assignment such transferee or assignee holds Common Units representing at least $10 million of
the Purchased Securities sold pursuant to the terms of the Purchase Agreement, or (b) any
transferee or assignee of such Common Units is already a party to this Agreement; provided that in
any case, (x) the Company is given written notice prior to any said transfer or assignment, stating
the name and address of each such transferee and identifying the securities with respect to which
such tag along rights are being transferred or assigned, and

6

 

(y) each such transferee assumes in writing responsibility for its portion of the obligations
of such Purchaser under this Agreement (unless it is already a party to this Agreement); and
provided further, that the requirements in this Section 3.03(a) and (b) shall not apply to an
Affiliate Transfer.

     Section 3.04 Specific Performance. Damages in the event of breach of this Agreement
by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed
that each such Person, in addition to and without limiting any other remedy or right it may have,
will have the right to an injunction or other equitable relief, including specific performance, in
any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the
terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it
may have on the ground of lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief. The existence of this right will not preclude any such
Person from pursuing any other rights and remedies at law or in equity which such Person may have.

     Section 3.05 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

     Section 3.06 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     Section 3.07 Governing Law. The laws of the State of New York shall govern this
Agreement without regard to principles of conflict of laws. 

     Section 3.08 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting or impairing the validity or enforceability of such provision in any other
jurisdiction.

     Section 3.09 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the rights granted by the Company set forth herein.
This Agreement supersedes all prior agreements and understandings between the parties with respect
to such subject matter.

     Section 3.10 Amendment. This Agreement may be amended only by means of a written
amendment signed by the Company and the Holders of a majority of the then outstanding Purchased
Securities; provided, however, that no such amendment shall materially and adversely affect the
rights of any Holder hereunder without the consent of such Holder.

     Section 3.11 No Presumption. In the event any claim is made by a party relating to
any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or

7

 

persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at
the request of a particular party or its counsel.

[The remainder of this page is intentionally left blank.]

8

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	 	EAGLE ROCK PIPELINE, LP
	 
	 	 	 	 
	 

	 	By:
	 	Eagle Rock Pipeline GP, LLC
	 

	 	 	 	its general partner

	 	 	 	 	 
	 	 	 
	 	By:  	                                      /s/ Alex A. Bucher
 	 
	 	 	Alex A. Bucher 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EAGLE ROCK PIPELINE GP, LLC

 	 
	 	By:  	  /s/ Alex A. Bucher
 	 
	 	 	Alex A. Bucher 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 	EAGLE ROCK HOLDINGS, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Eagle Rock GP, LLC

its general partner

	 	 	 	 	 
	 	 	 
	 	By:  	                          /s/ Alex A. Bucher
 	 
	 	 	Alex A. Bucher 	 
	 	 	Chief Executive Officer 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	GSO Special Situations Fund LP 

 	 
	 	By:  	GSO Associates LLC, its general partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/ Matthew W. Quigley
 	 
	 	 	Matthew W. Quigley 	 
	 	 	Senior Vice President 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	 	RCH Energy Opportunity Fund I, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	RCH Energy Opportunity Fund I GP,
L.P., 

its general
partner
	 
	 	 	 	 
	 

	 	By:
	 	RR Advisors, LLC, its general partner

	 	 	 	 	 
	 	 	 
	 	By:  	                         /s/ Robert Raymond
 	 
	 	 	    Robert Raymond, 	 
	 	 	    its sole member 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	HSH Nordbank AG, Cayman Islands Branch

 	 
	 	By:  	/s/ Thomas Emmons
 	 
	 	 	Thomas Emmons 	 
	 	 	Senior Vice President 	 
	 
	 	 	 
	 	By:  	/s/ Rohan Singh
 	 
	 	 	Rohan Singh 	 
	 	 	Vice President 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	Stephenson Equity Company

 	 
	 	By:  	/s/ Charles C. Stephenson, Jr.
 	 
	 	 	  Charles C. Stephenson, Jr. 	 
	 	 	  Partner 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	Swank MLP Convergence Fund, LP

 	 
	 	By:  	  /s/ Jerry Swank
 	 
	 	 	Jerry Swank, 	 
	 	 	Managing Partner 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	Tortoise Capital Resources Corporation

 	 
	 	By:  	  /s/ David J. Schulte
 	 
	 	 	David J. Schulte 	 
	 	 	President and Chief Executive Officer 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	 	Kenmont Onshore Fund, L.P.
	 
	 	 	 	 
	 

	 	By
	 	Kenmont
Investment Management, L.P.,

its Investment Manager
	 
	 	 	 	 
	 

	 	By:
	 	  /s/ John Harkrider
	 

	 	 	 	 
	 

	 	 	 	  John Harkrider

Chief Financial Officer

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	RAMOT Capital, LLC

 	 
	 	By:  	  /s/ Carol Calhoun
 	 
	 	 	  Carol Calhoun 	 
	 	 	  Chief Operating Officer 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	Steven Adams

 	 
	 	By:  	  /s/ Steven Adams
 	 
	 	 	Steven Adams 	 
	 	 	 	 
	 

[Signature Page to Tag Along Agreement]

 

 

	 	 	 	 	 
	 	BBTTFM Partners

 	 
	 	By:  	/s/ Steve Adams
 	 
	 	 	 	 
	 	 	 	 
	 

[Signature Page to Tag Along Agreement]exv10w01

 

Exhibit 10.01

AGREEMENT ON THE SALE OF A BUSINESS

Between the undersigned:

Annemie Moens, advocate of Antwerp, with registered offices in 2610 Antwerpen-Wilrijk, Prins
Boudewijnlaan 177-179, Belgium, acting in her capacity as receiver of the bankrupt estate of NV
Soft Cell, with registered offices in 2100 Deurne, Luchthavenlei 7A, Belgium, company number
0421.890.018, appointed in terms of the judgment rendered by the Commercial Court of Antwerp on
March 2nd, 2006.

Hereafter called the Seller

and

QAD Inc, company registered in terms of the laws of the State of Delaware, United States of
America, listed on the Nasdaq Stock Exchange, with registered offices at 6450 Via Real,
Carpinteria, California, USA

and represented by Karl Lopker, CEO

acting in its own name and on its own behalf, as well as in the name and on behalf of one or more
other buyers in accordance with article 5 hereafter.

hereafter called the Buyer

Hereby agree to the following:

Article 1

1.1. The Seller transfers to the Purchaser, who accepts, the assets of NV Soft Cell, which are
sufficiently well known to the Buyer.

This agreement includes all movable property, as included in the inventory appended to the present
agreement (excluding all goods belonging to third parties), including all intangible assets,
including inter alia all intellectual property rights, whether registered or not, but specifically
excludes all debt and outstanding customer claims.

Hereby are thus transferred the stock, the trading name “Soft Cell”, the equipment, the office
material, the computers and other hardware, the rolling stock, IT systems, know-how, procedures,
intellectual and property rights to all former and current software versions of NV Soft Cell as
well as those presently being developed, all software developments of NV Soft Cell, both registered
and unregistered, as well as the customer base [remark: the order portfolio is dealt with hereafter
under current agreements].

 

 

1.2 With the exception of the intellectual property rights, the real transfer of property rights
and delivery shall take place on the date of closing (hereafter called Closing), to be agreed upon
by the Parties, but in no event later than 15 April 2006, article 4 (Risk) notwithstanding.

1.3 Regarding current agreements, the Parties agree to the following:

- Lease
Agreements, Labour Agreements, etc. ...

The Seller confirms that the current leasing and/or rental agreements (in so far as is known 10 IBM
laptops, IBM servers, vehicle leases or rentals) and all contracts of employment have or will be
terminated at the expense of the bankrupt estate. The Seller confirms that the Buyer has no
(potential) liabilities in connection with the termination of the contracts of employment through
the failed company or in relation to the employment of only a part of these employees other than
the strict legal obligation with regards to the recognition of the seniority of the employees
employed in terms of Chapter III of CAO no 32b by the Buyer or by a company affiliated to it.

The lease agreement regarding the buildings was cancelled by the Seller as of the date of
bankruptcy. In view of the explicit confirmation of the manager of the buildings, which
confirmation had been communicated to the Buyer, said manager has accepted responsibility for the
direct conclusion of a new lease.

For the remaining agreements, and in the event of there being additional lease or rental agreements
not yet known to the receiver, the Seller shall, in application of art. 46 Faill. W., cancel all
these at the expense of the bankrupt estate.

- the Development, Maintenance, License and Service Contracts (of which a list has been appended to
the present agreement; with the understanding that the list in question does not feature the
partners nor the entire customer base but only customers/co-contracting parties with current or
expired maintenance/service contracts; it is thus possible that there are additional
customers/co-contracting parties and partners that fall under the scope of this agreement): the
Buyer declines to take over the existing contracts themselves with all their rights and obligations
in view of the relevant commitments and uncertainties. The Buyer receives from the Seller the
exclusive right to approach (part of) the co-contracting parties on the basis of its own views and
interests. However, up and to the date of Closing, the Buyer has the right to request assistance
from the Seller with the transfer of one or several of the aforementioned agreements, which
assistance shall be given by the Seller.

The Seller shall in due time, in agreement with the Buyer and in accordance with the relevant
stipulations inform the co-contracting parties and the media of the fact that the receiver no
longer implements and thus terminates these agreements. If the Buyer proactively in its own name
make declarations to co-contracting parties or the media, the Buyer shall keep the Seller informed
of any such communications.

1.4 The Seller also hereby declares and guarantees that the transfer is carried out free from any
seizure, priority right, right of lien, option, right of lease, debt, bond, first right of refusal,
option, limitations of use and right, as well as any other right held by a third party.

1.5. The receiver confirms that it is willing to transfer to the Buyer, at its request, the shares
held by the bankrupt company in the Czech company Soft Cell. In this regard, the Parties have
agreed that the Buyer shall have the exclusive right to these shares (until April 10th, 2006) and
will first carry out an investigation into the financial and administrative state of this company
before taking a decision on the matter. If the shares are transferred, they shall be transferred
for the symbolic

 

 

amount of EUR1 (one euro). . In this regard, the Buyer shall give notification of
its decision at the latest on April 10th, 2006.

1.6. Goods that belong to third parties shall not be included in the transfer: in this regard, the
Buyer needs to come to an agreement with third parties on the taking over of existing leases and/or
other agreements, or negotiate new agreements, e.g. the lease agreement entered into with NV Albino
(details already communicated).

Given that the claims verification report was concluded on March 31, 2006, and that up and to that
date third parties could invoke their reservation of title with respect to goods located at the
bankrupt company and for which payment had not been made, the Buyer hereby very explicitly
recognises that reservations of title may be invoked and that it will not resist the return of such
goods to third parties, provided that these parties exercise their right in a legally valid manner.

Should third parties formulate claims that lead to the compulsory restitution of goods by the
Buyer, such instances shall never authorise the Buyer to lodge against the receiver a claim for
damages or a reduction in the agreed purchase price.

1.7 The Seller declares that to the best of its knowledge the bankrupt company is the sole entity
entitled to the intellectual property rights, IT systems and software and that all intellectual
property rights, IT system and software are unencumbered. To the best knowledge of the Seller, upon
transfer the Buyer shall be fully entitled to the use and/or operating of the intellectual property
rights, IT systems, software and licenses. Unless provided for otherwise by the transferred
agreements, of which copy had been handed to the Buyer, after transfer the Buyer shall not be
liable to make payment to any third parties in terms of royalties, licensing or any other fees for
the use of the intellectual property rights, IT systems or software.

Article 2

On August 25, 2005, the Buyer granted a loan to the Seller, currently due, for an amount of
EUR250,000. The Buyer hereby relinquishes its right to repayment of this loan.

Article 3

The business thus described is transferred for the overall price of EUR810,000 (eight hundred and
ten thousand euro). The price of the intellectual property rights amounts to EUR600,000, shall be
due at the signing of the present agreement and paid within 24 hours after signing of this
agreement into the account of the bankrupt estate 403-4174031-97 tnv KBC Bank (IBAN BE54 4034 1740
3197 — BIC KREDBEBB). The price of goods other than the intellectual property rights amount to
EUR210,000 and shall be due at the date of the property transfer on Closing, but shall already be
written over by means of an advance payment for the account of the final buyer(s).

     In the event of the transfer being subject to VAT, in particular on account of a breakdown of the
purchase by several business, which breakdown shall be specified by the Buyer in accordance with
the stipulations of article 5, the aforementioned amount shall be increased by the due VAT amount.
The Seller guarantees the Buyer and any business acting on its behalf in accordance with article 5
of this Agreement, that the Seller shall do all the necessary, including, inter alia, the drafting
of documents, invoices or improved documents as well as the submission of a request for the refund

 

 

by the Seller’s tax authorities, to thereby enter the sale without the application of VAT on the
basis of articles 11 and 18, §3 of the VAT Code, or to enable the Buyer and any business acting on
its behalf to recover undue VAT or to deduct any prepaid VAT.

Article 4

As of the date of the signing of the present agreement, the Buyer shall take over and release the
Seller from all responsibility with reference to the purchased goods.

Article 5

With reference to goods other than the intellectual property rights which are hereby immediately
and completely acquired by the Buyer, the Parties agree that the present agreement constitutes an
agreement of principle between the Parties. At Closing, the Buyer has the right to appoint other
businesses (whether or not they belong to the QAD Group or have been newly set up) which, acting on
behalf of the Buyer, buy from the Seller part or all of the goods, divided up in accordance with
the specifications of the Buyer, taking such goods over in accordance with the conditions of the
present agreement, with the understanding that the quantities of the transferred goods shall remain
the same, as set out in this agreement, as well as the agreed price, as set out in article 3 of
this agreement. Failing appointment of other buyers, the Buyer shall definitively be bound by the
present contract with reference to all goods, and transfer of property shall be made to the Buyer
on Closing date. Should another Buyer be appointed in accordance with this article, the Seller
undertakes to give its full cooperation with the drafting, in a short space of time, of the
necessary contractual documents.

Article 6

The Seller acknowledges that there are no claims on the Buyer and that the Seller shall make no
claims on the Buyer, implying that the Seller relinquishes claims of payment of all outstanding
invoices for, inter alia, consultancy and services provided to the Buyer or any companies related
to the Buyer for an amount of EUR214,285.50 (with the exception of claims for payment of the
purchase price set out in Article 3).

Article 7

In the event of a dispute between the Seller and the Buyer with reference to the present agreement,
the Commercial Court of the arondissement in which are located the registered offices of the
bankrupt company alone shall have jurisdiction.

Drawn up in threefold, each Party acknowledging receipt of one copy, the third copy being due to
the Court/Overseeing Judge.

Antwerp, March 20, 2006

	 	 	 
	/s/ A. Moens

	 	/s/ Karl Lopker
	Receiver

	 	CEO, QAD Inc.
	 	 	 
	Seller

	 	Buyer

APPENDICES

1.
Inventory of movable property

2. List of
intellectual property rights, software and IT

3. List of
development, maintenance, licensing and service agreements

4. List of rolling stock

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]