EXHIBIT 10.12
MICROSOFT CORPORATION
AND
PROGINET CORPORATION
ASSET PURCHASE AGREEMENT
Dated as of December 17, 1996
TABLE OF CONTENTS
Page
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RECITALS 1
ARTICLE I DEFINITIONS 1
1.1 Assumed Obligations 1
1.2 Closing 1
1.3 Closing Date 1
1.4 Company Affiliate 2
1.5 Confidential Information 2
1.6 Follow-On Transition Period 2
1.7 Initial Transition Period 2
1.8 Intellectual Property Rights 2
1.9 MVS Platform 2
1.1O Object Code 3
1.11 Other Platforms 3
1.12 Product Revenues 3
1.13 Source Code 3
1.14 Transaction Period 3
1.15 Windows Components of the Acquired Assets 3
1.16 Windows Platforms 3
1.17 Other Defined Terms 3
ARTICLE II ACQUISITION AND DISPOSITION OF ACQUIRED ASSETS 3
2.1 Acquired Assets 3
2.1.1 Other Assets 4
2.1.2 Other Assets 4
2.1.3 Other Assets 4
2.2 Assumption of Obligations 4
ARTICLE III PURCHASE PRICE AND PAYMENT 4
3.1 Minimum Purchase Price 4
3.3 Additional Share Issuance 5
3.3 Additional Contingent Payments by Company 5
3.4 Restriction on Transfer 6
3.5 Fractional Shares 6
ARTICLE IV CLOSING 6
4.1 Closing and Delivery of Acquired Assets 6
4.2 Method of Acquisition 6
4.2.1 Conveyance of Acquired Assets 6
4.2.2 Assumption of Obligations 7
ARTICLE V REPRESENTATIONS AND WARRANTIES 7
5.1 Representations and Warranties of the Company 7
5.1.1 Authority 7
5.1.2 Adequate Shares 7
5.1.3 Due Authorization 7
5.1.4 Reliance 7
5.2 Representations and Warranties of Microsoft 7
5.2.1 Authority 7
5.2.2 Ownership of Acquired Assets 7
5.2.3 Reliance 8
ARTICLE VI ADDITIONAL AGREEMENTS 8
6.1 Registration Rights 8
6.2 Board Representation 11
6.3 BackOffice License Rights 11
6.4 Expenses 12
6.5 Additional Agreements 12
6.7 Public Announcements 12
6.8 Taxes 12
6.9 Bulk Sales 12
ARTICLE VII CONDITIONS PRECEDENT 13
7.1 Conditions to Company's Obligations 13
7.1.1 Representations and Warranties 13
7.1.2 Delivery of Software Code 13
7.1.3 Conveyance of Acquired Assets 13
7.1.4 Investment Agreement 13
7.1.5 Opinion of Counsel 13
7.2 Conditions to Microsoft's Obligations 14
7.2.1 Representations and Warranties 14
7.2.2 Delivery of Consideration 14
7.2.3 Assumption of Obligations 14
7.2.4 Opinion of Counsel 14
7.3 Effectiveness 14
ARTICLE VIII CONDITIONS SUBSEQUENT 14
8.1 Product Support Plan 15
8.2 Payments Related to Product Support 15
8.3 Customer Relationships 15
8.4 Company Upgrades 15
8.5 Marketing Efforts 16
ARTICLE IX INDEMNIFICATION 16
9.1 Indemnification by Company 16
9.2 Indemnification by Microsoft 18
9.3 Limitations of Liability 18
ARTICLE X MISCELLANEOUS 19
10.1 Notices 19
10.2 Dispute_Resolution 19
10.3 Assignment 19
10.4 Construction 20
10.5 Entire Agreement 20
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of December
17, 1996 (the "Agreement Date") by and between MICROSOFT CORPORATION, a
Washington corporation located at Xxx Xxxxxxxxx Xxx, Xxxxxxx, XX 00000
("Microsoft") and PROGINET CORPORATION, A Delaware corporation located at 000
Xxxxxx Xxxx Xxxxx, Xxxxxx Xxxx, Xxx Xxxx 00000 ("Company").
RECITALS
A. COMPANY DESIRES TO ACQUIRE CERTAIN ASSETS OF MICROSOFT (THE "Acquired ASSETS"
AS DEFINED IN SECTION 2.1) AND TO ASSUME CERTAIN CONTRACTUAL OBLIGATIONS (THE
"Assumed, Obligations" AS DEFINED IN SECTION 1.1), ALL ON THE TERMS AND SUBJECT
TO THE CONDITIONS HEREINAFTER SET FORTH.
7.2.2
A. MICROSOFT DESIRES TO SELL SUCH ASSETS TO COMPANY, AND TO TRANSFER SUCH
OBLIGATIONS TO COMPANY, ON THE TERMS AND SUBJECT TO THE CONDITIONS HEREINAFTER
SET FORTH.
7.2.3
A. THE BOARD OF DIRECTORS OF COMPANY HAS APPROVED THE TERMS OF THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED HEREBY.
7.2.4
7.2.5 D. THE PARTIES FURTHER DESIRE TO COOPERATE IN CERTAIN MARKETING
ACTIVITIES CONCERNING THE ACQUIRED ASSETS, AS DESCRIBED IN EXHIBIT C TO THIS
AGREEMENT (THE "Joint Sales and Support Plan").
INTENDING TO BE LEGALLY BOUND, and in consideration of the promises and
the mutual representations, warranties, covenants and agreements contained
herein, Microsoft and Company hereby agrees as follows:
ARTICLE I
DEFINITIONS
7.2.6 1.1 "Assumed Obligations" MEANS ALL AGREEMENTS, OBLIGATIONS AND
LIABILITIES WHICH COMPANY AGREES TO ASSUME UNDER THE TERMS OF THIS AGREEMENT, AS
LISTED IN EXHIBIT B AND FURTHER SPECIFIED IN SECTION 2.2 BELOW.
1.2 "CLOSING" means the closing of the transaction contemplated by this
Agreement, as such closing is further described in Section 4.1 below.
1.3 "CLOSING DATE" means the date on which the Closing occurs, as such date is
further described in Section 4.1 below.
1.4 "COMPANY AFFILIATE" means any entity directly or indirectly controlling,
controlled by, or under common control with Company, where "controlling,
controlling, and under common control with" refers to the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of an entity, whether through the ownership of voting shares, by
contract, or otherwise. In the case of an entity that is a partnership, limited
liability company, corporation, or similar entity and that has partners,
members, or shareholders with equal ownership interests or equal control
interests, by contract or otherwise, each such partner, member, or shareholder
shall be deemed to possess, directly or indirectly, the power to direct or cause
the direction of the management and policies of that entity.
1.5 "CONFIDENTIAL INFORMATION" means any trade secrets relating to either
party's product plans, designs, costs, prices and names, finances, marketing
plans, business opportunities, personnel, research development or know-how,
including without limitation the Source Code of the Acquired Assets.
Confidential Information shall not include information that: (i) is or becomes
generally known or available by publication, commercial use or otherwise through
no fault of the receiving party; (ii) is known and has
been reduced to tangible form by the receiving party at the time of disclosure
and is not subject to restriction; (iii) is independently developed or learned
by the receiving party; (iv) is lawfully obtained from a third party that has
the right to make such disclosure; (v) is made generally available by the
disclosing party without restriction on disclosure; (vi) is disclosed to the
extent required by judicial or administrative process when the party making such
disclosure believes in good faith and after consultation with the other party
that it is legally required to do so; or (vii) is contained in the documentation
components of the Acquired Assets.
1.6 "FOLLOW-ON TRANSITION PERIOD" means the fifteen (15) month period
immediately following the Initial Transition Period; i.e., beginning as of the
fourth (4th) month after the Closing Date and ending as of the eighteenth (I8th)
month after the Effective Date.
1.7 "INITIAL TRANSITION PERIOD" means the three (3) month period immediately
following the Closing Date.
1.8 "INTELLECTUAL PROPERTY RIGHTS" means all intellectual property rights
arising under statutory or common law, and whether or not perfected, including,
without limitation, all (a) patents and patent applications owned or licensable
by a party hereto, (b) rights associated with works of authorship, including
copyrights, copyright applications, mask work rights, mask work applications,
and mask work registrations, (c) rights relating to the protection of trade
secrets and confidential information, (d) any rights analogous to those set
forth in this Section 1.7 and any other proprietary rights relating to
intangible property, and (e) divisions, continuations, renewals, reissues and
extensions of the foregoing (as and to the extent applicable) now existing,
hereafter filed, issued or acquired.
1.9 "MVS PLATFORM" means the IBM mainframe operating system known as "WS" or
"OS/390," and any direct successors thereto.
1.10 "OBJECT CODE" means machine-executable computer software code in binary
form.
1.11 "OTHER PLATFORMS" means any and all computer operating systems
other than the MVS Platform or the Windows Platforms on which any of
the Acquired Assets operate as of the Closing Date.
7.2.7 1.12 "Product Revenues" MEANS GROSS REVENUES EARNED BY COMPANY IN
THE FORM OF LICENSE FEES, ROYALTIES, MAINTENANCE FEES, AND SUPPORT FEES
(INCLUDING BOTH PERIODIC MAINTENANCE AND/OR SUPPORT CHARGES AND CHARGES
FOR ERROR CORRECTION SERVICES CHARGED ON A PER-INCIDENT OR HOURLY
BASIS) WITH RESPECT TO THE ACQUIRED ASSETS. PRODUCT REVENUES ALSO
INCLUDE GROSS REVENUES EARNED BY ANY COMPANY AFFILIATE IN THE FORM OF
LICENSE FEES, ROYALTIES, MAINTENANCE FEES, AND SUPPORT FEES WITH
RESPECT TO THE ACQUIRED ASSETS, LESS ANY FEES PAID BY SUCH COMPANY
AFFILIATE TO COMPANY IN CONSIDERATION OF SUCH EXERCISES OF RIGHTS IN
ACQUIRED ASSETS. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
PRODUCT REVENUES SHALL NOT INCLUDE ANY REVENUES EARNED BY COMPANY OR A
COMPANY AFFILIATE IN CONSIDERATION OF THE SIX HUNDRED AND EIGHTY-FOUR
THOUSAND SIX HUNDRED AND FOUR DOLLARS (US$684,604.00) IN MICROSOFT
OBLIGATIONS ASSUMED BY COMPANY PURSUANT TO SECTION 2 OF THIS AGREEMENT
1.13 "SOURCE CODE" means computer software code in human-readable,
high-level language form which, when compiled or assembled, becomes the
executable Object Code of a software program. Source Code shall include
all developer comments concerning the relevant software code.
7.2.8 1.14 "Transition Period" MEANS THE EIGHTEEN (18) MONTH PERIOD
IMMEDIATELY FOLLOWING THE CLOSING DATE, AND CONSISTS OF BOTH THE
INITIAL TRANSITION PERIOD AND THE FOLLOW-ON TRANSITION PERIOD.
1.15 "WINDOWS COMPONENTS OF THE ACQUIRED ASSETS" means those portions
of the Acquired Assets which operate on Windows Platforms.
7.2.9 1.16 "Windows Platforms" MEANS MICROSOFT'S WINDOWS 3.X, WINDOWS
95, WINDOWS NT WORKSTATION, AND WINDOWS NT SERVER OPERATING SYSTEMS,
AND ANY DIRECT SUCCESSORS THERETO.
1.17 OTHER DEFINED TERMS. All other initially capitalized terms shall
have the meanings assigned to them in this Agreement.
ARTICLE II
ACQUISITION AND DISPOSITION OF ACQUIRED ASSETS
7.2.10 2.1 Acquired Assets. SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, AT THE CLOSING (AS DEFINED BELOW), MICROSOFT SHALL SELL, CONVEY,
TRANSFER, ASSIGN AND DELIVER TO COMPANY, AND COMPANY SHALL PURCHASE, ACQUIRE AND
ACCEPT FROM MICROSOFT, THE FOLLOWING ASSETS:
2.1.1 Netwise Assets. ALL SOFTWARE, DOCUMENTATION, TEST CASES,
DEVELOPMENT HISTORY DATABASE, TRAINING MATERIALS AND RELATED
PROPRIETARY MATERIALS ACQUIRED BY MICROSOFT FROM NETWISE, INC. (THE
"NETWISE ASSETS") UNDER AN ASSET PURCHASE AGREEMENT DATED OCTOBER 27,
1995 (THE "NETWISE ASSET PURCHASE AGREEMENT").
7.2.11
2.1.2 Netwise Assets Further Developed or Modified by Microsoft. THE
ACQUIRED ASSETS ALSO INCLUDE ALL ERROR CORRECTIONS AND UPDATES
TO THE NETWISE ASSETS, DOCUMENTATION AND MATERIALS RELATED TO
THE NETWISE ASSETS DEVELOPED BY MICROSOFT BETWEEN OCTOBER 27,
1995 AND THE CLOSING DATE OF THIS AGREEMENT.
7.2.12
2.1.3 Other Assets. "Other Assets" WHICH SHALL MEAN ALL OF
MICROSOFT'S INTANGIBLE ASSETS ACQUIRED PURSUANT TO THE NETWISE
ASSET PURCHASE AGREEMENT, INCLUDING GOODWILL, GOING CONCERN
VALUE, CUSTOMER LISTS, CONTRACTS, AGREEMENTS, LICENSES OR
LICENSE AGREEMENTS, COMMITMENTS, WARRANTIES, CLAIMS AND OTHER
XXXXXX AND INCHOATE RIGHTS, BUT EXCLUDING WITHOUT LIMITATION,
THE RETAINED OBLIGATIONS (AS DEFINED BELOW), CASH, MARKETABLE
SECURITIES, RECEIVABLES AND RIGHTS RELATING TO CONTRACTUAL
OBLIGATIONS (OTHER THAN THE
ASSUMED OBLIGATIONS (AS DEFINED BELOW)).
All of the above shall be referred to as the "ACQUIRED ASSETS";
provided, however, that notwithstanding anything to the contrary
hereinabove, the Acquired Assets do not include any leases, equipment
maintenance agreements or other contractual obligations to third
parties assumed by Microsoft under the Netwise Asset Purchase Agreement
(the "Retained Obligations").
7.2.13 2.2 Assumption of Obligations. AT THE CLOSING, COMPANY SHALL
ASSUME ONLY THOSE WRITTEN CONTRACTS, WRITTEN AGREEMENTS, WRITTEN LEASES
FOR PERSONAL PROPERTY AND WRITTEN COMMITMENTS OF MICROSOFT PERTAINING
TO THE ACQUIRED ASSETS AS OF THE CLOSING WHICH ARE SPECIFICALLY LISTED
ON EXHIBIT B (THE "Assumed Obligations"), WHICH SHALL THEREAFTER BE
PERFORMED BY COMPANY WHEN DUE IN ACCORDANCE WITH THE TERMS THEREOF
MICROSOFT SHALL USE ITS COMMERCIALLY REASONABLE BEST EFFORTS TO OBTAIN
CONSENT TO COMPANY'S ASSUMPTION OF ANY CONTRACTS REQUIRING THIRD PARTY
CONSENT. COMPANY SHALL BE SOLELY RESPONSIBLE FOR ALL COLLECTION MATTERS
AND ENTITLED TO RECEIVE ALL XXXXXXXX, PAYMENTS, AND RECEIPTS IN
CONNECTION WITH THE ASSUMED OBLIGATIONS, AND SHALL BE SOLELY
RESPONSIBLE FOR COMPLYING WITH MICROSOFT'S OBLIGATIONS AND ASSUMING
MICROSOFT'S LIABILITIES UNDER AND WITH RESPECT TO THE ASSUMED
OBLIGATIONS. COMPANY ASSUMES NO LIABILITIES WITH RESPECT TO THE
RETAINED OBLIGATIONS. AS OF THE TIME OF SUCH DELIVERY AND SUBJECT TO
SUCH EFFECTIVENESS, MICROSOFT'S SOLE OBLIGATIONS WITH RESPECT TO THE
ASSUMED OBLIGATIONS SHALL BE ITS OBLIGATIONS TO
COMPANY AS SET FORTH IN THIS AGREEMENT EACH PARTY WILL REMIT TO THE
OTHER, WITHIN @ (30) DAYS OF RECEIPT, ANY AMOUNTS RECEIVED BY SUCH
PARTY WHICH WERE EARNED BY THE OTHER PARTY IN CONNECTION WITH THE
ACQUIRED ASSETS AND SUPPORT THEREOF, AS DETERMINED AS OF THE CLOSING
DATE.
ARTICLE III
PURCHASE PRICE AND PAYMENT
3.1 Minimum Purchase Price. SUBJECT TO ARTICLE VII, COMPANY SHALL PAY
MICROSOFT A MINIMUM PURCHASE PRICE OF TWO MILLION SEVEN HUNDRED AND
EIGHTY-FOUR THOUSAND SIX HUNDRED AND FOUR DOLLARS (US$2,784,604.00), WHICH
SHALL INCLUDE BOTH AN ASSUMPTION OF OBLIGATIONS AND AN EQUITY COMPONENT AND
WHICH SHALL BE DUE AND NONREFUNDABLE AS OF THE CLOSING DATE, AS FOLLOWS:
7.2.14
3.1.1 COMPANY SHALL MAKE AN INITIAL PAYMENT TO MICROSOFT IN THE FORM OF
AN ASSUMPTION OF ASSUMED OBLIGATIONS EQUAL TO SIX HUNDRED AND
EIGHTY-FOUR THOUSAND SIX HUNDRED AND FOUR DOLLARS (US$684,604.00).
7.2.15
3.1.2 COMPANY SHALL MAKE FURTHER PAYMENTS IN THE FORM OF COMPANY'S
COMMON STOCK, PAR VALUE $.OOI PER SHARE OF COMPANY (THE "SHARES"),
WHICH SHARES SHALL BE EVIDENCED BY STOCK CERTIFICATES WITH LEGENDS AND
RESTRICTIONS AS REQUIRED BY LAW. THIS PAYMENT SHALL BE DELIVERED TO
MICROSOFT AS FOLLOWS: ON THE EIGHTEEN (18) MONTH ANNIVERSARY OF THE
CLOSING DATE (THE "18-MONTH ANNIVERSARY DATE"), COMPANY SHALL ISSUE
SHARES TO MICROSOFT HAVING A FAIR MARKET VALUE OF TWO MILLION ONE
HUNDRED THOUSAND DOLLARS (US$2,100,000.00). THE "FAIR MARKET VALUE" OF
THE SHARES TO BE ISSUED UNDER THIS SECTION 3.1.2 SHALL BE DETERMINED BY
DIVIDING TWO MILLION ONE HUNDRED THOUSAND DOLLARS (US$2,100,000.00) BY
THE AVERAGE CLOSING PRICE OF THE SHARES AS PUBLICLY REPORTED BY THE
EXCHANGE ON WHICH THE SHARES ARE LISTED, AS OF THE CLOSING TIME OF THE
LISTING EXCHANGE (IN SUCH EXCHANGE'S TIME ZONE) OVER THE TWENTY (20)
TRADING DAYS ENDING ONE TRADING DAY PRIOR TO THE 18-MONTH ANNIVERSARY
DATE. THE FOLLOWING EXAMPLE IS INSERTED FOR PURPOSES OF CLARIFICATION
OF THE PRECEDING SENTENCE: ASSUME THE 18-MONTH ANNIVERSARY DATE IS
WEDNESDAY, APRIL 1, 1998. THE SPECIFIED TWENTY (20) TRADING DAY PERIOD
WILL END ON AND INCLUDE TUESDAY, MARCH 31, 1998. ASSUME THE AVERAGE
PRICE DURING SUCH TWENTY (20) TRADING DAY PERIOD IS FOUR DOLLARS
(US$4.00) PER SHARE; MICROSOFT WOULD BE ENTITLED TO RECEIVE 525,000
SHARES ON THE 18-MONTH ANNIVERSARY DATE.
3.2 Additional Share Issuance. AS FURTHER CONSIDERATION FOR THE PROPERTY
PURCHASED UNDER THIS AGREEMENT, ON OR PRIOR TO THE CLOSING DATE, COMPANY
SHALL ISSUE AND DELIVER ONE HUNDRED THOUSAND (100,000) SHARES TO MICROSOFT,
WITH ANY LEGENDS AND RESTRICTIONS AS REQUIRED BY LAW, AND RECEIPT OF SUCH
SHARES BY MICROSOFT SHALL BE A CONDITION TO THE EFFECTIVENESS OF THIS
AGREEMENT.
7.2.16
3.3 Additional Contingent Payments by Company. COMPANY
SHALL MAKE ADDITIONAL PAYMENTS OF SHARES TO MICROSOFT BASED UPON THE
CUMULATIVE TOTAL OF PRODUCT REVENUES earned by Company during the
Transition Period TO the extent such cumulative total exceeds One Million
Dollars (US$1,000,000.00). Such additional payments shall be comprised of
the following:
3.3.1 ONE SHARE FOR EVERY FIFTY DOLLARS (US$50.00) OF COMPANY'S
CUMULATIVE PRODUCT REVENUES DURING THE TRANSITION PERIOD TO THE EXTENT
SUCH PRODUCT REVENUES EXCEED ONE MILLION DOLLARS (US$1,000,000.00) BUT
ARE LESS THAN FOUR MILLION DOLLARS (US$4,000.000-00); AND
7.2.17
3.3.2 ONE SHARE FOR EVERY TWENTY-FIVE DOLLARS (US$25.00) OF COMPANY'S
PRODUCT REVENUES DURING THE TRANSITION PERIOD FOR CUMULATIVE PRODUCT
REVENUES IN EXCESS OF FOUR MILLION DOLLARS (US$4,000,000-00) BUT LESS
THAN FOURTEEN MILLION DOLLARS (US$14,000.000.00).
FOR PURPOSES OF DETERMINING PRODUCT REVENUES, WHENEVER COMPANY
RECEIVES AN INDIVISIBLE REVENUE STREAM FOR TWO OR MORE PRODUCTS OR
SERVICES, INCLUDING FEES WHICH ARE INCLUDED IN THE DEFINITION OF
PRODUCT REVENUES, THEN COMPANY WILL PROPOSE A REASONABLE AND GOOD
FAITH ALLOCATION OF SUCH REVENUES ACROSS THE APPLICABLE PRODUCTS OR
SERVICES IN CONSULTATION WITH MICROSOFT. COMPANY SHALL ISSUE AND
DELIVER ALL SHARES DUE TO MICROSOFT UNDER THIS SECTION 5.3 WITHIN
SIXTY (60) DAYS AFTER THE "I 8-MONTH ANNIVERSARY DATE," WITH ANY
LEGENDS AND RESTRICTIONS AS REQUIRED BY LAW.
7.2.18
3.4 Restriction on Transfer. ALL OF THE SHARES ISSUED TO MICROSOFT UNDER
THIS AGREEMENT SHALL BE SUBJECT TO A CERTAIN INVESTMENT AGREEMENT BETWEEN
THE PARTIES, A FORM OF WHICH IS ATTACHED AS EXHIBIT E TO THIS AGREEMENT.
7.2.19
7.2.20 3.5 Fractional Shares. IN CONNECTION WITH THE SHARES TO BE ISSUED
PURSUANT TO SECTIONS 3.1 AND 3.2, NO FRACTIONAL SHARES WILL BE ISSUED. IN
LIEU OF SUCH ISSUANCE, THE NUMBER OF SHARES ISSUED TO MICROSOFT PURSUANT TO
THE TERMS OF THIS AGREEMENT SHALL BE ROUNDED TO THE CLOSEST WHOLE SHARE.
ARTICLE IV
CLOSING
4.1 Closing and Delivery of Acquired Assets. THE CLOSING OF THE TRANSACTION
(THE "Closing") WILL TAKE PLACE AS SOON AS PRACTICABLE AFTER
SATISFACTION OR WAIVER OF THE LAST TO BE FULFILLED OF THE CONDITIONS
SET FORTH IN ARTICLE VII THAT BY THEIR TERMS ARE NOT TO OCCUR AT THE
AGREEMENT DATE (THE "Closing Date"), AT THE OFFICES OF XXXXXXX XXXXX &
XXXXX, SEATTLE, WASHINGTON, UNLESS ANOTHER DATE OR PLACE IS AGREED TO
BY THE PARTIES HERETO. MICROSOFT AND COMPANY AGREE THAT MICROSOFT SHALL
DELIVER THE ACQUIRED ASSETS TO COMPANY IN THE STATE OF NEW YORK.
7.2.21
7.2.22 4.2 Method of Acquisition.
4.2.1 CONVEYANCE OF ACQUIRED ASSETS. The sale, conveyance, transfer,
assignment and delivery to Company of the Acquired Assets, as herein
provided, shall be effected by such bills of sale, endorsements,
assignments and other instruments of transfer and conveyance as may be
necessary to vest in Company the right, title and interest of Microsoft
in and to the Acquired Assets, free and clear of all liens, claims,
charges and encumbrances, except as otherwise provided in this
Agreement. Such documents shall include, without limitation, an
Assignment and Xxxx of Sale in the form hereto as Exhibit F. Microsoft
shall, at the Closing or at any time or from time to time after the
Closing, upon request, perform or cause to be performed such acts, and
execute, acknowledge and deliver or cause to be executed, acknowledged
and delivered, such documents as may be reasonably required or
requested to effectuate the sale, conveyance, transfer, assignment and
delivery to Company of any of the Acquired Assets or for the
performance by Microsoft of any of its obligations hereunder.
4.2.2 Assumption of Obligations. COMPANY SHALL AT THE CLOSING
EXECUTE AN ASSUMPTION OF OBLIGATIONS IN THE FORM ATTACHED
HERETO AS EXHIBIT G, AND WILL, AT THE CLOSING OR AT ANY TIME
OR FROM TIME TO TIME AFTER THE CLOSING, UPON REQUEST, PERFORM
OR CAUSE TO BE PERFORMED SUCH ACTS, AND EXECUTE, ACKNOWLEDGE
AND DELIVER OR CAUSE TO BE EXECUTED, ACKNOWLEDGED AND
DELIVERED, SUCH OTHER DOCUMENTS AS MAY BE REASONABLY REQUIRED
OR REQUESTED FOR THE ASSUMPTION BY COMPANY OF THE ASSUMED
OBLIGATIONS OR FOR THE DISCHARGE OR THE PERFORMANCE BY
MICROSOFT OF ANY OF ITS OBLIGATIONS HEREUNDER.
7.2.23
7.2.24
7.2.25
7.2.26
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of COMPANY. COMPANY REPRESENTS AND
WARRANTS TO MICROSOFT ON EXECUTION OF THIS AGREEMENT AND, IF LATER, ON
THE CLOSING DATE AS FOLLOWS:
7.2.27
5.1.1 AUTHORITY. It has the full power to enter into and perform under
this Agreement and give the license grants set forth herein.
5.1.2 ADEQAUTE SHARES. Company has and will keep available an adequate
number of authorized but unissued Shares to permit the issuances of the
Shares required pursuant to this Agreement and the transactions
contemplated hereby.
5.1.3 DUE AUTHORIZATION. The Shares to be issued to Microsoft pursuant
to the terms of this Agreement and the Investment Agreement, when
issued in accordance with this Agreement and the Investment Agreement,
will be duly authorized, validly issued, fully paid and nonassessable.
5.1.4 RELIANCE. The foregoing representations and warranties are made
by Company with the knowledge and expectation that Microsoft is placing
reliance thereon.
7.2.28 5.2 Representations and Warranties of Microsoft. MICROSOFT
REPRESENTS AND WARRANTS TO COMPANY AS FOLLOWS:
5.2.1 AUTHORITY. It has the full power to enter into and perform
under this Agreement and give the license grants set forth
herein.
5.2.2 OWNERSHIP OF ACQUIRED ASSETS. It has not previously and will not
grant any rights to any third party that are inconsistent with the
rights granted to Company herein.
5.2.3 TITLE; NO LIENS. It has good title to all of the Acquired Assets,
free and clear of any liens, claims, charges, chattel mortgages,
security interests or other encumbrances of whatsoever nature.
5.2.4 CONFLICTS, BINDING OBLIGATION. The execution and delivery of this
Agreement does not, and the transactions contemplated hereby will not,
violate or be in conflict with any agreement or contract, including
without limitation the Netwise Asset Purchase Agreement. There are no
claims by Netwise against Microsoft in connection with the Acquired
Assets or the Netwise Asset Purchase Agreement. This Agreement has been
duly executed and delivered by Microsoft and constitutes a valid and
legally binding obligation of Microsoft, enforceable in accordance with
its terms.
5.2.5 CONSENTS. No consent, action, approval or authorization of, or
registration, declaration or filing with, any federal, state or local
governmental agency or any third party is required to be obtained by
Microsoft in order to authorize the execution and delivery by Microsoft
of this Agreement or the performance by Microsoft of the terms hereof.
5.2.6 RELIANCE. The foregoing representations and warranties are made
by Microsoft with the knowledge and expectation that Company is placing
reliance thereon.
The foregoing warranties are for the benefit of Company only and do not
extend to any potential or claimed third party beneficiaries. EXCEPT AS
EXPRESSLY PROVIDED IN THIS SECTION 5.2, AND SUBJECT TO SECTION 7.1.3,
MICROSOFT IS SELLING THE ACQUIRED ASSETS ON AN "AS IS" BASIS. MICROSOFT
EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES, INCLUDING
WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
ARTICLE VI
ADDITIONAL AGREEMENTS
In addition to the foregoing, Microsoft and Company each agree to take the
following actions and to comply with the following terms after the
execution of this Agreement.
7.2.29 6.1. Registration Rights.
6.1.1 CANADIAN REGISTRATION RIGHTS. Within sixty (60) days after the 18
Month Anniversary Date, and upon the written request of Microsoft, the
Company shall prepare and file -with the British Columbia Securities
Commission (the "BC Commission") and the securities commission of any
other province of Canada in which the Company is then a reporting
issuer (collectively, with the BC Commission, the "Canadian
Commission") a preliminary prospectus qualifying the distribution of
the Shares so as to enable Microsoft to freely resell the Shares issued
under this Agreement without being subject to any hold period or other
resale restriction under applicable Canadian securities legislation
("Canadian Legislation"). As promptly as practicable after the filing
of the preliminary prospectus, the Company shall us6 its best efforts
to file a final prospectus relating to such distribution with, and to
obtain a receipt therefor from, the Canadian Commission under
applicable Canadian Legislation. The Company shall use its best efforts
to keep any resale prospectus current under the Canadian Legislation
for a period of one year, or such shorter period as may be required for
Microsoft to fully dispose of all the Shares thereunder. In connection
with the issuance of the shares, Microsoft agrees to provide any notice
or undertakings required by the Canadian Legislation, or by any stock
exchange located in Canada on which the Shares then trade.
6.1.2 6.1.2 U.S. Piggy-Back Rights. If Company is a reporting company
under Section 12(b) of 12(g) of the Securities Exchange Act of 1934, as
amended (a "Reporting Company"), then Microsoft subject to this Section
may have all or any portion of its Shares included in any registration
of Shares under the Securities Act of 1933, as amended (the "Act").
Whenever Company proposes to register under the Act the sale of any
class of its common stock or the common stock holdings of any of its
stockholders, then on any such occasion, Company will furnish Microsoft
with prompt written notice thereof. To the extent permitted by
applicable securities laws and this Agreement, Company will, subject to
Section 6.1.4, include in such registration such number of Microsoft's
Registrable Shares as Microsoft shall request to be included therein.
"Registrable Shares" shall mean all Shares issued pursuant to the
provisions of this Agreement. Microsoft shall exercise the "Piggy-back
rights" under this Section by giving written notice to Company to such
effect within seven (7) days after receipt of the Company's written
notice of any proposed registration by Company as aforesaid. The
provisions of this Section 6.1.2 shall not apply to a registration (1)
on Form S-8 or other comparable form relating solely to employee stock
benefit plans, (2) on Form S-4 or other comparable form relating solely
to business combination transactions, or (3) such other form which does
not include substantially the same information as would be included in
a registration statement covering the sale of common stock to the
public.
6.1.3 U.S. DEMAND REGISTRATION. In the event that the Company is a
Reporting Company, Microsoft may, (i) on an unlimited number of
occasions (but not more than twice in any twelve month period) require
the Company to effect the registration of Registrable Shares on Form
S-3 (or any successor form thereto, a "Short Form Registration); and
(ii) in the event a Short Form Registration is unavailable at the time
of such request on one occasion, require the Company to effect the
registration of Registrable Shares on Form S-1 (or any successor form
thereto, a "Long
Form Registration"), in each case pursuant to the provisions of this
Section 6.1.3. If Microsoft shall give notice to the Company to the
effect that it desires to transfer Registrable Shares pursuant to a
public distribution (within the meaning of the Act), then the Company
shall, as promptly as practicable after receipt of such notice (but in
any event within 60 days after receipt of such notice), file a
registration statement on the appropriate form pursuant to the Act
and, as promptly as is practicable thereafter, use its best efforts to
cause Registrable Shares to be registered under the Act and qualified
under the securities or blue sky laws of any jurisdiction requested by
Micro'sof4 to the end that such Registrable Shares may be sold by
Microsoft under the Act and pursuant to the securities or blue sky
laws of the jurisdictions requested, as promptly as is practicable
thereafter and the Company will use its best efforts to cause any such
registration to become effective and to keep the prospectus included
therein current for a period of one year from the effective date
thereof or, if sooner, until the distribution shall have been
completed; provided that Microsoft shall furnish the Company with such
appropriate information in connection therewith as the Company may
reasonably request in writing. Notwithstanding the foregoing, the
Company (i) shall not be required to effect a Long Form Registration
hereunder unless the proposed minimum aggregate offering price set
forth on the cover of the initial filing exceeds $1.0 million
(excluding any shares which Microsoft may then sell into the public
market pursuant to Rule 144 under the Act), and (ii) may, on one
occasion, delay or withdraw Microsoft's Long Form Registration under
this Section 6.1.3 if the Company's board of directors determines in
good faith that the timing of the registration would be detrimental to
the best interests of the Company. Subject to the provisions of
Section 6.1.5, in the event Company elects to withdraw the
registration statement, Company will bear no liability of any kind to
Microsoft, except for attorneys' and advisors' fees incurred by
Microsoft. The managing underwriters, if any, for any offering made
pursuant to this Section 6.1.3 shall be selected by the Company.
Without the prior written consent of Microsoft, which consent will not
be unreasonably withheld, the Company will not include in a
registration pursuant to Section 6.1.3 any securities which are not
Registrable Shares if the inclusion of such other securities would, in
the reasonable opinion of Microsoft, adversely impact the
marketability or value of the Registrable Shares subject to such
registration.
6.1.4 GENERAL REGISTRATION PROVISIONS. In the event an offering
effected under this Section 6.1 is an underwritten offering, Microsoft
shall (together with Company and other persons, if any, distributing
their shares through such offering) enter into an underwriting
agreement in customary form with the under-writer or underwriters
selected for such underwriting. Notwithstanding any other provision of
this Section 6. 1, if the underwriter reasonably determines and
notifies Company and Microsoft in writing that marketing factors
require a limitation of the number of shares to be underwritten, the
underwriter may limit the number of shares included therein first, by
reducing the number of shares to be included by shareholders who do not
have contractual rights to include shares in such registration, then,
if and to the extent additional limitations are required, by reducing
the number of Registrable Shares to be included in the registration
pari passu with any shares held by other shareholders of Company which
have contractual rights to include shares in such registration (other
than those shareholders (including Microsoft) whose exercise of demand
registration rights resulted in the relevant underwritten offering).
The Company shall advise Microsoft of any such limitation made by the
underwriter and of the number of Registrable Shares, if any, that may
be included in the registration along with such materials utilized to
calculate such limitation on the number of Registrable Shares. In the
event the terms of such underwriting include provisions which are not
customary or commercially reasonable for such type of transaction and
if Microsoft disapproves of such terms, it may elect to withdraw
therefrom by written notice to Company or the underwriter and any such
offering shall not be counted as a demand registration under Section
6.1.3. All expenses in connection with preparing and filing any
registration statement under this Agreement (and any registration or
qualification under the securities or "Blue Sky" laws of states in
which the offering will be made under such registration statement)
shall be borne in full by Company, except for discounts or commissions
relating to the Registrable Shares or fees of counsel or other advisors
to Microsoft. The rights pro
any permitted assignee or transferee pursuant to Section 10.3 hereof
Notwithstanding anything to the contrary in this Section 6. 1, the
provisions of this Section 6.1 shall be subject to and consistent with
the restrictions on resale of the Shares set forth in Investment
Agreement.
6.1.5 PUT RIGHT. Notwithstanding the foregoing provisions of Section 6.
1, if the Company is a Reporting Company Microsoft may, at it option,
require the Company to purchase, and the Company agrees to purchase
from Microsoft, all or such portion of the Registrable Shares as
Microsoft directs in the event the Company elects not to file a Long
Form Registration in accordance with the provisions of Section 6.1.3 or
in the event a Microsoft's right to demand a Long-Form Registration
under Section 6.1.3 is otherwise not available for the registration of
such Registrable Shares (the "Put Right"). Microsoft shall provide
Company with written notice of its intention to exercise its Put Right
(the "Put Notice") which shall include the number of shares to be sold
to Company and the purchase price therefor. The purchase price for each
share to be sold to Company under the Put Right shall be the Current
Market Price as of the date of the Put Notice. The term "Current Market
Price" for the each share as of a specified date shall mean the average
closing sale price over the preceding 10 trading days as reported on
the principal U.S. stock exchange or quotation system on which the
shares are listed or quoted The provisions of the Section 6.1.4 shall
terminate on the later to occur of (i) one year from the date the
Company becomes a Reporting Company and (ii) at such time as the
Company becomes eligible to use a Short Form Registration to register
Registrable Shares.
6.2 BOARD REPRESENTATION. At such time as Microsoft acquires at least two
percent (2%) of the outstanding voting securities of Company, Company shall
notify Microsoft thereof in writing. Within ninety (90) days of the receipt of
such notice, Microsoft, in its sole discretion, may, but is not obligated to,
notify Company of a person selected by Microsoft (the "Microsoft Designee") whom
Company will promptly appoint to its Board of Directors. Thereafter, for so long
as Microsoft holds at least two percent (2%) of the outstanding voting
securities of Company, at each meeting of Company's stockholders at which
directors are to be elected: (a) Company's management will recommend to its
stockholders the election of Microsoft's Designee to Company's Board of
Directors, and (b) Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx, and Xxxxx X. Xxxxx will each
vote all of their Company voting securities in favor of the Microsoft Designee's
election to Company Board of Directors. Notwithstanding the foregoing, if
Microsoft fails to notify Company of a Microsoft Designee within the ninety (90)
day period following the date on which Microsoft has received notice written
notice from Company that Microsoft has acquired at least two percent (2%) of the
outstanding voting securities of Company, Microsoft shall forfeit its right to
have the Microsoft Designee appointed to the Board of Directors, or to require
Company management to recommend the election of the Microsoft Designee to the
Board of Directors.
6.3 BACKOFFICE LICENSE RIGHTS. Microsoft shall deliver to Company as soon as
commercially available one (1) copy of Microsoft BackOffice(TM) v. 2.5, and
shall be deemed to have granted to Company, as of the Closing Date, a
non-exclusive, royalty-free, revocable, personal and nontransferable license
authorizing Company to exercise the license rights set forth in Microsoft's
standard end user license agreements "EULAs") for such Microsoft BackOffice
software, subject to the following amended terms which are hereby deemed
incorporated in such EULAs and shall modify and supersede any contrary
provisions in such EULAS. The foregoing license grant from Microsoft to Company
shall authorize Company to use fifteen (15) Server Licenses and one hundred
(100) Client Access Licenses to the Microsoft BackOffice software products;
provided, however, that Company may exercise rights under such licenses solely
for purposes of testing and internal use by Company employees and solely during
the Transition Period, after which the foregoing grant of license rights shall
expire automatically and Company shall be obligated to acquire any additional
license rights to Microsoft Back Office products through standard Microsoft
distribution channels.
6.4 EXPENSES. Whether or not the transactions contemplated under this Agreement
are closed, except as specifically provided in the Agreement, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense.
6.5 ADDITIONAL AGREEMENTS. In case at an time after the Closing Date any further
action is reasonably necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each corporation which is a
party to this Agreement shall take all such necessary action.
6.6 CONFIDENTIALITY OBLIGATIONS. Microsoft and Company shall each protect the
other's Confidential Information from unauthorized dissemination and use with
the same degree of care that such party uses to protect its own like
information. Neither party will use the other's Confidential Information for
purposes other than those necessary to directly further the purposes of this
Agreement. Neither party will disclose to third parties the other's Confidential
Information without the prior written consent of the other party. Except as
expressly provided in this Agreement, no ownership or license rights are granted
in any Confidential Information. Without limiting the generality of the
foregoing-, no information concerning this Agreement or the transactions
contemplated herein shall be disclosed by Microsoft or Company without the
consent of the other party except to such party's employees, agents, and
attorneys and financial advisors on a need to know basis, provided however that
nothing contained herein shall prevent either party at any time from furnishing
any such information to the extent required by judicial or administrative
process or from making any public disclosure when such party believes in good
faith and after consultation with the other party that it is legally required to
do so.
6.7 PUBLIC ANNOUNCEMENTS. Microsoft and Company agree to issue a joint press
release which shall be approved in advance in writing by both parties and which
shall announce their entry into this Agreement.
6.8 TAXES. Any sales or use or similar tax or levy arising from the transactions
contemplated by this Agreement shall be the sole responsibility of Company and
Company shall indemnify Microsoft from and against any liability arising in
connection therewith. Company acknowledges and agrees that Microsoft in its sole
and exclusive discretion shall control any defense against an assertion for any
such tax or levy at the expense of Company, and that if any such assertion is
made to Microsoft, Microsoft shall provide Company with prompt notice of such
assertion.
6.9 BULK SALES. Without implication that such laws apply to the transaction
contemplated hereby, Company and Microsoft shall not comply with the provisions
of the Uniform Commercial Code of any states relating to bulk sales.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 CONDITIONS TO COMPANY'S OBLIGATIONS. The obligations of Company hereunder
are subject to the satisfaction, at or before the Closing Date, of the following
conditions (any of which may be waived, in whole or in part, by Company):
7.1.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Microsoft contained in this Agreement shall be true and
correct in all material respects at the Closing Date as if made again
on and as of the Closing Date. Microsoft shall have duty performed and
complied with all agreements and conditions required by this Agreement
to be performed or complied with by Microsoft on or before the Closing
Date. Microsoft shall furnish Company with a certificate of an
appropriate officer of Microsoft, dated the Closing Date, certifying
the fulfillment of the foregoing conditions.
7.1.2 DELIVERY OF SOFTWARE CODE. Microsoft shall have delivered to
Company a copy of Source Code that can be compiled into complete Object
Code for the software components of the Acquired Assets which are
designed to operate on the MVS Platform and the Windows Platforms;
provided, however, that Company shall perform any compilation processes
and acceptance tests
on such Source Code which Company finds necessary or desirable within
five (5) days of Microsoft's delivery of such code, and such code
shall be deemed to satisfy the foregoing condition unless Company
notifies Microsoft within the foregoing five (5) day period of a
material error or omission within such Source Code as delivered by
Microsoft. Any such notice shall contain sufficient details to enable
Microsoft to diagnose and correct any alleged material omissions or
other errors, and Microsoft may at its option correct and resubmit the
applicable Source Code to Company at any time within thirty (30) days
of receiving a rejection notice from Company. In the event Microsoft
does not so re-deliver an acceptable version of the software code,
then upon Company's request Microsoft shall return to the Company any
Shares it has received following the end of such thirty (30) day
period and upon any such return neither party shall have any further
obligations or liabilities in connection with this Agreement,
including, without limitation, in connection with the Assumed
Obligations. Except as provided in this paragraph, the Company shall
be deemed to have accepted the Acquired Assets upon their delivery.
7.1.3 CONVEYANCE OF ACQUIRED ASSETS. Microsoft shall have executed and
delivered the Assignment and Xxxx of Sale conveying to Company the
Acquired Assets.
7.1.4 INVESTMENT AGREEMENT. Microsoft shall have executed and
delivered the Investment Agreement
7.1.5 OPINION OF COUNSEL. Company shall have received an opinion of
Xxxxxxx Xxxxx & Xxxxx, counsel to Microsoft, relating to the
authorization and enforceability of this Agreement.
7.2 CONDITIONS TO MICROSOFT'S OBLIGATIONS. The obligations of Microsoft
hereunder are subject to the satisfaction, at or before the Closing Date, of the
following conditions (any of which may be waived, in whole or in part, by
Microsoft):
7.2.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Company contained in this Agreement shall be true and
correct in all material respects at the Closing Date as if made again
on and as of the Closing Date. Company shall have duly performed and
complied with all agreements and conditions required by this Agreement
to be performed or complied with by Company on or before the Closing
Date. Company shall furnish Microsoft with a certificate of an
appropriate officer of Company, dated the Closing Date, certifying the
fulfillment of the foregoing conditions.
7.2.2 DELIVERY OF CONSIDERATION. Company delivers to Microsoft the
100,000 Shares described in Section 3.2.
7.2.3 ASSUMPTION OF OBLIGATIONS. Company shall have executed and
delivered to Microsoft an Assumption of Obligations assuming the
Assumed Obligations.
7.2.4 OPINION OF COUNSEL. Microsoft shall have received an opinion of
Xxxxxx Xxxxxx Flattau and Kimpl, LLP, counsel to the Company, relating
to (i) the authorization and enforceability of this Agreement, (ii) the
authorization of the Shares to be issued pursuant to the terms of this
Agreement, and (iii) the compliance with any applicable securities laws
relating to the issuance of the Shares as contemplated by this
Agreement (other than the laws of British Columbia).
7.2.5 EFFECTIVENESS. THIS AGREEMENT SHALL BECOME EFFECTIVE UPON THE
EXECUTION OF THIS AGREEMENT BY COMPANY AND MICROSOFT AND UPON THE
SATISFACTION, ON OR BEFORE THE CLOSING DATE, OF THE CONDITIONS SET
FORTH IN SECTIONS 7.1 AND 7.2, UNLESS ANY OF SUCH CONDITIONS HAS BEEN
WAIVED, IN WHOLE OR IN PART, BY COMPANY OR MICROSOFT, RESPECTIVELY.
ARTICLE VIII
CONDITIONS SUBSEQUENT
Microsoft and Company further agree to comply with their respective
obligations as set forth in this Article VIII, and Microsoft and Company
agree and acknowledge that in the event either of them materially breaches
its customer support obligations as set forth in this Article VIII, the
other party shall be entitled to exercise any and all remedies available at
law or in equity with respect to such breach. Each of Microsoft and Company
further agrees that in the event a party reasonably alleges such a breach,
the other party shall negotiate in good faith promptly upon the request of
such party with respect to any possible future arrangements between the
parties which may address the needs of customers of the software components
of the Acquired Assets, and to establish a fair and reasonable pro rata
allocation of support revenues associated with providing support to such
customers.
8.1 PRODUCT SUPPORT PLAN. During the Transition Period, Microsoft and Company
will each carryout their responsibilities for customer support for the software
components of the Acquired Assets as set forth in the Transition Plan set forth
in Exhibit A hereto. As described in such Transition Plan, during the Follow-On
Transition Period, (i) Company will be responsible for providing all customer
support for the software components of the Acquired Assets which operate on the
MVS Platform and Windows Platforms, and (ii) Microsoft will be responsible for
providing customer support to Company for the software components of the
Acquired Assets which operate on Other Platforms. Company will have sole
responsibility for providing customer support for any versions of the software
components of the Acquired Assets which operate on any new platform as a result
of Company's development efforts after the Closing. After the expiration of the
Transition Period, Microsoft shall have no further obligations to Company or its
customers with respect to any technical or other customer support for software
components of the Acquired Assets.
8.2 PAYMENTS RELATED TO PRODUCT SUPPORT. During the Initial Transition Period,
Microsoft will provide the resources and customer support assistance described
in the Transition Plan at no charge to Company. During, the Follow-On Transition
Period, (i) Microsoft will provide at no charge to Company secondary customer
support as described in the Transition Plan for the software components of the
Acquired Assets which operate on Other Platforms, and (ii) Microsoft will
provide secondary technical support to Company for the software components of
the Acquired Assets which operate on the MVS Platform and Windows Platforms,
provided that Company shall pay Microsoft a fee of Five Hundred Dollars
(US$500.00) per Unsupported Platform Event. As used herein, an "Unsupported
Platform Event' shall mean each instance in which Microsoft resolves a customer
problem concerning- the software components of the Acquired Assets that relates
to such software as used on the MVS Platform or Windows Platforms. Company shall
pay all amounts payable to Microsoft hereunder within thirty (30) days of
Microsoft's invoice date.
8.3 CUSTOMER RELATIONSHIPS. Company shall be responsible for maintaining
relationships and enforcing agreements with all end users, resellers,
distributors, and other licensees of the software components of the Acquired
Assets as of the Closing Date. Microsoft agrees to cooperate with Company in
undertaking the customer relations activities described in Exhibit D to this
Agreement during the Transition Period. Microsoft does not represent or
guarantee, however, that existing customers and other licensees of the software
components of the Acquired Assets will maintain or perform under their existing
agreements with respect to such software, and Company acknowledges and accepts
the risk that such current customers and licensees may terminate such
relationships following the Closing Date.
8.4 COMPANY UPGRADES. During the Initial Transition Period, Company shall
promptly deliver to Microsoft all error corrections, updates and upgrades it
develops or has developed to the software components of the Acquired Assets
(collectively, the "Company Upgrades") in Source Code and Object Code form, and
Company hereby grants to Microsoft a nonexclusive, nontransferable, worldwide
license to use, reproduce, and modify such Company Upgrades solely for purposes
of providing product support as required by this Agreement. During the Follow-On
Transition Period, Company shall promptly deliver to Microsoft all additional
error corrections, updates and upgrades it develops or has developed to the
software components of the Acquired Assets as used on the MVS Platform and the
Windows Platforms, all in Source Code and Object Code form, and all such
additional error corrections, updates and upgrades shall be included in the
"Company Upgrades" and shall be subject to the foregoing license grant. In the
event Company desires to obtain support for Other Platforms from Microsoft
during the Follow-On
Transition Period, Company shall provide any error corrections, updates and
upgrades developed by Company which may be relevant to obtaining such support,
in Source Code and Object Code form, and shall additional code shall also be
included in the "Company Upgrades" and shall be subject to the foregoing license
grant. Microsoft shall not retain any rights to Company Upgrades following the
expiration of the Transition Period, and at Company's written request Microsoft
shall destroy or return all copies of such Company Upgrades at such time;
provided, however, that nothing herein shall be deemed to supersede the
provisions of Section 6.10 of this Agreement. As further described in the
Transition Plan, Company acknowledges that Microsoft will use commercially
reasonable efforts to provide customer support in the event Company makes
substantial modifications to the Acquired Assets during the Transition Period,
but that Microsoft may not be able successfully to resolve such customer support
requests notwithstanding Company's delivery of Source Code hereunder.
8.5 MARKETING EFFORTS. The parties agree to undertake the joint marketing
efforts described in Exhibit C of this Agreement with respect to the Acquired
Assets.
ARTICLE IX
INDEMNIFICATION
9.1. INDEMNIFICATION BY COMPANY.
9.1.1 Company shall, at its expense and Microsoft's request, defend any
claim or action brought against Microsoft that (a) if true, would
constitute a breach of a warranty by Company in Section 5.1, (b) any
Company-authored derivative works of the Acquired Assets delivered to
Microsoft pursuant to Section 8.1.4 violate any third party's
intellectual property or other proprietary rights, or (c) arises in
connection with Company's performance of its obligations under Article
VIII hereof, and Company will indemnify and hold Microsoft harmless
from and against any costs, damages and fees reasonably incurred by
Microsoft, including but not limited to fees of attorneys and other
professionals, that are attributable to any such claims. Microsoft
shall: (i) provide Company reasonably prompt notice in writing of any
such claim or action and permit Company, through counsel mutually
acceptable to Microsoft and Company, TO answer and defend such claim or
action; and (ii) provide Company information, assistance and authority,
at Company's expense, to help Company to defend such claim or action.
Company will not be responsible for any settlement made by Microsoft
without Company's written permission, which permission will not be
unreasonably withheld.
9.1.2 Microsoft shall have the right to employ separate counsel and
participate in the defense of any claim or action covered by this
Section 9. 1. Company shall reimburse Microsoft upon demand for any
payments made or loss suffered by it at any time after the date hereof,
based upon the judgment of any court of competent jurisdiction or
pursuant to a bona fide compromise or settlement of claims, demands, or
actions, in respect to any damages related to any claim or action under
this Section 9. 1.
9.1.3 Company may not settle any claim or action under this Section 9.1
on Microsoft's behalf without first obtaining Microsoft's written
permission, which permission will not be unreasonably withheld. In the
event Microsoft and Company agree to settle a claim or action, Company
agrees not to publicize the settlement without first obtaining
Microsoft's written permission, which permission will not be
unreasonably withheld.
9.2 INDEMNIFICATION BY MICROSOFT.
9.2.1 Microsoft shall, at its expense and Company's request, defend any
claim or action brought against Company that (a) if true, would
constitute a breach of a warranty by Microsoft in Section 5.2, (b) the
Acquired Assets as delivered by Microsoft to Company violate any third
party's intellectual property or other proprietary rights (regardless
of whether such claim arises before or after the Agreement Date), or
(c) arises in connection with Microsoft's performance of its
obligations under Article VIII hereof, and Microsoft will indemnify and
hold Company harmless from and against any costs, damages and fees
reasonably incurred by Company, including but not limited to fees of
attorneys and other professionals, that are attributable to such claim.
Company shall: (i) provide Microsoft reasonably prompt notice in
writing of any such claim or action and permit Microsoft, through
counsel mutually acceptable le to Microsoft and Company, to answer and
defend such claim or action; and (ii) provide Company information,
assistance and authority, at Microsoft's expense, to help Microsoft to
defend such claim or action. Microsoft will not be responsible for any
settlement made by Company without Microsoft's written permission which
permission will not be unreasonably withheld.
9.2.2 Company shall have the night to employ separate counsel and
participate in the defense of any claim or action covered by this
Section 9.2. Microsoft shall reimburse Company upon demand for any
payments made or loss suffered by it at any time after the date hereof,
based upon the judgment of any court of competent jurisdiction or
pursuant to a bona fide compromise or settlement of claims, demands, or
actions, in respect to any damages related to any claim or action under
this Section 9.2.
9.2.3 Company may not settle any claim or action under this Section 9.2
on Microsoft's behalf without first obtaining Microsoft's written
permission, which permission will not be unreasonably withheld. In the
event Microsoft and Company agree to settle a claim or action, Company
agrees not to publicize the settlement without first obtaining
Microsoft's written permission, which permission will not be
unreasonably withheld.
9.3 LIMITATIONS OF LIABILITY.
9.3.1 NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9.3.2 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE
PARTIES AGREE THAT EACH OF THEIR AGGREGATE LIABILITY UNDER THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION ARTICLES V AND VI, SHALL NOT
EXCEED TWO MILLION AND FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00).
EACH PARTY AGREES AND UNDERSTANDS THAT THE RESULT OF THE FOREGOING
LIMITATION ON LIABILITY AND INDEMNIFICATION MAY PREVENT SUCH PARTY FROM
RECOVERING LOSSES OR DAMAGES IN CONNECTION WITH OTHERWISE VALID CLAIMS.
ARTICLE X
MISCELLANEOUS
10.1 NOTICES. All notices and requests in connection with this Agreement shall
be deemed given as of the day they are received either by messenger, delivery
service, or in the United States of America mails, postage prepaid, certified or
registered, return receipt requested, and addressed as follows:
To Microsoft: To Company:
Microsoft Corporation Proginet Corporation
One Microsoft Way 000 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000-0000 Garden City, NY 11 5 3 0
Attention: General Manager Attention: Xxxxx X. Xxxxx
SNA Server Development
Phone: (000) 000-0000 Phone: (516) Phone: (000) 000-0000
000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Copy to: Copy to:
Law & Corp. Affairs Xxxxxx Xxxxxx LLP
Fax: (000) 000-0000 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Phone:(000) 000-0000
Fax: (000) 000-0000
or to such other address as a party may designate pursuant to this notice
provision
10.2 DISPUTE RESOLUTION. ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, OR ANY BREACH THEREOF, SHALL BE SETTLED
EXCLUSIVELY AND FINALLY BY ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION, AND JUDGMENT UPON
SUCH AN AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION THEREOF. A DECISION OF THE ARBITRATOR SHALL BE BINDING AND
CONCLUSIVE ON THE PARTIES HERETO AND SHALL NOT BE SUBJECT TO ANY APPEAL. ALL
LIMITATIONS OF LIABILITY SET FORTH IN THIS AGREEMENT, INCLUDING BUT NOT LIMITED
TO THE LIMITATIONS SET FORTH IN ARTICLE IX HEREOF, SHALL BE BINDING AND GIVEN
FULL FORCE AND EFFECT IN ANY SUCH ARBITRATION. THE FEES AND EXPENSES OF ANY
ARBITRATION HEREUNDER, INCLUDING OF THE ARBITRATOR, SHALL BE ADVANCED EQUALLY BY
THE PARTIES, AND EACH PARTY SHALL BE RESPONSIBLE FOR ITS OWN ATTORNEYS' FEES IN
CONNECTION ` WITH AN ARBITRATION. NOTWITHSTANDING THE FOREGOING, THE PARTIES'
FINAL RESPONSIBILITY FOR ALL ARBITRATION FEES AND RELATED ATTORNEYS' FEES AND
EXPENSES SHALL BE SUBJECT TO THE FINAL DECISION OF THE ARBITRATOR.
10.3 Assignment. THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT
OF EACH PARTY'S RESPECTIVE SUCCESSORS AND LAWFUL ASSIGNS; PROVIDED, HOWEVER,
THAT DURING THE TRANSITION PERIOD COMPANY MAY NOT ASSIGN THIS AGREEMENT OR ANY
OF ITS RIGHTS OR OBLIGATIONS
under this Agreement, in whole or in part, without the prior written approval of
Microsoft, which consent will not be unreasonably withheld or delayed. For
purposes of this Agreement, an `6assigmnent" by Company under this Section shall
be deemed to include, without limitation, the following: (a) a merger of Company
with another party, except where Company is the surviving entity; (b) any
transaction or series of transactions whereby a third party acquires direct or
indirect power to control the management and policies of Company, whether
through the acquisition of voting securities, by contract, or otherwise; (c) the
sale or other transfer of more than fifty percent (50%) of Company's assets
(whether in a single transaction or series of transactions), or (d) the transfer
of any rights or obligations under this agreement in the course of a liquidation
or other similar reorganization of Company.
7.2.6 10.4 Construction. IF FOR ANY REASON A COURT OF COMPETENT
JURISDICTION FINDS ANY PROVISION OF THIS AGREEMENT, OR PORTION THEREOF,
TO BE UNENFORCEABLE, THAT PROVISION OF THE AGREEMENT WILL BE ENFORCED
TO THE MAXIMUM EXTENT PERMISSIBLE SO AS TO EFFECT THE INTENT OF THE
PARTIES, AND THE REMAINDER OF THIS AGREEMENT WILL CONTINUE IN FULL
FORCE AND EFFECT. FAILURE BY EITHER PARTY TO ENFORCE ANY PROVISION OF
THIS AGREEMENT WILL NOT BE DEEMED A WAIVER OF FUTURE ENFORCEMENT OF
THAT OR ANY OTHER PROVISION. THIS AGREEMENT HAS BEEN NEGOTIATED BY THE
PARTIES AND THEIR RESPECTIVE COUNSEL AND WILL BE INTERPRETED FAIRLY IN
ACCORDANCE WITH ITS TERMS AND WITHOUT ANY STRICT CONSTRUCTION IN FAVOR
OF OR AGAINST EITHER PARTY.
7.2.7 10.5 Entire AGREEMENT. THIS AGREEMENT DOES NOT CONSTITUTE AN
OFFER BY MICROSOFT AND IT SHALL NOT BE EFFECTIVE UNTIL SIGNED BY BOTH
PARTIES. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE
PARTIES WITH RESPECT TO THE SUBJECT MATTE
HEREOF AND MERGES ALL PRIOR AND CONTEMPORANEOUS COMMUNICATIONS. IT
SHALL NOT BE MODIFIED EXCEPT BY A WRITTEN AGREEMENT DATED ON OR
SUBSEQUENT TO THE AGREEMENT DATE AND SIGNED ON BEHALF OF COMPANY AND
MICROSOFT BY THEIR RESPECTIVE DULY AUTHORIZED REPRESENTATIVES.
[remainder of page intentionally left blank]
20
IN WITNESS VMEREOF, the parties have entered into this Agreement as of the
Agreement Date written above.
MICROSOFT CORPORATION PROGINET CORPORATION
------------------------------------- ------------------------------------
By (Sign) By (Sign)
------------------------------------- ------------------------------------
Name (Print) Name (Print)
------------------------------------- ------------------------------------
Title Title
------------------------------------- ------------------------------------
Date Date
Solely for purposes of Section 6.2 of this Agreement, the parties whose names
are set forth below hereby agree to be bound by the undertakings set forth in
Section 6.2 of this Agreement.
-------------------------------- ----------------------------------------
Xxxxx X. Xxxxx Xxxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx
EXHIBIT A
TRANSITION PLAN
During the Initial Transition Period, Microsoft will continue to resolve all
customer problems concerning the software components of the Acquired Assets
(referred to herein as the "Acquired Software") that have
been previously opened prior to the Closing Date. Also during the Initial
Transition Period, Microsoft will continue to accept new problems directly from
customers until all customers have been provided with instructions for obtaining
support from Company. Microsoft will provide assistance and training to Company
as reasonably necessary for Company to learn the Acquired Software and to create
the necessary infrastructure to support customers. Such activities during
Initial Transition Period will involve one visit by Microsoft staff to Company
and by Company staff to Microsoft, as necessary. Company will pay all out of
pocket cost incurred by Microsoft for any business trips, materials etc. during
the Transition Period.
During the Follow-On Transition Period, Company will assume responsibility for
customer support for the Acquired Software as used on the MVS Platform and
Windows Platforms. Microsoft agrees to provide support for the Acquired Software
as used on all other platforms on which the Acquired Software is intended to
operate as of the Closing Date at no charge to Company, provided that the
initial customer support incident is logged through Company. The parties agree
to the payment arrangements set forth in Article VIII of the Agreement with
respect to customer support during the Follow-On Transition Period.
The following activities will occur during the Initial Transition Period:
1. Microsoft will send technical staff to Company site in Long Island to:
A. ASSIST IN THE INSTALLATION OF THE ACQUIRED SOFTWARE ON COMPANY'S
MAINFRAME, INCLUDING ALL OF THE OPTIONAL COMPONENTS. MICROSOFT WILL
CONDUCT TRAINING SESSIONS AT COMPANY ON THE MVS, LJNIX, WINDOWS,
NETWARE, AND OTHER VERSIONS OF THE ACQUIRED SOFTWARE, WITH THE EMPHASIS
BEING ON THE MVS AND WINDOWS PLATFORM VERSIONS.
B. WORK WITH COMPANY TO PREPARE COMPANY MAINFRAME LABORATORY FOR THE
SUPPORT OF THE ACQUIRED SOFTWARE, INCLUDING THE CONFIGURATION OF DB2,
IMS-TM, CICS, AND THE COBOL AND PL/I COMPILER PROCEDURES. THE
OBJECTIVE TO BE ACCOMPLISHED IS TO ELIMINATE THE NEED TO USE THE
SUNGUARD SERVICE BUREAU AND INSTEAD USE COMPANY MAINFRAME IN ITS
PLACE. ALL THE MAINFRAME SUPPORT FOR THE ACQUIRED SOFTWARE IS TO BE
REMOVED FROM SUNGUARD TO COMPANY WITHIN NINETY (90)DAYS AFTER THE
CONTRACT IS EXECUTED.
C. MICROSOFT WILL PROVIDE TRAINING CLASSES IN THE ACQUIRED SOFTWARE.
2. Microsoft will provide machine readable copies of its problem database for
the Acquired Software to Company during the Transition Period.
3. Microsoft agrees to provide the Acquired Software test cases and automated
testing to Company pursuant to Article 11 of the Agreement.
4. Microsoft will provide the development history database for the Acquired
Software, as available, to Company which would include all current and
former versions of the Acquired Software.
5. Company will provide free access to its mainframe for Microsoft to
support Company with the Acquired Software.
The following activities will occur during the Follow-On Transition Period:
1. Company will receive all customer support calls on all platforms and will
be responsible for making initial diagnoses. Company will be responsible
for supporting the MVS Platform and Windows Platforms. Microsoft will have
the responsibilities defined in paragraph 3 below and Company will forward
information from customer calls on such issues as per paragraph 3 below
that Company desires Microsoft to support.
2. All problem tracking will be done through Company's new Internet based call
tracking system. During this period, Company, Microsoft and customer staff
can enter problems into the system, using their own Internet browsers.
3. Microsoft will be responsible for support for Acquired Software for Other
Platforms as provided herein after Company staff or support system has
received the problem report from the customer and diagnosed it as involving
such versions of Acquired Software. Company acknowledges and agrees that
Microsoft will not be responsible for providing any customer support for
versions of the Acquired Software which operate on any new platform as a
result of Company's development efforts after the Closing Date, and also
that Microsoft will not be able to provide customer support in the event
Company makes substantial modifications to the Acquired Software during the
Transition Period,
notwithstanding Company's delivery of Source Code to such versions pursuant
to Section 8.1.4 of the Agreement.
4. Microsoft and Company will work in good faith to jointly develop, agree on
and implement additional procedures related to support resolution, customer
communication etc.
EXHIBIT B
ASSUMED OBLIGATIONS
1) Customer agreements (listed in Attachment I to this Exhibit B)
2) Distribution agreements (listed in Attachment 2 to this Exhibit B)
3) XVT Software License Agreement with XVT Software, Inc., dated August 22,
1996.
B-1
Attachment 1 to Exhibit B
Customer Agreements
------------------------------------------------------------------------------------------------------------
Customer Name Billing City Billing State Billing Country
------------------------------------------------------------------------------------------------------------
American Management Systems Fairfax VA
------------------------------------------------------------------------------------------------------------
AMP Society North Sydney AUSTRALIA
------------------------------------------------------------------------------------------------------------
Xxxxxxxx Consulting St. Louis MO
------------------------------------------------------------------------------------------------------------
Xxxxxxxx Consulting/St of CT Chicago IL
------------------------------------------------------------------------------------------------------------
AT&T-MVS Maitland FL
------------------------------------------------------------------------------------------------------------
AT&T-non MVS Maitland FL
------------------------------------------------------------------------------------------------------------
AT&T - ITS Maitland FL
------------------------------------------------------------------------------------------------------------
AvNet Chandler AZ
------------------------------------------------------------------------------------------------------------
Blue Cross BS Tenn Chatanooga TN
------------------------------------------------------------------------------------------------------------
BMW of North America Woodcliff Lake NJ
------------------------------------------------------------------------------------------------------------
California PERS Sacramento CA
------------------------------------------------------------------------------------------------------------
Xxxxxxx Companies Inc Plymouth MN
------------------------------------------------------------------------------------------------------------
Case Consult International Gent Drougen BELGIUM
------------------------------------------------------------------------------------------------------------
Case Consult/Sony X-0000 Xxxxxxxx Xxxxxxx
------------------------------------------------------------------------------------------------------------
Case Consult/Winterthur X- 0 00 0 Xxxxxxxx XXXXXXX
------------------------------------------------------------------------------------------------------------
CDR Surrey UK
------------------------------------------------------------------------------------------------------------
CDR/British Aerospace Surrey UK
------------------------------------------------------------------------------------------------------------
CDR/British Library Surrey UK
------------------------------------------------------------------------------------------------------------
CDR/British Telecom Surrey UK
------------------------------------------------------------------------------------------------------------
CDR/Integrated Medical Solutions MKI4601 UK
------------------------------------------------------------------------------------------------------------
CDR/ITSA Surrey UK
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
CDR/M&G Surrey UK
------------------------------------------------------------------------------------------------------------
CDR/Mercury Surrey UK
------------------------------------------------------------------------------------------------------------
CDR/Prudential Surrey UK
------------------------------------------------------------------------------------------------------------
Chubb Branchburg NJ
------------------------------------------------------------------------------------------------------------
Cimage Enterprise Sys Ltd Xxx Arbor ml
------------------------------------------------------------------------------------------------------------
Citibank New York NY
------------------------------------------------------------------------------------------------------------
Citibank Student Loan Corp. Pittsford NY
------------------------------------------------------------------------------------------------------------
CPI/Alltel Jacksonville FL
------------------------------------------------------------------------------------------------------------
CSC Australia Ply Ltd North Sydney AUSTRALIA
------------------------------------------------------------------------------------------------------------
Cummins Engine Co Columbus IN
------------------------------------------------------------------------------------------------------------
Deloitte & Touche/St of Delaware New Castle DE
------------------------------------------------------------------------------------------------------------
Detroit Edison Detroit MI
------------------------------------------------------------------------------------------------------------
Distributed Solutions Inc San Francisco CA
------------------------------------------------------------------------------------------------------------
Documentum Pleasanton CA
------------------------------------------------------------------------------------------------------------
Xx. Xxxxxxx/BV Hamburg GERMANY
------------------------------------------------------------------------------------------------------------
DSI / Levi Xxxxxxx & Co. San Francisco CA
------------------------------------------------------------------------------------------------------------
EDS Plano TX
------------------------------------------------------------------------------------------------------------
EDS/Nad Car Rental Plano TX
------------------------------------------------------------------------------------------------------------
Fujitsu AustIASS Chatswood NSW AUSTRALIA
------------------------------------------------------------------------------------------------------------
Household Wood Date IL
------------------------------------------------------------------------------------------------------------
HWACOM(Rose Data Systems) San Jose CA
------------------------------------------------------------------------------------------------------------
IBP Dakota City NE
------------------------------------------------------------------------------------------------------------
Imperial 00 Xxxxxxx Xxxxxxx XXXXXX
------------------------------------------------------------------------------------------------------------
Intel Corporation Folsom CA
------------------------------------------------------------------------------------------------------------
Isis Marlborough MA
------------------------------------------------------------------------------------------------------------
ITT Hartford Hartford CT
------------------------------------------------------------------------------------------------------------
B-Al. I
Attachment 1 to Exhibit B
CUSTOMER AGREEMENTS
------------------------------------------------------------------------------------------------------------
JVL Paris FRANCE
------------------------------------------------------------------------------------------------------------
JVL / BMW France Paris FRANCE
Paris
FRANCE
------------------------------------------------------------------------------------------------------------
JVL / Crica Paris FRANCE
Paris
FRANCE
------------------------------------------------------------------------------------------------------------
Xxxxxx Aluminum Spokane WA Spokane WA
------------------------------------------------------------------------------------------------------------
Lexis-Nexis Miamisburg OH Miamisburg OH
-----------------------------------------------------------------------------------------------------------
Milestone / TK Hamburg Germany
Insurance Hamburg
GERMANY
------------------------------------------------------------------------------------------------------------
Navistar International Oak Brook Terrace IL Oak Brook Terrace IL
-----------------------------------------------------------------------------------------------------------
Open Environment Corp Dallas TX Dallas TX
(OEC)
------------------------------------------------------------------------------------------------------------
Oracle/Macroview/EDI Xxxxx Xxxxx XXXX XXXX
Xxxxx Xxxxx
XXXX XXXX
------------------------------------------------------------------------------------------------------------
Oracle/Macroview/HK Xxxxx Xxxxx XXXX XXXX
xxx. Xxxxx Xxxxx
XXXX XXXX
------------------------------------------------------------------------------------------------------------
Peregrine San Diego CA San Diego CA
------------------------------------------------------------------------------------------------------------
Praxis Alexandria VA Alexandria VA
------------------------------------------------------------------------------------------------------------
Praxis/BDM Federal, Kettering OH Kettering OH
Inc
------------------------------------------------------------------------------------------------------------
Praxis/Computer Alexandria VA Alexandria VA
Sciences
------------------------------------------------------------------------------------------------------------
Praxis/DISA -Westhem Alexandria VA Alexandria VA
------------------------------------------------------------------------------------------------------------
PSE&G Newark NJ Newark NJ
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Selesta Gestione Torino ITALY
Centri Torino
ITALY
------------------------------------------------------------------------------------------------------------
Selesta/Finsiel Torino ITALY
Torino
ITALY
------------------------------------------------------------------------------------------------------------
SHL System House Ottawa Ontario
Ottawa Ontario
------------------------------------------------------------------------------------------------------------
SHL/MCI Cerritos CA
Cerritos CA
------------------------------------------------------------------------------------------------------------
Simba/PageAhead Seattle WA
Seattle WA
------------------------------------------------------------------------------------------------------------
SNET/OEC New Haven CT
New Haven CT
------------------------------------------------------------------------------------------------------------
SNS (IAS Dist)
------------------------------------------------------------------------------------------------------------
XX Xxxx Mobile Dallas TX
Dallas TX
------------------------------------------------------------------------------------------------------------
Tadiran Givat Xxxxxx ISRAEL
Givat Xxxxxx
ISRAEL
------------------------------------------------------------------------------------------------------------
TCI/Vartec Denver CO
Denver co
------------------------------------------------------------------------------------------------------------
Teranet Whitby Ontario Canada
Xxxxxx Xxxxxxx
Xxxxxx
------------------------------------------------------------------------------------------------------------
Transaction Santa Monica CA
Technology Inc. Santa Monica CA
------------------------------------------------------------------------------------------------------------
Transquest Into Sol Atlanta GA
Atlanta GA
------------------------------------------------------------------------------------------------------------
TRW Oakland CA
Oakland CA
------------------------------------------------------------------------------------------------------------
UCC Seodaemoon-Ku Seol KOREA
Seodaemoon-Ku Seoul
KOREA
------------------------------------------------------------------------------------------------------------
Unify Sacramento CA
Sacramento CA
------------------------------------------------------------------------------------------------------------
Uniplex Limited Hertfordshire UK
Hertfordshire
UK
------------------------------------------------------------------------------------------------------------
United Healthcare Hartford CT
Services Hartford CT
------------------------------------------------------------------------------------------------------------
United Insurance Chicago IL
Chicago
IL
------------------------------------------------------------------------------------------------------------
United Technologies / Bloomfield CT
Otis Elev Bloomfield CT
------------------------------------------------------------------------------------------------------------
Unitel Comm Toronto Ontario CANADA
Toronto Ontario
ICANADA
------------------------------------------------------------------------------------------------------------
Wang Labs Lowell MA
Lowell MA
I
------------------------------------------------------------------------------------------------------------
B-Al.2
Attachment 2 to Exhibit B
DISTRIBUTION AGREEMENTS
------------------------------------------------------------------------------------------------------------
CUSTOMER NAME TYPE OF AGREEMENT
------------------------------------------------------------------------------------------------------------
Case Consult International Distributor, International
------------------------------------------------------------------------------------------------------------
CDR Distributor, International
------------------------------------------------------------------------------------------------------------
Cimage Enterprise Sys Ltd ISV
------------------------------------------------------------------------------------------------------------
Documentum ISV
------------------------------------------------------------------------------------------------------------
Xx. Xxxxxxx & Partners GMBH Consulting and tech support to the customers of Milestone
------------------------------------------------------------------------------------------------------------
JVL Distributor, International
------------------------------------------------------------------------------------------------------------
Milestone/TK Insurance ISV
------------------------------------------------------------------------------------------------------------
Open Environment Corp (OEC) Reseller
------------------------------------------------------------------------------------------------------------
Oracle/Macroview Distributor, International
------------------------------------------------------------------------------------------------------------
Peregrine SW LIC/ISV
------------------------------------------------------------------------------------------------------------
Praxis Distributor, Federal
------------------------------------------------------------------------------------------------------------
Selesta Gestione Centri Distributor, International
------------------------------------------------------------------------------------------------------------
SHL System House Reseller
------------------------------------------------------------------------------------------------------------
SNS ([AS Dist) Distributor, International
------------------------------------------------------------------------------------------------------------
Tadiran Distributor, International
------------------------------------------------------------------------------------------------------------
TCI/Vartec LSV
------------------------------------------------------------------------------------------------------------
TRW ISV
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
UCCc Distributor, International
------------------------------------------------------------------------------------------------------------
Unify SW Lic/ISV
------------------------------------------------------------------------------------------------------------
Wang Labs SW Lic/ISV
------------------------------------------------------------------------------------------------------------
B-A2
EXHIBIT C
JOINT SALES AND SUPPORT PLAN
Microsoft and Company have the common goal of making available the best
solutions for integrating
BackOffice with IBM mainframes. Accordingly, Microsoft and Company agree to the
following:
1. Company executive management and VP of Microsoft's DB and TP division agree
to meet, and develop ways to work together to leverage the core
competencies and strengths of both organizations to support the enterprise
customers.
2. Microsoft and the Company will jointly inform TransAccess customers and
distributors (as identified in Exhibit B), for both United States and
international, along guidelines determined by appropriate Microsoft and
Company management.
3. Microsoft and Company agree to jointly collaborate consistent with the
terms of this agreement, as follows:
a. Microsoft will provide introduction to the large systems integrators
that have been involved with the TransAccess business, as Microsoft
deems appropriate.
b. Microsoft will provide Company with
introductions, as appropriate, to contacts within Microsoft field
organization that deal with integration of BackOffice with IBM
mainframes.
c. According to normal and customary Microsoft practice, Microsoft may
provide Company with references of solution providers and/or
customers, as appropriate, who express an interest in integrating
BackOffice with IBM mainframes, and Microsoft may also provide
solution providers and/or customers with references to the Company.
d. Company will be invited to attend, as appropriate, at Microsoft
Consulting Services and SE force training events, in order to ensure
that MCS and SE staff are aware of Company solutions that integrate
BackOffice with IBM mainframes.
e. Microsoft and Company agree to have quarterly meetings during the
18-month transition period to review marketing/sales activities and
determine future activities.
EXHIBIT D
CUSTOMER RELATIONS PROGRAM
To effectively manage customer relationships and prospects and to reasonably
assure a high level of comfort and satisfaction for customers, the parties agree
to engage in the following Customer Relations Program.
I. Joint Letter to Customers - A joint letter will be sent to all existing
customers, as well as those designated to be in the pipeline. The letter will
contain the following points:
A. Nature of the transaction.
B. Microsoft's and Company's strong ongoing relationship.
C. Invitation to the upcoming joint event with Microsoft and
Company.
D. Detailing that Microsoft and Company are developing integration
solutions.
II. Joint Event for Microsoft and Company - Perhaps an addition to an existing
planned Microsoft function (PDC, Viper/Cedar Technology Preview, or sales
meeting), to inform customers face to face about the transition and the strong
relationship between Microsoft and Company. Alternative approach by Microsoft
would be acceptable.
III. Selected Joint Visits - A specific group of customers to be jointly agreed
upon by the parties will be jointly visited by Company Management and Microsoft
personnel, to address any concerns about the transition. The Microsoft personnel
should include the current Microsoft Sales Team, as well as the Major Account
Manager of the specific area.
IV. Microsoft Manager - Microsoft will designate a manager at Microsoft to be
responsible to work with Company to assure quality and timely service during,
the transition period.
EXHIBIT E
FORM OF
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT ("Investment Agreement") entered into as of the 17th
day of December between Microsoft Corporation, a Washington corporation
located at Xxx Xxxxxxxxx Xxx, Xxxxxxx, XX 00000 ("Microsoft") and Proginet
Corporation, a Delaware corporation located at 000 Xxxxxx Xxxx Xxxxx,
Xxxxxx Xxxx, Xxx Xxxx 00000 ("Company").
RECITALS
A. Microsoft and Company have entered into an Asset Purchase Agreement
of even date herewith (the "ASSET PURCHASE AGREEMENT"). B. The Asset
Purchase Agreement provides that Microsoft will sell certain assets to
Company. In exchange for the assets, Company will assume certain of
Microsoft's liabilities and issue shares of Company's common stock, par
value $.00I (the "SHARES") as specified in the Asset Purchase
Agreement. C. All capitalized terms shall have the same meaning as
defined in the Asset Purchase Agreement unless otherwise indicated
herein.
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
the mutual representations, warranties, covenants and agreements
contained herein, Microsoft and Company hereby agree as follows:
AGREEMENT
1. Microsoft Representations and Agreements. Microsoft hereby
represents, warrants and agrees that:
1.1 Investor Status. Microsoft: (i) is (a) a "sophisticated purchaser"
as that term is defined in Appendix A to Form 20A of the
Securities Act (British Columbia) 1985 (the "BC Act"), and (b) an
"accredited investor" as that term is defined in Rule 501(a)(5) of
Regulation D of the Securities Act of 1933 (the "1933 Act"), (ii)
is acquiring the Shares for its own account, (iii) has the
knowledge and experience in financial and business matters and is
capable of evaluating the merits and risks of the prospective
investment; and (iv) does not intend to make a distribution of the
Shares or otherwise act as an "underwriter" within the meaning of
Section 2(11) of the 0000 Xxx.
1.2 Company Disclosure Documents. Microsoft has received copies of all
of Company's disclosure documents that have been filed with
the British Columbia Securities Commission ("BCSC") since November 1,
1995, and a description of the Shares to be issued pursuant to the terms
of the Asset Purchase Agreement.
1.3 Transfer Restrictions. Microsoft agrees that any and all transfers
of Shares received pursuant to the Asset Purchase Agreement, shall
be limited as follows:
(a) No Shares may be sold or otherwise transferred by Microsoft
prior to the 18-Month Anniversary Date.
(b) During the six-month period after the 18-Month Anniversary
Date, Microsoft shall be permitted, but not obligated, to
sell: (i) the 100,000 Shares initially issued pursuant
to Section 3.2 of the Asset Purchase Agreement.
(c) During the six month period beginning 24 months after the Closing
Date, Microsoft shall be permitted, but not obligated, to sell: (a) any
of the Shares described in Section 1.3(b) above,
and (ii) one-third (1/3) of the Shares issuable to Microsoft pursuant
to Sections 3.1.2 and 3.2 of the Asset Purchase Agreement.
(d) During the six month period beginning 30 months after the Closing
Date, Microsoft shall be permitted, but not obligated, to sell: (a)
any of the Shares described in Section 1.3 (b) above, and (ii) an
additional one-third (1/3) of the Shares issuable to Microsoft
pursuant to Sections 3.1.2 and 3.2 of the Asset Purchase Agreement
(i.e., a cumulative total of 2/3 of such latter categories of Shares).
(e) On the 36-month anniversary date of the Closing Date, all of the
Shares issued to Microsoft pursuant to the terms of the Asset Purchase
Agreement shall be freely saleable, subject only to the restrictions
of Section 1.4 below, by Microsoft
1.4 Restrictions. Subject to the restrictions contained in Section
1.3, Microsoft will not offer to sell, exchange, transfer, pledge or otherwise
dispose of any of the Shares unless at such time at least one of the following
is satisfied:
(a) a registration statement under the BC Act or the 1933 Act, whichever is
applicable, covering the Shares proposed to be sold, transferred or otherwise
disposed of, describing the manner and terms of the proposed sale, transfer or
other disposition, and containing a current prospectus, shall have been filed
with the BCSC or the SEC, whichever is applicable, and made effective under
either the BC Act (through the issuance of a receipt by the BCSC) or the 1933
Act;
(b) such transaction shall be permitted pursuant to the provisions of Rule
144 under the 1933 Act ("RULE 144");
(c) counsel to Microsoft reasonably acceptable to Company shall have
advised Microsoft that no registration under the BC Act or 1933 Act would
be required in connection with the proposed sale, transfer or other
disposition; or
(d) an authorized representative of the BCSC or the SEC shall have
rendered written advice to Microsoft (sought by Microsoft or counsel to
Microsoft after prior notice to Company) to the effect that the BCSC or the
SEC would take no action, or that the staff of the BCSC or the SEC would
not recommend that the BCSC or SEC take action, with respect to the
proposed sale, transfer or other disposition if consummated.
1.5 Restrictive Legend(s). All certificates representing the Shares
deliverable to Microsoft pursuant to the Asset Purchase Agreement and any
certificates subsequently issued with respect thereto or in substitution
therefor, unless a sale, transfer or other disposition is executed pursuant
to one or more of the alternative conditions set forth in Section 1.4 shall
have occurred, or unless the conditions of paragraph (k) of Rule 144 shall
have been satisfied, and shall bear a legend substantially as follows:
"The shares represented by this certificate may not be offered, sold,
pledged, transferred or otherwise disposed of except in accordance with the
requirements of the Securities Act (British Columbia) 1985, as amended, and
the other conditions specified in that certain Investment Agreement, a copy
of which may be inspected by the holder of this certificate at the offices
of Proginet Corporation, 000 Xxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxx
Xxxx 00000, or Proginet Corporation will furnish, without charge, a copy
thereof to the holder of this certificate upon written request therefor."
Should the Shares be registered with the Securities and Exchange Commission
during the 30 months after the Closing Date, Microsoft shall return to
Company its Shares containing the above legend.
E-2
Company shall promptly replace these Shares with the same number of Shares
bearing the following
legend:
"The shares represented by this certificate may not be offered,
sold, pledged, transferred or otherwise disposed of except in
accordance with the requirements of the Securities Act (British
Columbia) 1985, as amended, and the other conditions specified in
that certain Investment Agreement, a copy of which may be
inspected by the holder of this certificate at the offices of
Proginet Corporation, 000 Xxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx
Xxxx, Xxx Xxxx 00000, or Proginet Corporation will furnish,
without charge, a copy thereof to the holder of this certificate
upon written request therefor."
Company, at its discretion, may cause a stop transfer order to be placed
with its transfer agent(s) with respect to the certificates for the Shares
but not as to the certificates for any part of the Shares as to which said
legend is no longer appropriate when one or more of the alternatives set
forth in Section 1.4 shall have been satisfied and the contractual
agreement not to engage in Sales as set forth in Section 1.3 has been
satisfied or waived by Company. Company covenants that upon the request of
Microsoft, it will remove said legend when a sale, transfer or other
disposition is executed in compliance with Sections 1.3 and one of the
alternatives in Section 1.4.
1.6 Observation of BC and 1933 Acts. Microsoft will observe and comply
with the BC Act and 1933 Act, whichever is applicable, and the General
Rules and Regulations thereunder, as now in effect and as from to time
amended and including those hereafter enacted or promulgated, in connection
with any offer, sale, pledge, transfer or other disposition of the
Microsoft Common Shares or any part thereof including the prospectus
delivery requirements of the BC and 1933 Acts.
2. REGISTRATION. Company shall have the obligation, at Company's sole
expense, to register the Shares issued to Microsoft in connection with
the Asset Purchase Agreement as set forth in, and subject to, Section
6.1 of the Asset Purchase Agreement. Sales pursuant to such a
registration shall be in a manner consistent with the provisions of
Section 1.3 and 1.4.
3. REPORTS. If the Shares are registered with the
SEC, from and after the 18-Month Anniversary Date, and for so long as
necessary in order to permit Microsoft to sell the Shares pursuant to
Rule 144, Company will use its best efforts to file on a timely basis
all reports required to be filed by it pursuant to Section 13 of the
Securities Exchange Act of 1934, referred to in paragraph (c)(1) of
Rule 144 (or, if applicable, Company will use its best efforts to make
publicly available the information regarding itself referred to in
paragraph (c)(2) of Rule 144), in order to permit Microsoft to sell,
pursuant to the terms and conditions of Rule 144, the Shares.
4. STOCK, SPLIT, RECLASSIFICATION OF SHARES. Should Company effect any
stock split or reclassification of its shares of common stock, such
stock split or reclassification shall apply to the terms of this
Agreement, and the number of Shares which have been issued to
Microsoft and which Microsoft may sell pursuant Section 1.3 to this
Agreement shall be adjusted accordingly.
5. WAIVER. No waiver by any party hereto of any condition or of any
breach of any provision of this Investment Agreement shall be
effective unless in writing.
6. NOTICES. All notices, requests, demands or other communications
which are required or may be given pursuant to the terms of this
Investment Agreement shall be in writing and shall be deemed to have
been duly given on the date of delivery if delivered by hand or upon
receipt if mailed by registered or certified mail, postage prepaid,
return requested, or sent by express courier, or by facsimile upon
written confirmation of receipt by the recipient of such notice to the
party at the address set forth below, or such other address as may be
hereafter be designated in writing by the party:
E-3
------------------------------------------------------------------------------------------------------------
To Microsoft: To Company:
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Microsoft Corporation Proginet Corporation
------------------------------------------------------------------------------------------------------------
Xxx Xxxxxxxxx Xxx 000 Xxxxxx.Xxxx Xxxxx
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Xxxxxxx, XX 00000-0000 Xxxxxx Xxxx, XX 00000
------------------------------------------------------------------------------------------------------------
Attention: General Manager, Attention: Xxxxx X. Xxxxx
------------------------------------------------------------------------------------------------------------
SNA Server Development
------------------------------------------------------------------------------------------------------------
Phone: (000) 000-0000 Phone: (000) 000-0000
------------------------------------------------------------------------------------------------------------
Fax: (000) 000-0000 Fax: (000) 000-0000
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Copy to: Copy to:
------------------------------------------------------------------------------------------------------------
Law & Corporate Affairs, US Legal Xxxxxx Xxxxxx Flattau and Kimpl, LLP
------------------------------------------------------------------------------------------------------------
Fax: (000) 000-0000 000 Xxxxxxxxx Xxxxxx
------------------------------------------------------------------------------------------------------------
Xxx Xxxx, XX 00000
------------------------------------------------------------------------------------------------------------
Attention: Xxxxx Xxxxxxxxx, Esq.
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Phone: (000) 000-0000
------------------------------------------------------------------------------------------------------------
Fax: (000) 000-0000
6. COUNTERPARTS. This Agreement may be executed in two or more
partially or fully executed counterparts each of which shall be deemed
an original and shall bind the signatory, but all of which together
shall constitute but one and the same instrument. `Me execution and
delivery of a Signature Page - Investment Agreement in the form annexed
to this Agreement by any party hereto who shall has been furnished the
final form of this Agreement shall constitute the execution and
delivery of this Agreement by such party.
7. SUCCESSORS AND ASSIGNS. This Investment Agreement shall be
enforceable by and shall inure to the benefit of and be binding upon,
the parties hereto and their respective successors and assigns. As
used herein, the terms "successors and assigns" shall mean, where the
context so permits, heirs, executors, administrators, trustees and
successor trustees, and personal and other representatives.
8. DISPUTE RESOLUTION. Any dispute, controversy or claim arising, out
of or in connection with this Agreement, or any breach thereof, shall
be addressed in accordance with Section 10.2 of the Asset Purchase
Agreement.
9. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, such provision and all other related
provisions shall be modified rather than voided, if possible, in order
to achieve the intent of the parties to this Agreement to the extent
possible. In any event all other unrelated provisions of this
Agreement shall be deemed valid and enforceable to the full extent.
10. EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction or
interpretation of this Investment Agreement.
11. DEFINITIONS. All capitalized terms used herein shall have the
meaning defined in the Asset Purchase Agreement, unless otherwise
defined herein.
12. THIRD PARTY RELIANCE. Counsel to the parties shall be entitled to
rely upon this Investment Agreement as needed in the rendering of
opinions as provided for in the Asset Purchase Agreement. 13.
CONFIDENTIALITY. Microsoft and Company agree to keep confidential all
information in accordance with Section 6.6 of the Asset Purchase
Agreement specifically including without limitation the amount of cash
and the number of Shares to be issued.
E-4
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date
first written above.
MICROSOFT CORPORATION PROGINET CORPORATION
---------------------------------------- ---------------------------------------
By (Sign) By (Sign)
Name (Print) Name (Print)
Title Title
E-5
EXHIBIT F
FORM OF
ASSIGNMENT AND XXXX OF SALE
THIS ASSIGNMENT AND XXXX OF SALE (this "Assignment and Xxxx of Sale") is
delivered pursuant to that certain Asset Purchase Agreement, dated as of
December 6, 1996, ("APA") between Microsoft Corporation, a Washington
corporation located at Xxx Xxxxxxxxx Xxx, Xxxxxxx, XX 00000 ("Microsoft")
and Proginet Corporation, a Delaware corporation located at 000 Xxxxxx Xxxx
Xxxxx, Xxxxxx Xxxx, Xxx Xxxx 00000 ("Company"). The terms and provisions of
the APA shall apply to this Assignment and Xxxx of Sale. All capitalized
terms used but not otherwise defined herein shall have the meanings set
forth in the APA.
RECITALS
7.2.8 A. UNDER THE APA, MICROSOFT AGREED TO SELL TO COMPANY AND COMPANY
AGREED TO PURCHASE FROM MICROSOFT CERTAIN ASSETS AND RIGHTS OF
MICROSOFT PERTAINING TO THE ACQUIRED ASSETS. 7.2.9 B. IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED BY THE APA, MICROSOFT AGREED TO
ASSIGN CERTAIN ASSETS AND RIGHTS PERTAINING TO THE ACQUIRED ASSETS TO
COMPANY.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, Microsoft hereby agrees as follows:
7.2.10 1. SALE AND ASSIGNMENT
Microsoft hereby sells, conveys, transfers, assigns and delivers to
Company all right, title and interest in and to the Acquired Assets,
free and clear of all liens, claims, charges and encumbrances,
including without limitation the following:
(a) Netwise Assets. All software, documentation, test cases,
development history database, training materials and related
proprietary materials acquired by Microsoft from Newts, Inc. (the
"Netwise Assets") under an Asset Purchase Agreement dated October
27, 1995 (the "Netwise Asset Purchase Agreement").
(b) Netwise Assets Further Developed or Modified by Microsoft. All
error corrections and updates to the Netwise Assets, documentation
and materials related to the Netwise Assets developed by Microsoft
between October 27, 1995 and the Closing Date of this Agreement.
(c) Other Assets. All of Microsoft's intangible assets acquired
pursuant to the Netwise Asset Purchase Agreement, including
goodwill, going concern value, customer lists, contracts,
agreements, licenses or license agreements, commitments,
warranties, claims and other xxxxxx and inchoate rights, but
excluding without limitation, the Retained Assets, cash,
F-I
marketable securities, receivables and rights relating to contractual
obligations (other than the Assumed Obligations).
7.2.11 2. MICROSOFT'S COVENANTS
Microsoft hereby covenants and agrees that it will, at the reasonable
request of Company, execute and deliver, and will cause to be executed
and delivered, such further instruments of sale, transfer, conveyance
and assignment and take such other action as may reasonably be required
to more effectively sell, transfer, convey, assign and deliver to, and
vest in, Company, title to and possession of the assets hereby sold,
transferred, conveyed, assigned and delivered, and to put Company in
actual possession and operating control thereof.
7.2.12 3. ATTORNEY-IN-FACT
Microsoft hereby irrevocably constitutes and appoints Company, and its
successors and assigns, as its attorney-in-fact, with full power of
substitution, in its name or otherwise, on behalf of Microsoft for
Company's use, to claim, demand, collect and receive at any time and
from time to time any and all assets, properties, claims, accounts and
other rights, tangible or intangible, real, personal or mixed sold,
transferred, conveyed, assigned and delivered under this Assignment and
Xxxx of Sale.
7.2.13 4. APA
Microsoft, by its execution of this Assignment and Xxxx of Sale, and
Company, by its acceptance and consent to the form of this Assignment
and Xxxx of Sale, each hereby acknowledge and agree that:
(a) The terms and provisions of the APA shall apply to this Assignment
and Xxxx of Sale, and the terms and conditions of this Assignment
and Xxxx of Sale shall be construed
consistently therewith; and
7.2.14 (B) NEITHER THE REPRESENTATIONS AND WARRANTIES NOR THE RIGHTS
(INCLUDING INDEMNIFICATION) AND REMEDIES OF ANY PARTY UNDER THE APA
SHALL BE DEEMED TO HAVE BEEN ENLARGED OR ALTERED IN ANY WAY BY THE
EXECUTION, ACCEPTANCE AND APPROVAL OF THIS ASSIGNMENT AND XXXX OF SALE.
5. Effective Date of Assignment and Xxxx of Sale
This Assignment and Xxxx of Sale shall be deemed effective for all
purposes as of the Closing Date of the APA.
F-2
IN WITNESS WHEREOF, Microsoft has executed this Assignment and Xxxx of Sale
effective as of the ___ day of __________ 1996.
MICROSOFT CORPORATION
By
ITS V:P, 6,s-c-s + -T@ S 0-@ IDIAS
ACCEPTED:
PROGINET CORPORATION
By
Its
F-3
EXHIBIT G
FORM OF
ASSUMPTION OF OBLIGATIONS
THIS ASSLWTTON OF OBLIGATIONS ("Assumption") is made by and between
Proginet Corporation, a Delaware corporation ("Company"), and Microsoft
Corporation, A Washington corporation ("Microsoft"). This Assumption is
delivered pursuant to that certain Asset Purchase Agreement, dated as of
December 6, 1996, ("APA"). Capitalized terms used but not otherwise defined
herein shall have the meanings set forth in the APA.
RECITALS
7.2.15 A. UNDER THE APA, MICROSOFT AGREED TO SELL AND COMPANY AGREED TO
PURCHASE FROM MICROSOFT CERTAIN ASSETS OF MICROSOFT ACQUIRED BY
MICROSOFT FROM NETWISE, INC. (THE
"NETWISE ASSETS") UNDER AN ASSET PURCHASE AGREEMENT DATED OCTOBER 27,
1995 BETWEEN MICROSOFT AND NETWISE, INC. 7.2.16 B. IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED BY THE APA, COMPANY AGREED TO ASSUME
CERTAIN CONTRACTUAL OBLIGATIONS OF MICROSOFT WITH RESPECT TO THE
ACQUIRED ASSETS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
as follows:
1. ASSIGNMENT AND ASSUMPTION
Microsoft hereby assigns to Company, and Company hereby assumes and agrees,
subject to the exclusions and limitations contained in the APA, to perform,
pay or discharge the Assumed Obligations as they are defined in the APA.
Except for the Assumed Obligations or as otherwise provided in the APA,
Company assumes no debt, liability or obligation of Microsoft by this
Assumption, and it is expressly understood and agreed that all debts,
liabilities and obligations other than the Assumed Obligations shall remain
the sole obligation of Microsoft, its successors and assigns, and no person
other than Microsoft shall have any rights under this Assumption.
2. APA
Company, by its execution of this Assumption, and Microsoft, by its
acceptance and consent to the form of this Assumption, each hereby
acknowledge and agree that:
7.2.17 (A) THE TERMS AND PROVISIONS OF THE APA SHALL APPLY TO THIS
ASSUMPTION, AND THE TERMS AND CONDITIONS OF THIS ASSUMPTION SHALL BE
CONSTRUED CONSISTENTLY THEREWITH; AND
G- I
7.2.18 (B) NEITHER THE REPRESENTATIONS AND WARRANTIES NOR THE RIGHTS
(INCLUDING INDEMNIFICATION) AND REMEDIES OF ANY PARTY UNDER THE APA
SHALL BE DEEMED TO HAVE BEEN ENLARGED OR ALTERED IN ANY WAY BY THE
EXECUTION, ACCEPTANCE AND APPROVAL OF THIS ASSUMPTION, AND THIS
ASSUMPTION SHALL NOT ENLARGE ANY RIGHTS OF THIRD PARTIES UNDER ANY OF
THE ASSUMED OBLIGATIONS.
3. EFFECTIVE DATE OF ASSUMPTION
This Assumption shall be deemed effective for all purposes as of the
Closing Date of the APA.
IN WITNESS WHEREOF, Microsoft and Company have executed this Assumption
effective as of the ___ day of ____________ of 1996.
PROGRNET CORPORATION
By
Its
ACCEPTED:
MICROSOFT CORPORTION
By-I
Its
G-2
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT ("INVESTMENT AGREEMENT") entered into as of the ___
day of December between MICROSOFT CORPORATION, A Washington corporation
located at Xxx Xxxxxxxxx Xxx, Xxxxxxx, XX 00000 ("MICROSOFT") and PROGINET
CORPORATION, a Delaware corporation LOCATED at 000 Xxxxxx Xxxx Xxxxx,
Xxxxxx Xxxx, Xxx Xxxx 00000 ("COMPANY").
RECITALS
7.2.19 A. MICROSOFT AND COMPANY HAVE ENTERED INTO AN ASSET PURCHASE
AGREEMENT OF EVEN DATE HEREWITH (THE "Asset Purchase Agreement").
7.2.20 B. THE Asset PURCHASE AGREEMENT PROVIDES THAT MICROSOFT WILL
sell CERTAIN ASSETS TO COMPANY. IN exchange for the ASSETS, COMPANY
WILL ASSUME CERTAIN OF MICROSOFT'S LIABILITIES AND ISSUE SHARES OF
COMPANY'S COMMON STOCK, PAR VALUE S.001 (THE "Shares") AS specified IN
THE Asset PURCHASE AGREEMENT. 7.2.21 C. ALL CAPITALIZED TERMS SHALL
HAVE THE SAME MEANING as DEFINED IN THE Asset PURCHASE AGREEMENT UNLESS
OTHERWISE INDICATED HEREIN.
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
THE mutual representations, warranties, covenants and agreements
contained herein, Microsoft and Company hereby agree as follows:
AGREEMENT
7.2.22 1. Microsoft Representations and Agreements. MICROSOFT
HEREBY REPRESENTS, WARRANTS AND AGREES THAT:
1.1 Investor Status. Microsoft: (i) is (a) a "SOPHISTICATED PURCHASER"
AS that term is DEFINED in Appendix A to Form 20A of the
Securities Act (British Columbia) 1985 (the "BC ACT"), and (b) an
"ACCREDITED INVESTOR" as that term is defined in Rule 50 1 (a)(5)
of Regulation D of THE Securities Act of 1933 (the "1933 ACT");
(ii) is acquiring the Shares for its own account, (iii) has the
knowledge and experience in financial and business matters and is
capable of evaluating the merits and risks of the prospective
investment; and (iv) does not intend to make a distribution of the
Shares or otherwise act as an "UNDERWRITER" within the meaning of
Section 2(11) of the 0000 Xxx.
1.2 Company Disclosure Documents. Microsoft has received copies of ALL
of Company's disclosure documents that have been filed with the
British Columbia Securities Commission ("BCSC") since November 1,
1995, and a description of the Shares to be issued pursuant to the
terms of the Asset Purchase Agreement.
1.3 Transfer Restrictions. Microsoft agrees that any and all transfers
of Shares received pursuant to the Asset Purchase Agreement, shall
be limited as follows:
(A) No Shares may be sold or otherwise transferred by Microsoft
prior to the 18-Month Anniversary Date.
(b) During the six month period after the 18-Month Anniversary
Date, Microsoft shall be permitted, but not obligated, to sell:
(i) the 100,000 Shares initially issued pursuant to
Section 3.2 of the Asset Purchase Agreement.
7.2.23 (C) DURING THE SIX MONTH PERIOD BEGINNING 24 MONTHS AFTER THE
CLOSING, DATE, MICROSOFT SHALL BE PERMITTED, BUT NOT OBLIGATED, TO
SELL: (A) ANY OF THE SHARES DESCRIBED IN SECTION 1.3(B) ABOVE, AND (II)
ONE-THIRD (1/3) OF THE SHARES ISSUABLE TO MICROSOFT PURSUANT TO
SECTIONS 3.1.2 AND 3.2 OF THE ASSET PURCHASE AGREEMENT.
7.2.24 (D) DURING THE SIX MONTH PERIOD BEGINNING 30 MONTHS AFTER THE
CLOSING DATE, MICROSOFT SHALL BE PERMITTED, BUT NOT OBLIGATED, TO SELL
(A) ANY OF THE SHARES DESCRIBED IN SECTION 1.3
(b) above, and (ii) an additional one-third (1/3) of the Shares issuable to
Microsoft pursuant to Sections
3.1.2 and 3.2 of the Asset Purchase Agreement (i.e., a cumulative total of
2/3 of such latter categories of Shares).
7.2.25 (E) ON THE 36-MONTH ANNIVERSARY DATE OF THE CLOSING DATE, ALL OF
THE SHARES ISSUED TO MICROSOFT PURSUANT TO THE TERMS OF THE ASSET
PURCHASE AGREEMENT SHALL BE FREELY SALEABLE, SUBJECT ONLY TO THE
RESTRICTIONS OF SECTION 1.4 BELOW, BY MICROSOFT.
1.4 Restrictions. Subject to the restrictions contained in Section
1.3, Microsoft will not offer to sell, exchange, transfer, pledge
or otherwise dispose of any of the Shares unless at such time at
least one of the following is satisfied:
(a) a registration statement under the BC Act or the 1933 Act,
whichever is applicable, covering the Shares proposed to be
sold, transferred or otherwise disposed of, describing the
manner and terms of the proposed sale, transfer or other
disposition, and containing a current prospectus, shall have
been filed with the BCSC or the SEC, whichever is applicable,
and made effective under either the BC Act (through the
issuance of a receipt by the BCSC) or the 1933 Act;
(b) such transaction shall be permitted pursuant to the provisions
of Rule 144 under the 1933 Act ("Rule 144");
(c) counsel to Microsoft reasonably acceptable to Company shall
have advised Microsoft that no registration under the BC Act
or 1933 Act would be required in connection with the proposed
sale, transfer or other disposition; or
7.2.26 (D) AN AUTHORIZED REPRESENTATIVE OF THE BCSC OR THE SEC SHALL
HAVE rendered written advice to Microsoft (sought by Microsoft or counsel to
Microsoft after prior notice to Company) to the effect that the BCSC or the SEC
would take no action, or that the staff of the BCSC or the SEC would not
recommend that the BCSC or SEC take action, with respect to the proposed sale,
transfer or other disposition if consummated.
7.2.27 1.5 RESTRICTIVE LEGEND(S). ALL CERTIFICATES REPRESENTING THE
SHARES DELIVERABLE TO MICROSOFT PURSUANT TO THE ASSET PURCHASE
AGREEMENT AND ANY CERTIFICATES SUBSEQUENTLY ISSUED WITH RESPECT THERETO
OR IN SUBSTITUTION THEREFOR, UNLESS A SALE, TRANSFER OR OTHER
DISPOSITION IS EXECUTED PURSUANT TO ONE OR MORE OF THE ALTERNATIVE
CONDITIONS SET FORTH IN SECTION 1.4 SHALL HAVE OCCURRED, OR UNLESS THE
CONDITIONS OF PARAGRAPH (K) OF RULE 144 SHALL HAVE BEEN SATISFIED, AND
SHALL BEAR A LEGEND SUBSTANTIALLY AS FOLLOWS:
y
"The shares represented by this certificate may not be offered, sold,
pledged, transferred or otherwise disposed of except in accordance with the
requirements of the Securities Act (British Columbia) 1985, as amended, and
the other conditions specified in that certain Investment Agreement, a copy
of which may be inspected by the holder of this certificate at the offices
of Proginet Corporation, 000 Xxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxx
Xxxx 00000, or Proginet Corporation will furnish, without charge, a copy
thereof to the holder of this certificate upon written request therefor."
Should the Shares be registered with the Securities and Exchange Commission
during, the 30 months after the Closing Date, Microsoft shall return to
Company its Shares containing the
above legend. Company shall promptly replace these Shares with the same number
of Shares bearing the following, legend:
0
"The shares represented by this certificate may not be offered, sold,
pledged, transferred or otherwise disposed of except in accordance with the
requirements of the Securities Act (British Columbia) 1985, as amended, and
the other conditions specified in that certain Investment Agreement, a copy
of which may be inspected by the holder of this certificate at the offices
of Proginet Corporation, 000 Xxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxx
Xxxx 00000, or Proginet Corporation will furnish, without charge, a copy
thereof to the holder of this certificate upon written request therefor.'
Company, at its discretion, may cause a stop transfer order to be placed
with its transfer agent(s) with respect to the certificates for the Shares
but not as to the certificates for any part of the Shares as to which said
legend is no longer appropriate when one or more of the alternatives set
forth in Section 1.4 shall have been satisfied and the contractual
agreement not to engage in Sales as set forth in Section 1.3 has been
satisfied or waived by Company. Company covenants that upon the request of
Microsoft, it will remove said legend when a sale, transfer or other
disposition is executed in compliance with Sections 1.3 and one of the
alternatives in Section 1.4.
7.2.28 1.6 OBSERVATION OF BC AND 1933 ACTS. MICROSOFT WILL OBSERVE AND
COMPLY WITH THE BC Act and 1933 Act, whichever is applicable, and the General
Rules and Regulations thereunder, as now in effect and as from to time amended
and including those hereafter enacted or promulgated, in connection with any
offer, sale, pledge, transfer or other disposition of the Microsoft Common
Shares or any part thereof including the prospectus delivery requirements of the
BC and 1933 Acts.
7.2.29 2. REGISTRATION. COMPANY SHALL HAVE THE OBLIGATION, AT COMPANY'S
SOLE EXPENSE, TO REGISTER THE SHARES ISSUED TO MICROSOFT IN CONNECTION
WITH THE ASSET PURCHASE AGREEMENT AS SET FORTH IN, AND SUBJECT TO,
SECTION 6.1 OF THE ASSET PURCHASE AGREEMENT. SALES PURSUANT TO SUCH A
REGISTRATION SHALL BE IN A MANNER CONSISTENT WITH THE PROVISIONS OF
SECTION 1.3 AND 1.4.
7.2.30 3. REPORTS. IF THE SHARES ARE REGISTERED WITH THE SEC, FROM AND
AFTER THE 18-MONTH ANNIVERSARY DATE, AND FOR SO LONG AS NECESSARY IN
ORDER TO PERMIT MICROSOFT TO SELL THE SHARES PURSUANT TO RULE 144,
COMPANY WILL USE ITS BEST EFFORTS TO FILE ON A TIMELY BASIS ALL
REPORTS REQUIRED TO BE FILED BY IT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934, REFERRED TO IN PARAGRAPH (C)(1) OF
RULE 144 (OR, IF APPLICABLE, COMPANy WILL USE ITS BEST EFFORTS TO MAKE
PUBLICLY AVAILABLE THE INFORMATION REGARDING ITSELF REFERRED TO IN
PARAGRAPH (C)(2) OF RULE 144), IN ORDER TO PERMIT MICROSOFT TO SELL,
PURSUANT TO THE TERMS AND CONDITIONS OF RULE 144, THe SHARES.
7.2.31 4. STOCK SPLIT, RECLASSIFICATION OF SHARES. SHOULD COMPANY
EFFECT ANY STOCK SPLIT OR RECLASSIFICATION O I@ SHARES OF COMMON
STOCK, SUCH STOCK SPLIT OR RECLASSIFICATION SHALL APPLY TO THE TERMS
OF THIS AGREEMENT, AND THE NUMBER OF SHARES WHICH HAVE BEEN ISSUED TO
MICROSOFT AND WHICH MICROSOFT MAY SELL PURSUANT SECTION 1.3 TO THIS
AGREEMENT SHALL BE ADJUSTED ACCORDINGLY.
7.2.32 5. WAIVER. NO WAIVER BY ANY PARTY HERETO OF ANY CONDITION OR OF
ANY BREACH OF ANY PROVISION OF THIS INVESTMENT AGREEMENT SHALL BE
EFFECTIVE UNLESS IN WRITING
7.2.33 6. NOTICES. ALL NOTICES, REQUESTS, DEMANDS OR OTHER
COMMUNICATIONS WHICH ARE REQUIRED OR MAY BE GIVEN PURSUANT TO THE
TERMS OF THIS INVESTMENT AGREEMENT SHALL BE IN WRITING AND SHALL BE
DEEMED TO HAVE BEEN DULY GIVEN ON THE DATE OF DELIVERY IF DELIVERED BY
HAND OR UPON RECEIPT IF MAILED BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, RETURN REQUESTED, OR SENT BY EXPRESS COURIER, OR BY
FACSIMILE UPON WRITTEN CONFIRMATION OF RECEIPT BY THE RECIPIENT OF
SUCH NOTICE TO THE PARTY AT THE ADDRESS SET FORTH BELOW, OR SUCH
other ADDRESS AS MAY be hereafter be designated in writing by the party:
C,
To Microsoft: To Company:
Microsoft Corporation Proginet Corporation
One Microsoft Way 000 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000-0000 Xxxxxx Xxxx, XX 00000
Attention: General Manager, Attention: Xxxxx X. Xxxxx
7.2.34 SNA SERVER DEVELOPMENT
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Copy to: Copy to:
Law & Corporate Affairs, US Legal Xxxxxx Xxxxxx Flattau and Kimpl, LLP
Fax: (000) 000-0000 0000 Xxxxxx Xx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
7.2.35 6. COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
PARTIALLY OR FULLY EXECUTED COUNTERPARTS EACH OF WHICH SHALL BE DEEMED
AN ORIGINAL AND SHALL BIND THE SIGNATORY, BUT ALL OF WHICH TOGETHER
SHALL CONSTITUTE BUT ONE AND THE SAME INSTRUMENT. THE EXECUTION AND
DELIVERY OF A SIGNATURE PAGE - INVESTMENT AGREEMENT IN THE FORM ANNEXED
TO THIS AGREEMENT BY ANY PARTY HERETO WHO SHALL HAS BEEN FURNISHED THE
FINAL FORM OF THIS AGREEMENT SHALL CONSTITUTE THE EXECUTION AND
DELIVERY OF THIS AGREEMENT BY SUCH PARTY.
7.2.36 7. SUCCESSORS AND ASSIGNS. THIS INVESTMENT AGREEMENT SHALL BE
ENFORCEABLE BY AND SHALL INURE TO THE BENEFIT OF AND BE BINDING UPON,
THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. AS
USED HEREIN, THE TERMS "SUCCESSORS AND ASSIGNS" SHALL MEAN, WHERE THE
CONTEXT SO PERMITS, HEIRS, EXECUTORS, ADMINISTRATORS, TRUSTEES AND
SUCCESSOR TRUSTEES, AND PERSONAL AND OTHER REPRESENTATIVES.
7.2.37 8. DISPUTE RESOLUTION. ANY DISPUTE, CONTROVERSY OR CLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, OR ANY BREACH
THEREOF, SHALL BE ADDRESSED IN ACCORDANCE WITH SECTION 10.2 OF THE
ASSET PURCHASE AGREEMENT.
7.2.38 9. SEVERABILITY. IF ANY PROVISION OF THIS AGREEMENT IS HELD TO
BE UNENFORCEABLE FOR ANY REASON, SUCH PROVISION AND ALL OTHER RELATED
PROVISIONS SHALL BE MODIFIED RATHER THAN VOIDED, IF POSSIBLE, IN ORDER
TO ACHIEVE THE INTENT OF THE PARTIES TO THIS AGREEMENT TO THE EXTENT
POSSIBLE. IN ANY EVENT, ALL OTHER UNRELATED PROVISIONS OF THIS
AGREEMENT SHALL BE DEEMED VALID AND ENFORCEABLE TO THE FULL EXTENT.
7.2.39 10. EFFECT OF HEADINGS. THE SECTION HEADINGS HEREIN ARE FOR
CONVENIENCE ONLY AND SHALL NOT AFFECT THE CONSTRUCTION OR
INTERPRETATION OF THIS INVESTMENT AGREEMENT.
11. Definitions. All capitalized terms used herein shall have the meaning
defined in the Asset Purchase Agreement, unless otherwise defined herein.
7.2.40 12. THIRD PARTY RELIANCE. COUNSEL TO THE PARTIES SHALL BE
ENTITLED TO RELY UPON THIS INVESTMENT AGREEMENT AS NEEDED IN THE
RENDERING OF OPINIONS AS PROVIDED FOR IN THE ASSET PURCHASE AGREEMENT.
7.2.41 13. CONFIDENTIALITY. MICROSOFT AND COMPANY AGREE TO KEEP
CONFIDENTIAL ALL INFORMATION IN ACCORDANCE WITH SECTION 6.6 OF THE
ASSET PURCHASE AGREEMENT SPECIFICALLY INCLUDING WITHOUT LIMITATION THE
AMOUNT OF CASH AND THE NUMBER OF SHARES TO BE ISSUED.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date FIRST written above.
MICROSOFT CORPORATION PROGINET CORPORATION
By ZSip) BI (Sign)
NAME (Print) NAME (Print)
Title TITLE
p@ A,
Date Date
I\chdM[02-00.45Nn@tdoc
ASSIGNMENT AND XXXX OF SALE
THIS ASSIGNMENT AND XXXX OF SALE (this "Assignment and Xxxx of Sale") is
delivered pursuant to that certain Asset Purchase Agreement, dated as of
December 6, 1996, ("APA") between Microsoft Corporation, a Washington
corporation located at Xxx Xxxxxxxxx Xxx, Xxxxxxx, XX 00000 (`Microsoft')
and Proginet Corporation, a Delaware corporation located at 000 Xxxxxx Xxxx
Xxxxx, Xxxxxx Xxxx, Xxx Xxxx 00000 ("Company"). `Me terms and provisions of
the APA shall apply to this Assignment and Xxxx of Sale. All capitalized
terms used but not otherwise defined herein shall have the meanings set
forth in the APA.
RECITALS
7.2.42 A. UNDER THE APA, MICROSOFT AGREED TO SELL TO COMPANY AND
COMPANY AGREED TO PURCHASE FROM MICROSOFT CERTAIN ASSETS AND RIGHTS OF
MICROSOFT PERTAINING TO THE ACQUIRED ASSETS. 7.2.43 B. IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED BY THE APA, MICROSOFT AGREED TO
ASSIGN CERTAIN ASSETS AND RIGHTS PERTAINING TO THE ACQUIRED ASSETS TO
COMPANY.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, Microsoft hereby agrees as follows:
7.2.44 1. SALE AND ASSIGNMENT
Microsoft hereby sells, conveys, transfers, assigns and delivers to
Company all right, title and interest in and to the Acquired Assets,
free and clear of all liens, claims, charges and encumbrances,
including without limitation the following:
C,
(a) Netwise Assets. All software, documentation, test cases,
development history database, training materials and related
proprietary materials acquired by Microsoft from Netwise, Inc.
(the "Netwise Assets") under an Asset Purchase Agreement dated
October 27, 1995 (the "Netwise Asset Purchase Agreement").
(b) Netwise Assets Further Developed or Modified by Microsoft. All
error corrections and updates to the Netwise Assets, documentation
and materials related to the Netwise Assets developed by Microsoft
between October 27, 1995 and the Closing Date of this Agreement.
(c) Other Assets. All of Microsoft's intangible assets acquired
pursuant to the
Netwise Asset Purchase Agreement, including goodwill, going concern value,
customer lists, contracts, agreements, licenses or license agreements,
commitments, warranties, claims and other xxxxxx and inchoate rights, but
excluding without limitation, the Retained Assets, cash, marketable securities,
receivables and rights relating to contractual obligations (other than the
Assumed Obligations).
7.2.45 2. MICROSOFT'S COVENANTS
Microsoft hereby covenants and agrees that it will, at the reasonable
request of Company, execute and deliver, and will cause to be executed
and delivered, such further instruments of sale, transfer, conveyance
and assignment and take such other action as may reasonably be required
to more effectively sell, transfer, convey, assign and deliver to, and
vest in, Company, title to and possession of the assets hereby sold,
transferred, conveyed, assigned and delivered, and to put Company in
actual possession and operating control thereof.
7.2.46 3. ATTORNEY-IN-FACT
----------------------------------
Microsoft hereby irrevocably constitutes and appoints Company, and its
successors and assigns, as its attorney-in-fact, with full power of
substitution, in its name or otherwise, on behalf of Microsoft for
Company's use, to claim, demand, collect and receive at any time and
from time to time any and all assets, properties, claims, accounts and
other rights, tangible or intangible, real, personal or mixed sold,
transferred, conveyed, assigned and delivered under this Assignment and
Xxxx of Sale.
7.2.47 4. APA
---------------------
Microsoft, by its execution of this Assignment and Xxxx of Sale, and
Company, by its acceptance and consent to the form of this Assignment
and Xxxx of Sale, each hereby acknowledge and agree that:
(a) `Me terms and provisions of the APA shall apply to this Assignment
and Xxxx of Sale, and the terms and conditions of this Assignment
and Xxxx of Sale shall be construed consistently therewith; and
(b) Neither the representations and warranties nor the rights
(including indemnification) and remedies of any party under the
APA shall be deemed to have been enlarged or altered in any way by
the execution, acceptance and approval of this Assignment and Xxxx
of Sale.
7.2.48 5. EFFECTIVE DATE OF ASSIGNMENT AND XXXX OF SALE
---------------------------------------------------------------
This Assignment and Xxxx of Sale shall be deemed effective for all
purposes as of the Closing Date of the APA.
IN WITNESS @REOF, Microsoft has executed this Assignment and Xxxx of
Sale effective as of the /-7/4 day of 1996.
MICROSOFT CORPORATION
By
`700
----
its
ACCEPTED:
PROGINET CORPORATION
By_
its
ASSUMPTION OF OBLIGATIONS
THIS ASSUMPTION OF OBLIGATIONS ("Assumption") is made by and between
Proginet Corporation, a Delaware corporation ("Company"), and Microsoft
Corporation, a Washington corporation ("Microsoft"). This Assumption is
delivered pursuant to that certain Asset Purchase Agreement, dated as of
December 6, 1996, ("X.XX"). Capitalized terms used but not otherwise
defined herein shall -have the meanings set forth in the APA.
RECITALS
7.2.49 A. UNDER THE APA, MICROSOFT AGREED TO SELL AND COMPANY AGREED TO
PURCHASE FROM MICROSOFT CERTAIN ASSETS OF MICROSOFT ACQUIRED BY
MICROSOFT FROM NETWISE, INC. (THE "NETWISE ASSETS") UNDER AN ASSET
PURCHASE AGREEMENT DATED OCTOBER 27, 1995 BETWEEN MICROSOFT AND
NETWISE, INC.
7.2.50 B. IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY
THE APA, COMPANY AGREED TO ASSUME CERTAIN CONTRACTUAL OBLIGATIONS OF
MICROSOFT WITH RESPECT TO THE ACQUIRED ASSETS.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
as follows:
7.2.51 1. ASSIGNMENT AND ASSUMPTION
-------------------------------------------
Microsoft hereby assigns to Company, and Company hereby assumes and
agrees, subject to the exclusions and limitations contained in the APA,
to perform, pay or discharge the Assumed Obligations as they are
defined in the APA.
Except for the Assumed Obligations or as otherwise provided in the APA,
Company assumes no debt, liability or obligation of Microsoft by this
Assumption, and it is expressly understood and agreed that all debts,
liabilities and obligations other than the Assumed Obligations shall
remain the sole obligation of Microsoft, its successors and assigns,
and no person other than Microsoft shall have any rights under this
Assumption.
7.2.52 2. APA
---------------------
Company, by its execution of this Assumption, and Microsoft, by its
acceptance and consent to the form of this Assumption, each hereby
acknowledge and agree that:
ZP
(a) `Me terms and provisions of the APA shall apply to this
Assumption, and the terms and conditions of this Assumption shall
be construed consistently therewith; and
(b) Neither the representations and warranties nor the rights
(including indemnification) and remedies of any party under the
APA shall be deemed to have been enlarged or altered in any way by
the execution, acceptance and approval of this Assumption, and
this Assumption shall not enlarge any rights of third parties
under any of the Assumed Obligations.
7.2.53 3. EFFECTIVE DATE OF ASSUMPTION THIS ASSUMPTION SHALL BE DEEMED
EFFECTIVE FOR ALL PURPOSES AS OF THE CLOSING DATE OF THE APA. TN
WITNESS WHEREOF, Microsoft and Company have executed this Assumption
effective as of ther7.6d-ay of 1996.
PROGINET CORPORATION
By
its
ACCEPTED:
NHC ON
By
its
COVENANT
This Covenant (the "Covenant") is entered into and effective
contemporaneously with the Asset Purchase Agreement entered into between
these same parties dated the I'-7-6day of December, 1996 (the "Agreement)
by Proginet Corporation, a Delaware corporation located at 000 Xxxxxx Xxxx
Xxxxx, Xxxxxx Xxxx, XX II530 ("Covenant"), in favor of Microsoft
Corporation, a Washington corporation located at Xxx Xxxxxxxxx Xxx,
Xxxxxxx, XX 00000, ("Microsoft") and Microsoft's employees, agents,
officers, directors, distributors, resellers, licensees, and its and their
successors and assigns (collectively, "Covenantees").
1. Definitions.
7.2.54 1.1 IBIS COVENANT INCORPORATES BY REFERENCE AS THOUGH FULLY SET
FORTH HEREIN THE DEFINITIONS OF THE FOLLOWING TERMS FOUND IN SECTION I
OF THE AGREEMENT: ACQUIRED ASSETS, SOURCE CODE, AND Confidential
Information.
7.2.55 1.2 "RESIDUALS" MEANS INFORMATION IN NON-TANGIBLE FORM, WHICH
MAY BE RETAINED BY PERSONS who have had access to Confidential
Information, including Source Code for Acquired Assets or portions
thereof, and the ideas, concepts, know-how or techniques contained in
that Confidential Information.
2. Covenant In consideration of the promises made and obligations undertaken
by Microsoft under the Agreement, and for additional good and valuable
consideration, the receipt and sufficiency of which Covenantor hereby
acknowledges, Covenantor hereby covenants and agrees, on behalf of itself
and its directors, officers, employees, agents, and its and their
successors and assigns, that notwithstanding any provision of the
Agreement, it will never institute, prosecute, aid in the prosecution of,
or join in any administrative proceeding, legal action, or administrative
or judicial appeal relating to, arising out of, or in any manner connected
with a claim that Covenantees, or any of them, have improperly or without
proper authority used or disclosed Residuals in any manner, including
without limitation in connection with the acquisition, licensing,
development, manufacture, distribution or marketing, for it or themselves,
of similar technology performing the same or similar functions as the
technology which is the subject of the Agreement. This paragraph shall not
be deemed to supersede, modify or limit Microsoft's obligations to Company
under Section 9.2.1 of the Agreement, notwithstanding anything to the
contrary herein.
3. Choice of law/availability of injunctive relief. Covenantor acknowledges
and agrees that any breach of this Covenant will result in irreparable harm
to Covenantees, and each of them, and that any breach shall entitle
Covenantees and each of them to injunctive relief, among other remedies.
In WITNESS @EREOF, the parties have entered into this Covenant as of the date
first written
7.2.56 ABOVE.
MICROSOFT CO[ PR T CORPORATION
By (sign) B@(sign)
o C)LLO , ti Uric, K@ v't
Name (print) Nam?(print) @
@@@ese@4
Title Title
Date Date
LICENSE AGREEMENT
License Agreement (the "License") is entered into and effective
contemporaneously with the Asset Purchase Agreement entered into between
these same parties dated the ____ day of December, 1996 (the "Agreement")
by and between Proginet Corporation, a Delaware corporation located at 000
Xxxxxx Xxxx Xxxxx, Xxxxxx Xxxx, XX 00000 ("Licensor'), and Microsoft
Corporation, a Washington corporation located at Xxx Xxxxxxxxx Xxx,
Xxxxxxx, XX 00000 ("Microsoft").
1. Definitions. This License incorporates by reference as though fully set
forth herein the definitions of the following terms found in Section I of
the Agreement: Acquired Assets, Source Code, Object Code, and Closing Date.
2. License Grant and Payment. In consideration of a payment of Ten Thousand
Dollars ($ 1 0,000.00) in cash to be made in full by Microsoft to Licensor
on or before the Closing Date, Licensor shall be deemed to have granted to
Microsoft, as of the Closing Date, a non-exclusive, fully paid, royalty
free, irrevocable, perpetual license to (i) make, use, copy, edit, format,
port, translate, modify, adapt and create derivative works based upon the
"Exec Hub" software components (including all subsystems thereof) of the
Acquired Assets in both Source Code and Object Code form; and (ii) to
reproduce, license, rent, lease or otherwise distribute, and have
reproduced, licensed, rented, leased or otherwise distributed, to and by
third parties, such derivative works as part of any and all Microsoft
products in Source Code and Object Code form. For purposes of this License,
the "Exec Hub" software, including all of its subsystems, refers to the
Exec Hub software and subsystems as described in the document "TransAccess
EXEC for MVS, internals Guide," dated September, 1995.
In WITNESS WHEREOF, the parties have entered into this License as of the
date first written above.
0 p ET CORPORATION
Mr@A
`w b t
By (sign) B5r(sign)
v a si@ V'.
Name (print) Name (print)
v
Title Title
iqq@
Date Date
MICROSOFT CORPORATTON
CERTIFICATE OF ASSISTANT SECRETARY
This certificate is being furnished to you pursuant to Section 7. 1. I of
the Asset Purchase Agreement (the "Agreement") dated as of December 17,
1996 by and among Microsoft Corporation, a Washington corporation (the
"Company"), Proginet Corporation, a Delaware corporation, and certain
shareholders of Proginet Corporation. , The undersigned, Xxxxxx X.
Xxxxxxxx, does hereby certify that he is the duly elected and acting
Assistant Secretary of the Company, and does hereby further certify as
follows:
7.2.57 (A) THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY IN THE
AGREEMENT WERE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF DECEMBER
!L 1996 AND AS OF THE CLOSING DATE (AS DEFINED IN THE AGREEMENT) AS
THOUGH MADE ON AND AS OF THE CLOSING DATE, AND 7.2.58 (B) THE COMPANY
HAS PERFORMED IN ALL RESPECTS ALL AGREEMENTS AND COVENANTS REQUIRED TO
BE PERFORMED BY THE COMPANY UNDER THE AGREEMENT PRIOR TO THE CLOSING
DATE.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
17th day of December 1996.
Xxxxxx X. Xxxxxxxx, Assistant Secretary
