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EXHIBIT 2.1
SOFTWARE LICENSE AGREEMENT
This SOFTWARE LICENSE AGREEMENT is made and entered into as of December
6, 1999 (the "Effective Date") by and among SalesLogix Corporation, a Delaware
corporation, with its principal offices located at 0000 X. Xxxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 ("SalesLogix"), and Symantec Corporation, a
Delaware corporation, with its principal offices located at 00000 Xxxxxxx Xxxxx
Xxxx., Xxxxxxxxx, Xxxxxxxxxx 00000 ("Parent"), and Symantec Limited, a
wholly-owned limited liability company organized under the laws of Ireland, with
its principal offices located at Ballycoolin Business park, Blanchardstown,
Xxxxxx 00, Xxxxxxx ("Subsidiary"). Parent and Subsidiary are collectively
referred to herein as "Symantec".
RECITALS
A. Symantec owns or has sufficient rights to certain proprietary
software products (consisting of programs and related
documentation) that Symantec distributes and licenses under
the name "ACT!(R)".
B. SalesLogix is in the business of developing, marketing and
distributing proprietary software products consisting of
programs and related documentation and related services.
C. Symantec and SalesLogix wish to enter into an agreement
providing, among other things, for SalesLogix to license, on
an exclusive basis, Symantec's ACT! product line and certain
related rights and Intellectual Property, with an option to
purchase the product line.
WHEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. GLOSSARY
1.1 "Act" means the Copyright Act of 1976, as amended.
1.2 "ACT! 2000" means the ACT! 2000 for Windows 95/98/NT.
1.3 "ACT! CE" means the ACT! 1.01 for Windows CE.
1.4 "ACT! for Mac" means the ACT! 2.8 for Macintosh.
1.5 "ACT! Pilot" means the ACT! 1.01 for Palm Pilot Link.
1.6 "Affiliate" means, with respect to any person or entity, any
other person or entity that directly or indirectly controls, is controlled by,
or is under common control with such person or entity, except that the term
"Affiliate" shall not be deemed to apply to officers and directors of a party
hereto acting in their own personal individual capacity and not for the benefit
of or on behalf of a party hereto or such party, subsidiaries or entity
affiliates. For purposes of this
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provision, "control" means, with respect to an entity, the ownership, directly
or indirectly, of more than 50% of the equity interest of such entity.
1.7 "Ancillary Agreements" means, collectively, the Transition
Agreement, the Derivative Products Escrow Agreement, the Purchase Escrow
Agreement, the Registration Rights Agreement (or alternatively, the Alternate
Investor Rights Agreement), and the Stockholder Agreement (as such terms are
defined herein).
1.8 "Anniversary Date" means the fourth (4th) Anniversary of the
Closing Date (as defined below).
1.9 "Assumed Contracts" means all support and upgrade insurance
contracts for the Licensed Products in effect on the Closing Date as described
on EXHIBIT C, plus those additional contracts designated as Assumed Contracts on
EXHIBIT C.
1.10 "Symantec Disclosure Letter" means the disclosure letter dated as
of the Effective Date, which is being delivered by Symantec to SalesLogix
concurrently with the execution of this Agreement as provided in Section 11.
1.11 A "business day" means a day, other than Saturday, Sunday or a day
on which banks located in San Francisco, California are closed for business due
to a federal or state holiday. If the day on which an act or event is scheduled
to occur under this Agreement shall not be a business day, then the same shall
be timely if it occurs on the next following business day.
1.12 "Closing" means consummation of the transfers and activities
contemplated by Section 3.1 of this Agreement in accordance therewith.
1.13 "Closing Date" means the date upon which the Closing has occurred
pursuant to Section 3.
1.14 "Code" means the U.S. Internal Revenue Code of 1986, as amended,
and the Treasury regulations (final and temporary) promulgated thereunder and
the administrative pronouncements issued by the Internal Revenue Service
relating thereto.
1.15 "Confidential Information" of a party hereto means all
confidential and proprietary information of such party marked as such (if such
information is capable of being so marked) not generally known to the public
regarding such party's products and business that are disclosed by such party
(the "Disclosing Party") to the other party (the "Non-Disclosing Party") under
this Agreement including, but not limited to, the Licensed Programs and the
Licensed Materials (as defined below). Confidential Information does not include
information (i) in the public domain at the time of delivery, (ii) subsequently
published or otherwise made part of the public domain through no fault of the
Non-Disclosing Party or of its representatives, (iii) rightfully in the
Non-Disclosing Party's possession at the time of disclosure and not acquired by
the Non-Disclosing party directly or indirectly from such Disclosing Party or
its representatives on a confidential basis, or (iv) which becomes available to
the Non-Disclosing Party on a non-confidential basis from a source that, to the
best of its knowledge, is not under an obligation to the Disclosing Party.
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1.16 "Consolidated Revenue" means the combined revenues of SalesLogix
and the SalesLogix Group determined in accordance with GAAP.
1.17 "Deliverables" means (i) the Source Code to be delivered to
Symantec as provided herein, (ii) such other items as are specified in EXHIBIT
I, and (iii) such other items as are specified in the Transition Agreement.
1.18 "Derivative Products Escrow Agreement" means that certain
agreement to be entered into by and among SalesLogix, Symantec and DSI
Technology Escrow Services, Inc. ("DSI") on DSI's standard terms and conditions
to implement the escrow contemplated by Section 9.7 hereof .
1.19 "Derivative Work" means a work based upon, recast, transformed or
adapted from any of the Licensed Programs or Licensed Materials and includes any
revisions, customizations, enhancements, interfaces, annotations, elaborations,
or other additions or modifications made to any of the Licensed Programs or
Licensed Materials.
1.20 "Designated Persons" means those persons set forth in EXHIBIT S.
1.21 "Encumbrance" means any title defect, lien, mortgage, security
interest, pledge, charge, adverse claim, encumbrance or any other right of
others or other adverse interest of any kind, including without limitation
licenses, sublicenses, leases, chattel mortgages, conditional sales contracts,
collateral security arrangements and other title or interest retention
arrangements.
1.22 "End Products" means any SalesLogix products, materials or
offerings which include all of, any portion of, or any Derivative Work based on,
a Licensed Product.
1.23 "End User" means any person or entity that is granted a license by
or through SalesLogix, its Providers, its licensees, sublicensees or their
respective agents, pursuant to the authority granted under this Agreement, to
use an End Product solely for such End User's internal purposes and not for
further licensing to others.
1.24 "ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended, and the rulings and regulations promulgated thereunder.
1.25 "GAAP" means United States generally accepted accounting
principles, as in effect from time to time, consistently applied.
1.26 "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.
1.27 "Intellectual Property" means all patents, patent applications,
trademarks (registered or unregistered) and trademark applications, and all
trademark rights and related goodwill, including but not limited to service
names, service marks, trade names and design marks (and any applications or
registrations therefor), trade secrets, corporate names, copyrights, copyright
registrations (and any applications therefor), reports, utility models,
proprietary data and systems, customer lists, pricing policies, customer
information, customer contact information, marketing plans and strategies,
promotional materials, analyses, forecasts, studies,
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research and development data, data bases, manuals, documents, records, computer
files, software programs, data, plans, information, schematics, codes, methods,
processes, routines, algorithms, formulae, ideas, concepts, innovations,
inventions, new discoveries (including new machines, manufacturing methods,
apparatuses, compositions of matter, designs and improvements), know-how, rights
of privacy or publicity, any licenses for use of any of the foregoing, and any
and all other intellectual property, proprietary information and proprietary
rights related thereto, whether or not subject to statutory registration or
protection.
1.28 "Licenses" means the licenses granted to SalesLogix pursuant to
Sections 2.1, 2.2 and 2.6 of this Agreement.
1.29 "Licensed Materials" means all of the user manuals, handbooks and
other related written materials developed by or for Symantec for use by End
Users of the Licensed Programs in conjunction with any Licensed Program or a
Derivative Work based on a Licensed Program.
1.30 "Licensed Products" means the Licensed Materials, the Licensed
Programs and the Shared Technology.
1.31 "Licensed Programs" means the proprietary computer software
programs of Symantec licensed under this Agreement, as described on EXHIBIT A,
each further consisting of a series of instructions in Source Code form (as
defined below) and the underlying program logic and concepts, together with all
related proprietary technology, Intellectual Property and intangible rights and
Derivative Works thereof; provided, however, that only the Source Code for the
most current version, as of the Closing Date, of each of the Licensed Programs,
excluding Source Code for any Third Party Software (to the extent Symantec
cannot provide such Source Code under its license agreements) and the Source
Code for the Shared Technology, shall be a Deliverable hereunder.
1.32 "Marks" means the registered and unregistered trademarks listed on
EXHIBIT B.
1.33 "Material Adverse Effect" when used with reference to a party
means any event, change or effect that is (or will with the passage of time be)
materially adverse to such party's condition (financial or otherwise),
properties, assets, liabilities, business, operations or results of operations.
1.34 "Object Code" means code, including Java byte code and applets,
resulting from the translation or processing of Source Code by a computer into a
machine language, and thus is in a form that would not be convenient to human
understanding of the program logic, but which is appropriate for execution or
interpretation by a computer.
1.35 "Other Transferred Assets" means the rights described on EXHIBIT
C.
1.36 "Providers" means all original equipment manufacturers,
independent software vendors, system houses, system integrators, value added
relicensors, distributors, dealers, and other entities engaged in doing business
with SalesLogix for the purposes of ultimate distribution, directly or
indirectly, of End Products to End Users.
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1.37 "Purchase Escrow Agreement" means that certain agreement to be
entered into by and among SalesLogix, Symantec and Xxxxxx Trust Company of
California (the "Escrow Agent") in substantially the form of EXHIBIT K hereto.
1.38 "Retained Assets" means all assets of Symantec not listed on
Exhibits A, B, C and D, including (by way of example) but not limited to: (i)
the marketing, advertising and distribution channel assets of Symantec, whether
or not related to the Licensed Products; (ii) all Symantec's cash, bank accounts
and securities; (iii) all Symantec's accounts receivable, unbilled receivables,
notes and other amounts receivable from third parties; (iv) all insurance
policies of Symantec and all rights of Symantec of every nature and description
under or arising out of such insurance policies; (v) claims for refunds of Taxes
(as defined below) actually paid by Symantec prior to the Closing Date; and (vi)
all assets of, or held by or with respect to, any employee benefit plan (whether
or not governed by ERISA) or any trust, fund or account that is related to any
such employee benefit plan or that is similar in purpose or function thereto.
Notwithstanding the foregoing, if an asset fits within any of the categories
described in clauses (i) through (vi) above, but is included on Exhibit A, B, C
or D, such asset shall nonetheless be transferred to SalesLogix hereunder.
1.39 "Royalty Term" means the period from the Closing Date through the
Anniversary Date.
1.40 "Shared Technology" means the LiveUpdate and LiveReg software
programs as well as the other programs and technology listed on EXHIBIT G
hereto.
1.41 "Source Code" means a computer software program in a form in which
the program logic can be deduced by a human being, such as a printed listing of
the program, or in an encoded machine-readable form, such as might be recorded
on magnetic tape or disk, from which a printed listing can be made by processing
it with a computer.
1.42 "SalesLogix Disclosure Letter" means the disclosure letter dated
as of the Effective Date which is being delivered by SalesLogix to Symantec
concurrently with the execution of this Agreement as provided in Section 12.
1.43 "SalesLogix Group" means any and all corporations, firms,
partnerships or other entities, whether de jure or de facto, that directly or
indirect own, are owned by or are under common ownership with SalesLogix to the
extent of at least 50 percent of the equity having the power to vote on or
direct the affairs of such entity and any corporation, firm, partnership or
other entity actually controlled by, controlling or under common control with
SalesLogix.
1.44 "Sublicensed Contracts" means those contracts designated as such on
EXHIBIT C.
1.45 "Subsidiaries" means any corporation in which a party hereto owns,
directly or indirectly, more than fifty percent (50%) of its outstanding shares.
1.46 "Tangible Assets" means the tangible assets listed on EXHIBIT D,
which shall be deemed to have the aggregate purchase price indicated on Exhibit
D.
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1.47 "Tax" or "Taxes" means all taxes or similar governmental charge,
impost or levy of any kind whatsoever (whether payable directly or by
withholding), including without limitation, income taxes, gross receipts taxes,
franchise taxes, transfer taxes or fees, stamp taxes, sales taxes, use taxes,
excise taxes, ad valorem taxes, value added taxes, documentary taxes, intangible
personal property taxes, withholding taxes, real or personal property taxes,
employee withholding taxes, worker's compensation, payroll taxes, unemployment
insurance, social security, minimum taxes or windfall profits taxes, together
with any related liabilities, penalties, fines, additions to tax or interest,
imposed by the United States or any state, county, provincial, local or foreign
government or any instrumentality, subdivision or agency thereof.
1.48 "Third Party Software" means proprietary computer software
programs or other Intellectual Property rights, owned by third parties, licensed
to Symantec and incorporated in the Licensed Products. Third Party Software is
identified in EXHIBIT T, with EXHIBIT T-1 listing the Third Party Software that
Symantec is sublicensing to SalesLogix pursuant to Section 2.1(c) hereof (which
licenses are also listed on Exhibit C as Sublicensed Contracts), EXHIBIT T-2
listing the Third Party Software licenses that are being assigned by Symantec to
SalesLogix, if any (which licenses are also listed on Exhibit C as Assumed
Contracts), and EXHIBIT T-3 listing Third Party Software which Symantec may not
sublicense or assign to SalesLogix and for which SalesLogix will need to obtain
its own license (which Third Party Software is also identified in the Symantec
Disclosure Letter).
1.49 "Transaction Fee" means the fee payable by SalesLogix to Symantec
pursuant to Section 6.1.
1.50 "Transferred Liabilities" means the liabilities and obligations
described on EXHIBIT E.
1.51 "Transition Agreement" means the agreement between the parties for
organizing and effecting transition of the Licensed Products from Symantec to
SalesLogix, in substantially the form of EXHIBIT F.
1.52 "Transition Period" means the period from the Closing Date through
March 31, 2000, except as adjusted pursuant to Section 6.6.
1.53 "Year 2000 Compliant" means that the software:
Will accurately process prior to, during and after the year 2000, all
date-related data and dates before, on and after January 1,2000, including but
not limited to accurately inputting, storing, manipulating, comparing,
calculating, updating, recording, displaying, outputting, transferring and
sequencing such dates and data;
(a) Will accurately interface with other software and hardware
that uses standard date format (4 digits) for representation of the year;
(b) Will correctly process calendar dates for leap year as
defined by the Gregorian calendar (note that year 2000 is a leap year);
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(c) Will not incur any adverse performance degradation due to
changes added to support Year 2000 compliance;
(d) Will provide capability for users to readily identify and
use the century in any date fields without special processing; and
(e) Will accommodate date data century recognition (4 digit
years) in all date-related data fields and in all date-related functions.
2. LICENSES GRANTED
2.1 Licensed Products. Subject to the terms and conditions of this
Agreement and the Transition Agreement, as well as pre-existing licenses granted
by Symantec through the Closing Date which are described on SCHEDULE 2.1 hereto,
Symantec hereby grants SalesLogix, effective as of the Closing Date and
continuing for the duration of the Royalty Term:
(a) an exclusive, worldwide license under Symantec's Intellectual
Property rights:
2.1.1 to reproduce, distribute and display the Licensed
Programs in Object Code form, in whole or in part, including, the right to
incorporate and distribute such Licensed Programs in Object Code form in End
Products to be distributed by or for SalesLogix or its Providers and to license
and sublicense Providers to reproduce, distribute and display such Licensed
Programs in Object Code form to End Users;
2.1.2 to reproduce and to license Providers to reproduce the
Licensed Programs in Source Code form, in whole or in part, for purpose of
providing maintenance and support to End Users; and
2.1.3 to reproduce, distribute and display and to license
Providers to reproduce, distribute and display the Licensed Materials, in whole
or in part, in End Products to be distributed by or for SalesLogix or its
Providers and to license and sublicense Providers to distribute such Licensed
Materials to End Users;
(b) a non-exclusive worldwide license to exercise the rights described
in Subsections 2.1.1, 2.1.2 and 2.1.3 above with respect to the Shared
Technology; provided, however, that Symantec shall retain its rights in the
Shared Technology and the right to grant sublicenses to third parties with
respect thereto (and only the Object Code, and not the Source Code, for the
Shared Technology shall be a Deliverable hereunder); and
(c) a non-exclusive, worldwide license to reproduce, distribute and
display the Object Code of the sublicensed Third Party Software identified in
EXHIBIT T-1, subject to the terms and conditions of such third party contracts.
2.2 Derivative Works. Subject to the terms and conditions of this
Agreement and the Transition Agreement, Symantec hereby grants to SalesLogix,
effective as of the Closing Date and continuing for the duration of the Royalty
Term, an exclusive, worldwide license:
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2.2.1 to prepare Derivative Works and compilations based on
the Licensed Programs and Licensed Materials and any Derivative Works or
compilations thereof, including the right to license Providers to prepare
Derivative Works and the right to reproduce and distribute Licensed Programs in
Source Code form and Licensed Materials to such licensee(s) for purposes of
preparing Derivative Works; provided, however, that such Derivative Works based
on the Licensed Programs are prepared solely for SalesLogix or, if prepared for
a specific Provider, involve only minor private labeling, interfacing or
translation changes that do not substantially change the overall functionality
of the underlying product when compared to the form of the Licensed Programs
that is offered by SalesLogix to other Providers. Notwithstanding the foregoing
restrictions, but subject to Section 2.8, SalesLogix may authorize up to a
maximum of ten (10) Providers to have Derivative Works containing significant
changes to functionality prepared for them, provided that SalesLogix provides
written notice thereof to Symantec, and provided that SalesLogix does not
authorize more than ten (10) Providers to have such Derivative Works prepared
for them without the prior written consent of Symantec. Any such agreements
entered into by SalesLogix with Providers shall provide that SalesLogix will be
the owner of any Derivative Works created and the Intellectual Property rights
therein.
2.2.2 to reproduce, distribute and display such Derivative
Works and compilations based on Licensed Programs and Licensed Materials, in
whole or in part, provided that portions of such Derivative Works and
compilations containing Licensed Programs may be reproduced and distributed in
Object Code form only; and
2.2.3 to license and sublicense Providers to reproduce,
distribute and display such Derivative Works and compilations based on Licensed
Programs and Licensed Materials, provided that such portions of such Derivative
Works and compilations containing Licensed Programs may be reproduced and
distributed in Object Code form only.
2.3 Rights Retained by Symantec. In addition to the rights retained by
Symantec with respect to the Shared Technology as set forth in Section 2.1(b)
above and the Third Party Software identified in EXHIBITS T-1 AND T-3, Symantec
shall remain the owner of the Licensed Products and the Intellectual Property
rights associated with the Licensed Products in the form delivered at Closing.
Symantec (and its Affiliates) shall be entitled: (a) to internally use the
Licensed Products to support its business activities; and (b) to include
portions of the Licensed Products currently shared by other products currently
distributed, marketed or licensed by Symantec (as well as products currently
under development by Symantec as long as the portions of the Licensed Products
included in such products under development do not represent a material portion
of any Licensed Program) for use, promotion, marketing, licensing or
distribution of products to third parties (including future revisions or
versions of such products).
2.4 Grant Back of License to Derivative Works to Symantec. Any
Derivative Works of the Licensed Programs and Licensed Materials created,
developed, used, adapted, modified, reproduced, marketed, promoted, licensed or
sublicensed pursuant to Section 2.2 (the "Derivative Products") shall be owned
by SalesLogix. SalesLogix hereby grants Symantec a fully paid worldwide license,
with rights to sublicense (i) to use, adapt, modify and reproduce for all
purposes the Derivative Products, in whole or in part, (ii) to create and
develop Derivative Works and compilations based on the Derivative Products, in
whole or in part, and (iii) to license and sublicense others to use, adapt,
modify, reproduce, market, promote, license and sublicense
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the Derivative Products, in whole or in part, which rights shall include, but
not be limited to, the right to license and sublicense to third parties the
right to incorporate and distribute such Derivative Products in End Products to
be distributed by such third parties. Such license shall become exclusive
following the Royalty Term (unless a conversion of the Licenses to perpetual
occurs pursuant to Section 9.1 or SalesLogix exercises the Purchase Option
pursuant to Section 9.2), and shall become exclusive upon a termination of this
Agreement during the Royalty Term. Symantec hereby covenants to forebear from
exercise of the rights granted to it pursuant to this Section 2.4 and, other
than the obligations to deliver Source Code and Derivative Products into the
source code escrow pursuant to the Derivative Products Escrow Agreement, as
provided by Section 9.7, SalesLogix shall have no delivery obligations under
this Section 2.4, until the earlier of (a) the Anniversary Date, or (b) the date
on which this Agreement is terminated. In the event the Licenses are converted
to perpetual pursuant to Section 9.1 or SalesLogix exercises the Purchase Option
pursuant to Section 9.2, then upon such conversion, the license to Derivative
Works granted to Symantec hereunder shall terminate and expire.
2.5 Copyright Registrations. If SalesLogix shall register pursuant to
the Act a copyright in the End Products or Derivative Works or compilations
based upon or containing Licensed Products, SalesLogix shall identify in any
such registration the pre-existing Licensed Product(s) by Symantec which is
included in or upon which is based the End Product, Derivative Work or
compilation.
2.6 Trademarks. For the duration of the Royalty Term, Symantec hereby
grants to SalesLogix an exclusive worldwide license, subject to the preexisting
licenses granted by Symantec, to use the Marks in connection with the promotion
of the Licensed Products and Derivative Products. This trademark license shall
be subject to SalesLogix's compliance with Symantec's trademark usage guidelines
attached hereto as EXHIBIT H to which Symantec may make reasonable modifications
from time to time upon written notice to SalesLogix. SalesLogix hereby
acknowledges Symantec's ownership of the Marks, agrees that it will do nothing
inconsistent with such ownership, and agrees that all use of the Marks by
SalesLogix shall inure to the benefit of Symantec. SalesLogix agrees that
nothing in this Agreement shall give SalesLogix any right, title or interest in
the Marks other than the right to use the Marks in accordance with this
Agreement. SalesLogix agrees not to register or attempt to register the Marks as
a trademark, service xxxx, internet domain name, or trade name, or any similar
xxxx or name, with any domestic or foreign governmental or quasi governmental
authority, which would be likely to cause confusion with the Marks. SalesLogix
may not register or use the Marks or an abbreviation of the Marks as part of an
internet domain name, except with Symantec's prior written approval, which
approval shall not be unreasonably denied or delayed; provided however, that the
domain names listed on SCHEDULE 2.6 hereto are deemed approved by Symantec. Use
of any such internet domain name will be subject to the terms of this Agreement.
SalesLogix agrees to maintain a consistent level of quality in connection with
its use of the Marks equal to that found in SalesLogix's existing
technology-related publications. SalesLogix further agrees to maintain a level
of quality in connection with its use of the Marks that is consistent with
general industry standards. SalesLogix understands that Symantec has the right
to monitor SalesLogix's use of the Marks. If SalesLogix produces other than
on-line publications in connection with the Marks, SalesLogix shall provide
Symantec representative samples of each such publication at the time the
publication is first published. If Symantec determines that SalesLogix is using
the Marks improperly and/or on goods which do not meet the quality
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standards set forth above, Symantec shall so notify SalesLogix, and SalesLogix
shall remedy the improper use within fifteen (15) business days following
receipt of such notice from Symantec, with respect to on-line use, and within
thirty (30) days following receipt of such notice from Symantec with respect to
hard copy, CD-ROM and other electronic publications. The title of any
publication SalesLogix publishes pursuant to this agreement shall bear subscript
trademark notices ("(TM)" or (R), as appropriate) immediately following the
Marks. SalesLogix shall include with any publication with which the Marks is
used a trademark legend indicating that the Marks are marks of Symantec, used
under license, and a disclaimer that SalesLogix and not Symantec has produced
the publication and is responsible for the content thereof.
2.7 Competing Products Permitted. During the Royalty Term SalesLogix
shall have the right to develop, use, adapt, modify, reproduce, market, promote,
sell, license and sublicense products competitive with or functionally similar
to the Licensed Products or the End Products which are independently developed
by SalesLogix or by a third party and no such product shall give rise to a
different or additional royalty or other payment obligation under this
Agreement.
2.8 Sublicenses. SalesLogix shall not grant exclusive licenses or
sublicenses relating to a Licensed Product unless: (a) SalesLogix obtains
Symantec's prior written consent, which consent shall not be unreasonably denied
or delayed; or (b) such exclusive license (i) is subject to Symantec's rights
under this Agreement (including Sections 2.3 and 2.4), (ii) shall terminate
immediately, by its terms, if and when the Licenses to SalesLogix terminate, and
(iii) does not have the effect of licensing to SalesLogix's licensee a
substantial portion of the material rights granted to SalesLogix under this
Agreement.
2.9 Termination of Licenses for Default. Without limiting Symantec's
other remedies hereunder, if SalesLogix fails to fulfill any payment obligation
when due under this Agreement, then, thirty (30) days after providing written
notice to SalesLogix specifying such default, Symantec may terminate the
Licenses, without liability, unless SalesLogix has cured the default within the
thirty (30) day period. Termination of the Licenses by Symantec under this
Section 2.9 shall give immediate rise to the rights and obligations of the
parties under Section 9.5.
3. CLOSING
The parties intend that, pursuant to the Licenses, SalesLogix shall
during the Royalty Term have sole and exclusive responsibility for the Licensed
Programs and the Licensed Materials, subject to the terms and conditions of this
Agreement. Accordingly, in order to permit SalesLogix to fully implement the
Licenses and conduct its business related to the Licensed Products during the
Royalty Term, Symantec and SalesLogix agree to the Section 3 provisions set
forth below.
3.1 Closing. The Closing of the transactions described in this
Agreement shall take place at 10:00 a.m., at the offices of Fenwick & West LLP
at Two Palo Alto Square, Palo Alto, California, on a date to be specified by the
parties, which will be no later than the fifth (5th) business day after
satisfaction or waiver of the conditions set forth in Sections 4 and 5, but in
no event before December 31, 1999.
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3.2 Transfer of Tangible Assets and Other Transferred Assets;
Deliverables. Symantec shall sell, assign and transfer to SalesLogix, at the
Closing, all right, title and interest to the Tangible Assets. At the Closing
Symantec shall transfer to SalesLogix the rights indicated on EXHIBIT C hereto
to the Other Transferred Assets. At the Closing Symantec shall transfer to
SalesLogix and SalesLogix shall assume the Transferred Liabilities. In no event
shall Symantec be deemed to have transferred to SalesLogix any rights in the
Retained Assets. Symantec shall deliver to SalesLogix at the Closing the
Deliverables described in EXHIBIT I.
3.3 Termination of Agreement Prior to Closing; Effect; Waivers. This
Agreement may be terminated prior to Closing: (i) by the mutual consent in
writing of Symantec and SalesLogix; (ii) by the Board of Directors of Symantec
if any condition provided in Section 5 has not been satisfied or waived on or
before March 30, 2000; (iii) by the Board of Directors of SalesLogix if any
condition provided in Section 4 has not been satisfied or waived on or before
March 30, 2000; or (iv) by the Board of Directors of either Symantec or
SalesLogix if the Closing Date has not occurred by March 30, 2000; provided,
however, that the right to terminate this Agreement under clause (iv) shall not
be available to any party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or shall have resulted in, the failure
of the Closing to occur prior to such date; or (v) by either party if there
shall have been instituted, pending or threatened (and not withdrawn) any action
or proceeding by any governmental authority or administrative agency before any
governmental authority, administrative agency or court of competent
jurisdiction, or there shall be in effect any judgment, decree or order of any
governmental authority, administrative agency or court of competent
jurisdiction, in either case, seeking to prevent consummation of any of the
transactions contemplated by this Agreement or the Ancillary Agreements.
3.3.1 Effect of Termination. In the event of termination of
this Agreement as provided in this Section 3.3, this Agreement shall forthwith
become void (excepting only those provisions hereof that by their terms survive
the termination of this Agreement), each party shall pay the costs and expenses
incurred by it in connection herewith, and there shall be no liability on the
part of any party hereto; provided that nothing herein shall relieve either
party from liability for any willful breach hereof.
3.3.2 Waiver. At any time prior to the Closing, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party to be bound thereby.
3.4 Other Negotiations. Between the Effective Date and either Closing
or termination of this Agreement pursuant to Section 3.3 (the "Expiration
Date"), Symantec will not, directly or indirectly, through any officer, director
(subject, however, to the fiduciary duty of the Board of Directors), employee,
Affiliate or agent or otherwise, take any action to solicit, initiate, seek,
entertain, encourage or support any inquiry, proposal or other offer from,
furnish any information to, or participate in any discussions or negotiations
with, any third party regarding any sale or licensing of the Licensed Programs
or Licensed Materials or associated business, other than
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nonexclusive licenses in the ordinary course of business related to the
distribution of the Licensed Products.
4. CONDITIONS TO CLOSING BY SALESLOGIX
SalesLogix's obligation to Close the transactions described in this
Agreement is subject to the fulfillment on or prior to the Closing Date of each
of the following conditions:
4.1 Representations and Warranties Correct; Performance. The
representations made by Symantec pursuant to Section 11 shall be true and
correct in all material respects when made and shall be true and correct in all
material respects on the Closing Date with the same force and effect as if they
had been made on and as of the Closing Date other than such representations and
warranties as are made as of another date; and all covenants, agreements, and
conditions contained in this Agreement to be performed or complied with by
Symantec on or prior to the Closing shall have been performed or complied with
in all material respects.
4.2 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to SalesLogix.
4.3 Officer's Certificates. SalesLogix shall have received a
certificate, dated as of the Closing Date, executed on behalf of Symantec by an
appropriate officer stating that the conditions to Closing set forth in Section
4.1 hereof have been complied with in all material respects.
4.4 Requisite Approvals. All requisite consents, authorizations, and
regulatory approvals of governmental bodies, and of those private entities
listed on EXHIBIT J shall have been received.
4.5 Escrow Agreements. The parties thereto shall have entered into and
delivered the Purchase Escrow Agreement and the Derivative Products Escrow
Agreement.
4.6 Opinion of Symantec's Counsel. SalesLogix shall have received an
opinion of counsel for Symantec in the form attached hereto as EXHIBIT L dated
as of the Closing Date.
4.7 Registration Rights Agreement. Symantec shall have entered into and
delivered a Registration Rights Agreement with Symantec, in the form of EXHIBIT
M hereto (the "Registration Rights Amendment"), or at Symantec's option, shall
have entered into and delivered an agreement which provides Symantec with the
registration and other rights granted under the Investors Rights Agreement
entered into by SalesLogix with one or more of the new investors who provide
financing to SalesLogix between the date hereof and the Closing Date (the
"Alternate Investor Rights Agreement").
4.8 Stockholder Agreement. Symantec shall have entered into and
delivered the Stockholder Agreement in substantially the form of EXHIBIT N
hereto (the "Stockholder Agreement").
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4.9 Transition Agreement. Symantec shall have entered into and
delivered the Transition Agreement.
4.10 HSR Act. All waiting periods, if any, under the HSR Act relating
to the transactions contemplated hereby will have expired or terminated early.
4.11 No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction, judgment or other order or ruling issued by any court of competent
jurisdiction or other governmental entity or other legal restraint or
prohibition will be in effect which would (i) make the Licenses illegal or
otherwise prevent the consummation of this Agreement, (ii) prohibit SalesLogix's
receipt, use or operation of, or compel SalesLogix or to dispose of or hold
separate, all or a material portion of the Licenses or Licensed Products, (iii)
compel SalesLogix to dispose of or hold separate all or a material portion of
the Licenses or Licensed Products or Tangible Assets, or (iv) impose material
limitations on the ability of SalesLogix effectively to exercise full ownership
and financial benefits of the Licenses and Tangible Assets, or impose any
condition to this Agreement or the Licenses which would be materially adverse to
SalesLogix.
4.12 No Litigation. No suit, claim, cause of action, arbitration,
mediation, investigation or other proceeding under which a third party or
governmental entity is contesting, challenging or seeking to alter, enjoin or
adversely affect the transfer of the Licensed Products or Licenses contemplated
by this Agreement or any other transaction contemplated by this Agreement, will
be pending or threatened.
4.13 Licensed Products. There shall have been no material adverse
change in the business that consists of Symantec's marketing, distribution and
sale of the Licensed Products from the Effective Date.
4.14 Xxxx of Sale and Assumption of Liabilities. The parties shall have
executed and delivered a Xxxx of Sale with respect to the Tangible Assets and an
Assignment and Assumption of Liabilities with respect to the Assumed Contracts
and the Transferred Liabilities, each in form and substance satisfactory to
SalesLogix.
5. CONDITIONS TO CLOSING BY SYMANTEC
Symantec's obligation to Close the transactions described in this
Agreement is subject to the fulfillment or prior to the Closing Date of each of
the following conditions:
5.1 Representations and Warranties Correct; Performance. The
representations and warranties made by SalesLogix in Section 12 shall be true
and correct in all material respects when made, and shall be true and correct in
all material respects on the Closing Date with the same force and effect as if
they had been made on and as of the Closing Date other than such representations
and warranties as are made as of another date; and all covenants, agreements,
and conditions contained in this Agreement to be performed or complied with by
SalesLogix on or prior to the Closing shall have been performed or complied with
in all material respects.
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5.2 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to Symantec.
5.3 Officer's Certificate. Symantec shall have received a certificate,
dated as of the Closing Date, executed on behalf of SalesLogix by an appropriate
officer stating that the conditions to closing set forth in Section 5.1 hereof
have been complied with in all material respects.
5.4 Requisite Approvals. All requisite consents, authorizations, and
regulatory approvals of governmental bodies, and of those private entities
listed on EXHIBIT J shall have been received.
5.5 Opinion of SalesLogix's Counsel. Symantec shall have received an
opinion of Xxxxxx Xxxxxxx, P.A., counsel to SalesLogix, in the form attached
hereto as EXHIBIT O dated as of the Closing Date.
5.6 Registration Rights Agreement. SalesLogix and the requisite other
parties thereto shall have entered into and delivered the Registration Rights
Amendment, or at the option of Symantec, the Alternate Investor Rights
Agreement.
5.7 Transition Agreement. SalesLogix shall have entered into and
delivered the Transition Agreement.
5.8 HSR Act. All waiting periods, if any, under the HSR Act relating to
the transactions contemplated hereby will have expired or terminated early.
5.9 No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction, judgment or other order or ruling issued by any court of competent
jurisdiction or other governmental entity or other legal restraint or
prohibition will be in effect which would make the Licenses illegal or otherwise
prevent the consummation of this Agreement.
5.10 No Litigation. No suit, claim, cause of action, arbitration,
mediation, investigation or other proceeding under which a third party or
governmental entity is contesting, challenging or seeking to alter, enjoin or
adversely affect the transfer of the Licensed Products or Licenses contemplated
by this Agreement or any other transaction contemplated by this Agreement, will
be pending or threatened.
5.11 Issuance of Stock. SalesLogix shall have issued and delivered to
Parent a duly prepared and executed stock certificate representing the Shares
(as defined below) in the form of EXHIBIT P.
5.12 Escrow Agreements. The parties thereto shall have entered into and
delivered the Purchase Escrow Agreement and the Derivative Products Escrow
Agreement.
5.13 No Material Adverse Effect. Since the Effective Date there shall
have been no Material Adverse Effect with respect to SalesLogix.
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5.14 Xxxx of Sale and Assumption of Liabilities. The parties shall have
executed and delivered a Xxxx of Sale with respect to the Tangible Assets and an
Assignment and Assumption of Liabilities with respect to the Assumed Contracts
and the Transferred Liabilities, each in form and substance satisfactory to
Symantec.
6. PAYMENTS TO SYMANTEC
6.1 Transaction Fee.
6.1.1 Transfer of Common Stock Consideration. In consideration
of the Licenses granted in Section 2 and the transfer of the Tangible Assets
pursuant to Section 3, and the Purchase Option granted in Section 9, SalesLogix
shall deliver to Symantec at Closing a Transaction Fee consisting of that number
of shares of fully paid and nonassessable Common Stock of SalesLogix (the
"Common Stock Consideration") equal to $20,000,000 divided by the average of the
bid and ask price for SalesLogix Common Stock for the twenty (20) trading days
immediately prior to the Effective Date, as such stock is traded on the NASDAQ
National Market System.
6.1.2 Investment Representations. In connection with the
receipt of the shares representing the Common Stock Consideration (the
"Shares"), Symantec has made the investment representations and warranties set
forth in Section 11.1.
6.1.3 Legends. The share certificate(s) evidencing the Shares
issued hereunder shall be endorsed with the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY."
Symantec acknowledges that appropriate stop transfer orders may be noted on
SalesLogix's stock records with respect to all certificates so legended.
6.2 Royalty during Royalty Term. In further consideration of the
Licenses and the Purchase Option, SalesLogix agrees to make royalty payments
("Royalties") to Symantec during the Royalty Term, equal to:
- 40% of the Consolidated Revenue for each calendar quarter during the
period beginning on the Closing Date and ending on December 31, 2000;
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- 35% of the Consolidated Revenue for each calendar quarter during the
period beginning on January 1, 2001 and ending on December 31, 2001;
- 30% of the Consolidated Revenue for each calendar quarter during the
period beginning on January 1, 2002 and ending on December 31, 2002; and
- 25% of the Consolidated Revenue for each calendar quarter during the
period beginning on January 1, 2003 and ending on December 31, 2003.
Notwithstanding the foregoing formula, SalesLogix shall not be required
to pay Royalties to Symantec hereunder in excess of the following aggregate
cumulative Royalties as of the relevant calendar quarter end dates:
Max. Cum.
Quarter Ending Royalties Quarter Ending Max Cum. Royalties
-------------- --------- -------------- ------------------
March 31, 2000 $5,000,000 March 31, 2002 $39,750,000
June 30, 2000 $10,000,000 June 30, 2002 $42,500,000
September 30, 2000 $15,000,000 September 30, 2002 $45,250,000
December 31, 2000 $20,000,000 December 31, 2002 $48,000,000
March 31, 2001 $24,250,000 March 31,2003 $50,250,000
June 30, 2001 $28,500,000 June 30, 2003 $52,500,000
September 30, 2001 $32,750,000 September 30, 2003 $54,750,000
December 31, 2001 $37,000,000 December 31, 2003 $57,000,000
6.3 Payment of Royalties. SalesLogix shall provide Symantec with
quarterly reports of the Royalties due under Section 6.2 within three (3) to
five (5) business days after the end of Symantec's fiscal quarter (the ending
dates of each such fiscal quarter are indicated on SCHEDULE 6.3 hereto),
specifying the amount of Royalties based on revenues from United States
operations and the amount of Royalties based on revenues from international
operations. SalesLogix shall pay the Royalties for each calendar quarter to
Symantec or its designee, in U.S. Dollars, within fifteen (15) days after the
end of such calendar quarter. If there should be a discrepancy in the amount of
Consolidated Revenue reported to Symantec pursuant to this Section 6.3 with
respect to a particular calendar quarter and the amount of Consolidated Revenue
reported by SalesLogix on its Form 10-Q, resulting in a discrepancy between the
actual Royalties and reported Royalties (whether due to the difference between
Symantec's fiscal quarter and the calendar quarter or otherwise), then the
report and payment for the next successive calendar quarter shall include any
adjustment, whether an additional payment or a deduction, required to "true up"
the actual Royalties to the reported Royalties. The parties acknowledge that
with respect to the calendar quarter ending March 31, 2000, Consolidated Revenue
will include and Royalties will be payable with respect to revenue generated
under the Transition Agreement, but such revenue numbers will not be included in
the Consolidated Revenue reported by SalesLogix until such revenue numbers are
provided to SalesLogix by Symantec.
6.4 Audit Rights. SalesLogix shall keep all appropriate records and
books of account, in accordance with generally accepted accounting principles,
with respect to its distribution of products, revenues and the amount of
Royalties due pursuant to this Section 6. During the
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Royalty Term (and for one year thereafter if less than $57,000,000 in Royalties
are received by Symantec during the Royalty Term) Symantec may cause a third
party auditor hired by Symantec, after reasonable prior written notice and
during normal business hours, to enter SalesLogix's premises where such books
and records are normally kept, at reasonable intervals but no more frequently
than on an annual basis, for purposes of auditing or inspecting all such records
and books of account for the period(s) requested in such notice. The cost of any
such audit or inspection shall be paid and borne by Symantec; provided, however,
that in the event Symantec initiates an audit or inspection under this Section
6.4 and it is finally determined that the Royalties reported and paid by
SalesLogix pursuant to this Section 6 for the period(s) audited or inspected is,
in the aggregate, less than ninety-five percent (95%) of the aggregate Royalties
actually payable for said period(s), then SalesLogix shall pay to Symantec on
demand the reasonable costs and expenses of such audit or inspection. If any
such audit or inspection reveals that an overpayment or underpayment of
Royalties may have occurred, then (i) in the case of an underpayment, the
necessary correcting payment shall be made within fifteen (15) days after the
amount of the discrepancy is determined or (ii) in the case of an overpayment,
the amount overpaid, at Symantec's option, shall be paid in cash or credited
against future Royalties otherwise payable (any unpaid balance remaining when
this Agreement terminates or the Royalty Term ends shall then be paid in cash by
Symantec to SalesLogix), in either case with interest on the amount outstanding
until paid or credited (as applicable) in full, at the then "prime rate" as
published in the Wall Street Journal.
6.5 Adjustment to Royalty Calculations. The parties acknowledge that
both the percentages of Consolidated Revenue specified in Section 6.2 above as
Royalties and the use of a percentage of Consolidated Revenue as the method of
calculating Royalties payable hereunder assume that SalesLogix and the
SalesLogix Group will continue to conduct that portion of their businesses in
existence as of the Effective Date (the "Core Business") in a manner consistent
with the conduct of such businesses as of the Effective Date, including with
respect to revenue recognition policies. Should SalesLogix and/or the SalesLogix
Group make a change in their revenue recognition policies or business models
applicable to the Core Business that result in revenue recognition not occurring
immediately upon the sale, license or other disposition or distribution of the
products and/or services constituting the Core Business and such change would
result in a decrease of twenty percent (20%) or more of the Consolidated Revenue
for any quarter specified in Section 6.2, Symantec shall have the right to
require an adjustment in the royalty provisions of this Agreement, which shall
be negotiated in good faith by the Chief Financial Officers of the parties as
promptly as possible, which new royalty provisions shall have the effect of
providing Symantec with Royalties comparable in amount to the Royalties it would
have received if SalesLogix and/or the SalesLogix Group had not made any changes
in their revenue recognition policies or business models applicable to the Core
Business.
6.6 Additional Payment Adjustment. If the Closing Date occurs after the
expiration of the normal HSR waiting period (the "Measurement Date"), SalesLogix
shall pay Symantec, within five (5) business days of the actual Closing Date, an
amount equal to the number of business days after December 31, 1999 that the
Closing occurs multiplied by $14,500; provided, however, that the foregoing
shall not apply in the event all conditions to Closing have been met (including
the required HSR approval or expiration) but Symantec fails to close on such
date or delays the closing through no fault of SalesLogix. If the Closing Date
has not occurred on or before the first business day following the Measurement
Date, the Chief Financial Officers of
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Symantec and SalesLogix shall meet and renegotiate in good faith the allocation
and recognition of costs and revenues related to the Licensed Products and the
term and pricing of the Transition Agreement.
7. ADDITIONAL AGREEMENTS OF THE PARTIES
7.1 Taxes, etc. SalesLogix shall be exclusively responsible for the
payment of all taxes, tariffs and duties (including without limitation sales,
use, value added, transfer, withholding and excise taxes and customs duties of
all types) arising from amounts payable to Symantec hereunder, excluding any
income taxes on amounts received by Symantec. SalesLogix hereby waives
compliance by Symantec with any bulk sale or similar laws or statutes in
connection with the transactions contemplated hereby.
7.2 Standard of Performance. Each party shall perform its obligations
under this Agreement using a standard of performance that is equal to or greater
than the standard of performance used by such party to perform its general
business obligations and in any event shall use its diligent good faith efforts
and devote sufficient resources to perform its obligations under this Agreement.
7.3 Government Authorizations; Xxxx Xxxxx Xxxxxx.
7.3.1 Efforts. Each party hereto will use its reasonable best
efforts to obtain all authorizations, consents, orders and approvals of all
United States and other non-U.S., federal, state and local regulatory bodies and
officials that may be or become necessary for the execution and delivery of, and
the performance of its obligations pursuant to, this Agreement and the Ancillary
Agreements and will cooperate fully with the other party in promptly seeking to
obtain all such authorizations, consents, orders and approvals. Each party
hereto agrees to make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions contemplated hereby as
promptly as is practicable after the date hereof and to supply promptly any
additional information and documentary material that may be requested by any
governmental authority pursuant to the HSR Act. The parties hereto will not take
any action that will have the effect of delaying, impairing or impeding the
receipt of any required approvals. Without limiting the generality of the
parties' undertakings pursuant to this Section, the parties shall use their
reasonable best efforts to prevent the entry in a judicial or administrative
proceeding brought under any antitrust law by any government antitrust authority
or any other party of any permanent or preliminary injunction or other order
that would make consummation of the transactions contemplated by this Agreement
unlawful or that would prevent or delay such consummation.
7.3.2 Communications. Each party hereto shall promptly inform
the other of any material communication between such party and the Federal Trade
Commission, the Department of Justice or any other United States federal or
state, or non-U.S. government or governmental authority regarding any of the
transactions contemplated hereby. If any party or any affiliate of such party
receives a request for additional information or for documents or any material
from any such government or governmental authority with respect to the
transactions contemplated hereby, then such party shall endeavor in good faith
to make or cause to be made, as soon as reasonably practicable and after
consultation with the other party, an appropriate
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response in compliance with such request. Further, no written materials shall be
submitted by any party to the Federal Trade Commission, the Department of
Justice or any other United States federal or state, or non-U.S. governmental
agency in connection with HSR Act compliance or the merger control or
competition regulations of any other country, nor shall any oral communications
be initiated with such governmental entities by any party, without prior
disclosure to and coordination with the other parties and their counsel. Each
party hereto will cooperate in connection with reaching any understandings,
undertakings or agreements (oral or written) involving the Federal Trade
Commission, the Department of Justice or any other United States federal or
state, or non-U.S. governmental authority in connection with the transactions
contemplated hereby.
7.4 Assumption of Liabilities by SalesLogix. SalesLogix shall assume
and be responsible for the Transferred Liabilities as of the Closing Date.
7.5 Transition Teams. SalesLogix and Symantec shall each promptly
appoint representatives from their product development, marketing, sales,
finance and human resources departments to form counterpart transition teams for
the period from the Effective Date through the end of the Transition Period.
Such departmental transition teams shall use reasonable good faith efforts to
cooperate and coordinate activities to facilitate SalesLogix's preparations
prior to the Closing for the transition, and to facilitate after the Closing a
smooth implementation of the Transition Agreement and a smooth transition of the
Licensed Products from Symantec to SalesLogix.
8. POST-CLOSING COVENANTS
8.1 Export Compliance. SalesLogix will comply with all laws applicable
to distribution of the Licensed Products, including but not limited to the U.S.
Export Administration Act and regulations promulgated thereunder and all other
laws, regulations, rules, orders, writs, injunctions, judgments and decrees
applicable to the export or re-export of controlled commodities or technical
data. Symantec shall provide any necessary or reasonable cooperation and
assistance, to the extent requested by SalesLogix, in connection with
SalesLogix's processing of any export applications and licenses for the Licensed
Products, provided that SalesLogix reimburses Symantec for any out-of-pocket
expenses reasonably incurred in connection with providing such assistance.
8.2 Non-Competition by Symantec. Symantec agrees that, during the
Royalty Term, Symantec will not, and will cause its Subsidiaries not to, engage
or participate in the conduct or management of, or own (legally or beneficially)
any entity which as a material portion of its business (a portion shall be
deemed to be material if it represents more than 20% of the revenue of such
entity) engages in the development, marketing, licensing or sale of (i) a stand
alone software product or hosted or online offering that has as its principal
functionality contact management, sales automation, or customer relationship
management, or (ii) a stand alone software product or hosted or online offering
that competes with any of the products listed on EXHIBIT A. The foregoing
covenant shall not prohibit the ownership, or right or option to acquire, any
passive investment in any business provided that such investment constitutes not
more than twenty percent (20%) of the aggregate equity interests in such
business. Symantec acknowledges that the foregoing covenant is supported by
adequate consideration and waives the
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claim or defense of inadequate consideration. By executing this Agreement,
Symantec specifically acknowledges that the foregoing restrictions were
bargained for by the parties, that such restrictions are reasonable and
necessary to protect the legitimate interests of SalesLogix and that monetary
damages would be inadequate compensation for a breach of this provision.
8.3 Non-Competition by SalesLogix. SalesLogix agrees that, during the
Royalty Term, SalesLogix will not, and will cause its Subsidiaries not to, use
the Licensed Products, the Source Code or Intellectual Property to engage or
participate in the conduct or management of, or own (legally or beneficially)
any business which engages in the development, marketing, licensing or sale of
software products that compete with the other product offerings of Symantec as
of the Effective Date that are listed on EXHIBIT Q. The foregoing covenant shall
not prohibit the ownership, or right or option to acquire, any passive
investment in any business provided that such investment constitutes not more
than twenty percent (20%) of the aggregate equity interests in such business.
SalesLogix acknowledges that the foregoing covenant is supported by adequate
consideration and waives the claim or defense of inadequate consideration. By
executing this Agreement, SalesLogix specifically acknowledges that the
foregoing restrictions were bargained for by the parties, that such restrictions
are reasonable and necessary to protect the legitimate interests of Symantec and
that monetary damages would be inadequate compensation for a breach of this
provision.
8.4 Symantec's Status. Based solely on the Common Stock Consideration
Xxxxxx to Symantec hereunder, SalesLogix will not classify or subject Symantec
to treatment as a "control person," "affiliate" or "insider" and will not take
the position that Symantec is subject to SalesLogix's xxxxxxx xxxxxxx policy or
the restrictions applicable to affiliates under Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), or restrict Symantec
to selling the Shares only during SalesLogix's trading window.
8.5 S-3 Availability. SalesLogix will use its best efforts to become
eligible to use Form S-3 as soon as possible under applicable law, which is
presently expected to be approximately May 27, 2000.
8.6 Further Assurances. From time to time after the Closing Date,
Symantec will at SalesLogix' expense, execute and deliver, or cause to be
executed and delivered, such documents to SalesLogix as SalesLogix may
reasonably request, and from time to time after the Closing Date, SalesLogix
will, at Symantec's expense, execute and deliver such documents to Symantec as
Symantec may reasonably request, in order to more effectively consummate the
transactions and transfers contemplated by this Agreement.
8.7 Assistance. Upon five (5) business days notice, Symantec will
cooperate with and provide to SalesLogix's auditors reasonable access during
Symantec normal business hours to the necessary Symantec business records to
permit such auditors to audit the books and records relating to the ACT! product
line to satisfy SalesLogix's disclosure obligations under law, including but not
limited to preparation of a Form 8-K and other related documents. Any such audit
shall be conducted and access shall be provided in a manner to cause the least
interference possible with the conduct of Symantec's business. SalesLogix shall
reimburse Symantec for its out-of-pocket expenses incurred for preparation or
production of records,
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reports or information requested by SalesLogix or its auditors that are outside
Symantec's ordinary financial reporting procedures.
8.8 Third Party Consents. Symantec and SalesLogix shall each use
reasonable commercial efforts and shall cooperate together to obtain the Third
Party Consents prior to the Closing Date, as specified in EXHIBIT J.
8.9 ACT!4.0. Because the parties have agreed that the ACT!4.0 for
Windows 95/98/NT ("ACT!4.0") product should be obsolete and because making the
Source Code for ACT!4.0 a Deliverable under this Agreement would be burdensome
given the need to cull out Third Party Software, the parties have agreed to
exclude ACT!4.0 as a Deliverable under this Agreement. If after the Effective
Date the parties discover that it will be necessary for SalesLogix to support
existing copies of ACT!4.0 for Windows products in use by end user customers or
otherwise to assume liabilities with respect to ACT!4.0, the parties shall work
together in good faith to provide SalesLogix with access to the Source Code for
ACT!4.0 or otherwise enable SalesLogix to fulfill such obligations. Any revenue
generated by ACT!4.0 after the Closing Date shall accrue to the benefit of
SalesLogix. Symantec covenants and agrees to archive the Source Code for ACT!4.0
or on before the Closing Date. Other than for the purpose of fulfilling existing
licensing commitments, and subject to Symantec's retained rights to the Shared
Technology and its rights under Sections 2.3 and 2.4, Symantec shall not
directly or indirectly license, reproduce, distribute or prepare Derivative
Works from ACT!4.0 following the Closing Date without SalesLogix's prior written
consent, which shall not be unreasonably denied or delayed.
9. CONVERSION OF LICENSES TO PERPETUAL; GRANT OF PURCHASE AND QUIT CLAIM
OPTIONS
9.1 Conversion of Licenses. If on or prior to the Anniversary Date,
SalesLogix shall have paid Royalties to Symantec aggregating $60,000,000 over
the Royalty Term without regard to the time value of money, then upon such
Anniversary Date: (i) the Licenses granted pursuant to Sections 2.1(a) , 2.2,
and 2.6 shall be automatically converted to exclusive, perpetual, paid-up, and
irrevocable Licenses and the Licenses granted pursuant to Section 2.1(b) shall
be automatically converted to non-exclusive, perpetual and paid-up Licenses;
(ii) the rights and licenses of Symantec under Section 2.4 shall terminate;
(iii) the restriction in Sections 2.1, 2.2 and 2.8 on SalesLogix's ability to
grant exclusive licenses or licenses of Source Code shall terminate; (iv) the
restriction in Section 2.6 on SalesLogix's use of the Marks shall terminate; (v)
SalesLogix shall have the right thereafter, at its sole discretion, to exercise
the Purchase Option described in Section 9.2; and (vi) if SalesLogix does not
exercise the Purchase Option described in Section 9.2; Symantec shall have the
right thereafter, at its sole discretion, to exercise the Quit Claim Option
described in Section 9.3.
9.2 Grant of Purchase Option. If on or prior to the Anniversary Date,
SalesLogix shall have paid Royalties to Symantec aggregating $60,000,000 over
the Royalty Term without regard to the time value of money, then upon such
Anniversary Date SalesLogix shall have the option, exercisable at any time
within 30 days after the Anniversary Date, to purchase all of Symantec's right,
title and interest to the Licensed Programs, subject to the rights retained
pursuant to Section 2.3, and the Derivative Products thereof (the "Purchase
Option"), by
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delivery to Symantec and the Escrow Agent named in the Purchase Escrow Agreement
of written notice of exercise of the Purchase Option.
9.3 Grant of Quit Claim Option. If the Purchase Option described in
Section 9.2 is triggered but not exercised by SalesLogix within the time period
provided, Symantec shall thereafter have the option, exercisable at any time
thereafter, to deliver to SalesLogix a quit claim transferring ownership of all
of Symantec's right, title and interest to the Licensed Programs, subject to the
rights retained pursuant to Section 2.3, and the Derivative Products thereof to
SalesLogix (the "Quit Claim Option"), which quit claim shall be accepted by
SalesLogix without reservation.
9.4 Implementation of Purchase Option Exercise. Promptly following the
exercise of the Purchase Option and the delivery of notice of exercise by
SalesLogix to Symantec and the Escrow Agent, the parties shall execute and
deliver to Escrow Agent appropriate instructions for release of the Purchase
Option documents from the escrow.
9.5 Effect of Non-Conversion of Licenses. If on or prior to the
Anniversary Date, SalesLogix shall have paid Royalties to Symantec aggregating
less than $60,000,000 over the Royalty Term without regard to the time value of
money, then upon such Anniversary Date: (i) the Licenses shall automatically
terminate and cease to exist, (ii) Symantec shall be released of its obligation
to forebear exercise of its license to Derivative Works of Licensed Products
pursuant to Section 2.4; and (iii) SalesLogix shall deliver to Symantec within
fifteen (15) days of such Anniversary Date copies of all Licensed Products and
Derivative Products, including electronic copies of Source Code and Object Code
of Derivative Works of Licensed Products and physical copies and electronic
copies of Derivative Works of Licensed Materials.
9.6 Additional Payments of Royalties. SalesLogix may, but shall not be
required to, make additional payments of Royalties during the thirty (30) day
period prior to the Anniversary Date to bring the total amount of Royalties paid
to Symantec to $60,000,000 in the aggregate.
9.7 Derivative Works Escrow. From time to time as Derivative Products
are developed and marketed to third parties (but no more frequently than
semi-annually), SalesLogix shall deposit a copy of all such Derivative Products
(but only for new versions denominated by changes in version number to the left
of the decimal point or similar changes in designation indicative in the
software industry as denominating a new version), including electronic copies of
Source Code and Object Code, as well as physical copies and electronic copies of
Derivative Works of Licensed Materials, with DSI under the Derivative Products
Escrow Agreement, in a form to be agreed upon by the parties prior to Closing.
Such copies of Derivative Products shall be released by DSI to Symantec upon
written demand by Symantec (a) after the Anniversary Date if the Licenses have
not converted to perpetual pursuant to Section 9.1, or (b) upon the earlier
termination of this Agreement prior to the Anniversary Date.
10. CONFIDENTIAL INFORMATION
10.1 Symantec's Obligations. Symantec shall safeguard and keep
confidential all Confidential Information of SalesLogix delivered to Symantec in
connection with the transactions contemplated by this Agreement and shall return
all Confidential Information to
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SalesLogix promptly upon request and in any event within fifteen (15) days of
the termination of this Agreement. Symantec agrees to safeguard any such
Confidential Information received from SalesLogix using measures that are equal
to the standard of performance used by Symantec to safeguard its own
Confidential Information of comparable value, but in no event less than
reasonable care. Symantec will keep confidential and safeguard the Licensed
Products using measures that are equal to the standard of performance used by
Symantec to safeguard its other Confidential Information of comparable value,
but in no event less than reasonable care. Symantec will maintain in full force
and effect any and all existing Intellectual Property rights in the Licensed
Products, subject to the Licenses, provided that SalesLogix reimburses Symantec
for any out-of-pocket expenses incurred by Symantec to do so. SalesLogix shall
have the right to require Symantec, at SalesLogix's expense, to take such
additional actions as SalesLogix reasonably believes appropriate to obtain,
maintain and enforce other forms of proprietary protection (including without
limitation patent and copyright registration) that are not inconsistent with the
confidential treatment required by this Agreement.
10.2 SalesLogix's Obligations. SalesLogix shall safeguard and keep
confidential all Confidential Information of Symantec delivered to SalesLogix in
connection with the transactions contemplated by this Agreement and shall return
all Confidential Information of Symantec to Symantec promptly upon request and
in any event within fifteen (15) days of termination of this Agreement.
SalesLogix agrees that the Licensed Products are Confidential Information and
valuable trade secrets of Symantec and agrees that except as expressly provided
in this Agreement, all ownership rights therein remain in Symantec and that
SalesLogix will safeguard such Confidential Information using measures that are
equal to the standard of performance used by SalesLogix to safeguard its own
Confidential Information of comparable value, but in no event less than
reasonable care. Prior to exercise of the Purchase Option, SalesLogix will
include Symantec copyright notices in all copies made of any of the Licensed
Products, Derivative Products or substantial portions thereof.
10.3 Joint Obligations. Neither party shall, without the prior written
consent of the other party:
10.3.1 disclose any Confidential Information of the other
party to any person other than an employee or an independent contractor with a
need to know who agrees to be bound by confidentiality agreements containing
provisions no less protective than this Section or as expressly contemplated by
this Agreement;
10.3.2 make any unauthorized copies of Confidential
Information; or
10.3.3 use any Confidential Information of the other party for
any purpose except to implement its rights and obligations under this Agreement
and as otherwise expressly contemplated by this Agreement;
provided, however, that if any party or its representatives is requested or
required to disclose any Confidential Information by a governmental entity or
court order, that party will promptly notify the other party of such request or
requirement in writing so that the other party may seek an appropriate
protective order or other appropriate relief and/or waive compliance with the
provisions of this Agreement, and if, in the absence of such relief or waiver,
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any party or its representatives are, in the opinion of such party's counsel,
legally compelled to disclose Confidential Information, then that party may
disclose such of the Confidential Information to the entity compelling
disclosure as is, according to such opinion, required, without liability
hereunder.
10.4 Unauthorized Use or Disclosure. If either party learns of any use
or disclosure of Confidential Information of the other party which is not
permitted under this Agreement, it shall promptly notify the party whose
Confidential Information was used or disclosed, stating in reasonable detail all
facts known to it with respect to such unauthorized use or disclosure and shall
cooperate in all respects reasonably requested by the party whose Confidential
Information was used or disclosed or its counsel, at such requesting party's
expense, in such requesting party's pursuit of available remedies against the
person or persons responsible for such unauthorized use or disclosure.
10.5 Injunctive Relief. Each party acknowledges that breach of the
foregoing obligations may cause irreparable injury to the party whose
Confidential Information is disclosed and that such party may seek and obtain
injunctive relief against such breach or threatened breach without prejudice to
any other remedies which may be available to it.
10.6 Survival. The provisions of this Section 10 shall take effect upon
execution of this Agreement and shall survive any termination of this Agreement.
11. REPRESENTATIONS AND WARRANTIES OF SYMANTEC
11.1 General. Except as disclosed in the Symantec Disclosure Letter,
Symantec hereby represents, warrants and covenants to SalesLogix, as follows:
11.1.1 Authority; Enforceability. Symantec has the right,
power, legal capacity and authority to enter into, execute, deliver and perform
its obligations under this Agreement and the Ancillary Agreements and Symantec
has all requisite corporate power and authority to consummate all of the
transactions contemplated by this Agreement and by the Ancillary Agreements. The
execution, delivery and performance of this Agreement and each of the Ancillary
Agreements by Symantec have been duly and validly approved and authorized by all
necessary corporate action on the part of Parent's Board of Directors and
shareholders. This Agreement and the Ancillary Agreements are, or when executed
by Symantec will be, valid and binding obligations of Symantec enforceable in
accordance with their respective terms, subject to the effect, if any, of (a)
applicable bankruptcy and other similar laws affecting the rights of creditors
generally and (b) rules of law governing specific performance, injunctive relief
and other equitable remedies.
11.1.2 Brokers and Finders. Other than the firm of Xxxxxxxxx,
Xxxxxx & Xxxxxxxx, no person or firm has, or will have, any right, interest or
valid claim against Symantec for any commission, fee or other compensation in
connection with the Licenses or exercise of the Purchase Option as a finder or
broker or in any similar capacity as a result of any act or omission by
Symantec, or anyone acting on behalf of Symantec. Symantec hereby agrees to
indemnify and hold SalesLogix harmless in connection with the payment of any
such fees.
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11.1.3 Governmental Consents No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental entity on the part of Symantec is required in
connection with the consummation of the transactions contemplated by this
Agreement, except for compliance with the HSR Act.
11.1.4 Litigation. There is no action, suit, proceeding or
investigation pending or currently threatened against Symantec that questions
the validity of this Agreement or the Ancillary Agreements, or the right of
Symantec to enter into this Agreement or the Ancillary Agreements or to
consummate the transactions contemplated hereby or thereby.
11.1.5 Access to Business Records. Parent: (a) has been
furnished access to the business records of SalesLogix and such additional
information and documents as it may have requested, has been given the
opportunity to meet with SalesLogix officials and to have such persons answer
questions regarding SalesLogix's affairs and condition, and is, on the basis of
such access, opportunity and information, able to make an informed investment
decision regarding its investment in the Shares, and (b) is acquiring the Shares
being purchased: (i) for the account of Symantec, and (ii) for investment and
not with a view to, or for sale in connection with, any distribution of said
Shares or with any present intention of distributing or selling said Shares. No
information or knowledge obtained in any investigation pursuant to this Section
shall affect or be deemed to modify any representation or warranty of SalesLogix
contained herein or the conditions to Symantec's obligations to consummate the
acquisition of the Shares.
11.1.6 Compliance with Other Instruments and Laws. The
execution, delivery and performance of this Agreement and the Ancillary
Agreements by Symantec and the consummation of the transactions contemplated
hereby and thereby do not and will not result in a violation or default in any
material respect of: (a) any provision of the charter documents of Symantec or
(b) any judgment, order, writ, or decree applicable to the assets of Symantec,
or (c) or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a breach, violation or default) under any
material contract to which it is a party which would have a Material Adverse
Effect on Symantec. Symantec is not in violation or default in any material
respect of any provision of its charter documents, or of any instrument,
judgment, order, writ, decree or contract to which it is a party or by which it
is bound that could reasonably be expected to have a Material Adverse Effect on
the Licensed Products, or, to the best of its knowledge, of any provision of any
federal or state statute, rule or regulation applicable to it that could
reasonably be expected to have a Material Adverse Effect on it or the Licensed
Products.
11.1.7 Investment Purpose. Parent is acquiring the Shares for
investment for its own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the Securities
Act and applicable state securities laws. Symantec further acknowledges and
understands that the Shares have not been registered under the Securities Act by
reason of a specific exemption therefrom, which exemption depends upon, among
other things, the bona fide nature of its investment intent as expressed herein.
11.1.8 Investment Risk. Parent acknowledges that it is aware
that it will not be entitled to make any offer or sale of any of the Shares for
an indefinite period unless the offering of those Shares are then registered
under the Securities Act or an exemption from such registration is available.
Although it may be possible in the future to make limited public sales
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of the Shares without registration in reliance on Rule 144 under the Securities
Act, Parent is aware that there is no assurance that it will remain available
for this purpose. Accordingly, Parent understands that it must bear the economic
risk of its investment in the Shares for an indefinite period.
11.1.9 Accredited Investor. Parent is an "Accredited Investor"
within the meaning of Regulation D promulgated under the Securities Act.
11.1.10 Selected Financial. True and complete copies of
certain financial data statements for the Licensed Products operations, as
listed in SCHEDULE 11.1.10, have been delivered by Symantec to SalesLogix. These
statements: (1) are in accordance with the books and records of Symantec, and
(2) present fairly in all material respects the financial data and cash flows
disclosed therein for the periods indicated in such statements. Symantec makes
no representations whatsoever regarding any projections that may be contained in
any of the aforementioned documents.
11.2 Intellectual Property. Except as disclosed in the Symantec
Disclosure Letter, Symantec hereby represents, warrants and covenants to
SalesLogix as follows (the following representations and warranties apply only
to the most current version , as of the Closing Date, of ACT! 2000 unless
otherwise specifically indicated):
11.2.1 Ownership. Except for Third Party Software (for which,
in each case, Symantec warrants it has sufficient rights therein, without the
consent or approval of any third party, to grant the Licenses and fulfill its
obligations under this Agreement, except as disclosed in the Symantec Disclosure
Letter), Symantec owns exclusively, free and clear of all Encumbrances, all
right, title and interest in the current version, as of the Effective Date, of
ACT! 2000, including without limitation all Intellectual Property embodied
therein, with all rights to use and to make, license and sell products and other
property based on, or embodied or described in ACT! 2000. All other versions of
the Licensed Products are provided "as is". Except with respect to Third Party
Software, the Source Code deliverable hereunder shall contain only material that
Symantec is legally entitled to deliver to SalesLogix.
11.2.2 Infringement. To the best of Symantec's knowledge, the
use of the current version, as of the Effective Date, of ACT! 2000 and the
manufacture, licensing and sale thereof does not conflict with, infringe upon or
violate any patent, patent license, patent application, or any pending
application relating thereto, or any copyright or any other Intellectual
Property right of any third person, entity or corporation.
11.2.3 Asserted Claims. There are no pending, or to the best
of Symantec's knowledge, threatened governmental, judicial or adversary
proceedings, hearings, arbitrations, disputes or other claims relating to, and
no notice of infringement has been served upon or otherwise come to the
knowledge of Symantec with respect to, ACT! 2000. The Designated Persons have no
actual knowledge of any infringement by others of the current version of ACT!
2000. There are no pending, or to the actual knowledge of the Designated
Persons, threatened governmental, judicial or adversary proceedings, hearings,
arbitrations, disputes or other claims relating to, and no notice of
infringement has been served upon or otherwise come to the
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knowledge of Designated Persons with respect to the current versions of ACT! CE,
ACT! for Mac or ACT! Pilot.
11.2.4 Litigation. There is no action, claim, investigation or
proceeding before any court or governmental agency pending, or to the best of
Symantec's knowledge, threatened against or involving Symantec related to the
current version of ACT! 2000, Other Transferred Assets or Tangible Assets. To
the actual knowledge of the Designated Persons, there is no action, claim,
investigation or proceeding before any court or governmental agency pending or
threatened against or involving Symantec related to current versions of ACT! CE,
ACT! for Mac or ACT! Pilot.
11.2.5 No Encumbrances. Symantec has not and shall not prior
to the Closing Date grant to any third party any rights, including Encumbrances,
that are inconsistent with this Agreement. Notwithstanding the foregoing,
Symantec has granted and may continue to grant licenses for the Licensed
Products in the ordinary course of business.
11.2.6 Year 2000 Statements. The Licensed Programs are Year
2000 Compliant provided that all products (e.g. hardware, software, firmware)
used in combination with the Licensed Programs properly exchange date data with
it.
11.2.7 Source Code. To the best knowledge of Symantec, the
Source Code of ACT! 2000 has not been disclosed to any person or entity other
than employees and consultants of Symantec, and each of such employees and
consultants is a party to a valid and enforceable agreement containing
confidentiality provisions customary for public companies engaged in the
business of licensing software.
11.2.8 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH
IN THIS SECTION 11, ALL LICENSED PROGRAMS, LICENSED MATERIALS, SHARED
TECHNOLOGY, THIRD PARTY SOFTWARE, TANGIBLE ASSETS, OTHER TRANSFERRED ASSETS, AND
OTHER DELIVERABLES ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND AND ALL
IMPLIED WARRANTIES WITH RESPECT TO THE FOREGOING, INCLUDING BUT NOT LIMITED TO
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
HEREBY EXCLUDED.
11.3 Export Compliance. With respect to the Licensed Products, Symantec
has complied, is in full compliance, and will comply through the Closing Date
with the Export Administration Act and regulations promulgated thereunder and
all other laws, regulations, rules, orders, writs, injunctions, judgments and
decrees applicable to the export or re-export of controlled commodities or
technical data.
12. REPRESENTATIONS AND WARRANTIES OF SALESLOGIX
Except as disclosed in the SalesLogix Disclosure Letter, SalesLogix
hereby represents, warrants and covenants to Symantec as follows:
12.1 Organization and Standing: Certificate of Incorporation and
Bylaws. SalesLogix is a corporation duly organized, validly existing and in good
standing under the laws of the State
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of Delaware. The copies of SalesLogix's Certificate of Incorporation, as
amended, and Bylaws delivered to Symantec are true, correct and complete copies
of the originals, each of which remains in full force and effect and has not
been repealed or amended. SalesLogix is duly qualified as a foreign corporation
in good standing in each jurisdiction in which the conduct of its business makes
such qualification necessary and appropriate and the failure to so qualify will
not materially and adversely affect SalesLogix, and such qualification remains
in effect and has not been revoked. Except as set forth in the SalesLogix
Disclosure Letter, SalesLogix has no subsidiaries and no equity interest, direct
or indirect, in any corporation, partnership, limited liability company, joint
venture or other business entity.
12.2 Corporate Power and Government Consents. SalesLogix has all
requisite corporate power to enter into this Agreement, to transfer the Shares,
to carry out and perform its obligations under the terms of this Agreement, and
to carry out its business both as presently conducted and as presently
contemplated. Assuming the accuracy of Symantec's representations in Section
12.1, no consent, authorization, approval, permit or order of, or declaration to
or filing with any governmental or regulatory authority (except for the HSR
Filing) is required in connection with: (i) the execution, delivery and
performance of this Agreement, or (ii) the offer, issuance, sale or delivery of
the Shares.
12.3 Capitalization. Immediately prior to the Closing, SalesLogix's
authorized, issued and outstanding stock of all classes and all options, rights,
and warrants with respect to such stock shall be as described on SCHEDULE 12.3
attached hereto. All outstanding shares of each class have been duly and validly
issued, and are fully paid and nonassessable and were issued in compliance with
all applicable securities laws.
12.4 Authority; Enforceability; Reservation of Shares. SalesLogix has
the right, power, legal capacity and authority to enter into, execute, deliver
and perform its obligations under this Agreement and the Ancillary Agreements
and SalesLogix has all requisite corporate power and authority to consummate all
of the transactions contemplated by this Agreement and by the Ancillary
Agreements. The execution, delivery and performance of this Agreement and each
of the Ancillary Agreements by SalesLogix have been duly and validly approved
and authorized by all necessary corporate action on the part of its Board of
Directors and shareholders, including without limitation the authorization,
issuance and delivery of the Shares. The resolution of the Board of Directors
authorizing the issuance and sale of the Shares to be sold pursuant to this
Agreement remains in full force and effect and has not been amended or revoked.
This Agreement and the Ancillary Agreements are, or when executed by SalesLogix
will be, valid and binding obligations of SalesLogix enforceable in accordance
with their respective terms, subject to the effect, if any, of (a) applicable
bankruptcy and other similar laws affecting the rights of creditors generally
and (b) rules of law governing specific performance, injunctive relief and other
equitable remedies.
12.5 Issuance of the Shares. The Shares, when issued and transferred to
Symantec in accordance with the terms of this Agreement, will be validly issued,
fully paid and nonassessable and will be free and clear of any lien, claim or
Encumbrance created or suffered by SalesLogix, excepting only restrictions on
transfer described in this Agreement. The shares constitute part of the class of
securities that has been registered under the 1934 Act and has been listed on
the Nasdaq National Stock Market. The issuance of the Shares will not be in
violation of any
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preemptive right of any security holder of SalesLogix. SalesLogix shall, at the
time of Closing, have paid any issuance, transfer or stamp tax connected with
the sale of the Shares. There are no voting agreements, voting trusts, rights of
repurchase, rights of first refusal or other restrictions (other than normal
restrictions on transfer under applicable securities laws) applicable to any of
SalesLogix's outstanding securities or to the issuance of the Shares to Symantec
hereunder. Except as described in the SalesLogix Disclosure Letter or the
Amended and Restated Investors Rights Agreement dated June 4, 1998, as amended
as of April 22, 1999, SalesLogix is not under any obligation to register under
the Securities Act or under any other securities law, any of its presently
outstanding securities or any securities that may be subsequently issued.
12.6 Financial Statements. True and complete copies of the current
financial statements of SalesLogix, as listed in SCHEDULE 12.6, have been
delivered by SalesLogix to Symantec. Those financial statements: (1) are in
accordance with the books and records of SalesLogix, (2) are prepared in
accordance with generally accepted accounting principles consistently applied,
subject in the case of unaudited interim statements to changes resulting from
year end adjustments, and (3) present fairly in all material respects the
financial position of SalesLogix at the dates, and the results of its operations
and cash flows for the periods, indicated in those statements. As of the date of
the most recent balance sheet listed in SCHEDULE 12.6, SalesLogix did not have
any material debts, liabilities or obligations, whether absolute, accrued,
contingent or otherwise, which are not fully reflected in such balance sheet or
otherwise listed in the financial statements listed on SCHEDULE 12.6, nor has
SalesLogix suffered any Material Adverse Effect since the date of such balance
sheet. All reserves established by SalesLogix and set forth in the such balance
sheet are reasonably adequate. At the date of such balance sheet, there were no
material loss contingencies (as such term is used in United States Statement of
Financial Accounting Standards No. 5 issued by the Financial Accounting
Standards Board in March 1975) which are not adequately provided for in such
balance sheet as required by said Statement No. 5.
12.7 Litigation. There are no legal actions, suits, arbitrations or
other legal, administrative or governmental proceedings pending or, to
SalesLogix's knowledge, threatened against SalesLogix which would have a
Material Adverse Effect on it. There is no action, suit, proceeding or
investigation pending or currently threatened against SalesLogix that questions
the validity of this Agreement or the Ancillary Agreements, or the right of
SalesLogix to enter into this Agreement or the Ancillary Agreements or to
consummate the transactions contemplated hereby or thereby.
12.8 Taxes. SalesLogix has: (a) timely filed all national, state, local
and foreign tax returns required to be filed by it; (b) timely paid all taxes
required to be paid by it in respect of all periods for which returns have been
filed; (c) has timely withheld and paid to the appropriate taxing authorities
all taxes and other payments required to be withheld by SalesLogix from salaries
and other compensatory payments paid or payable by SalesLogix to employees or
other service providers paid or payable by SalesLogix; (d) established an
adequate accrual or reserve for the payment of all taxes payable in respect of
the periods subsequent to the periods covered by the most recent applicable tax
returns; (e) timely made all necessary estimated tax payments; and (f) no
material liability for taxes in excess of the amount so paid or accruals or
reserves so established. SalesLogix is not delinquent in the payment of any tax
or in the filing of any tax returns, and no deficiencies for any tax or any
penalties or interest charges have been threatened,
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claimed, proposed or assessed against SalesLogix. SalesLogix has not received
any notification that any issues have been raised (and are currently pending) by
any taxing authority (including but not limited to any income, franchise, sales
or use tax authority) regarding SalesLogix and no tax return of SalesLogix has
ever been audited by any national, state, local or foreign taxing agency or
authority. To SalesLogix's knowledge, no tax liens have been filed against any
assets of SalesLogix. SalesLogix has not agreed to any extension or waiver of
any statute of limitations governing when any taxing authority may seek to: (a)
recover any payments for taxes from SalesLogix; or (b) audit any tax return or
tax filing made by SalesLogix.
12.9 Compliance with Laws and Other Instruments. To SalesLogix's best
knowledge, the business and operations of SalesLogix have been and are being
conducted in accordance with all applicable laws, rules, regulations, judgments
and decrees in all material respects. Subject to the accuracy of Symantec's
representations contained in Section 11.1 hereof, the offer, sale and issuance
of the Shares pursuant to the terms of this Agreement are exempt from
registration under Section 5 of the Securities Act and any applicable state
securities law. The execution, delivery and performance of this Agreement and
the Ancillary Agreements by SalesLogix and the consummation of the transactions
contemplated hereby and thereby do not and will not result in a violation or
default in any material respect of: (a) any provision of the charter documents
of SalesLogix or (b) any judgment, order, writ, or decree applicable to the
assets of SalesLogix, or (c) or constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a breach, violation or
default) under any material contract to which it is a party which would have a
Material Adverse Effect on SalesLogix. SalesLogix is not in violation or default
in any material respect of any provision of its charter documents, or of any
instrument, judgment, order, writ, decree or contract to which it is a party or
by which it is bound that could reasonably be expected to have a Material
Adverse Effect on it. Neither the execution, delivery or performance of this
Agreement, nor the offer, issuance, sale or delivery of the Shares, with or
without the giving of notice or passage of time, or both, will (i) violate, or
result in any breach of, or constitute a default under, or result in the
imposition of any Encumbrance upon any asset of SalesLogix pursuant to, any
provision of any corporate charter, bylaws, contract, judgment, decree or other
document or instrument or (ii) will cause SalesLogix to lose the benefit of any
right or privilege it presently enjoys or, to the best of SalesLogix's
knowledge, cause any person who normally does business with SalesLogix to
discontinue to do so on the same basis.
12.10 Permits, Patents, Trademarks, and Trade Secrets. SalesLogix has
all franchises, permits, licenses and other similar authority necessary for the
conduct of its business as now being conducted and as planned to be conducted,
and it is not in material default under any of them. SalesLogix owns or
possesses or has applied for all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, rights to Intellectual Property and
copyrights necessary to conduct its business as now being conducted and as
planned to be conducted without conflict with or infringement upon any valid
rights of others. Except as disclosed in the SalesLogix Disclosure Letter,
SalesLogix has not received any notice of infringement upon or conflict with the
asserted rights of others.
12.11 No Defaults; Insurance. In all material respects, SalesLogix has
performed all obligations required to be performed by it, and is not in default
under, any contract, commitment or instrument, and no event or condition has
occurred which, with the giving of notice or passage of time, or both, would
constitute such a default. SalesLogix has insurance coverage in such
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amounts and covering such risks as is usually carried by public companies
engaged in similar businesses and is adequate for the business being conducted,
and the properties owned or leased, by SalesLogix.
12.12 Brokers and Finders. Other than Xxxxx X. Xxxxxxx (Osprey
Ventures, L.P.) and the firm of Xxxxxxxxx & Xxxxx, LLC, no person or firm has,
or will have, any right, interest or valid claim against SalesLogix for any
commission, fee or other compensation in connection with the sale of the Shares
as a finder or broker or in any similar capacity as a result of any act or
omission by SalesLogix, or anyone acting on behalf of SalesLogix. SalesLogix
hereby agrees to indemnify and hold Symantec harmless in connection with the
payment of such fees.
12.13 SEC Reporting. SalesLogix has filed all reports, registration
statements, proxy statements, and other materials required to be filed with the
Securities and Exchange Commission (the "Commission") pursuant to the federal
securities laws and rules and regulations thereunder (the "Federal Securities
Laws"). Such reports, registration statements, proxy statements, and other
materials were prepared in all material respects in accordance with the
requirements of the Federal Securities Laws, and none of such materials contains
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. For so long as Symantec owns any of the Shares, SalesLogix shall
file with the Commission all periodic reports, proxy statements, registration
statements and other materials required to be so filed pursuant to the Federal
Securities Laws. The benefits of Rule 144 are currently available with respect
to the common stock of SalesLogix.
12.14 Disclosures. Neither this Agreement (including the Exhibits and
Schedules) nor any writing furnished to Symantec pursuant to or in connection
with this Agreement by SalesLogix or anyone acting on its behalf, including, but
not limited to, the financial statements, contains any untrue statement of a
material fact. Together they do not omit to state any material fact required to
make the statements herein or therein not misleading in the light of the
circumstances under which those statements were made. Any projections contained
in any of the aforementioned documents have been prepared in good faith by
SalesLogix on the basis of assumptions which SalesLogix believes to be
reasonable, but SalesLogix makes no representation that its actual operating
results will conform to any such projections.
12.15 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental entity on the part of SalesLogix is required in
connection with the consummation of the transactions contemplated by this
Agreement, except for compliance with the HSR Act.
12.16 Compliance with Other Instruments and Laws. The execution,
delivery and performance of this Agreement and the Ancillary Agreements by
SalesLogix and the consummation of the transactions contemplated hereby and
thereby do not and will not result in a violation or default in any material
respect of: (a) any provision of the charter documents of SalesLogix or (b) any
judgment, order, writ, or decree applicable to the assets of SalesLogix, or (c)
or constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a breach, violation or default) under any material
contract to which it is a party. SalesLogix is not in violation or default in
any material respect of any provision of its charter
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documents, or of any instrument, judgment, order, writ, decree or contract to
which it is a party or by which it is bound that could reasonably be expected to
have a material adverse effect on its business, or, to the best of its
knowledge, of any provision of any federal or state statute, rule or regulation
applicable to it that could reasonably be expected to have a material adverse
effect on it.
12.17 Export Compliance. SalesLogix has complied, is in full
compliance, and will comply with the Export Administration Act and regulations
promulgated thereunder and all other laws, regulations, rules, orders, writs,
injunctions, judgments and decrees applicable to the export or re-export of
controlled commodities or technical data.
12.18 No Exercise of Registration Rights. No investor under any
existing agreement with SalesLogix that grants such investor the right to have
SalesLogix register such investor's shares of SalesLogix for public resale has
exercised any such rights.
13. EMPLOYEE MATTERS
13.1 Right to Offer Employment. Prior to the Closing, SalesLogix shall
have the right to contact the employees of Symantec listed on EXHIBIT R hereto
(the "Employees") at reasonable times agreed upon by SalesLogix and Symantec for
the purpose of making offers of employment with SalesLogix (in each case such
offers of employment shall be contingent on consummation of the transactions
contemplated by this Agreement). Offers made to Product Group Employees (as
defined on Exhibit R) shall be effective as of the Closing Date, while offers
made to Support Group Employees (as defined on Exhibit R) shall be effective as
of the end of the Transition Period. Symantec shall notify SalesLogix promptly
if the employment of any Employee is terminated after the Effective Date but
prior to the Closing Date in the case of those Employees designated in EXHIBIT R
as Product Group Employees or prior to the end of the Transition Period in the
case of those employees designated in EXHIBIT R as Support Group Employees. Each
such Employee who is employed by Symantec on the Closing Date and who actually
accepts an offer of employment with SalesLogix (or any affiliate designated by
SalesLogix) effective as of or promptly following the Closing Date or at the end
of the Transition Period as a result of an offer of employment made by
SalesLogix is hereafter referred to as a "New Hire". Symantec hereby consents to
the hiring of each New Hire by SalesLogix and waives, with respect to the
employment by SalesLogix of such New Hire, any claims or rights Symantec may
have against SalesLogix with respect thereto and against any such New Hire under
any non-competition, non-solicitation, confidentiality or employment agreement
with respect to the Licensed Products. SalesLogix shall not, however, be
obligated to offer employment to any Employee. Such offers of employment as may
be extended by SalesLogix to Employees who are on a workers'
compensation-related or disability leave or a Family Medical Leave Act leave or
other statutory leave shall be conditioned upon their return from such leave in
accordance with Symantec's leave of absence policy. SalesLogix and Symantec
shall cooperate with one another to encourage the Employees to whom SalesLogix
makes offers of employment to accept such offers and transition from one
employer to the other in a smooth and orderly fashion.
13.2 COBRA Coverage. Symantec shall be responsible for any COBRA
coverage continuation notices or similar employee benefit type notices required
to be provided with
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respect to any New Hires or Excess Employees (as defined below) or their
qualified beneficiaries under applicable laws.
13.3 Employee Benefit Plans. As of the Closing Date with respect to
Product Group Employees and as of the last day of the Transition Period with
respect to Support Group Employees, the New Hires shall cease to be participants
in Symantec's employee benefit plans and shall be treated as terminated
employees under all such plans subject to the vesting, distribution and all
other rights and obligations available to employees who have voluntarily
resigned. SalesLogix shall designate a defined contribution plan that will
accept a direct rollover, within the meaning of Section 401(a)(31) of the Code,
of the account balances of the New Hires in Symantec's 401(k) plan, including
any loan obligation that a New Hire may have in his or her account in the 401(k)
plan. To the extent a New Hire transfers a loan obligation to SalesLogix's plan,
SalesLogix shall accept repayments of such loan amounts and shall otherwise
administer such loans in accordance with their terms and ERISA until such loan
amounts are repaid or are foreclosed upon.
13.4 WARN Compliant. In the event Symantec affects a reduction or
cessation of the operations or workforce that exists to service or support the
Licensed Products prior to or subsequent to the Closing Date that would be
subject to the Workers' Adjustment and Retraining Act ("WARN"), Symantec shall
provide notice to SalesLogix and perform and undertake all acts as may be
necessary to comply with the applicable provisions, if any, of WARN. In the
event that SalesLogix effects a reduction or cessation of the operations or
workforce that exists to service the Licensed Products subsequent to the Closing
Date that would be subject to WARN, SalesLogix shall perform and undertake all
acts as may be necessary to comply with the applicable provisions of WARN.
13.5 Immigration, Visas. SalesLogix shall be responsible for obtaining
any required visas or other immigration approvals to allow New Hires to become
employed by SalesLogix at whatever location is specified by SalesLogix. Symantec
shall cooperate with and provide information reasonably requested with respect
to such efforts.
13.6 Future Claims. (a) SalesLogix shall be liable for and obligated to
pay and indemnify, and hold Symantec and its Affiliates harmless from, any and
all expenses, contracts, agreements, commitments, obligations, claims, suits,
and other liabilities of any nature whatsoever, whether known or unknown,
accrued or not accrued, fixed or contingent, or arising hereafter, directly or
indirectly, with respect to (i) the employment by SalesLogix or termination of
employment by SalesLogix of any New Hire after the Closing Date, whether in
connection with the transactions contemplated hereby or otherwise; (ii) any
claims of discrimination under state or federal law provided such claims arise
from the New Hire's employment or service with or termination by SalesLogix
after the Closing Date; (iii) any other claims or obligations arising out of the
terms and conditions of employment of any New Hire by SalesLogix whether for
salary, wages, bonuses, profit sharing, commissions, severance, vacation pay,
sick pay or otherwise; or (iv) any duties or obligations of SalesLogix or
administrators under any existing or future employee benefit plans or
arrangements maintained by SalesLogix with respect to its employees; (b)
Symantec shall be liable for and obligated to pay and indemnify, and hold
SalesLogix and its Affiliates harmless from, any and all expenses, contracts,
agreements, commitments, obligations, claims, suits, and other liabilities of
any nature whatsoever, whether
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known or unknown, accrued or not accrued, fixed or contingent, or arising
hereafter, directly or indirectly, with respect to (i) the employment by
Symantec or termination of employment by Symantec of any current or future
employee or consultant of Symantec or any of its Affiliates, whether in
connection with the transactions contemplated hereby or otherwise (except as to
50% of the severance payments to Excess Employees as provided in Section 13.8);
(ii) any claims of discrimination under state or federal law provided such
claims arise from the New Hire's employment or service with or termination by
Symantec prior to the Closing Date; (iii) any other claims or obligations
arising out of the terms and conditions of employment of any Excess Employee (as
defined below) by Symantec whether for salary, wages, bonuses, profit sharing,
commissions, severance (subject to Section 13.8), vacation pay, sick pay or
otherwise; (iv) any duties or obligations of Symantec or administrators under
any existing or future employee benefit plans or arrangements maintained by
Symantec with respect to its employees; or (v) any present or future obligations
or liabilities of Symantec to prior, existing or future employees of Symantec
(subject to Section 13.8).
13.7 Employment Taxes. Symantec and SalesLogix shall each be
responsible for any withholding or employment Taxes with respect to any New
Hires which accrue or become payable during the period of such New Hire's
employment or service with such party or arise out of the termination of such
person's employment with such party. Symantec and SalesLogix shall each be
responsible for filing all United States and non-U.S. federal, state and local
employment Tax returns with respect to New Hires attributable to periods of
employment or service with such party.
13.8 Termination of Employment; Responsibility for Severance. The
parties acknowledge that (i) those Employees not offered employment by
SalesLogix on terms comparable (including compensation and benefits) to the
terms upon which such Employees are employed by Symantec as of the Effective
Date and whom Symantec does not reassign to another position within Symantec's
organization and (ii) those Employees who are offered employment by SalesLogix
who do not accept such offers and whom Symantec does not reassign to another
position within Symantec's organization (collectively the "Excess Employees")
may be terminated by Symantec. SalesLogix hereby covenants and agrees with
Symantec to reimburse Symantec for one-half of the following payments made by
Symantec with respect to Excess Employees: (x) severance payments pursuant to
Symantec's severance policy, a copy of which has been provided to SalesLogix
(provided, however, that SalesLogix shall not be required to pay any portion of
paid time off provided to such Excess Employees), (y) COBRA benefit expenses and
(z) outplacement expenses, if any. Symantec shall issue an invoice to SalesLogix
within forty-five (45) days of the Closing Date specifying the amount, if any,
owed to Symantec by SalesLogix under this Section 13.8 with respect to Product
Group Employees, which invoice shall be due and payable within ten (10) days of
receipt by SalesLogix. Symantec shall issue an invoice to SalesLogix within
forty-five (45) days of the last day of the Transition Period specifying the
amount, if any, owed to Symantec by SalesLogix under this Section 13.8 with
respect to Support Group Employees, which invoice shall be due and payable
within ten (10) days of receipt by SalesLogix.
13.9 No Solicitation. Except as provided by law, for a period of
eighteen (18) months after the Closing Date, SalesLogix shall not actively
solicit any employee of Symantec to terminate his or her employment with
Symantec or to become an employee of SalesLogix. For
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purposes of this Section, the term "actively solicit" shall not mean or include
the placement of general advertisements, participation in career days, or
responding to unsolicited inquiries, applications or resumes.
13.10 No Rights Conferred Upon Employees. Nothing in this Section 13 or
any other provision of this Agreement shall confer any rights or remedies on any
employee (including without limitation any Employee, New Hire or Excess
Employee) of Symantec and no employee of Symantec (including without limitation
any Employee, New Hire or Excess Employee) shall be a third party beneficiary
with respect to any covenant, representation or agreement in this Agreement.
13.11 Survivability. Each of the agreements and covenants set forth in
this Section 13 shall survive the Closing.
13.12 Other Employee Related Matters. Certain other employee related
matters shall be handled as provided in the Transition Agreement.
14. INDEMNIFICATION
14.1 Loss Defined; Indemnitees. For purposes of this Section 14, the
term "LOSS" will mean and include any and all Liability, loss, damage, claim,
expense, cost, fine, fee, penalty, obligation, injury or amounts paid in
settlement, including, without limitation, those resulting from any and all
claims, actions, suits, demands, assessments, investigations, judgments, orders,
awards, arbitrations, settlements or other proceedings, together with reasonable
costs and expenses, including the reasonable attorneys' and experts' fees, court
costs, arbitration costs, filing fees and other legal costs and expenses
relating thereto. As used in this Section 14, the term "SalesLogix Indemnities"
means and includes SalesLogix, any present or future officer, director,
employee, affiliate, stockholder or agent of SalesLogix and its or their
respective successors and assigns. As used in this Section 14, the term
"Symantec Indemnities" means and includes Symantec and any present or future
officer, director, employee, affiliate, stockholder or agent of Symantec and its
respective successors and assigns.
14.2 Indemnification by Symantec. Symantec agrees, subject to the other
terms, conditions and limitations of this Agreement (including the provisions of
Section 14.5 hereof), to indemnify SalesLogix and each of the other SalesLogix
Indemnities against, and to hold SalesLogix and each of the other SalesLogix
Indemnities harmless from, all Loss arising out of, resulting from, caused by or
attributable to:
(a) the failure of any representation or warranty of Symantec
contained in this Agreement (including any schedule or exhibit hereto), to be
true and correct as of the Closing Date, and even though disclosed, the Simple
Sophistication Claim disclosed in the Symantec Disclosure Letter;
(b) the breach or violation by Symantec of any covenant or
agreement of Symantec contained in this Agreement (including any schedule or
exhibit hereto) or the Ancillary Agreements required to be performed after the
Closing Date; and
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(c) the operation of the business of exploiting the Licensed
Products prior to the Closing Date and all liabilities associated therewith
other than the Transferred Liabilities.
14.3 Indemnification by SalesLogix. SalesLogix agrees, subject to the
other terms, conditions and limitations of this Agreement (including the
provisions of Section 14.5 hereof), to indemnify Symantec and each of the other
Symantec Indemnities against, and to hold Symantec and each of the other
Symantec Indemnities harmless from, all Loss arising out of, resulting from,
caused by or attributable to:
(a) the failure of any representation or warranty of
SalesLogix contained in this Agreement (including any schedule or exhibit
hereto), to be true and correct as of the Closing Date;
(b) the breach or violation by SalesLogix of any covenant or
agreement of SalesLogix contained in this Agreement (including any schedule or
exhibit hereto), the Ancillary Agreements required to be performed after the
Closing Date;
(c) the operation of the business of exploiting the Licensed
Products and Derivative Products after the Closing Date; and
(d) the Transferred Liabilities.
14.4 Procedures for Indemnification.
(a) As used herein, an "Indemnified Party" means a SalesLogix
Indemnitee seeking indemnification pursuant to Section 14.2 or a Symantec
Indemnitee seeking indemnification pursuant to Section 14.3 hereof. The
Indemnified Party agrees to give the other party ("Indemnitor") prompt written
notice of any event, or any claim, action, suit, demand, assessment,
investigation, arbitration or other proceeding by or in respect of a third party
(a "Third Party Claim") of which it has knowledge, for which such Indemnified
Party is entitled to indemnification under this Section 14 (including in any
case copies of any summons, complaint or other pleading which may have been
served on it and any written claim, demand, invoice, billing or other document
evidencing or asserting the same). No delay on the part of an Indemnified Party
in giving the Indemnitor notice of a Third Party Claim shall relieve the
Indemnitor from any obligation hereunder unless (and then solely to the extent)
that the Indemnitor is prejudiced thereby.
(b) The Indemnitor will have the right, at its sole cost and
expense, to defend the Indemnified Party against the Third Party Claim with
counsel of the Indemnitor's choice that is reasonably satisfactory to the
Indemnified Party so long as (i) the Indemnitor notifies the Indemnified Party
in writing within ten (10) days after the Indemnified Party has given notice of
the Third Party Claim that the Indemnitor intends to undertake such defense,
(ii) the Indemnitor provides each Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnitor will have the financial
resources to defend against the Third Party Claim and fulfill its
Indemnification obligations hereunder, (iii) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (iv)
settlement of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the
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continuing business interests of the Indemnified Party, (v) the Indemnitor
conducts the defense of the Third Party Claim actively and diligently; and (vi)
the counsel chosen by the Indemnitor does not have any conflict of interest in
representing the interests of the Indemnified Party.
(c) So long as the Indemnitor is conducting the defense of the
Third Party Claim in accordance with Section 14.3 (b) above, (i) the Indemnified
Party may retain separate co-counsel and participate in the defense of the Third
Party Claim at its own cost and expense (except as provided below) and shall
have the right to receive copies of all pleadings, notices and communications
with respect to the Third Party Claim to the extent no privilege is thereby
waived, (ii) the Indemnified Party may participate in settlement negotiations
with respect to the Third Party Claim, and (iii) the Indemnitor will not consent
to the entry of any judgment or enter into any settlement with respect to the
Third Party Claim unless (A) each affected Indemnified Party consents thereto in
writing (which consent will not unreasonably be withheld) or (B) the settlement,
compromise or consent includes an unconditional release from all Liability with
respect to the claim in favor of each affected Indemnified Party.
Notwithstanding the foregoing, if an Indemnified Party is offered a written
settlement proposal by a third party that has as its sole component the payment
of money by the Indemnified Party and the Indemnitor recommends to the
Indemnified Parties in writing that they accept such settlement proposal (the
"Sanctioned Settlement") and the Indemnified Parties refuse to accept such
settlement proposal, in such event if the ultimate settlement terms agreed to by
the Indemnified Party with such third party or the final monetary damages award
against the Indemnified Parties after exhaustion of all appeals either referred
to as (the "Final Settlement Amount"), is greater than the amount of the
Sanctioned Settlement, the Indemnified Party shall be responsible for the
differential between the Final Settlement Amount and the Sanctioned Settlement
and the Indemnitor's liability shall be limited to the amount specified in the
Sanctioned Settlement.
(d) If the Indemnitor does not elect to assume control of or
otherwise participate in the defense or settlement of any Third Party Claim, or
if the Indemnitor does so elect but any of the conditions in Section 14.3 (b)
above is or becomes unsatisfied, or if the Indemnitor ceases to any time to
actively defend the Third Party Claim, then, (i) the Indemnified Party may
defend against and consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim, provided, however, that the
Indemnitor (A) shall have the right to receive copies of all pleadings, notices
and communications with respect to the Third Party Claim so long as the receipt
of such documents by the Indemnitor does not affect any attorney-client
privilege relating to the Indemnified Party, and (B) may participate in
settlement negotiations with respect to the Third Party Claim and the
Indemnified Party shall not enter into any settlement without the prior written
consent of the Indemnitor (which consent shall not be unreasonably withheld),
(ii) the Indemnitor will reimburse the Indemnified Party promptly and
periodically for all costs and expenses incurred in defending against the Third
Party Claim (including without limitation reasonable attorneys' and experts'
fees and expenses and court and arbitration costs), and (iii) the Indemnitor
will remain responsible for any Loss the Indemnified Party may suffer resulting
from, arising out of, relating to or caused by the Third Party Claim to the
fullest extent provided in this Section 14.
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14.5 Limitations on Indemnification.
(a) Limits on Symantec Indemnification. Symantec shall not be
required to provide indemnification under this Section 14 unless and until the
aggregate Loss for which one or more SalesLogix Indemnities seeks
indemnification hereunder exceeds an aggregate of Two Hundred Thousand Dollars
($200,000) (the "Symantec Basket"), in which event Symantec shall be liable to
indemnify the SalesLogix Indemnities for all Loss in excess of the Symantec
Basket. The maximum aggregate Loss recoverable by SalesLogix Indemnities
(considered together as a group) against Symantec under this Section 14 shall
not exceed Twelve Million Dollars ($12,000,000) (the "Symantec Cap").
Notwithstanding the foregoing, (i) the Symantec Basket and the Symantec Cap
shall not apply to that certain potential infringement matter disclosed in the
Symantec Disclosure Letter and (ii) SalesLogix and any other Indemnified Party
shall be entitled to recover any Loss arising from fraud or willful misconduct
on the part of Symantec.
(b) Limits on SalesLogix Indemnification. SalesLogix shall not
be required to provide indemnification under this Section 14 unless and until
the aggregate Loss for which one or more SalesLogix Indemnities seeks
indemnification hereunder exceeds an aggregate of Two Hundred Thousand Dollars
($200,000) (the "SalesLogix Basket"), in which event SalesLogix shall be liable
to indemnify the Symantec Indemnities for all Loss in excess of the SalesLogix
Basket. The maximum aggregate Loss recoverable by Symantec Indemnities
(considered together as a group) against SalesLogix under this Section 14 shall
not exceed Twelve Million Dollars ($12,000,000) (the "SalesLogix Cap").
Notwithstanding the foregoing, (i) Symantec and any other Indemnified Party
shall be entitled to recover any Loss arising from fraud or willful misconduct
on the part of Symantec, and (ii) the SalesLogix Cap and the SalesLogix Basket
shall not be applicable to the payment of Royalties due hereunder which must be
paid to and may be recovered by Symantec irrespective of any other claims made
or recoveries received pursuant to the provisions of this Section 14.
(c) Time Limits. Notwithstanding anything herein to the
contrary, no claim for indemnification under this Section 14 may be brought
after the first (1st) anniversary of the Closing Date; provided, however, that
with respect to the representations and warranties regarding Taxes a claim for
indemnification under this Section 14 may be brought until the end of the
statutory period. To preserve a claim for indemnification under this Section 14,
an Indemnified Party need only provide written notice in reasonable detail of
such claim to the Indemnitor prior to the expiration of the applicable time
limit described in the preceding sentence; and if an Indemnified Party provides
such notice prior to the expiration of such time limit, such Indemnified Party
may pursue such claim for indemnification after the expiration of such time
limit. Notwithstanding the foregoing, SalesLogix shall indemnity Symantec and
each of the other Symantec Indemnities against, and hold Symantec and each of
the other Symantec Indemnities harmless from, all Loss arising out of, resulting
from, caused by or attributable (i) to the operation by SalesLogix of the
business of exploiting the Licensed Products and Derivative Products after the
Anniversary Date and (ii) the Transferred Liabilities; provided, however, that
such obligations shall cease as of the date the Purchase Option or Quit Claim
Option is exercised.
14.6 Indemnity After the Royalty Term. If the Licenses convert to
perpetual Licenses under Section 9.1 and neither the Purchase Option nor the
Quit Claim Option is exercised, then
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the indemnity obligations imposed by this Section 14 upon SalesLogix shall be
without any time limits whatsoever and thereafter shall not be subject to the
SalesLogix Basket or the SalesLogix Cap.
14.7 No Setoff against Royalties. SalesLogix shall not be entitled to
set off against the Royalties payable to Symantec hereunder any claims for Loss
or other claims for indemnity.
14.8 Remedy Limitations. Except with respect to the payment obligations
under Section 6.6 and 13.8 of this Agreement and the payment obligations under
the Transition Agreement, the foregoing provisions of this Section 14 shall be
the sole remedy of an indemnified party for: (a) any failure of a representation
or warranty as described in Section 14.2(a) or Section 14.3(a); (b) the matters
described in Section 14.2(c), Section 14.3(c) or Section 14.3(d); or (c) any
breach or violation of any covenant or agreement contained in this Agreement or
the Ancillary Agreements required to be performed after the Closing Date under
Section 14.2(b) or Section 14.3(b). Notwithstanding the foregoing, if a
post-Closing breach or violation as described in Section 14.2(b) or Section
14.3(b) does not give rise to an indemnification right because of the passage of
the applicable time limit set forth in Section 14.5(c), then the party against
whom such breach is committed shall retain the right to bring a breach of
contract claim for appropriate damages and/or equitable relief; provided,
however, that such claim shall be subject to the Symantec Basket and Symantec
Cap or the SalesLogix Basket and SalesLogix Cap, as the case may be, to the same
extent as if such claim had been brought as a claim for indemnification under
Section 14.2(b) or Section 14.3(b). Nothing contained in this Section 14.8 shall
be deemed to restrict (i) a party's ability to seek and obtain injunctive
relief, (ii) a party's ability to terminate this Agreement in accordance with
its terms, or (iii) Symantec's ability to recover unpaid Royalties.
15. ASSIGNMENT AND SUBLICENSE
15.1 Successors and Assigns. This Agreement is binding on the
successors and assigns of the parties; provided, that this Agreement may not be
assigned (by operation of law or otherwise) by either party without the prior
written consent of the other party, except as provided in this Section 15.
15.2 Assignment by Symantec. Notwithstanding Section 15.1, the rights
and obligations of Symantec under this Agreement may be assigned, in whole or in
part, without the consent of SalesLogix, by Symantec to any corporation which is
a direct or indirect wholly-owned subsidiary of Symantec, any corporation that
is the parent of Symantec, any entity which is the surviving entity of a merger,
consolidation or reorganization in which Symantec participates, or any
corporation or other person or business entity which acquires all or
substantially all of the Licensed Products from Symantec. In the event that
Symantec transfers all or substantially all of the Licensed Products to a third
party outside the context of a merger, consolidation, reorganization or sale of
substantially all of its assets, the Purchase Option granted to SalesLogix in
Section 9.2 shall, at the option of SalesLogix, accelerate and become
exercisable during the thirty (30) period following the date of such transfer of
the Licensed Products. In addition, Symantec may assign, in whole or in part,
without the consent of SalesLogix, its right to receive Royalties hereunder.
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15.3 Assignment by SalesLogix. Notwithstanding Section 15.1, the rights
and obligations of SalesLogix under this Agreement may be assigned, in whole or
in part, without the consent of Symantec, by SalesLogix to any corporation which
is a direct or indirect wholly-owned subsidiary of SalesLogix, any corporation
that is the parent of SalesLogix, any entity which is the surviving entity of a
merger, consolidation or reorganization in which SalesLogix participates, or any
corporation or other person or business entity which acquires all or
substantially all of assets of SalesLogix; provided, however, that such
surviving entity or acquirer agrees in writing to assume all of the obligations
of SalesLogix under this Agreement, the Purchase Escrow Agreement, the
Derivative Products Escrow Agreement and, if such assignment occurs during the
Transition Period, the Transition Agreement.
16. DISPUTE RESOLUTION
16.1 Management Negotiation. SalesLogix and Symantec shall attempt to
resolve disputes between SalesLogix and Symantec arising out of or in connection
with this Agreement and/or the Ancillary Agreements through good faith
negotiations as provided herein. The parties agree that disputes shall be fully
discussed by the functional representatives of SalesLogix and Symantec involved
in the dispute in an attempt to achieve a prompt resolution of such dispute. In
the event that such dispute shall not be promptly resolved by the mutual
agreement of the functional representatives of SalesLogix and Symantec, the
dispute shall be submitted to the Chief Financial Officers of each of SalesLogix
and Symantec. Such officers shall meet and fully discuss such dispute in an
attempt to achieve a prompt resolution of the dispute. If such dispute is not
promptly resolved by the mutual agreement of the Chief Financial Officers of the
parties, each of SalesLogix and Symantec shall be free to exercise any of the
remedies available to it (i) pursuant to the terms of this Agreement or (ii)
otherwise at law or in equity, subject to the terms of this Agreement.
16.2 Good Faith. Each of SalesLogix and Symantec agrees to act
reasonably and in good faith in connection with all matters arising out of or in
connection with this Agreement or the Ancillary Agreements that are submitted to
the dispute resolution process set forth in this Section.
16.3 Injunctive Relief. Nothing contained herein shall be deemed to
prohibit, restrict or in any way hinder one party from seeking and obtaining
injunctive or equitable relief, whether temporary, preliminary or permanent,
against the other.
16.4 Waiver of Jury Trial. The parties hereby waive trial by jury in any
litigation in any court with respect to, in connection with, or arising out of
this Agreement or the Ancillary Agreements or the transactions contemplated
thereby.
17. GENERAL TERMS AND CONDITIONS
17.1 Time of the Essence. Time is of the essence of this Agreement.
17.2 Governing Law; Jurisdiction and Venue. The validity and
performance of this Agreement shall be governed by and construed in accordance
with the laws of the State of California, excluding that body of law applicable
to choice of law. The parties consent and submit and agree not to object to the
jurisdiction and venue of the state and federal courts located
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in San Francisco and Santa Xxxxx Counties, California and in Maricopa County,
Arizona for proceedings relating to enforcement of, or any other remedy under,
this Agreement and the Ancillary Agreements.
17.3 Headings. Headings included in this Agreement are for convenience
only and are not to be used to interpret this Agreement.
17.4 Waiver. The failure of either party to enforce at any time any of
the provisions hereof or exercise any right or option hereunder shall not be
construed to be a waiver of the right of such party thereafter to enforce any
such provisions or exercise such right or option.
17.5 No Joint Venture. This is a license agreement. No agency,
partnership, joint venture or other joint relationship is created hereby.
SalesLogix does not extend to Symantec or Symantec's agents or distributors any
authority of any kind to bind SalesLogix in any respect whatsoever. Symantec
does not extend to SalesLogix, its agents or distributors, or sublicensees any
authority of any kind to bind Symantec in any respect whatsoever.
17.6 Attorneys' Fees. In any litigation or other action between
parties, the prevailing party shall be entitled to reasonable attorneys' fees
and all costs of proceedings, experts, investigations and related expenses,
incurred in enforcing, or pursuing other remedies with respect to, this
Agreement.
17.7 Expenses. All costs and expenses, including, without limitation,
fees and disbursements of counsel, financial advisors and accountants, incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs and expenses, whether or not the
Closing shall have occurred.
17.8 Public Announcement. Upon execution of this Agreement, Symantec
and SalesLogix will issue a press release approved by such parties announcing
the transaction. Thereafter, each party may issue such press releases, and make
such other disclosures regarding the transactions contemplated hereby, as it
determines are required under applicable securities laws or regulatory rules,
but shall first, when practicable, consult with the other and provide the other
party with an opportunity to comment on any such press release. Prior to the
publication of the press release issued upon execution of this Agreement,
neither party shall make any public announcement relating to this Agreement or
the transactions contemplated hereby (except as may be required by applicable
securities laws and the rules of any securities exchange on which the shares of
such party are listed).
17.9 Consents by Symantec. Whenever under this Agreement the consent of
Symantec is not to be unreasonably withheld or delayed, Symantec shall respond
promptly and shall use its good faith efforts to respond as soon as practicable.
To expedite Symantec's review and response to any such request for consent, the
request for consent shall be directed by SalesLogix to the Legal Department of
Symantec, addressed to the attention of its General Counsel.
17.10 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any
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manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
17.11 Entire Agreement; Modification. This Agreement, together with the
Exhibits, Schedules and Disclosure Letters hereto and the Ancillary Agreements,
constitutes the entire agreement between the parties with respect to the
transactions contemplated herein, and supersedes all proposals, oral or written,
all negotiations, conversations or discussions between the parties relating to
this Agreement including but not limited to the September 13, 1799 letter
agreement and the non-binding Term Sheet between the parties and that certain
Nondisclosure Agreement between the parties dated July 7, 1999, and all past
course of dealing or industry custom, and no representations, warranties,
inducements or oral agreements have been made by any party except as expressly
set forth herein or in the Ancillary Agreements. This Agreement may not be
changed, modified or rescinded, except in writing, signed by both parties
hereto, and any attempt at oral modification of this Agreement shall be void and
of no effect.
17.12 Specific Performance. SalesLogix and Symantec each acknowledges
and agrees that the parties' respective remedies at law for a breach or
threatened breach of any of the provisions of this Agreement would be inadequate
and, in recognition of that fact, agrees that, in the event of a breach or
threatened breach by SalesLogix or Symantec of the provisions of this Agreement,
in addition to any remedies at law, Symantec and SalesLogix, respectively,
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then be available.
17.13 Notices. All notices required or permitted under this Agreement
shall be in writing and shall be effective only upon the third (3rd) day after
mailing, if mailed by registered mail, return receipt requested, upon the next
day after mailing, if mailed by express courier service (such as FedEx or UPS
Overnight), or upon delivery, if personally delivered and receipted for or
delivered by facsimile as follows: SalesLogix Corporation, at its address set
forth in the first paragraph of this Agreement, Attention: Chief Financial
Officer, Fax: (000) 000-0000, with a copy to Xxxxxx Xxxxxxx, P.A. 0000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Fax:
(000) 000-0000 or as follows: Symantec Corporation at its address set forth in
the first paragraph of this Agreement, Attention: General Counsel, Fax: (408)
000-0000, with a copy to Fenwick & West LLP, Xxx Xxxx Xxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Fax: (000) 000-0000. Either
party may change its address for service of written notice to the other.
17.14 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, SalesLogix and Symantec have executed this
Agreement as of the Effective Date.
SALESLOGIX CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxx
Title Chief Executive Officer
SYMANTEC CORPORATION
By /s/ Xxxxxxx Xxxxx
Title Chief Financial Officer and
Vice President of Finance
SYMANTEC LIMITED
By /s/ Xxxxx Xxxxx
Title Director
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LIST OF ATTACHED EXHIBITS:
Exhibit A: Licensed Programs
Exhibit B: Marks
Exhibit C: Other Transferred Assets (including Assumed Contracts and Sublicensed Contracts)
Exhibit D: Tangible Assets
Exhibit E: Transferred Liabilities
Exhibit F: Transition Agreement
Exhibit G: Shared Technology
Exhibit H: Symantec Trademark Guidelines
Exhibit I: Deliverables
Exhibit J: Third Party Consents
Exhibit K: Purchase Escrow Agreement
Exhibit L: Opinion of Symantec's Counsel
Exhibit M: Registration Rights Agreement
Exhibit N: Stockholder Agreement
Exhibit O: Opinion of SalesLogix's Counsel
Exhibit P: Form of Stock Certificate
Exhibit Q: Symantec Product Offerings
Exhibit R: Employees (including Product Group Employees and Support Group Employees)
Exhibit S: Designated Persons
Exhibit T: Third Party Software
LIST OF ATTACHED SCHEDULES:
Schedule 2.1: Licenses Granted
Schedule 2.6: Domain Names
Schedule 6.3: Symantec Fiscal Quarter End Dates
Schedule 11.1.10: List of Symantec Financial Schedules Provided to SalesLogix
Schedule 12.3 SalesLogix Capitalization
Schedule 12.6 List of SalesLogix Financial Statements Provided to Symantec
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