AMENDED AND RESTATED AGREEMENT
This Amended and Restated Agreement is amended and restated as of the
31st day of December, 1996 by and among XcelleNet, Inc. ("XcelleNet"), a Georgia
corporation with its principal place of business at 0 Xxxxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxx, XX 00000; The Netplex Group, Inc. ("Netplex"), a New York
corporation with its principal place of business at 0000 Xxxxxxxxxx Xxxxx, #000,
XxXxxx, XX 00000; and Technology Development Systems, Inc. ("TDS"), an Ohio
corporation and wholly owned subsidiary of Netplex.
WHEREAS XcelleNet, Netplex and TDS are parties to an Agreement dated as
of November 5, 1996, as amended by an amendment thereto dated as of November 15,
1996 (the "Amendment"), and as further amended by a Second Amendment thereto
dated as of November 19, 1996 (the "Second Amendment");
WHEREAS XcelleNet, Netplex and TDS desire to further amend such
agreement and to restate the agreement as so amended (as so amended and
restated, this "Agreement").
For and in consideration of the mutual covenants contained herein, it
is hereby agreed by and between the undersigned, intending to be bound thereby
as follows:
I. TERMS OF SALE
1.1 Purchase and Sale. Netplex and TDS hereby agree to sell, transfer,
grant, convey, set over, assign and relinquish exclusively to XcelleNet, and
XcelleNet hereby agrees to purchase, acquire, accept and receive from Netplex
and TDS:
(a) all right, title, and interest in and to both the tangible and the
intangible property constituting the computer software programs currently or
previously developed or offered by Netplex or TDS under the name "WorldLink"
(including, but not limited to, computer software programs under development by
or for Netplex or TDS that represent enhancements to, new versions of, and
corrections to the WorldLink family of software products), consisting of a
series of modular client/server message-oriented middleware products used to
facilitate intra-and inter-company communications and information exchange and
as more particularly described on Exhibit 1.1 hereto, but solely excluding the
software licensed from Data Systems Analysts, Inc. ("DSA") and identified with
footnote "(1)" on Exhibit 1.1 (the "Software"), including, but not limited to,
the following incidents to the Software:
(i) All media and devices that constitute all copies of any and every
version of the Software, its component parts, and all Documentation (as defined
in Section 1.2(c) below) relating thereto;
(ii) All patentable inventions and certificates of invention, the
protection of works of authorship or expression, including United States and
international copyrights and future copyrights, together with any renewals or
extensions thereof, pertaining to the Software owned, claimed or subject to a
claim by Netplex or TDS, and any moral rights pertaining thereto;
(iii) Any and all logos, trademarks, service marks, trade names
(including all goodwill appertaining thereto) and trade dress, if any,
pertaining to the Software;
(iv) Any and all trade secrets, know-how, technology licenses, if any,
inventions, discoveries, improvements, ideas, confidential information, shop
rights and all other intellectual property rights owned or claimed (or which
could be claimed) and embodied in the Software or any documentation or media
associated therewith, or similar rights provided under any laws or international
conventions throughout the world, and including the right to apply for
registrations, certificates or renewals with respect thereto, and the rights to
prosecute, enforce, obtain damages relating to, settle or release any past,
present or future infringement thereof, and
(b) All right, title and interest of Netplex and TDS in and to all
Derivative Works and Enhancements (as such terms are defined in Sections 7.5(f)
and 7.5(g), respectively) created by or for Netplex or TDS (the "DSA
Enhancements") to the software licensed by DSA to Netplex pursuant to the
license agreement between DSA and Netplex and/or TDS included in Exhibit 7.8
(the "DSA License"). The DSA Enhancements and the software licensed pursuant to
the DSA License are sometimes collectively referred to as the "DSA Software."
1.2 Delivery of Physical Objects. Netplex and TDS hereby agree to
deliver to XcelleNet:
(a) Except as hereinafter provided, its entire inventory of copies of
the Software in object code (machine-readable) form;
(b) All master copies of the Software computer programming code,
together with all enhancements or modifications thereto, (except for the single
copy retained by Netplex pursuant to the license granted in Article IV) which
code consists of object code and source code and is in a form suitable for
copying (for purposes hereof, "source code" means the computer programming code
in human readable form, including, but not limited to, any comments and job
control language); and
(c) all textual material pertaining to the Software, including, to the
extent that it exists and is in the possession or control of Netplex or TDS,
system documentation, technical documentation, end-user documentation, videos,
books and manuals, flow charts, logic manuals, design and development
specifications, schematics, flow charts, principles of operation, error reports,
operating instructions, other technical or nontechnical data and/or
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information and any other machine readable text or graphic files subject to
display or printout, and/or related correspondence or memoranda (collectively,
the "Documentation").
1.3 In consideration for the sale and assignment to XcelleNet of the
Software and the DSA Enhancements and the warranties, representations and
agreements contained herein, XcelleNet hereby agrees to pay to TDS the total sum
of Three Million Dollars ($3,000,000), which total sum shall be delivered by
wire transfer or a certified or bank check upon the execution hereof to Xxxxxx,
Price, Kaufman, Kammholz & Day, attorneys for Netplex and TDS, (the "Escrow
Agent") to be held by the Escrow Agent in escrow pursuant to a separate
agreement consistent with the terms and provisions of this Agreement and
executed by the Escrow Agent and the parties hereto. Of such total sum deposited
with the Escrow Agent, Two Million Dollars ($2,000,000) shall be held by the
Escrow Agent in escrow for delivery to Netplex and/or TDS at the Closing and One
Million Dollars ($1,000,000) shall be held by the Escrow Agent for delivery to
Netplex and/or TDS at the Second Closing. The remaining Five Hundred Thousand
Dollars ($500,000) delivered by XcelleNet to the Escrow Agent in connection with
this transaction shall be held by the Escrow Agent for delivery to XcelleNet at
the Second Closing.
1.4 Simultaneously with the execution and delivery of the Second
Amendment of this Agreement, Netplex and TDS shall execute and deliver into
escrow with the Escrow Agent a Xxxx of Sale and Assignment conveying the
Software and the DSA Enhancements to XcelleNet. The Xxxx of Sale and Assignment
will be delivered at the Closing (as defined in Section 2.3 below) to XcelleNet
simultaneously with the delivery by the Escrow Agent to Netplex of that portion
of the purchase price allocated pursuant to Section 1.3 above to the Software
and the DSA Enhancements.
1.5 After the Closing, Netplex and/or TDS shall have only the rights to
use the Software and the DSA Enhancements and to retain a copy of the source
code as are specifically granted by Article IV of this Agreement.
1.6 At any time, from and after the Second Closing, XcelleNet shall
have the option, exercisable in its sole discretion, to acquire from Netplex and
TDS an assignment of such of Netplex' and TDS' right, title and interest in and
to the license of software by DSA to Netplex and/or TDS pursuant to the DSA
License as XcelleNet shall determine, in consideration for an additional payment
by XcelleNet to Netplex of One Hundred Dollars ($100), payable in cash. This
option may be exercised by XcelleNet in writing at any time, upon ten business
days notice, given as provided in this Agreement for the provision of notices
and accompanied by XcelleNet's check in payment of the option price. Upon the
exercise of such option, Netplex and TDS shall assign to XcelleNet all such
right, title and interest as XcelleNet shall have chosen to acquire, by
execution and delivery of an assignment in form and substance reasonably
satisfactory to XcelleNet. The exercise of such option and the execution and
delivery of such assignment is sometimes referred to herein as the "Third
Closing."
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II. DELIVERY OF THE SOFTWARE AND OTHER
CONDITIONS PRECEDENT TO CLOSING
2.1 On the first business day following the execution of this
Agreement, the Software shall be delivered by Netplex and available for review
by XcelleNet at TDS's offices in Chicago for a period from the date of such
Agreement to the end of the day on Tuesday, November 19, 1996. The computer
programs contained in the Software shall be delivered by Netplex in source code
form, which shall then be generated into executable code by XcelleNet under the
direction of Netplex.
2.2 Netplex shall also, at the same time, deliver to XcelleNet three
(3) hard copies of the Documentation relating to the Software and user manuals
and one (1) copy on magnetic media in editable form. Handwritten notes, diagrams
and other materials not conveniently storable on magnetic media will be provided
in hard copy only. Netplex shall also deliver a complete copy of the DSA
Software and all documentation with respect thereto normally used by Netplex or
TDS in using, maintaining and sub-licensing such software.
2.3 (a) During the period from the date of this Agreement to the end of
the day on Tuesday November 19, 1996 (the "Software Review Period"), XcelleNet
shall review the Software and conduct such additional investigations as
XcelleNet shall deem advisable in order to satisfy itself that the warranties
and representations contained in Article VII of this Agreement with respect to
the Software are correct. In the event that XcelleNet determines that the
warranties contained in Article VII with respect to the Software are not true
and correct in all material respects, it shall so notify Netplex and the Escrow
Agent that it rejects the Software. XcelleNet shall either reject or accept the
Software at the end of said Software Review Period or sooner. XcelleNet shall
not unreasonably withhold acceptance of the Software. Upon XcelleNet's
acceptance of the Software, $2,000,000 of the purchase price held in escrow
pursuant to Section 1.3 above, shall be released to Netplex and/or TDS from
escrow and the Xxxx of Sale and Assignment shall be released to XcelleNet (the
"Closing"). Upon XcelleNet's rejection of the Software, Netplex and/or TDS shall
have the right for a reasonable period of time, not to exceed 15 business days,
to cure any misrepresentation or breach of warranty that can reasonably be cured
within such time or to obtain revisions to any provisions of the agreements
included in Exhibit 7.8 to make them not objectionable to XcelleNet. In the
event that such misrepresentation or breach of warranty is not cured within such
period or such agreements are not so revised, or it earlier becomes evident that
such misrepresentation or breach cannot be so cured or such agreements so
revised, XcelleNet shall notify Netplex and the Escrow Agent and all sums held
in escrow pursuant to this Agreement and the Escrow Agreement shall be released
to XcelleNet, together with any interest earned thereon, the Xxxx of Sale and
Assignment shall be returned to Netplex and the parties shall be released from
any further obligation to each other except as provided in Article V below.
(b) Simultaneously with the amendment and restatement of this
Agreement, the sum of $1 million ($1,000,000) previously paid to the Escrow
Agent to be held in connection
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with this Agreement shall be released to Netplex and/or TDS from Escrow and all
remaining amounts paid by XcelleNet to the Escrow Agent, together with any
interest earned thereon, shall be returned to XcelleNet (the "Second Closing").
III. TRANSITION
In order to effect a transition from Netplex to XcelleNet of the
business generated by and associated with the Software subsequent to the
Closing, Netplex shall use its reasonable best efforts to:
3.1 introduce and make available to XcelleNet the employees of
TDS for interviews and meetings during the period from the date of such
Agreement to the end of the day on Tuesday, November 19, 1996 described
in Section 2.1, with a view to possible prospective employment by
XcelleNet, subject to Section 5.7 below and Netplex's and/or TDS's
requirements for technical support staff necessary to fulfill its
obligations under existing contracts with its customers;
3.2 introduce to XcelleNet Netplex's and/or TDS's existing
licensees of the Software with a view to the possible prospective
migration from WorldLink to XcelleNet's RemoteWare products upon the
expiration of existing contracts between said licensees and Netplex
and/or TDS;
3.3 introduce to XcelleNet current distributors and/or
partners of Netplex and/or TDS with respect to the Software with a view
to the possible prospective engagement of said distributors and/or
partners as XcelleNet distributors or partners upon the expiration of
existing contracts between said distributors and/or partners and
Netplex and/or TDS; and
3.4 introduce to XcelleNet prospective customers and/or
licensees of the Software; and
3.5 make up to three members of Netplex's and/or TDS's
technical staff available at TDS's offices in Chicago, Illinois for up
to 15 man-days (within the first 60 days subsequent to Closing) to
train XcelleNet personnel with respect to the Software. (XcelleNet may
obtain additional training at Netplex's prevailing hourly consultant
races.)
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IV. NON-COMPETITION CLAUSE AND
NON-EXCLUSIVE LICENSE
4.1 XcelleNet and Netplex both mutually covenant that the Software sold
and assigned by this Agreement will be an important proprietary product of
XcelleNet. Accordingly, it is mutually recognized that there is a need for a
reasonable and enforceable Non-Competition agreement between the undersigned
parties to protect XcelleNet's substantial investment in the purchase of the
Software.
4.2 The parties expressly recognize that XcelleNet's, Netplex's and
TDS's businesses are worldwide in scope and that this Agreement requires an
effective Non- Competition clause.
4.3 (a) For a period of five (5) years after the date hereof, each of
Netplex and TDS shall not, other than for the benefit and at the direction of
XcelleNet, engage in the business of acquiring, developing, marketing (except as
a remarketer for third parties not related to Netplex or TDS) or licensing
systems and application computer programs similar to or competitive with the
Software as described in Exhibit 1.1, anywhere in the world. Each of Netplex and
TDS acknowledges and agrees that the current market for the Software is
worldwide and it is therefore reasonable to prohibit Netplex and TDS from
competing with XcelleNet as contemplated herein. Each of Netplex and TDS
covenants that it shall not engage in any such activity, directly or indirectly,
on its own behalf or in the service of or on behalf of others. Notwithstanding
any provision of this Section 4.3 to the contrary, neither Netplex nor TDS shall
be restricted from (a) continuing to fulfill its obligations under those
agreements listed on Exhibit 7.5, (b) engaging in its systems integration
services practice with respect to computer software products (including, but not
limited to, computer software products that are similar to or competitive with
the Software) owned and offered by third parties not related to Netplex or TDS,
or (c) engaging in its contingency staffing business of providing computer
professionals on a contract basis to organizations in need of project-specific
staffing.
(b) For a period of five (5) years after the date of this Agreement,
each of Netplex and TDS shall not, use, modify, or license-to others the
software licensed to Netplex and TDS pursuant to the DSA License, except solely
to the extent necessary to enable Netplex and/or TDS to perform its respective
obligations under existing agreements with licensees, distributors or partners
in connection with licenses of the Software. For a period of five (5) years
after the date of this Agreement, neither Netplex nor TDS shall assign to any
other person any rights or interest in the DSA license. Each of Netplex and TDS
acknowledges and agrees that the restrictions contained in this Section 4.3(b)
are necessary and reasonable in order to provide XcelleNet with its bargained
for benefit of the purchase of the Software.
4.4 For a period of two (2) years from and after the effective date
hereof, each of Netplex and TDS agrees that it shall not, except as permitted to
continue to fulfill its obligations under the agreements listed on Exhibit 7.5
or as permitted by XcelleNet written
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consent in each case, in any capacity, directly or indirectly, on its own behalf
or on behalf of any person, firm, partnership, corporation or other entity or
organization, solicit, contact, call upon or accept or attempt to solicit or
accept, any business from any licensee of the Software listed on Exhibit 7.5,
for purposes of or with a view to selling or providing computer software that is
competitive with the Software.
4.5 To enable Netplex and/or TDS to perform its respective obligations
under existing agreements with licensees, distributors or partners related to
the Software, Netplex and TDS are hereby granted a license to use the Software
and the DSA Enhancements in the form sold to XcelleNet pursuant to this
Agreement, on the terms attached to this Agreement as Exhibit 4.5.
4.6 Subject to XcelleNet's prior written consent, which shall not be
unreasonably withheld, Netplex shall promptly terminate any existing agreements
with licensees, distributors or partners related to the license or sale of the
Software, to the extent permitted by, and in accordance with the terms and
conditions of said agreements.
4.7 Netplex acknowledges that its compliance with Article IV hereof is
necessary to protect the goodwill and other proprietary interests of XcelleNet.
Netplex acknowledges that a breach of Article IV hereof will result in
irreparable and continuing damage to XcelleNet for which there will be no
adequate remedy at law; and Netplex agrees that in the event of any breach of
Article IV, XcelleNet and its successors and assigns shall be entitled to
injunctive relief and to such other and further relief as may be proper.
V. PROPRIETARY INFORMATION, CONFIDENTIALITY,
AND NON-DISCLOSURE
5.1 Each party acknowledges that, in the course of performing their
respective obligations hereunder, they shall be receiving information which is
proprietary and confidential to the disclosing party and which the disclosing
party wishes to protect from public disclosure ("Proprietary Information"). For
purposes of this Article V, Netplex and TDS shall be considered a single party.
5.2 Proprietary Information as used herein includes without limitation
all information disclosed at any time before, after or at the time of execution
of this Agreement between the parties relating to the Software or the DSA
Enhancements (including without limitation the source code and any
specifications, designs, techniques or processes used in creating the Software);
and any other confidential information or trade secrets that have been or shall
be disclosed between the parties relating to their respective businesses,
customers, products, marketing and sales plans, financial status, product
development plan strategies and the like. For purposes of this Agreement, all
Proprietary Information included in or related to the Software or the DSA
Enhancements shall be treated as the Proprietary Information of
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TDS prior to the Closing and the Proprietary Information of XcelleNet from and
after the Closing.
5.3 Without the express, prior written consent of the other party, in
each case, each party (a) shall hold such Proprietary Information of the other
party in confidence and not disclose it, except to its employees or
representatives to whom disclosure is necessary to effect the purposes of this
Agreement and who are similarly bound in writing to hold the Proprietary
Information in confidence; (b) shall use its best efforts to prevent inadvertent
or unauthorized disclosure; (c) shall not make any use of any Proprietary
Information nor circulate Proprietary Information in its organization, except to
the extent necessary to carry out the intent of this Agreement.
5.4 The parties shall take appropriate action by written agreement with
their employees to satisfy their obligations under this Agreement with respect
to use, copying, modification, protection and security of the Software and
Proprietary Information.
5.5 Nothing in this Agreement shall be interpreted as placing any
obligation of confidence and non-use on a party with respect to any Proprietary
Information that (a) can be demonstrated to have been in the public domain as of
the effective date of this Agreement or comes into the public domain during the
term of the obligations of the parties pursuant to this Article V through no
fault of such party; or (b) can he demonstrated by clear and convincing evidence
to have been independently developed by such party; or (c) is rightfully
received by such party from a third party not under an obligation of confidence
to the other party hereto with respect thereto; or (d) is required by law to be
disclosed. For purposes of this Section 5.5, from and after the Closing all
Proprietary Information included in or related to the Software or the DSA
Enhancements shall be deemed not to have been developed by or for Netplex or TDS
and to have been received by Netplex and TDS only from XcelleNet.
5.6 In the event that either party is requested or compelled by court
order, decree, subpoena or other legal process to disclose (or is advised in
writing by its regular outside legal counsel that it is obligated under law,
rule or regulation to disclose) any of the Proprietary Information of the other
party, the party required to make such disclosure shall provide reasonably
prompt notice (unless such notice is prohibited by law) to the party owning such
Proprietary Information of any such requirements so that the owning party may,
at its option and expense, seek a protective order or other appropriate remedy.
The party by whom disclosure is required agrees to cooperate with the owning
party in any such proceeding, at the expense of the owning party; provided that
the foregoing shall not be construed to require the party by whom disclosure is
required to undertake litigation or other legal proceedings on its behalf.
Regardless of whether such protective order or other appropriate remedy is
obtained, the party by whom disclosure is required will only furnish that
portion of the Proprietary Information of the owning party that it is required
to disclose.
5.7 The terms and conditions of this Agreement shall be deemed to
constitute Proprietary Information. Notwithstanding the preceding, Netplex or
XcelleNet may disclose
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the terms and conditions of this Agreement, without obtaining the prior written
consent of the other party, in order to comply with the disclosure requirements
of the Securities and Exchange Commission, or any other governmental entity, if
the disclosing party's outside legal counsel advises that such disclosure is
required.
5.8 Unless otherwise mutually agreed to in writing, the obligations of
the parties contained in this Article V with respect to Proprietary Information
shall terminate five (5) years from the date of this Agreement. With respect to
all trade secrets included in the Proprietary Information, the obligations of
the parties shall continue for so long as such information continues to qualify
as a trade secret.
5.9 Further to facilitate the confidentiality provisions of this
Article, each of the parties agrees that for a period of three years from the
execution of this Agreement, it will not hire or attempt to hire any individual
as an employee or a subcontractor who is or has been an employee of the other
party for a period of at least 12 months from the date, of that employee's
termination without the written consent of the former employer.
5.10 Each of the parties hereto acknowledges that its compliance with
Article V hereof is necessary to protect the goodwill and other proprietary
interests of the other. Each party acknowledges that a breach of Article V
hereof will result in irreparable and continuing damage to the other party for
which there will be no adequate remedy at law; and each party agrees that in the
event of any breach of Article V, the other party and its successors and assigns
shall be entitled to injunctive relief and such further relief as may be proper.
VI. ACTIONS FOR INFRINGEMENT OF SOFTWARE
OR ENHANCED SOFTWARE
6.1 Any action to be brought to prevent or enjoin any third party from
infringement of any trade name, trademark, service xxxx, trade secret, copyright
or other proprietary rights of XcelleNet with respect to the Software or the DSA
Enhancements shall be brought exclusively by XcelleNet, in its sole discretion
and control and at its sole cost and expense. All damages or monetary recovery
resulting from any acts of infringement shall be the property of XcelleNet.
6.2 Netplex shall assist XcelleNet in all actions to enforce any rights
covered by this Agreement to the extent that its assistance is reasonably
requested. Netplex shall make any witnesses reasonably requested available,
participate at depositions and trial and lend whatever additional technical
support is reasonably requested to assist XcelleNet in the successful
prosecution of any lawsuit involving the software.
6.3 Netplex shall be paid a fee of $1,000 per day plus reasonable and
actual travel and living expenses for each employee or officer of Netplex who,
at XcelleNet's request, assists XcelleNet in the enforcement of any rights
assigned herein.
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6.4 Netplex shall promptly notify XcelleNet in writing of any
infringers of the Software or the DSA Enhancements.
VII. REPRESENTATIONS AND WARRANTIES
Netplex and TDS hereby jointly and severally represent and warrant to
XcelleNet as follows:
7.1 Organization. Netplex is a corporation validly existing and in good
standing under the laws of the State of New York, with full corporate power and
authority to conduct its business and to own and hold its properties and assets.
TDS is a wholly owned subsidiary of Netplex and is a corporation validly
existing and in good standing under the laws of the State of Ohio, with full
corporate power and authority to conduct its business and to own and hold its
properties and assets.
7.2 Power and Authority of Netplex. Netplex and TDS each has the
requisite corporate power and authority to execute, deliver, and perform this
Agreement and the other agreements and instruments to be executed and delivered
by it in connection with the transactions contemplated hereby. Netplex and TDS
have taken all necessary actions, corporate or otherwise, to authorize the
execution and delivery of this Agreement and such other agreements and
instruments and the performance and consummation of the transactions
contemplated hereby and thereby. This Agreement is, and the other agreements and
instruments to be executed and delivered by Netplex and TDS in connection with
the transactions contemplated hereby upon their execution and delivery shall be
the legal, valid and binding obligations of Netplex and TDS, respectively,
enforceable in accordance with their terms.
7.3 No Conflict. Neither the execution and delivery of this Agreement
and the other agreements and instruments to be executed and delivered in
connection with the transactions contemplated hereby or thereby, nor the
consummation of the transactions contemplated hereby or thereby, will, with or
without the giving of notice or the lapse of time, or both, violate or conflict
with (a) any federal, state, or local law, regulation, ordinance, governmental
restriction, order, judgment or decree to which Netplex, TDS or the Software is
subject; (b) any provision of any charter, bylaw or other governing or
organizational instrument of Netplex or TDS; or (c) any mortgage, indenture,
license, instrument, trust, contract, agreement or other commitment or
arrangement to which Netplex or TDS is a party or by which Netplex, TDS, the
Software or any of the other rights to be conveyed hereunder are bound.
7.4 Required Consents. No approval, authorization, consent, permission,
or waiver to or from, or notice, filing, or recording to or with, any person is
necessary for (a) the execution and delivery of this Agreement and the other
agreements and instruments to be executed and delivered in connection with the
transactions contemplated hereby, or the
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consummation by Netplex and TDS of the transactions a contemplated hereby; or
(b) XcelleNet's ownership and use of the Software and the other assets and
rights conveyed pursuant to this Agreement.
7.5 Title to Intellectual Property.
(a) Netplex and TDS own and have all rights to all technology, patent
rights, trademarks, trade secrets, copyrights and know-how included in or
integral to the Software. Exhibit 1.1 contains a list of all principal
components of the Software and the Documentation and identifies the principal
components of the DSA Software. The Software and the DSA Software constitute all
of the computer software programs currently or previously developed or offered
by Netplex or TDS under the name 'WorldLink'.
(b) XcelleNet shall receive, pursuant to and as of the Closing,
complete and exclusive right, title, and interest in and to all tangible and
intangible property rights existing in the Software, subject only to the rights
reserved and retained pursuant to Section 4.5 of this Agreement, and except for
the rights of those existing customers and distributors under the agreements
listed on Exhibit 7.5. Netplex or TDS has developed the Software entirely
through efforts of its employees for their own account, the Software is free and
clear of any liens, claims, encumbrances, rights or equities whatsoever of any
third party, and the Software contains no software components in which any third
party may claim superior or joint ownership nor is the Software an Enhancement
or Derivative Work (as such terms are defined below) of any other software
programs not owned in their entirety by Netplex or TDS. Netplex or TDS owns all
right, title and interest in all DSA Enhancements except for that right, title
and interest which is owned by DSA as owner of the underlying work upon which
the DSA Enhancements are based.
(c) The Software and its use by Netplex, TDS and their licensees does
not infringe any patent, copyright, or trade secret of any third party, and the
source code and specification for the Software have been maintained in secrecy
and confidence. TDS has properly affixed the copyright notice to all copies of
the Software, but has not registered any copyrights, trademarks, trade names,
service marks or patents associated with the Software, except for the trademark
'LapControl'. So far as is known to Netplex and TDS, the DSA Software does not
infringe on any patent, copyright or trade secret of any third party and the
source code and assistant specifications for such Software have been maintained
in secrecy and confidence.
(d) All personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the conception and
development of the Software (a) have been party to a "work-for-hire"
relationship with Netplex or TDS that has accorded Netplex or TDS full,
effective, and exclusive original ownership of all tangible and intangible
property thereby arising with respect to the Software, and/or (b) have executed
appropriate instruments of assignment in favor of Netplex or TDS as assignee
that have
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conveyed to Netplex or TDS full, effective, and exclusive ownership of all
tangible and intangible property thereby arising with respect to the Software.
(e) There are no agreements or arrangements in effect with respect to
the marketing, distribution, licensing, or promotion of the Software or the DSA
Enhancements by any independent salesperson, distributor, sublicensor, or other
remarketer or sales organization except as set forth on Exhibit 7.5 hereto.
(f) For purposes hereof, "Derivative Work" shall mean a work that is
based upon one or more preexisting works, such as a revision, modification,
translation, abridgment, condensation, expansion, or any other form in which
such preexisting works may be recast, transformed or adapted and that if
prepared without the authorization of the owner of the preexisting work would
constitute copyright infringement or other infringement of the proprietary
rights of the owner therein.
(g) For purposes hereof, "Enhancements" shall mean changes or
additions, including all new releases, that add significant new functions or
substantially improve the performance by changes in system design or coding and
related code and Documentation.
(h) So far as is known to Netplex and TDS, all personnel, including
employees, agents, consultants and contractors, who have contributed to or
participated in the conception and development of the DSA Software (i) have been
party to a "work for hire" relationship with a predecessor of Netplex or TDS or
with DSA that has accorded such predecessor or DSA full, effective and exclusive
original ownership of all tangible and intangible property thereby arising with
respect to the DSA Software, and/or (ii) have executed appropriate instruments
of assignment in favor of such predecessor or DSA that have conveyed to such
predecessor or DSA full, effective, and exclusive ownership of all tangible and
intangible property thereby arising with respect to the DSA Software, and such
rights have been conveyed to Netplex by DSA or such predecessor of Netplex or
TDS.
7.6 Absence of Claims. There is no pending or, to the knowledge of
Netplex or TDS, threatened infringement, misuse or misappropriation of the
Software or, to the knowledge of Netplex or TDS, the DSA Software by any person
or entity. So far as it is known to them, neither Netplex nor TDS is infringing
or has infringed on any rights of any person or entity in the operation of its
business with respect to the Software or the DSA Software. Except for the
conveyance of such rights to XcelleNet, the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
thereby will not alter or impair the rights of Netplex or TDS in and to the
Software or the DSA Software.
7.7 Documentation. The Documentation includes the source code and
technical documentation, including any program language (including compilers,
"work benches," tools, and higher level or "proprietary" languages) and all
other materials used by Netplex or TDS
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for the development, maintenance and implementation of the Software. The
documentation provided to XcelleNet with respect to DSA Software pursuant to
Section 2.2 includes the source code and technical documentation, including any
program language (including compilers, "work benches," tools, higher level or
"proprietary" languages) and all other materials used by Netplex or TDS for the
development of Enhancements or Derivative Works (as those terms are defined in
Section 7.5) with respect to the DSA Software or for the maintenance and
implementation of the DSA Software.
7.8 Agreements.
(a) Netplex or TDS has granted rights in the Software or the DSA
Software solely pursuant to the agreements, true, correct and complete copies of
which are included in Exhibit 7.8.
(b) the DSA License, a true correct and complete copy of which is
attached in Exhibit 7.8, is in full force and effect in accordance with its
terms without amendment or modification and neither party is in default with
respect thereto.
7.9 Litigation. There is no claim, action, suit, proceeding, inquiry,
hearing, arbitration, administrative proceeding or investigation (collectively,
"Litigation") pending, or, to the knowledge of Netplex or TDS, threatened
against Netplex or TDS, present or former directors, officers, or employees of
Netplex or TDS, or any other person affecting, involving, or relating to the
Software, or to the knowledge of Netplex or TDS, the DSA Software. No litigation
has been brought within the last five (5) years against Netplex or TDS
affecting, involving or relating to the Software or the DSA Software. Netplex
knows of no facts that could reasonably be expected to serve as a basis for
Litigation against Netplex or TDS (or XcelleNet upon acquisition of the Software
or rights in the DSA Software) or any other person affecting, involving or
relating to the Software or the DSA Software.
7.10 Software Functionality and Documentation. The Documentation
correctly describes in all material respects the operation and maintenance of
and interface with the Software. The copy of the DSA Software delivered to
XcelleNet pursuant to Section 2.2 includes all such software and documentation
regularly used by Netplex or TDS in connection with the use, maintenance and
sub-licensing of such software and correctly describes in all material respects
the operation and maintenance of and interface with the DSA Software.
7.11 Disclosure. No representation, warranty, or statement made by
Netplex in this Agreement or in any document or certificate furnished or to be
finished to XcelleNet pursuant to this Agreement contains or will contain any
material untrue statement, or omits or will omit to state any material fact
necessary to make the; statements contained herein or therein not misleading.
Netplex has disclosed to XcelleNet all facts known or reasonably available to
Netplex that are material to the Software.
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7.12 The Warranties provided for in this Agreement shall be EXCLUSIVE
of all other Warranties. NETPLEX MAKES NO IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER EXPRESS OR IMPLIED WARRANTY.
7.13 IN NO EVENT SHALL NETPLEX BE LIABLE FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSS OF PROFITS OR OTHER ECONOMIC LOSSES.
VIII. INDEMNIFICATION
8.1 Indemnification by Netplex. Netplex shall indemnify, defend and
hold harmless XcelleNet and its respective successors and assigns and the
directors, officers, employees, and agents of XcelleNet from and against any and
all demands, claims, actions, or causes of action, assessments, losses, damages,
liabilities, costs, and expenses, including reasonable fees and expenses of
counsel, other expenses of investigation, handling and litigation, and
settlement amounts, together with interest and penalties (collectively, a "Loss"
or "Losses"), asserted against, resulting from, imposed upon, or incurred by
XcelleNet, directly or indirectly, by reason of, or arising in connection with
any of the following:
(a) Any inaccuracy in or breach of any representation, warranty,
covenant or agreement of Netplex or TDS contained in or made pursuant to this
Agreement or in any of the agreements and other instruments contemplated hereby;
(b) Any and all claims, suits or actions based upon products sold by,
transactions entered into, or other actions taken by or on behalf of Netplex or
TDS (i) prior to the date of the Closing or (ii) insofar as they may relate to
rights in the software licensed pursuant to the DSA License prior to the date of
the Third Closing, or (iii) from and after the date of the Closing in connection
with the agreements included in Exhibit 7.8;
(c) Any obligations or liabilities of Netplex or TDS; and
(d) To the extent not covered by the foregoing, any and all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
costs, and expenses, including reasonable fees and expenses of counsel, other
expenses of investigation, handling and litigation, and settlement amounts,
together with interest and penalties, incident to the foregoing.
8.2 Indemnification by XcelleNet. XcelleNet shall indemnify, defend and
hold harmless Netplex, TDS and their respective successors and assigns and the
directors, officers, employees, and agents of each of them from and against any
and all demands, claims, actions, or causes of action, assessments, losses,
damages, liabilities, costs, and expenses, including reasonable fees and
expenses of counsel, other expenses of investigation,
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handling and litigation, and settlement amounts, together with interest and
penalties (collectively, a "Loss" or "Losses"), asserted against, resulting
from, imposed upon, or incurred by any of them directly or indirectly, by reason
of, or arising in connection with any of the following:
(a) Any allegation that the Software or the DSA Enhancements as
modified by XcelleNet following the date of the Closing (or, if the Third
Closing occurs, any allegation that the software licensed pursuant to the DSA
License as modified by XcelleNet following the date of the Third Closing)
infringes, violates or misappropriates any patent, copyright, trademark, trade
secret or other proprietary right of a third party; provided that the Software
or the DSA Enhancements in its form as sold to XcelleNet by Netplex and TDS (or
the software licensed pursuant to the DSA License in the form delivered at the
Third Closing, as appropriate) pursuant to this Agreement and without the
modification made by XcelleNet would not be subject to such allegation;
(b) Any and all claims, suits or actions based upon transactions
entered into or other actions taken by or on behalf of XcelleNet with respect to
the Software or the DSA Enhancements from and after the date of the Closing or
with respect to the software licensed pursuant to the DSA License from and after
the date of the Third Closing;
(c) To the extent not covered by the foregoing, any and all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
costs, and expenses, including reasonable fees and expenses of counsel, other
expenses of investigation, handling and litigation, and settlement amounts,
together with interest and penalties, incident to the foregoing.
8.3 Notice of Claim. The party entitled to indemnification hereunder
(the "Claimant") shall promptly deliver to the party liable for such
indemnification hereunder (the "Obligor") notice in writing (the "Required
Notice") of any claim for recovery under Section 8.1 or 8.2, specifying in
reasonable detail the nature of the Loss, and, if known, the amount, or an
estimate of the amount, of the liability arising therefrom (the "Claim"). The
Claimant shall provide to the Obligor as promptly as practicable thereafter
information and documentation reasonably requested by the Obligor to support and
verify the claim asserted, provided that, in so doing, it may restrict or
condition any disclosure in the interest of preserving privileges of importance
in any foreseeable litigation.
8.4 Defense. If the facts pertaining to the Loss arise out of the claim
of any third party available by virtue of the circumstances of the Loss, the
Obligor may assume the defense or the prosecution thereof, including the
employment of counsel or accountants, at its cost and expense. The Claimant
shall have the right to employ counsel separate from counsel employed by the
Obligor in any such action and to participate therein, but the fees and expenses
of such counsel employed by the Claimant shall be at Claimant's own expense. The
Claimant shall have the right to determine and adopt (or, in the case of a
proposal by Obligor, to approve) a settlement of such matter in its reasonable
discretion, except that
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Claimant need not consent to any settlement that (a) imposes any non monetary
obligation on Claimant or (b) Obligor does not agree to pay in full. The Obligor
shall not be liable for any settlement of any such claim effected by Claimant
without Obligor's prior written consent, which shall not be unreasonably
withheld. Whether or not the Obligor chooses to so defend or prosecute such
claim, all the parties hereto shall cooperate in the defense or prosecution
thereof and shall furnish such records, information, and testimony and attend
such conferences, discovery proceedings, hearings, trials, and appeals, as may
be reasonably requested in connection therewith.
8.5 Offset for Insurance Recoveries nd Tax Benefits. The amount of any
Loss recovered from Obligor by a Claimant shall be reduced by the amount, if
any, of any insurance recovery realized by the Claimant with respect to such
Loss, but only to the extent of any amount actually exceeding the amount
necessary to make the Claimant whole for the entire Loss (and giving
consideration, for such purpose, to any tax detriment the Claimant may realize
from the insurance, indemnification, or other recoveries the Claimant may obtain
with respect to such Loss). To the extent such an insurance recovery is
realized, the Claimant shall reimburse the Obligor for the amount of any such
insurance recovery or net tax benefit when and as realized at any time.
8.6 Survival of representations and warranties and obligations of
parties to indemnify. The representations, warranties, covenants and agreements
made or to be performed pursuant to this Agreement shall survive the
consummation of the transactions contemplated hereby, except that the warranties
and representations of Netplex and TDS contained in Section 7.7 and 7.10 with
respect to the Software shall not survive the acceptance of the Software by
XcelleNet and the warranties and representations of Netplex and TDS contained in
Sections 7.7 and 7.10 with respect to the DSA Software shall not survive the
Third Closing.
IX. POST-CLOSING COVENANTS AND AGREEMENTS
9.1 Further Assurances. Each of Netplex and TDS shall execute and
deliver such further conveyance instruments and take such further actions as may
be reasonably necessary or desirable to evidence more fully the transfer of
ownership of all of the Software and the DSA Enhancements to XcelleNet and, if
the Third Closing occurs, the rights in the software licensed pursuant to the
DSA License conveyed to XcelleNet. Without limitation, each of Netplex and TDS
agrees:
(a) To execute, acknowledge and deliver any affidavits or documents of
assignment and conveyance regarding the Software and the DSA Enhancements and,
if the Third Closing occurs, the rights conveyed to XcelleNet in the software
licensed pursuant to the DSA License;
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(b) To provide, consistent with the provisions of Article VI, testimony
in connection with any proceeding affecting the right, title, or interest of
XcelleNet in the Software and the DSA Enhancements and, if the Third Closing
occurs, the software licensed pursuant to the DSA License; and
(c) To perform any other acts deemed necessary to carry out the intent
of this Agreement.
XcelleNet shall reimburse Netplex or TDS for any reasonable and actual
fees, costs or expenses incurred in connection with the foregoing.
9.2 Transfer Taxes. All sales, transfer and similar taxes and fees
(including all recording fees, if any) incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne equally by
Netplex and XcelleNet, with XcelleNet's liability limited to $20,000.
X. ACKNOWLEDGMENT OF RIGHTS.
In furtherance of this Agreement, Netplex and TDS hereby acknowledge
that, from and after the effective date of the Closing with respect to Software
and the DSA Enhancements (and if the Third Closing occurs, from and after the
effective date of the Third Closing with respect to the rights of Netplex and
TDS pursuant to the DSA License that XcelleNet has elected to acquire),
XcelleNet has acquired all of Netplex's and TDS's right, title and standing to:
10.1 Receive all rights and benefits pertaining to the Software, the
DSA Enhancements (and the software licensed pursuant to the DSA License, if
applicable), except for those rights and benefits pursuant to the agreements in
effect as of the effective date of the Closing with those parties identified in
Exhibit 7.5;
10.2 Institute and prosecute all suits and proceedings and take all
actions that XcelleNet, in its sole discretion, may deem necessary or proper to
collect, assert, or enforce any claim, right, or title of any kind in and to the
Software, the DSA Enhancements (and, if the Third Closing occurs, the software
licensed pursuant to the DSA License); and
10.3 Defend and compromise any and all such-actions, suits, or
proceedings relating to such transferred and assigned rights, title, interest,
and benefits, and to perform all such other acts in relation thereto as
XcelleNet, in its sole discretion subject to Section 8.3, deems advisable.
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XI. FORCE MAJEURE
11.1 Neither party to this Agreement shall be liable to the other for
delays in the performance of the Agreement caused by unforeseen circumstances or
causes beyond its control, including but not limited to, acts of God, wars,
riots, strikes, fires, floods, shortages of labor or materials, labor disputes,
inevitable accidents and governmental restrictions.
XII. NOTICES
12.1 All notices, requests, and demands given to or made upon the
parties shall be in writing and shall be mailed properly addressed, postage
prepaid, registered or certified, return receipt requested, or personally
delivered to either party at the addresses set forth below:
Xx. Xxxxxx X. Xxxxxxxx Xx. Xxxx Xxxxx
Chairman and CEO Chairman and CEO
XcelleNet, Inc. The Netplex Group, Inc.
0 Xxxxxxxxx Xxxxxxx 0000 Xxxxxxxxxx Xxxxx, #000
Xxxxx 000 XxXxxx, XX 00000
Xxxxxxx, XX 00000
or at such other address for a party as shall be specified by like notice. Any
notice that is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party (or its agent for notices hereunder). Any notice that is
addressed and mailed in the manner herein provided shall be conclusively
presumed to have been duly given to the party to which it is addressed at the
close of business, local time of the recipient, on the fourth business day after
the day it is so placed in the mail.
XIII. SEVERABILITY
13.1 If any provision of the Agreement shall be held by a court of
competent jurisdiction to be contrary to law, the remaining provisions of the
Agreement shall remain in full force and effect.
13.2 The undersigned parties hereto agree that in the event that
portions of this Agreement are adjudged invalid, unenforceable or inoperative,
the Court of competent jurisdiction which so rules shall have the authority to
rewrite and reform this Agreement to the extent to make it valid, operative and
enforceable under the law.
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XIV. SUCCESSORS AND ASSIGNS
14.1 This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the parties. Neither Netplex nor TDS may assign
this Agreement or any rights or obligations hereunder, in whole or in part,
without the prior written consent of XcelleNet.
XV. WAIVER
15.1 No term or provision hereof shall be deemed waived and no breach
excused unless such waiver or consent shall be in writing and signed by the
party claimed to have waived or consented.
XVI. GOVERNING LAW
16.1 This Agreement shall be governed by and construed in accordance
with the laws of the State of Virginia without regard to its choice of law
provisions.
XVII. ENTIRE AGREEMENT; MODIFICATION
17.1 This Agreement, together with the Exhibits hereto which are
incorporated herein by reference, the Xxxx of Sale and Assignment and the Escrow
Agreement to be delivered pursuant hereto, constitute the entire Agreement
between the parties concerning the subject matter hereof. It supersedes any
proposal or prior agreement, oral or written, and any other communication and
may only be modified in a writing signed by both parties. No amendment,
modification, or alteration of the terms or provisions of this Agreement shall
be binding unless the same shall be in writing and duly executed by the parties
hereto.
XVIII. MISCELLANEOUS
18.1 This Agreement may be executed in one or more counterparts, each
of which shall for all purposes be deemed to be an original and all of which
shall constitute the same instrument.
18.2 The headings of the sections and paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
18.3 XcelleNet and Netplex shall consult with each other before issuing
any press releases or otherwise making any public statements with respect to
this Agreement and the transactions contemplated hereby. Neither XcelleNet,
Netplex nor TDS shall issue any
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such press release or make any public statement without the agreement of the
other party, except as such party's counsel advises in writing may be required
by law.
18.4 All covenants, agreements, representations, and warranties made
herein shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Agreement to be executed by their undersigned duly authorized representatives on
the date first set forth above.
The Netplex Group, Inc.
------------------------- By:____________________________
Date Xxxx Xxxxx
Chairman and CEO
Technology Development Systems, Inc.
------------------------- By:____________________________
Date Name:
Title:
XcelleNet, Inc.
------------------------- By:_____________________________
Date Xxxxxx X. Xxxx
Executive Vice President and CFO
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