EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into and
effective as of May 19, 1998 (the "Execution Date"), by and between XXX
Xxxxxxxxxxx, a Maryland corporation with a place of business at 0000 X.
Xxxxxxxxx Xxxxxxxxx, Xxxxxx, XX 00000-0000 ("NCR"), and BEA Systems, Inc., a
Delaware corporation with a place of business at 000 Xxxxxxx Xxxx Xxxxx,
Xxxxxxxxx, XX 00000 ("BEA").
1. STATEMENT OF PURPOSE
1.1. NCR desires to sell to BEA, and BEA desires to purchase from NCR, the
Assets;
1.2. BEA desires to acquire the Software technology currently owned and
being developed by NCR for further development by BEA to render the
Software technology suitable for sale to BEA customers, with the
purpose of the acquisition being the transfer of the Software
technology, and the transfer of tangible property (such as Inventory,
Documentation, and Physical Assets) being merely incidental;
1.3. Simultaneously with the consummation of the transactions contemplated
hereby, NCR and BEA each desires to enter into the Distribution
Agreement and the Consulting Agreement in connection with such sale;
and
1.4. NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants, agreements and conditions set
forth in this Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, BEA and
NCR, intending to be legally bound, hereby agree as follows:
2. DEFINITIONS
2.1. "ACCOUNTS RECEIVABLE" means all accounts receivable of NCR relating
to the conduct and operation of its business as of the Closing Date
and all rights of NCR to payment for goods or services rendered by
NCR on or prior to the Closing Date; provided, however, that the term
"Accounts Receivable" shall not include any amounts that have not yet
been billed by NCR to a customer as of the Closing Date pertaining to
the sale, distribution, license, support or maintenance of, or the
provision of consulting services with respect to, the Software.
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2.2. "AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by, or under common
Control with such first Person.
2.3. "APPLICABLE LAW" means any applicable constitution, treaty, statute,
rule, regulation, ordinance, order, directive, code, interpretation,
judgment, decree, injunction, writ, determination, award, permit,
license, authorization, directive, requirement or decision of or
agreement with or by Governmental Authorities.
2.4. "ASSETS" means and includes the following:
2.4.1. A copy of the Source Code and a copy of the Object Code (in
all existing forms in NCR's possession) for any and all
existing versions of the Software for any operating system,
including any and all foreign language versions of the same,
whether now in existence or in the development stage,
whether recorded on paper, magnetic media or other
electronic device;
2.4.2. the Inventory;
2.4.3. the Documentation;
2.4.4. the Assumed Contracts;
2.4.5. the Physical Assets;
2.4.6. the User List;
2.4.7. the Proprietary Rights;
2.4.8. all goodwill associated with the Assets; and
2.4.9. all of NCR's rights under manufacturers' and vendors'
warranties relating to items included in the Physical Assets
and all similar rights against third parties relating to
items included in the Assets to the extent contractually
assignable.
2.5. "ASSUMED CONTRACTS" means all Customer Agreements, service
agreements, independent contractor agreements and other agreements
(including all material related documentation) between NCR and any
third party to the extent pertaining to the Software (other than any
such agreements pertaining to Embedded Software Agreements) and which
are either (a) assignable by NCR to BEA as of the Closing Date or (b)
assignable by NCR to BEA after the Closing Date. All such contracts
which are assignable by NCR to BEA as of the Closing Date are set
forth on Schedule 2.5 attached hereto and made a part hereof.
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2.6. "BEA GROUP" means BEA and its officers, directors, shareholders,
Affiliates and agents.
2.7. "BINARY CODE" means Computer Program code that loads and executes
without further processing by a software compiler or linker, or that
results when Source Code is processed by a software compiler.
2.8. "CHANGE OF CONTROL" means, with respect to any Person, such Person
either:
2.8.1. becomes a Subsidiary of another Person; or
2.8.2. any person or group (within the meaning of Rule 13d-5 under
the Exchange Act as in effect on the Execution Date) shall
come to own, directly or indirectly, beneficially or of
record, voting securities representing more than 50% of the
total voting power of such Person; provided, however, that,
for the purposes of this definition, the phrase "any person or
group" shall exclude X.X. Xxxxxx & Co. and any Affiliate
thereof.
2.9. "CLAIM" means a written notice asserting a breach of a
representation, warranty or covenant specified in this Agreement,
which shall reasonably set forth, in light of the information then
known to the party giving such notice, a description of and an
estimate (if then reasonable to make) of the amount involved in such
breach.
2.10. "CLOSING" means the closing of the transactions contemplated by this
Agreement.
2.11. "CLOSING DATE" has the meaning set forth in Section 3.
2.12. "COMPUTER PROGRAM" means a list of steps or list of statements
and/or instructions which are capable when incorporated in a machine-
readable medium of causing a computer to indicate, perform or achieve
particular functions, tasks or results.
2.13. "CONFIDENTIAL INFORMATION" has the meaning set forth in Section 8.1
hereof.
2.14. "CONSENTS" means all of the consents or approvals of Governmental
Authorities and other third parties necessary to sell, transfer and
assign the Assets to BEA and to otherwise consummate the transactions
contemplated hereby in compliance with all Applicable Law.
2.15. "CONSULTING AGREEMENT" means the Consulting Services Agreement by
and between NCR and BEA to be executed as of the Closing Date,
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substantially in the form of Exhibit I attached hereto and made a
part hereof.
2.16. "CONTROL" means having the power to direct the affairs of a Person
by reason of either (i) owning or controlling the right to vote a
sufficient number of shares of voting stock or other voting interest
of such Person or (ii) having the right to direct the general
management of the affairs of such Person by contract or otherwise.
2.17. "CUSTOMER AGREEMENT" means any and all licenses, leases,
distribution and maintenance agreements whereby NCR has authorized
any third party to use or distribute any of the Software as of the
Closing Date; provided, however, that the term "Customer Agreement"
shall not include any Embedded Software Agreement.
2.18. "DAMAGES" means all claims, liabilities, demands, impositions,
causes of action, losses, investigations, proceedings, damages,
penalties, fines, assessments, deficiencies, interest, expenses and
judgments, including reasonable attorneys' fees and disbursements.
2.19. "DISTRIBUTION AGREEMENT" means the Distribution and License
Agreement by and between NCR and BEA to be executed as of the Closing
Date, substantially in the form of Exhibit II attached hereto and
made a part hereof.
2.20. "DOCUMENTATION" means all documentation in NCR's possession, custody
or control pertaining to the Software, including, the System
Documentation and User Documentation for the Software, any marketing
materials, the Software-related contents of Web pages, product
specifications, flow charts, diagrams, algorithms, other design
documentation, training manuals, bug lists, and any electronic
machine-readable and Source Code versions of the same, and a summary
of NCR's current promotional activity with respect to the Software,
any and all Software-related answer books or other records of
customer service issues and/or responses, and any and all written
notes, plans and other documentation describing problems with respect
to the Software and proposed and implemented solutions therefor, if
any, written proposals with respect to future development of the
Software, or other matters related to the use, operation, development
or enhancement of the Software, excluding, however, any such items
pertaining to Software that is embedded in, or a component of, any
other products sold or provided by NCR.
2.21. "EMBEDDED SOFTWARE AGREEMENT" means a Customer Agreement pursuant to
which the Software is provided by NCR as an embedded part of a larger
NCR product offering.
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2.22. "EXECUTION DATE" means the date of this Agreement.
2.23. "GOVERNMENTAL AUTHORITY" means any government, any governmental
entity, department, commission, board, agency or instrumentality, and
any court, tribunal or judicial or arbitrational body, whether
federal, state or local.
2.24. "GOVERNMENTAL ORDER" means any order, judgment, injunction, decree,
stipulation, determination or award entered by or with any
Governmental Authority.
2.25. "HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
2.26. "INDEMNIFIED PARTY" means the party who is entitled to
indemnification for, and to be held harmless with respect to,
Damages, as provided under the terms and subject to the conditions of
this Agreement.
2.27. "INDEMNIFYING PARTY" means the party who is obligated to indemnify,
and to hold harmless, the other party hereto with respect to Damages,
as provided under the terms and subject to the conditions of this
Agreement.
2.28. "INVENTORY" means all raw materials for, all in-process units, and
all finished units of, the Software in NCR's possession or control on
the Closing Date.
2.29. "ISV" means independent software vendor.
2.30. "MAINTENANCE AGREEMENT" means the Maintenance Agreement for Non-
Assumed Contracts and Embedded Software Agreements, by and between
NCR and BEA, to be executed as of the Closing Date, in a form
mutually agreed by and between BEA and NCR.
2.31. "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means any
change or effect that is materially adverse to the Assets, the
business operations related to the Assets or the transactions
contemplated by this Agreement.
2.32. "NCR GROUP" means NCR and its officers, directors, shareholders,
Affiliates and agents.
2.33. "NCR HOUSE MARKS" means any and all trademarks, trade names, service
marks, logos and similar designations of source of origin owned by
NCR excluding Trademarks.
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2.34. "NON-ASSUMED CONTRACTS" shall mean all Customer Agreements which are
not assigned to BEA as Assumed Contracts pursuant to this Agreement.
2.35. "OBJECT CODE" means the fully compiled or assembled series of
Computer Programs in machine language in either printed form or as
stored in software media.
2.36. "OUTSTANDING LICENSE AGREEMENTS" means the license agreements by and
between NCR and a third party pursuant to which such third party is
granted certain rights and licenses to the Software, the
Documentation or the Proprietary Rights and which are set forth on
Schedule 2.36 attached hereto and made a part hereof.
2.37. "PATENTS" means the patents, patent applications, and invention
disclosures which are set forth on Schedule 2.37 attached hereto and
made a part hereof. The term Patents includes all divisions,
reissues, continuations, continuations-in-part, reexaminations, and
extensions thereof and corresponding foreign patents and patent
applications corresponding to those patents listed on Schedule 2.37.
2.38. "PERMITTED LIENS" means (i) liens for Taxes not yet due or payable;
and (ii) inchoate materialmen's, mechanics', carriers',
warehousemen's, landlords', workmen's, repairmen's, employees' or
other like liens arising in the ordinary course of business and for
which payment is not overdue.
2.39. "PERSON" shall mean a natural person, a corporation, a partnership,
a limited liability company, an association, a trust or any other
entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
2.40. "PHYSICAL ASSETS" means all of the furniture, desks, file cabinets,
copiers, personal computers, computer servers, test equipment,
printers and laptops which are used by or necessary to perform the
duties of the Transferred Employees in connection with the Assets and
which are set forth on Schedule 2.40, attached hereto and made a part
hereof; provided. however, that notwithstanding anything contained
herein to the contrary, Physical Assets shall not include any
furniture, fixtures, equipment or other facilities that are shared
across the NCR campus (such as by way of illustration and not of
limitation, network and video conferencing equipment).
2.41. "PROPRIETARY RIGHTS" means the Trademarks, the Patents, all
registered and unregistered copyrights in or to the Software and the
Documentation and all applications for registration thereof, and all
know-how, trade
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secrets, proprietary processes, formulae, business information, and
other intellectual and industrial property rights in and to the
Software or the Documentation.
2.42. "PURCHASE PRICE" has the meaning set forth in Section 5.1.
2.43. "RELATED AGREEMENTS" means all agreements, instruments and
certificates contemplated hereby and thereby.
2.44. "SOFTWARE" means all Computer Program(s), data compilation(s) and/or
other intellectual property of intangible nature for the TOP END
product more fully described in Schedule 2.44 hereto that are
expressed in Object Code, and shall consist of the Source Code,
Binary Code and Object Code therefor as of the date hereof.
2.45. "SOURCE CODE" means the Computer Programs in human readable form.
2.46. "SUBSIDIARY" means a corporation, company or other entity (i) more
than fifty percent (50%) of whose outstanding shares or securities
(representing the right to vote for the election of directors or
other managing authority) are, or (ii) which does not have
outstanding shares or securities, as may be the case in a
partnership, joint venture, or unincorporated association, but more
than fifty percent (50%) of whose ownership interest representing the
right to make the decisions for such corporation, company or other
entity is, now or hereafter, owned or controlled, directly or
indirectly, by any other Person, but such corporation, company or
other entity shall be deemed to be a Subsidiary only so long as such
ownership or control exists.
2.47. "SUCCESSOR SOFTWARE" means the Computer Programs for the BEA
middleware suite of products resulting from the merging and
integration of BEA's middleware software products, including the
TUXEDO product offerings, and the Software as contemplated by Section
6.5 hereof, including the Source Code and Object Code therefor, the
System Documentation and User Documentation therefor, all
enhancements, updates, revisions, error corrections and upgrades
pertaining thereto.
2.48. "SYSTEM DOCUMENTATION" means documentation, however recorded, other
than Source Code, which documents collectively the design and details
of a particular software program and provides information to enable a
reasonably knowledgeable computer programmer to make enhancements,
revisions and modifications.
2.49. "TAXES" OR INDIVIDUALLY "TAX," means any federal, state, local or
foreign taxes, assessments, interest, penalties, deficiencies, fees
and other governmental charges or impositions (including without
limitation,
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all income tax, unemployment compensation, social security, payroll,
sales and use, excise, privilege, property, ad valorem, franchise,
license, school and any other tax or similar governmental charge or
imposition).
2.50. "TAX CODE" means the Internal Revenue Code of 1986, as amended.
2.51. "THIRD-PARTY CLAIM" means, in respect of the obligations of each
Indemnifying Party hereunder, a claim asserted against the
Indemnified Party by a third party.
2.52. "THRESHOLD AMOUNT" has the meaning set forth in Section 12.4.
2.53. "TRADEMARKS" means the trademarks, trade names, service marks, logos
and similar designations of source and origin, and all registrations
and applications for registration thereof which are set forth on
Schedule 2.53 attached hereto and made a part hereof and all goodwill
associated therewith.
2.54. "TRANSFERRED EMPLOYEES" has the meaning set forth in Section 9.1
hereof.
2.55. "USER DOCUMENTATION" shall mean the user documentation needed to
support and use the Software, which shall include instructions for
the use of each function thereof and any training materials related
thereto.
2.56. "USER LIST" means NCR's user lists, customer lists, mailing lists,
contact lists, and the like relating to the Software, but shall not
include any such list pertaining solely to a product in which the
Software is embedded. To the extent practical, each such list will
be in hard copy and in a magnetic format to be specified by BEA;
provided, however, that NCR shall not be required to incur any
expenses in providing any such list in any such format.
2.57. "WAIVER AND CONFIDENTIALITY AGREEMENT" has the meaning set forth in
Section 6.11.
3. CLOSING; CONDITIONS TO CLOSING; DELIVERIES
3.1. CLOSING. The Closing shall occur within five (5) business days
following the satisfaction or waiver of the conditions precedent set
forth in Sections 3.2 and 3.3 (the "Closing Date") and shall be held
at the offices of Xxxxxxxxx & Xxxxxxx in Washington, D.C. at 9:00
a.m. local time, or at such other time and place as NCR and BEA may
mutually agree. Notwithstanding the actual time the deliveries of
the parties hereto are made on the Closing Date, the parties hereto
agree that the
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Closing shall be effective and deemed for all purposes to have
occurred as of 12:01 a.m., local time, on the Closing Date.
3.2. CONDITIONS TO OBLIGATIONS OF NCR TO CLOSE. The obligations of NCR to
consummate the Closing shall be subject to the satisfaction, on or
before the Closing Date, of each and every one of the following
conditions, all or any of which may be waived, in whole or in part,
by NCR, provided, however, that in the event that any or all of such
conditions are waived, such waiver shall be for all purposes and not
only for purposes of closing the transactions contemplated hereby,
and the conditions so waived shall not serve as a basis for
indemnification under Section 12 hereof.
3.2.1. REPRESENTATIONS AND WARRANTIES; COVENANTS.
3.2.1.1. The representations and warranties of BEA contained
in this Agreement shall be true and correct in all
material respects as of the Closing, with the same
force and effect as if made as of the Closing; and
3.2.1.2. The covenants and agreements contained in this
Agreement to be complied with by BEA at or prior to
the Closing shall have been complied with in all
material respects.
3.2.2. COMPLIANCE WITH HSR ACT. Any waiting periods (and any
extension thereof) applicable to the transactions
contemplated by this Agreement under applicable U.S. and
foreign antitrust or trade regulation laws and regulations,
including under the HSR Act, shall have expired or been
earlier terminated, and all governmental consents,
authorizations or approvals required in connection with the
transactions and their consummation contemplated by this
Agreement shall have been obtained or given.
3.2.3. NO ORDER. No action or proceeding shall have been instituted
against NCR or any of its Affiliates or any officer or
director of NCR or any of its Affiliates which seeks to, or
would render it unlawful as of the Closing to effect the
transactions contemplated hereby in accordance with the terms
hereof or creates or poses a risk of creating a limitation on
NCR to own the BEA Shares, and no such action shall seek
damages in a material amount by reason of the consummation of
the transactions contemplated hereby.
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3.2.4. OPINIONS OF COUNSEL. NCR shall have received from Xx Xxxxxx,
Esq., General Counsel of BEA, and Xxxxxxxx & Xxxxxxxx,
counsel to BEA, opinions dated as of the Closing Date in form
and substance reasonably satisfactory to NCR.
3.2.5. DELIVERIES. BEA shall have made or stand willing and able to
make all the deliveries to NCR set forth in Section 3.5.
3.3. CONDITIONS TO OBLIGATIONS OF BEA. The obligations of BEA to
consummate the Closing shall be subject to the satisfaction, on or
before the Closing Date, of each and every one of the following
conditions, all or any of which may be waived, in whole or in part,
by BEA, provided, however, that in the event that any or all of such
conditions are waived, such waiver shall be for all purposes and not
only for purposes of closing the transactions contemplated hereby,
and the conditions so waived shall not serve as a basis for
indemnification under Section 12 hereof..
3.3.1. REPRESENTATIONS AND WARRANTIES; COVENANTS.
3.3.1.1. The representations and warranties of NCR contained
in this Agreement shall be true and correct in all
material respects as of the Closing, with the same
force and effect as if made as of the Closing; and
3.3.1.2. The covenants and agreements contained in this
Agreement to be complied with by NCR at or prior to
the Closing shall have been complied with in all
material respects.
3.3.2. COMPLIANCE WITH HRS ACT. Any waiting periods (and any
extension thereof) applicable to the transactions
contemplated by this Agreement under applicable U.S. and
foreign antitrust or trade regulation laws and regulations,
including under the HSR Act, shall have expired or been
earlier terminated, and all governmental consents,
authorizations or approvals required in connection with the
transactions and their consummation contemplated by this
Agreement shall have been obtained or given.
3.3.3. NO ORDER. No action or proceeding shall have been instituted
against BEA or any of its Affiliates or any officer or
director of BEA or any of its Affiliates which seeks to, or
would, render it unlawful as of the Closing to effect the
transactions contemplated hereby in accordance with the terms
hereof or
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would restrain, prohibit or otherwise interfere with the
effective operation or enjoyment by BEA of all or any
material portion of the Assets or with the effective transfer
of the Transferred Employees as contemplated hereby, and no
such action shall seek damages in a material amount by reason
of the consummation of the transactions contemplated hereby.
3.3.4. CONSENTS AND APPROVALS. Each of the Consents shall have been
duly obtained and delivered to BEA with no material adverse
conditions imposed by any such Consent and no Material
Adverse Change to the terms of any Assumed Contract with
respect to which any Consent is obtained.
3.3.5. EMPLOYMENT OF TRANSFERRED EMPLOYEES. Those Transferred
Employees whose name on Schedule 9.1 bears an asterisk shall
have accepted employment with BEA, conditioned upon the
occurrence of the Closing, pursuant to an offer of employment
extended by BEA in satisfaction of its obligations under
Section 9.1.
3.3.6. OPINIONS OF COUNSEL. BEA shall have received from Xxx Xxxx,
Esq., Senior Vice President and General Counsel of NCR, and
Xxxxxxxxx & Xxxxxxx, counsel to NCR, opinions dated as of the
Closing Date in form and substance reasonably satisfactory to
BEA.
3.3.7. NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
Material Adverse Change since the date of this Agreement.
3.3.8. DELIVERIES. NCR shall have made or stand willing and able
to make all the deliveries to BEA set forth in Section 3.4.
3.4. DELIVERIES BY NCR. Prior to or on the Closing Date, NCR shall
deliver, or cause to be delivered, to BEA the following, in form and
substance reasonably satisfactory to BEA and its counsel:
3.4.1. TRANSFER DOCUMENTS. DULY EXECUTED COPIES OF THE FOLLOWING:
3.4.1.1. Xxxx of sale, Assignment and Assumption Agreement,
in a form mutually agreed by and between BEA and
NCR;
3.4.1.2. Intellectual Property Assignment Agreement, in a
form reasonably satisfactory to NCR and BEA; and
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3.4.1.3. Other transfer documents which shall be sufficient
to vest good and marketable title to the Assets in
the name of BEA or its permitted assignees.
3.4.2. CONSULTING AGREEMENT. Duly executed Consulting Agreement.
3.4.3. DISTRIBUTION AGREEMENT. Duly executed Distribution
Agreement.
3.4.4. MAINTENANCE AGREEMENT. Duly executed Maintenance
Agreement.
3.4.5. LEASE AGREEMENT. Duly executed Office Space Lease
Agreement, in a form reasonably acceptable to NCR and BEA.
3.4.6. WAIVER AND CONFIDENTIALITY AGREEMENTS. Duly executed copies
of the Waiver and Confidentiality Agreements contemplated
under Section 6.11 hereof.
3.4.7. SECRETARY'S CERTIFICATE. Certificate, dated as of the Closing
Date, executed by the Secretary or Assistant Secretary of NCR
certifying (i) as to the Charter of NCR, (ii) as to the
Bylaws of NCR, (iii) that the resolutions, as attached to
such certificate, were duly adopted by the Board of Directors
of NCR, authorizing and approving the consummation of the
transactions contemplated hereby and that such resolutions
remain in full force and effect and (iv) as to the incumbency
of the officers of NCR duly authorized to execute and deliver
this Agreement and the Related Agreements.
3.4.8. OFFICER'S CERTIFICATE. Certificate, dated as of the Closing
Date, executed by the President or Vice President of NCR,
certifying that: (i) the representations and warranties of
NCR in this Agreement are true and complete at and as of the
Closing Date (except for representations and warranties that
by their terms are made as of a specified date and except for
changes that are contemplated by this Agreement or occur in
the ordinary course of business which do not singly or in the
aggregate have a Material Adverse Effect) and (ii) NCR has
performed all of its obligations and has complied in all
material respects with all of its covenants set forth in this
Agreement to be performed or complied with on or prior to the
Closing Date.
3.4.9. GOOD STANDING CERTIFICATE. A certificate as to the good
standing of NCR, issued by the Secretary of State of the
State of
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Maryland, dated no more than ten (10) days prior to the
Closing.
3.4.10. OTHER. Such other evidence of the performance of all
covenants and satisfaction of all conditions required of NCR
by this Agreement, at or prior to the Closing, as BEA or its
counsel may reasonably require.
3.5. DELIVERIES BY BEA. Prior to or on the Closing Date, BEA shall
deliver, or cause to be delivered, to NCR the following, in form and
substance reasonably satisfactory to NCR and its counsel:
3.5.1. PURCHASE PRICE. The Purchase Price in cash by wire transfer
of immediately available funds.
3.5.2. XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT. Duly
executed Xxxx of Sale, Assignment and Assumption Agreement,
substantially in the form of Exhibit V hereto.
3.5.3. CONSULTING AGREEMENT. Duly executed Consulting Agreement.
3.5.4. DISTRIBUTION AGREEMENT. Duly executed Distribution Agreement.
3.5.5. MAINTENANCE AGREEMENT. Duly executed Maintenance Agreement.
3.5.6. SECRETARY'S CERTIFICATE. Certificate, dated as of the Closing
Date, executed by the Secretary or Assistant Secretary of BEA
certifying (i) as to the Certificate of Incorporation of BEA,
(ii) as to the Bylaws of BEA, (iii) that the resolutions, as
attached to such certificate, were duly adopted by the Board
of Directors of BEA, authorizing and approving the execution
of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and
thereby and that such resolutions remain in full force and
effect and (iv) as to the incumbency of the officers of BEA
duly authorized to execute and deliver this Agreement and the
Related Agreements.
3.5.7. OFFICER'S CERTIFICATE. Certificate, dated as of the Closing
Date, executed by the President or Vice President of BEA,
certifying that (i) the representations and warranties of BEA
in this Agreement are true and complete at and as of the
Closing Date (except for representations and warranties that
by their terms are made as of a specified date and except for
changes that are
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contemplated this Agreement) and (ii) BEA has performed all
of its obligations and has complied in all material respects
with all of its covenants set forth in this Agreement to be
performed or complied with on or prior to the Closing Date.
3.5.8. GOOD STANDING CERTIFICATE. A certificate as to the good
standing of BEA, issued by the Secretary of State of the
State of Delaware, dated not more than ten (10) days prior to
the Closing.
3.5.9. OTHER. Such other evidence of the performance of all
covenants and satisfaction of all conditions required of BEA
by this Agreement, at or prior to the Closing, as NCR or its
counsel may reasonably require.
4. SALE AND PURCHASE OF ASSETS
4.1.1. TRANSFER OF ASSETS. Pursuant to the terms and subject to the
conditions set forth in this Agreement, NCR hereby agrees to
sell, grant, transfer, convey, assign and deliver to BEA on
the Closing Date, and BEA agrees to purchase and acquire from
NCR on the Closing Date, all right title and interest of NCR
in and to the Assets.
4.1.2. Subject to the provisions of Section 4.1.1., hereof, the
Software will be transferred by NCR to BEA by electronic
means directly into the permanent storage memory of computer
hardware owned by BEA. The transfer of the Software will
occur on the Closing Date but shall occur subsequent to and
shall be separate and apart from the transfer of all other
Assets, including Documentation, and any printed form of the
Object Code and Source Code, to BEA. With respect to the
transfer of the Software, NCR shall maintain complete and
exclusive control over all personal property (including
personal property owned by BEA) used to effectuate the
transfer and BEA shall not thereafter obtain possession of
the computer diskettes, tape, or other media used by NCR to
effectuate such transfer. The intent of this Section 4.1.2.,
is to structure the transfer of the Software by electronic
means as set forth in this Section 4.1.2., to minimize the
California sales and use Tax due on such transfer. The
language of this Section 4.1.2 shall be construed to achieve
as nearly as possible the intent specified herein.
4.2. ASSUMPTION OF ASSUMED CONTRACTS. Pursuant to the terms and subject
to the conditions set forth in this Agreement, effective upon
Closing, NCR
15
shall assign to BEA all of NCR's rights and obligations under the
Assumed Contracts, which are assignable by NCR to BEA as of the
Closing Date, and BEA shall accept such assignment and shall assume
all responsibilities and obligations of NCR under such Assumed
Contracts. Following the Closing Date, and pursuant to the terms and
conditions set forth in this Agreement, NCR shall assign to BEA all
of NCR's rights and obligations under, and BEA shall accept such
assignment and shall assume all responsibilities and obligations of
NCR under, the Assumed Contracts which are assignable by NCR to BEA
after the Closing Date.
4.3. LIMITATION ON ASSUMPTION. BEA shall not assume, pay or discharge or
in any respect be liable for any liability, obligation, commitment or
expense of NCR with respect to the Assumed Contracts other than those
which accrue (a) after the Closing Date with respect to Assumed
Contracts assigned to BEA upon Closing, or (b) after the effective
date of the assignment with respect to any Assumed Contract assigned
to BEA after the Closing Date.
5. CONSIDERATION
5.1. TRANSFER OF ASSETS. Pursuant to the terms and subject to the
conditions of this Agreement, in consideration for the sale,
transfer, conveyance, and assignment of the Assets, BEA agrees to pay
to NCR the following purchase price (the "Purchase Price"): Ninety-
Two Million, Four Hundred Thousand Dollars ($92,400,000), payable at
the Closing by wire transfer of immediately available funds in
accordance with the wire transfer instructions delivered to BEA by
NCR no later than three (3) business days prior to the Closing.
5.2. ALLOCATION OF PURCHASE PRICE. Within ninety (90) days following the
Closing Date, BEA will provide to NCR an allocation statement (the
"Asset Allocation Statement") with BEA's proposed allocation of the
aggregate consideration payable pursuant to Section 5.1 among the
Assets. Within fifteen (15) days after the receipt of such Asset
Allocation Statement, NCR will propose to BEA any changes to such
Asset Allocation Statement (and in the event no such changes are
proposed in writing to BEA within such time period, NCR will be
deemed to have agreed to, and accepted, the Asset Allocation
Statement). NCR and BEA will endeavor in good faith to resolve any
differences with respect to the Asset Allocation Statement within
fifteen (15) days after BEA's receipt of written notice of objection
from NCR.
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5.2.1. Subject to Sections 5.2.2., the parties hereto agree (i) to
use the allocations set forth in the Asset Allocation
Statement provided by BEA to NCR pursuant to Section 5.2.
above, for accounting, financial reporting and Tax purposes;
(ii) that such allocations shall be in accordance with, and
as provided by, Section 1060 of the Tax Code; and (iii) that
any Tax returns or other Tax information they may file or
cause to be filed with any Governmental Authority or fiscal
intermediary shall be prepared and filed consistently with
such allocation. The parties agree that, to the extent
required, they will each properly and timely file Form 8594
in accordance with Section 1060 of the Tax Code.
5.2.2. If NCR withholds its consent, in the manner and within the
time period specified in Section 5.2, to the allocation
reflected in the Asset Allocation Statement, and NCR and BEA
have acted in good faith to resolve any differences with
respect to items on the Asset Allocation Statement and
thereafter are unable to resolve any differences that, in the
aggregate, are material, then any remaining disputed matters
will be finally and conclusively determined by an independent
accounting firm of recognized national standing (the
"Allocation Arbiter") selected by NCR and BEA, which firm
shall not be the regular accounting firm of NCR or BEA.
Promptly, but not later than fifteen (15) days after its
acceptance of appointment hereunder, the Allocation Arbiter
will determine (based solely on presentations by NCR and BEA
and not by independent review) only those matters in dispute
and will render a written report as to the disputed matters
and the resulting allocation of Purchase Price, which report
shall be conclusive and binding upon the parties. NCR and BEA
shall share equally in all costs attributable to the review
and determination by the Allocation Arbiter.
5.3. SALES OR USE TAXES. All sales, use and other similar Taxes, charges
and fees, if any, arising out of or in connection with the
transactions contemplated by this Agreement (other than any income,
capital gains and other similar Taxes, charges and fees imposed on,
or imposed in respect of, the income or gain of NCR), shall be paid
by BEA. Each of the parties shall cooperate with the other to the
extent reasonably required and permitted by Applicable Law in order
to eliminate or minimize any such Tax. Without limiting the
foregoing, to the extent any such Tax is imposed, NCR shall prepare
and file any required Tax returns in connection therewith and BEA
shall pay and promptly discharge when due the entire amount of any
such Tax.
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6. ADDITIONAL OBLIGATIONS; COVENANTS
6.1. CONSENTS
6.1.1. OBTAINING CONSENTS. NCR will use all commercially reasonably
efforts to obtain any Consent required to assign all Assumed
Contracts and complete all other transfers and transactions
contemplated by this Agreement at NCR's sole expense. NCR
will provide BEA with prompt written notice of the effective
date of the assignment of any Assumed Contract assigned to
BEA after the Closing Date and with a copy of each such
Assumed Contract.
6.1.2. ALTERNATIVE ARRANGEMENT. In the event and to the extent that
NCR is unable to obtain any such Consent, or if any attempted
assignment or novation would be ineffective or would
restrain, prohibit or otherwise interfere with the effective
operation or enjoyment by BEA of all or any material portion
of the Assets or with the effective transfer of the
Transferred Employees as contemplated hereby, NCR will
reasonably cooperate with BEA, to the extent permitted by
law, in a reasonable arrangement under which BEA would, to
the fullest extent possible, obtain the benefits and assume
the obligations with respect to such Asset, in accordance
with this Agreement, and nothing contained herein or in any
Related Agreements shall be construed to have assigned any
such non-assignable contract or agreement.
6.2. HSR FILING.
6.2.1. FILING OF NOTIFICATION AND REPORT FORM. 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 within five (5) business
days of the date hereof and to supply promptly any additional
information and documentary material that may be requested
pursuant to the HSR Act. Each party shall pay its own costs
in connection with the preparation and filing thereof, and
the parties shall each pay one-half of the filing fee in
connection therewith.
6.2.2. ADDITIONAL ACTIONS. Each party shall take such actions as in
its sole judgment are appropriate to eliminate any concerns
on the part of any Governmental Authority over the
enforcement of applicable antitrust laws regarding the
legality of the consummation of the transactions contemplated
hereby under
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any antitrust law; provided, however, that notwithstanding
the foregoing, neither party shall be required hereunder to
appeal any injunction, to divest any of its assets or to take
any other specific step which in its sole judgment would not
be in its best interest under the circumstances in order to
eliminate such concerns.
6.3. NO COMPETING PRODUCTS.
6.3.1. MIDDLEWARE STAND ALONE PRODUCTS. During the ten (10)-year
period commencing on the Closing Date, NCR shall not,
directly or indirectly (including through any Affiliate
thereof, whether existing now or in the future), develop or
have developed for or on behalf of NCR or any of its
Affiliates enterprise middleware Computer Programs having the
same or substantially similar features as that of the
Software for license or sale by or on behalf of NCR or any of
its Affiliates as an independent, stand-alone product (i.e.,
a product not licensed or sold as a component or part of, or
otherwise embedded in, a substantial additional program).
6.3.2. MIDDLEWARE EMBEDDED PRODUCTS. During the five (5)-year period
commencing on the Closing Date, NCR shall not, directly or
indirectly (including through any Affiliate thereof, whether
existing now or in the future), develop or have developed for
or on behalf of NCR or any of its Affiliates enterprise
middleware Computer Programs having the same or substantially
similar features as that of the Software for license or sale
by or on behalf of NCR or any of its Affiliates as a
component or part of, or otherwise embedded in, a substantial
additional program offered or sold by NCR.
6.3.3. For purposes of clarification only, and without limiting the
restrictions on competing products set forth in paragraphs
6.3.1 and 6.3.2, NCR and BEA agree that NCR shall have the
right to continue to develop and have developed (a)
middleware enterprise Computer Programs (other than the
Software) which are included on NCR's published price list,
or for which the development is substantially complete, as of
the Closing Date, provided that such Computer Programs do not
come to have the same or substantially similar features as
that of the Software, and (b) Computer Programs which are
solely designed to effect the integration of an NCR product
offering that is not in violation of this paragraph 6.3 with
other generally
19
commercially available enterprise middleware Computer
Programs.
6.4. EXISTING TOP END CUSTOMERS, ISVS, AND BUSINESS PARTNERS. In addition
to carrying out NCR's obligations under the Assumed Contracts as
provided under Section 4, BEA will, to the extent commercially
reasonable and to the extent the Assumed Contracts pertaining to
NCR's obligations have been provided to BEA, continue to support all
NCR Software sales promotions, solutions, customers, ISVs, channel
partners and business partners for the duration of all contractual
obligations under the Assumed Contracts. To the best of NCR's
knowledge, Schedule 6.4 sets forth a true and complete list of all
NCR Software customers, ISVs, channel partners and business partners.
In addition, BEA will, to the extent commercially reasonable,
continue to support all current and older versions of the Software
product family in a manner consistent with BEA's standard policies,
including end-of-life policies and practices.
6.5. TOP END PRODUCT ROADMAP. Promptly following the Closing Date, BEA
shall issue a press release substantially in the form attached hereto
as Exhibit V, announcing BEA's commitment to the development of the
Successor Software, which will merge BEA's TUXEDO and the Software
and will serve as the basis for BEA's future product offering. BEA
agrees that the Software product family will be integrated into the
Successor Software such that, to the extent commercially reasonable,
the Successor Software will be a functional "super-set" to what
TUXEDO offers and to what the Software offers. The Software features
and interfaces (including enhancements and modifications thereto
developed pursuant to the Consulting Agreement) will be supported and
offered in the Successor Software. BEA will provide a reasonable
migration path for customers using the Software to the Successor
Software. In the event that BEA does not provide Successor Software
that is generally commercially available and available to NCR under
the Distribution Agreement within two (2) years after the Closing
Date, NCR shall have the right, in addition to any other rights or
remedies it may have, to require BEA to continue to maintain the
Software as a viable and competitive product until the Successor
Software becomes generally commercially available and available to
NCR under the Distribution Agreement. From and after the date on
which the Successor Software becomes generally commercially
available, BEA shall maintain the Successor Software on BEA's general
price list for a period of 18 months thereafter.
6.6. SUBSEQUENT TOP END PRODUCT RELEASES. BEA shall produce release 3.0
of the Software under the Consulting Agreement and subsequent
maintenance releases and/or patches, as required. BEA agrees to sell
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through its sales force TOP END release 2.05 until the earlier to
occur of (a) the date 18 months after it is made generally available,
(b) the date it is replaced by the Successor Software, or (c) the
date of the next release of the Software.
6.7. FURTHER ASSURANCES. NCR agrees that, at any time after the Closing
Date, upon the request of BEA, it will do, execute, acknowledge and
deliver, or will cause to be done, executed, acknowledged and
delivered, all such further acknowledgments, deeds, assignments,
bills of sale, transfers, conveyances, instruments, consents and
assurances as may reasonably be required for the better assigning,
transferring, granting, conveying, assuring and confirming to BEA,
its successors and assigns, the transfers contemplated by this
Agreement.
6.8. CONDUCT OF BUSINESS OF NCR PENDING THE CLOSING. NCR agrees that,
during the period from the Execution Date to the Closing:
6.8.1. OPERATION. NCR shall (a) cause the business operations
related to the Assets to be conducted in the ordinary course
consistent with past practice, (b) use commercially
reasonably efforts to preserve intact the relevant business,
properties and organization with respect thereto in all
material respects, (c) use commercially reasonable efforts to
maintain the Physical Assets in good operating condition and
repair (ordinary wear and tear excepted), and (d) use
commercially reasonable efforts to preserve for the benefit
of BEA the goodwill of customers, vendors and others having
business relations with it related to the Assets; and
6.8.2. DISPOSITION OF ASSETS. NCR shall: (a) not sell or dispose of
any of the Assets, except in the ordinary course of business
consistent with past practice, (b) use commercially
reasonable efforts to prevent the occurrence of any event or
condition which may have a Material Adverse Effect or would
restrain, prohibit or otherwise interfere with the effective
operation or enjoyment by BEA of all or any material portion
of the Assets or with the effective transfer of the
Transferred Employees as contemplated hereby, and (c) not
enter into any agreement, in writing or otherwise, that would
result in a breach either of the foregoing covenants.
6.9. UPDATED SCHEDULES. NCR shall promptly disclose in writing to BEA any
information contained in its representations and warranties or any of
the Schedules hereto which, because of an event occurring after the
date of this Agreement, is incomplete or is no longer correct as of
all times
21
after the Execution Date and until the Closing Date. Any such
disclosure shall be in the form of an updated Schedule, marked to
reflect the new or amended information. In the event that NCR makes
any such disclosure prior to the Closing and the Closing occurs, such
disclosure shall be deemed to amend and supplement the
representations and warranties and the applicable Schedule hereto,
and BEA shall have the right to be indemnified with respect to such
representations and warranties, and the applicable Schedule thereto
as so amended and supplemented, but not with respect to any prior
representation and warranty which has been amended, deleted or
superseded as a result of such new or amended information. Nothing
contained in this Section 6.9 shall be construed as changing any
party's right to terminate this Agreement as provided in Section 13.
6.10. NOTICE OF CERTAIN MATTERS. NCR shall give prompt written notice to
BEA, and BEA shall give prompt written notice to NCR, of any failure
of NCR or BEA, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by
it hereunder.
6.11. WAIVER AND CONFIDENTIALITY AGREEMENTS. NCR shall use its reasonable
best efforts to deliver to BEA on or before the Closing Date a copy
of a Waiver and Confidentiality Agreement, in a form reasonably
acceptable to BEA (the "Waiver and Confidentiality Agreement"),
executed by each of the NCR employees, agents or consultants listed
in Schedule 6.11 hereto.
6.12. ACCESS TO RECORDS. Each party agrees to allow representatives of
the other party after the Closing, upon reasonable written notice,
access to any books and records relating to the Assets or the
Transferred Employees for the purpose of filing and supporting Tax
returns and Tax audits of such other party or defending any Claim
relating thereto or any Third Party Claim. Each party shall preserve
such books and records as necessary to support tax returns of the
other party relating to the Assets or the Transferred Employees and
to notify the other party prior to destruction of any such records
relating to periods prior to the Closing if the destruction thereof
is scheduled to occur within five (5) years after the Closing Date,
and the other party shall be permitted, upon reasonable written
notice, to take possession of such records at its sole expense.
Nothing herein shall be deemed to constitute a waiver of any
attorney-client, work-product or joint-defense privilege.
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7. OWNERSHIP OF INTELLECTUAL PROPERTY; LICENSES
7.1. LICENSE TO USE NCR HOUSE MARKS. NCR hereby grants to BEA a non-
exclusive, royalty free license to use, commencing on the Closing
Date, the NCR House Marks in connection with BEA's marketing,
distribution and licensing of the Software, the Documentation, and
modifications thereto, and goods and services related to the
Software, subject to the following: (i) the NCR House Marks may be
used in a manner and with materials that have been reviewed and
approved by NCR in writing prior to such use, which approval shall
not be unreasonably withheld, conditioned or delayed; and (ii) such
usage shall be in accordance with NCR's then-current trademark usage
policies as provided and updated by NCR. The license to BEA to the
NCR House Marks shall expire, without any further actions by the
parties hereto, upon the earlier of (x) the second anniversary of the
Closing Date or (y) termination of this Agreement, the Distribution
Agreement or the Consulting Agreement due to a breach or default by
BEA of its obligations thereunder.
7.2. OWNERSHIP OF TRADEMARKS. Subject to the non-exclusive license in the
NCR House Marks granted herein to BEA, NCR shall own all NCR House
Marks and any goodwill which may accrue to such marks as a result of
any of the BEA uses of the NCR House Marks licensed thereunder. BEA
shall own the Trademarks transferred herein as part of the Assets,
together with all other trademarks, service marks, logos, symbols or
identifiers thereafter after the Closing used or developed by BEA
(excluding the NCR House Marks) in connection with BEA's use of the
Assets. Subject to BEA's obligations pursuant to Section 7.1, each
of NCR and BEA shall be solely responsible for the protection,
maintenance and enforcement of their respective trademarks and any
registrations or applications therefor.
7.3. INTERNAL USE LICENSE TO USER LIST, DOCUMENTATION. BEA hereby grants
to NCR, its Affiliates and Subsidiaries, a non-exclusive, perpetual,
paid-up, royalty-free license to use, reproduce and modify the User
List and Documentation, provided, however, that such license shall be
limited solely to NCR's internal business purposes and shall be
perpetual conditioned upon NCR's continuing compliance with its
obligations to BEA under Sections 6.3 and 8 of this Agreement.
7.4. LICENSE UNDER PATENTS. NCR hereby grants to BEA, its Affiliates and
Subsidiaries, a non-exclusive, worldwide, perpetual, irrevocable,
paid-up, royalty-free license, under any patents which NCR now holds
or may acquire in the future, to make, use, modify, and sell or
otherwise distribute the Software, or any future versions or
modifications thereof,
23
whether stand-alone or as incorporated in or bundled with any other
software, hardware, firmware, or enhancements.
8. CONFIDENTIALITY
8.1. CONFIDENTIAL INFORMATION. In the course of the performance of this
Agreement, NCR and BEA each recognizes that it will obtain, or has
prior to the Execution Date obtained, access to the confidential,
proprietary, technical, business and operational information of the
other, including without limitation the Proprietary Rights (excluding
the issued Patents) (the "Confidential Information"). Confidential
Information includes all terms of the transactions contemplated by
this Agreement.
8.2. NON-CONFIDENTIAL INFORMATION. Information shall not constitute
Confidential Information if:
8.2.1. PREVIOUSLY POSSESSED. It is demonstrated to have been in the
possession of the receiving party or available to the
receiving party prior to the disclosure, without any breach
of a duty of confidentiality owed by any party to the
disclosing party;
8.2.2. SUBSEQUENTLY OBTAINED. The receiving party rightfully obtains
the Confidential Information without breach of this
Agreement, or any Applicable Laws , from a third party having
no duty of confidentiality to the disclosing party;
8.2.3. DEVELOPED. It is independently developed by the receiving
party without use of the Confidential Information; or
8.2.4. AUTHORIZED. The disclosing party authorizes in writing the
disclosure of the Confidential Information.
8.3. BEA CONFIDENTIAL INFORMATION. As of the Closing Date, all
information disclosed by NCR which becomes or is intended to become
the property of BEA by virtue of the transactions contemplated herein
constitutes Confidential Information of BEA, as if BEA were the
disclosing party therefor.
8.4. STANDARD OF CARE. All Confidential Information shall remain the
exclusive property of the disclosing party, and the receiving party
may not disclose any Confidential Information of the disclosing party
for any reason without the prior written consent of the disclosing
party or make any use of such Confidential Information other than as
expressly permitted by or necessary to perform its obligations under
this Agreement or the Related Agreements. The receiving party shall
use the same care and discretion, but no less than reasonable care
and discretion,
24
to avoid disclosure, publication, or dissemination of Confidential
Information it has received, as the receiving party employs for
similar information of its own which it does not desire to publish,
disclose or disseminate, except to those employees, directors, agents
and/or permitted subcontractors of the receiving party who have a
need to know in order to exercise the rights granted or retained
pursuant to this Agreement and who have agreed in writing to be bound
by the confidentiality terms of the Agreement. The receiving party
shall be responsible and liable for breaches of confidentiality
obligations by its employees, directors, agents and/or permitted
subcontractors.
8.5. REQUIRED DISCLOSURE. Notwithstanding any other provision of this
Section 8, if the receiving party is required to disclose any
Confidential Information pursuant to legal, accounting or regulatory
requirements, the receiving party shall provide to the disclosing
party written notice of such required disclosure sufficiently in
advance thereof to enable the disclosing party to take reasonable
actions to avoid the requirement of disclosure. Notwithstanding the
foregoing, and subject to the prior consent of the other party (such
consent not to be unreasonably withheld or delayed), either party
shall have the right to disclose the existence and material terms of
this Agreement to the extent such party reasonably determines is
necessary to comply with stock exchange, securities and other similar
disclosure requirements. The receiving party shall cooperate with
all reasonable requests of the disclosing party in connection
therewith.
8.6. SURVIVAL OF COVENANT. Notwithstanding anything contained herein to
the contrary, the obligations of the parties under this Section 8
shall survive for a period of five (5) years from the earlier of the
Closing Date or the termination of this Agreement pursuant to Section
13.
9. EMPLOYEES; LEASE OF SPACE
9.1. OFFER OF EMPLOYMENT. All NCR employees identified on Schedule 9.1
will receive written offers of employment with BEA, to be delivered
by BEA not less than ten (10) business days prior to the Closing
Date, and will not be required to take drug tests or physical
examinations as a condition of such employment. All such offers
shall be contingent upon the Closing and shall be subject to
acceptance or rejection by such employees prior to Closing. All such
employees who have not accepted such offers on the business day
immediately prior to the Closing Date shall be deemed to have
rejected such offers. Those employees who have accepted such offers
from BEA prior to the Closing Date shall be referred to herein as
"Transferred Employees." Upon Closing, each of
25
the Transferred Employees will cease their employment with NCR and
shall become employees of BEA.
9.2. COMPENSATION/BENEFITS PACKAGE.
9.2.1. COMPARABLE COMPENSATION. Subject to the terms of this Section
9.2, BEA shall offer the Transferred Employees compensation
and benefits packages that are reasonably comparable to those
being provided by NCR to the Transferred Employees
immediately prior to the Closing Date. BEA shall offer to
each Transferred Employee a base salary that is substantially
similar to that earned by such employee at NCR on the Closing
Date for a position with BEA which is the same or
substantially equivalent to the employee's position at NCR
immediately prior to the Closing. BEA will offer each
Transferred Employee stock options and bonuses consistent
with those received by other similarly situated BEA
employees. It is understood by both parties, however, that
BEA will make vesting of stock options and bonuses contingent
on successful completion of the milestones of the Plan of
Record under the Consulting Agreement. Prior to the Execution
Date, BEA has provided to NCR written confidential
information regarding the proposed compensation packages for
each Transferred Employee for the purpose of enabling NCR to
evaluate independently whether BEA's proposed benefits
package is "comparable" to that received by each such
employee at NCR and NCR hereby confirms that BEA's proposed
compensation packages as disclosed to NCR comply with BEA's
obligations hereunder with respect thereto.
9.2.2. BENEFITS COVERAGE. To the extent permitted by law or
contract, BEA's benefit plans and programs offered to the
Transferred Employees shall reflect credit for service with
NCR. No pre-existing limitations, waiting periods, or proof
of insurability will be imposed by BEA or its benefits plans
with respect to initial benefits eligibility of the
Transferred Employees. To the extent legally permitted, NCR
will distribute the amount in each Transferred Employee's
savings account in NCR's 401(K) plan, and BEA will allow each
Transferred Employee to rollover the amount to BEA's 401(K)
plan. NCR acknowledges and agrees that nothing in this
Section 9 shall require BEA to undertake any modification of
BEA's existing compensation and benefits practices or to take
any action that would tend, in BEA's good faith judgment, to
expose BEA to any material liability under
26
any law, regulation, court order, ordinance or contract of
any kind.
9.2.3. ACCRUED BENEFITS. At or before the Closing, NCR shall pay out
to all Transferred Employees all accrued vacation, sabbatical
or other similar accrued liability owed by NCR to the
Transferred Employees as of the Closing Date. BEA shall
provide each Transferred Employee who requests vacation time
during the first 12 months after Closing with two (2) weeks
unpaid vacation, subject to BEA's policies and procedures
regarding its employees' exercise of vacation time.
9.3. TRANSFERRED EMPLOYEES' LOCATION; OFFICE SPACE. BEA shall use
commercially reasonable efforts to provide office space for the
Transferred Employees which is located within a reasonable proximity
of the current NCR Rancho Xxxxxxxx, California, location. NCR and
BEA agree that the following areas in California shall be deemed to
be within a reasonable proximity to the current NCR Rancho Xxxxxxxx
location: Rancho Xxxxxxxx, Poway, and Carmel Mountain Ranch, and the
commercial reasonableness of BEA's efforts shall be evaluated based
upon, among other things, facility availability and costs. At BEA's
election, upon reasonable prior written notice to NCR delivered prior
to the Closing, NCR shall lease to BEA certain office space at NCR's
Rancho Xxxxxxxx, California, facility pursuant to an Office Space
Lease Agreement in substantially the form as Exhibit VIII hereto.
9.4. NON-SOLICITATION
9.4.1. NCR COVENANT. NCR agrees, for itself and its Affiliates, not
to re-hire, or directly or indirectly attempt to re-hire, for
a period of twelve (12) months from the Closing Date, any of
the Transferred Employees.
9.4.2. BEA COVENANT. BEA agrees, for itself and its Affiliates, not
to solicit for employment or hire, or directly or indirectly
attempt to solicit for employment or hire, for a period of
two (2) years from the Closing Date, any employee of NCR with
whom BEA came into contact through the negotiation or
performance of this Agreement.
9.4.3. PERMITTED EXCEPTION. Notwithstanding the foregoing to the
contrary, BEA shall not be in breach of its obligations under
Section 9.4.2 hereof if BEA solicits for employment or hires
NCR professional services employees with expertise in the
Software in Europe and/or Asia/Pacific who have been
identified to BEA by NCR. NCR agrees that at its discretion,
27
during the six (6) months following the Closing Date, it
shall assist BEA by identifying a reasonable number of such
personnel and by providing introductions to them for BEA
representatives.
10. REPRESENTATIONS AND WARRANTIES OF NCR
NCR hereby represents and warrants to BEA as of the date hereof and as of
the Closing Date as follows:
10.1. ORGANIZATION AND STANDING; CERTIFICATE AND BYLAWS. NCR is a
corporation duly organized and existing under, and by virtue of, the
laws of the state of Maryland and is in good standing under such
laws. NCR has the requisite corporate power to own and operate its
properties and assets and to carry on its business as currently and
previously conducted and as proposed to be conducted. NCR is duly
qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material
adverse effect on its business or properties.
10.2. CORPORATE POWER. NCR has all requisite corporate power to execute
and deliver this Agreement and the Related Agreements and to carry
out and perform its obligations under the terms hereof and thereof.
10.3. AUTHORIZATION. All corporate action on the part of NCR, its
directors and its stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Related
Agreements has been taken. This Agreement and the Related
Agreements, when executed and delivered by NCR, will constitute valid
and binding obligations of NCR enforceable in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws from time to time in effect affecting the enforcement of
creditors' rights generally and except as enforcement of remedies may
be limited by general equitable principles.
10.4. COMPLIANCE WITH OTHER INSTRUMENTS, NO CONSENTS, ETC. The execution,
delivery and performance of and compliance with this Agreement and
the Related Agreements will not result in any violation of, or
conflict with, or constitute a default under NCR's Charter or Bylaws,
or under any material agreement to which NCR is a party, or result in
the creation of, any mortgage, pledge, lien, encumbrance or charge
upon the Assets. Except as set forth in Schedule 10.4, and except
with respect to the filing of a Premerger Notification Report under
the HSR Act, no Consent is required to be obtained on the part of NCR
to permit the consummation
28
of the transactions contemplated by this Agreement. NCR is not in
violation of any term of its Charter or Bylaws, or in any material
respect of any term or provision of any mortgage, indebtedness,
indenture, contract, agreement, instrument, judgment or decree,
order, statute, rule or regulation applicable to NCR.
10.5. LITIGATION, ETC. Except as otherwise disclosed on Schedule 10.5,
there are no actions, suits, proceedings, oppositions, interferences,
cancellation proceedings, challenges, or other legal or governmental
proceedings (nor, to the best of NCR's knowledge, investigations
pending against NCR or its officers or properties before any court,
arbitrator or governmental agency)(the foregoing collectively
referred to as "Actions"), nor, to the best of NCR's knowledge, is
there any threat of any of the foregoing Actions; provided, however,
that with respect to Actions arising out of activities outside the
United States of America, or exclusively arising under and subject to
jurisdictions outside the United States of America, the foregoing
representation and warranty is made only to the extent that such
Actions, individually or in the aggregate, would not result in a
Material Adverse Effect. NCR is not a party to or subject to the
provisions of any Governmental Order that, in any such case,
questions the validity of this Agreement and/or any of the Related
Agreements or any action taken or to be taken by NCR in connection
herewith or therewith, or that challenges the validity,
enforceability or ownership by NCR of any of the Proprietary Rights.
There is no action, suit, proceeding or investigation by NCR
currently pending or that NCR currently intends to initiate that
questions or has the potential to harm the validity of this Agreement
and/or any of the Related Agreements or any action taken or to be
taken by NCR in connection herewith or therewith, or the validity,
enforceability, use or ownership by NCR of any of the Proprietary
Rights.
10.6. OWNERSHIP OF ASSETS. NCR owns all of the Assets free and clear of
all liens, security interests and other encumbrances other than
Permitted Liens and Outstanding License Agreements.
10.7. DISCLOSURE. The representations and warranties of NCR contained in
this Agreement and the Related Agreements do not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein
not misleading in light of the circumstances under which they were
made. NCR has no present intention to transfer this Agreement or any
of its rights or obligations hereunder or under the Related
Agreements to any third party or any of its Affiliates.
10.8. TITLE TO ASSETS.
29
10.8.1. NO LIENS. Except as otherwise disclosed on Schedule 10.8.1
and subject to any Permitted Liens or Outstanding License
Agreements, NCR has good and marketable title to all of the
Assets, including the Software, the Documentation, the User
List, and the Proprietary Rights, and has the sole and
exclusive right to use, sell, license, dispose of or bring
actions for the infringement of the Proprietary Rights or any
of the other Assets.
10.8.2. REGISTRATIONS. Schedule 2.37 sets forth a complete and
correct list of all patents, patent applications and
invention disclosures regarding or relating solely to
technology used in or necessary for the use and development
of the Assets or the operation, use, licensing and sale of
the Software. Schedule 2.53 sets forth a complete and correct
list of all trademarks, trade names, service marks, logos and
similar designations of source and origin, and all
registrations and applications for registration thereof
related to or used in connection with the Software. Schedule
10.8.2 contains a complete and correct list of all registered
copyrights and copyright applications (collectively the
"Additional Registrations") and all material unregistered
Proprietary Rights. NCR currently is listed in the records of
the appropriate United States, state or foreign agency as the
sole owner of record for each registration identified on
Schedules 2.37, 2.53 and 10.8.2 ("Registrations"). All of the
Registrations have been duly maintained, including the
submission of all necessary filings in accordance with the
legal and administrative requirements of the appropriate
jurisdictions, have not lapsed, expired or been abandoned,
and are valid, subsisting, in proper form and enforceable.
Each of Schedule 2.37, 2.53, and 10.8.2 sets forth all
submissions and fees due or payable in connection with any
registrations and applications listed on such schedules on or
before six (6) months after the Execution Date.
10.8.3. FEES. Except as otherwise disclosed in Schedule 10.8.3, NCR
has no royalties, honoraria, fees or other payments due and
payable to any third party in connection with the Proprietary
Rights or other elements of the Assets, including to any
Person by reason of ownership, use, licensure, sale or
disposition of any of the same, the nonpayment of which has
resulted or will result in a Material Adverse Effect.
10.8.4. NECESSARY PROGRAMS. Except as set forth on Schedule 10.8.4,
no third party Computer Programs or other property was used
in or is necessary for the development of the Software or
30
Documentation or is intended to be embedded in, included
with, or shipped with the Software (whether as a runtime
module or otherwise).
10.8.5. PUBLIC DISCLOSURE. Except as otherwise disclosed in Schedule
10.8.5 and subject to the immediately following sentence, NCR
has received no notice that any (and to the best of NCR's
knowledge, no) trade secret, know-how, confidential
information or other Proprietary Right, including without
limitation all Source Code for any version of the Software,
has been invalidated or committed to the public domain, nor
have the same been disclosed or authorized to be disclosed to
a third party other than pursuant to written non-disclosure
or confidentiality agreements. The foregoing representation
and warranty in this paragraph 10.8.5 is made only to the
best of NCR's knowledge with regard to the receipt by NCR of
any notice where such notice was received by NCR only outside
the United States of America.
10.8.6. CLAIMS TO PROPRIETARY RIGHTS. Except as otherwise disclosed
in Schedule 10.8.6, none of the former or present employees,
officers, directors or independent contractors of NCR holds
any contractual right, title or interest, directly or
indirectly, in whole or in part, in or to any Proprietary
Right, or has asserted any claim with regard to any
Proprietary Right.
10.8.7. INFRINGEMENT. (a) Except as otherwise disclosed in Schedule
10.8.7, NCR has received no notice that any (and, to its best
knowledge, none) of the Assets or the other assets to be
transferred by NCR to BEA in accordance with this Agreement,
or the use thereof, (i) encroaches or infringes upon any
property or rights (including without limitation any
copyrights, patents, trade secrets or trademarks) of any
third party, or (ii) contravenes any applicable material law
or ordinance or any other administrative regulation or
violates any restrictive covenant or any provision of
material law. The foregoing representation and warranty is
made only to the best of NCR's knowledge with regard to the
receipt by NCR of any notice where such notice was received
by NCR only outside the United States of America.
(b) Except as otherwise disclosed in Schedule 10.8.7 and
subject to the Permitted Liens and Outstanding License
Agreements, there are no agreements or arrangements between
NCR and any third party which have any effect upon NCR's
31
title to or other rights respecting the Assets, including the
right to transfer the same as contemplated by this Agreement
and the Related Agreements.
10.9. CONDITION OF PHYSICAL ASSETS. The Physical Assets are in good
operating condition and repair (ordinary wear and tear excepted) and
are available for immediate use.
10.10. ADEQUACY OF PROPERTY. Except as set forth in Schedule 10.10 and
Schedule 10.8.4, the Assets, the license grant in paragraph 7.4
hereof, the rights granted to BEA under the Maintenance Agreement,
and the Assumed Contracts, constitute all of the assets and rights
necessary to conduct, in all material respects, the business related
to the Assets as presently conducted (excluding, however, the
business with respect to the sale, maintenance or development of the
Software as a product embedded in, or a component of, another product
offered by NCR).
10.11. LICENSES AND ASSUMED CONTRACTS.
10.11.1. LICENSES. Except as set forth in Schedule 10.11.1, each
Assumed Contract is valid, binding, and enforceable in
accordance with its terms, is in full force and effect, and
NCR is not in breach, violation or default under any such
license or agreement. Except as disclosed in Schedule
10.11.1, neither the execution and delivery by NCR of this
Agreement or any Related Agreement, nor the consummation of
the transactions contemplated hereby or thereby will result
in any breach, violation or default under, or require the
consent of any other party to, any such agreement.
10.11.2. ASSUMED CONTRACTS. Schedule 2.5 contains a complete and
correct list of all material contracts, instruments,
commitments and agreements relating to the Assets or the
other assets to be transferred by NCR to BEA in accordance
with this Agreement, including the Assumed Contracts to be
transferred to BEA upon Closing. NCR has delivered to BEA
correct and complete copies of all Assumed Contracts which
are assignable by NCR to BEA as of the Closing Date,
including any and all amendments thereto. NCR has
specifically identified in Schedule 2.5 the number and
extent of all such Assumed Contracts that involve the
license of source code. All of the Assumed Contracts are in
full force and effect, and NCR is not currently in material
breach of any of the terms of the Assumed Contracts. Except
as specifically identified in Schedule 2.4, none of the
other parties to the Assumed Contracts are not
32
performing, or have provided NCR with written notice that it
will not be able to perform, the party's obligations under
the Assumed Contract. Except as specifically identified in
Schedule 2.4, NCR can assign to BEA all of the Assumed
Contracts which are assignable by NCR to BEA as of the
Closing Date, and after Closing, BEA shall have been
assigned all rights of NCR under such Assumed Contracts.
10.12. CURRENT USE. Except as set forth on Schedule 10.12, the
reproduction, distribution, marketing, manufacture, development, use,
sale, license, or sublicense of any Proprietary Rights, Software or
Documentation or any other Asset in the manner currently so done by
NCR does not (i) violate any license or agreement with any third
party or (ii) infringe on, or otherwise conflict with, the rights of
any person, nor has such violation or an infringement been alleged or
noticed to NCR, and to the best of NCR's knowledge, there is no valid
basis for any such allegation. Except as otherwise disclosed in
Schedule 10.12, NCR has not, in connection with the Assets or any
portion thereof, received notice, that it or any of its customers or
distributors has infringed any copyright, patent, trademark, trade
name, or other intellectual property right of any third party or
misappropriated or misused any invention, trade secret or other
proprietary information entitled to legal protection. NCR has not
asserted any such claim of infringement, misappropriation or misuses
against any third party in connection with the Assets.
10.13. USER LIST. To the best of NCR's knowledge, the User List is a
substantially complete list of the customers other than those
customers for which the Software is embedded in, or a component of,
another product sold or provided by NCR. The only recipients of
alpha and beta versions of the Software distributed by or on behalf
of NCR have been NCR customers.
10.14. CONFORMANCE OF THE SOFTWARE TO SPECIFICATIONS. The Software
performs substantially in accordance with the specifications
therefore set forth in Schedule 2.44, and there are currently no
claims or assertions pending or, to the best of NCR's knowledge,
threatened alleging a failure of the product to so perform. The
Software has been reviewed to confirm that it stores, processes
(including sorting and performing mathematical operations), inputs
and outputs data containing date information correctly regardless of
whether the data contains dates before, on, or after January 1, 2000.
10.15. NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Agreement, in the
Exhibits and Schedules hereto, the agreements specified herein and in
33
the certificates required to be delivered pursuant to or in
connection herewith, neither NCR nor any other Person acting for NCR
makes any representation or warranty, express or implied, and NCR and
BEA hereby disclaim any such representation or warranty, whether by
NCR or any of its officers, directors, employees, agents,
representatives or any other Person, with respect to the execution,
delivery or performance by NCR of this Agreement or the agreements
specified herein or with respect to the transactions contemplated
hereby or thereby, including any implied warranties of
merchantability and fitness for a particular purpose.
11. REPRESENTATIONS AND WARRANTIES OF XXX
XXX hereby represents and warrants to NCR as of the date hereof and the
Closing Date as follows:
11.1. ORGANIZATION AND STANDING; CERTIFICATE AND BYLAWS. BEA is a
corporation duly organized and existing under, and by virtue of, the
laws of the state of Delaware and is in good standing under such
laws. BEA has the requisite corporate power to own and operate its
properties and assets and to carry on its business as currently and
previously conducted and as proposed to be conducted. BEA is duly
qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material
adverse effect on its business or properties.
11.2. CORPORATE POWER. BEA has all requisite corporate power to execute
and deliver this Agreement and the Related Agreements and to carry
out and perform its obligations under the terms of this Agreement and
such other agreements.
11.3. AUTHORIZATION. All corporate action on the part of BEA, its
directors and its stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Related
Agreements has been taken. This Agreement and the Related
Agreements, when executed and delivered by BEA, will constitute valid
and binding obligations of BEA enforceable in accordance with their
respective terms.
11.4. COMPLIANCE WITH OTHER INSTRUMENTS, NO CONFLICTS, ETC. The
execution, delivery and performance of, and compliance with, this
Agreement and the Related Agreements will not result in any violation
of, or conflict with, or constitute a default under BEA's Certificate
of Incorporation or Bylaws, or under any agreement to which BEA is a
party, or result in the creation of, any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of BEA or
the BEA Shares. No Consent is
34
required to be obtained on the part of BEA to permit the consummation
of the transactions contemplated by this Agreement, except those
Consents expressly identified in this Agreement. BEA is not in
violation of any term of its Certificate of Incorporation or Bylaws,
or in any material respect of any term or provision of any mortgage,
indebtedness, indenture, contract, agreement, instrument, judgment or
decree, order, statute, rule or regulation applicable to BEA.
11.5. LITIGATION, ETC. Except as otherwise disclosed in Schedule 11.5,
there are no actions, suits, proceedings, oppositions, challenges or
investigations pending against BEA or its officers or properties
before any Governmental Authority (or, to the best of BEA's
knowledge, is there any threat thereof), and BEA is not a party to or
subject to the provisions of any Governmental Order that, in any such
case, questions or has the potential to harm the validity of this
Agreement and/or any of the Related Agreements or any action taken or
to be taken in connection or herewith or therewith. There is no
action, suit, proceeding or investigation by BEA currently pending or
that BEA currently intends to initiate that questions or has the
potential to harm the validity of this Agreement and/or any of the
Related Agreements or any action taken or to be taken in connection
or herewith or therewith.
11.6. DISCLOSURE. The representations and warranties of BEA contained in
this Agreement or the Related Agreements do not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein
not misleading in light of the circumstances under which they were
made. BEA has no present intention to transfer this Agreement or any
of its rights or obligations hereunder or under the Related
Agreements to any third party.
11.7. NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Agreement, in the
Exhibits and Schedules hereto, the agreements specified herein and in
the certificates required to be delivered pursuant to or in
connection herewith, neither BEA nor any other Person acting for BEA
makes any representation or warranty, express or implied, and NCR and
BEA hereby disclaim any such representation or warranty, whether by
BEA or any of its officers, directors, employees, agents,
representatives or any other Person, with respect to the execution,
delivery or performance by BEA of this Agreement or the agreements
specified herein or with respect to the transactions contemplated
hereby or thereby.
35
12. INDEMNIFICATION
12.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Section 10.12 (Current Use), any
representation and warranty made in this Agreement or any Related
Agreement, the breach of which the breaching party had knowledge of
on or prior to the Closing, for a period of five (5) year following
the Closing Date and any covenant or obligation under this Agreement
or any Related Agreement to be performed after the Closing shall
survive the Closing and continue until the expiration of the
applicable statute of limitations. All other representations and
warranties of the parties in this Agreement or any Related Agreement
and any covenant or obligation to be performed prior to the Closing
shall survive the Closing for a period of two (2) years after the
Closing Date. Notwithstanding the foregoing to the contrary, if a
Claim is timely made, it may continue to be asserted beyond the
termination date of the representation, warranty or covenant to which
such Claim relates.
12.2. INDEMNIFICATION.
12.2.1. INDEMNIFICATION BY NCR. NCR hereby agrees to indemnify,
defend and hold harmless each member of the BEA Group from
and against all Damages asserted against, imposed upon or
incurred by any member of the BEA Group, directly or
indirectly, by reason of or resulting from (i) any breach or
inaccuracy of any representation, warranty or covenant of
NCR set forth in this Agreement, any certificates required
to be provided by NCR pursuant to this Agreement, or any
other agreement or obligation of the NCR contained in or
made pursuant to this Agreement or any of the Related
Agreements; (ii) the conduct and operation of NCR's business
on or before the Closing Date; (iii) the sale, license, use
or operation of the Assets on or before the Closing Date;
(iv) the employment of the Transferred Employees on or
before the Closing Date or the termination of any Retained
Employee's employment by NCR as a result of the consummation
of the transactions contemplated hereby; (v) the Assumed
Contracts on or before the Closing Date; and (vi) except as
otherwise provided in Section 5.3, liabilities of NCR for
any Taxes, including without limitation arising as a result
of the transactions contemplated by this Agreement or the
conduct or operation of NCR's business on or prior to the
Closing Date.
12.2.2. INDEMNIFICATION BY BEA. BEA hereby agrees to indemnify,
defend and hold harmless each member of the NCR Group from
36
and against all Damages asserted against, imposed upon or
incurred by any member of the NCR Group, directly or
indirectly, by reason of or resulting from (i) any breach or
inaccuracy of any representation, warranty or covenant of
BEA set forth in this Agreement, any certificates required
to be provided by BEA pursuant to this Agreement, or any
other agreement or obligation of BEA contained in or made
pursuant to this Agreement or any of the Related Agreements;
(ii) the Assumed Contracts from and after the Closing Date
to the extent assigned on the Closing Date and from and
after the effective date of any such Assumed Contract if
assigned to BEA after the Closing Date (but only if BEA has
received written notice of such post-Closing Date
assignment); (iii) the sale, license, use or operation of
the Assets from and after the Closing Date; and (iv) the
employment or termination of employment of the Transferred
Employees from and after the Closing Date.
12.3. THIRD-PARTY CLAIMS. The obligations and liabilities of each party
to this Agreement under Section 12.2 related to Third-Party Claims
shall be subject to the following terms and conditions:
12.3.1. PARTICIPATION BY INDEMNIFYING AND INDEMNIFIED PARTY. Upon
receipt of written notice of any Third-Party Claim asserted
against, imposed upon or incurred by an Indemnified Party,
the Indemnified Party shall notify the Indemnifying Party
thereof in writing. The Indemnifying Party shall be
entitled, at its own expense, to participate in and, upon
notice to the Indemnified Party, to undertake the defense
thereof in good faith by counsel of the Indemnifying Party's
own choosing, which counsel shall be reasonably satisfactory
to the Indemnified Party, provided that (i) the Indemnified
Party shall at all times have the option, at its own
expense, to participate fully therein (without controlling
such action) and (ii) if in the Indemnified Party's
reasonable judgment (as evidenced and supported by an
opinion of its legal counsel who will not be the same
counsel who will represent the Indemnified Party in the
underlying case) a conflict of interest exists between such
Indemnified Party and the Indemnifying Party in respect of
such Third-Party Claim, such Indemnified Party shall be
entitled to select counsel of its own choosing, reasonably
satisfactory to the Indemnifying Party, and the Indemnifying
Party shall be obligated to pay the reasonable fees and
expenses of such counsel.
37
12.3.2. FAILURE BY INDEMNIFYING PARTY TO DEFEND. If within thirty
(30) days after written notice to the Indemnified Party of
the Indemnifying Party's intention to undertake the defense
of any Third-Party Claim the Indemnifying Party shall fail
to defend the Indemnified Party against such Third-Party
Claim, the Indemnified Party will have the right (but not
the obligation) to undertake the defense, compromise or
settlement of such Third-Party Claim on behalf of, and for
the account and at the risk of, the Indemnifying Party.
12.3.3. RIGHT OF INDEMNIFIED PARTY TO DEFEND AND SETTLE. Anything in
this Section 12.3 to the contrary notwithstanding, if a
Third-Party Claim is asserted against an Indemnified Party
and there is a reasonable probability in the Indemnified
Party's reasonable good faith judgment that a Third-Party
Claim may materially and adversely effect the Indemnified
Party, other than as a result of the imposition of money
damages or other money payments, (i) the Indemnified Party
shall have the right, at its sole option, to take over the
defense of such Third-Party Claim (in which case the
Indemnifying Party and the Indemnified Party shall share
equally the cost and expense of such defense) or to co-
defend such Third-Party Claim (in which case the Indemnified
Party shall bear the cost and expense of the additional
counsel) and no compromise or settlement of such Third-Party
Claim shall be permitted without the consent of both the
Indemnified Party and the Indemnifying Party and (ii) the
Indemnifying Party and the Indemnified Party shall not,
without the prior written consent of the other party, settle
or compromise any Third-Party Claim or consent to the entry
of any judgment relating to any such Third-Party Claim,
unless such settlement, compromise or judgment includes as
an unconditional term thereof that the Indemnified Party
shall be released from all liabilities in respect of such
Third-Party Claim.
12.4. LIMITATION ON INDEMNIFICATION OBLIGATIONS.
12.4.1. LIMITATION. Notwithstanding anything contained in this
Section 12 to the contrary, no party shall assert a Claim
against the other party for indemnification hereunder,
unless and until the amount of all Damages determined to
have been incurred or suffered at the time by the
Indemnified Party exceeds, in the aggregate, $150,000, (the
"Threshold Amount") and then only for the excess of such
amount. The parties hereto further acknowledge and agree
that the total indemnification obligations of each party
hereto under this Agreement shall not exceed, in the
38
aggregate for such party, $15,000,000. The foregoing
limitations shall not apply to Claims made by a party with
respect to fraud on the part of the other party or a breach
by the other party of any representation or warranty in this
Agreement or any Related Agreement, of which such breaching
party had knowledge on or prior to the Closing, or to a
breach by BEA of its obligations under Section 5.3.
12.5. CONSEQUENTIAL DAMAGES. No party hereto shall have any liability
under any provision of this Agreement for, and in no event shall any
party's Threshold Amount be applied to, any consequential, special or
indirect Damages, including lost profits.
13. TERMINATION
13.1. METHODS OF TERMINATION. The transactions contemplated herein may be
terminated and/or abandoned at any time prior to the Closing:
13.1.1. MUTUAL CONSENT. By the mutual written consent of NCR and
BEA;
13.1.2. FAILURE TO CLOSE. By either NCR or BEA, if the Closing shall
not have occurred prior to September 30, 1998, provided,
however, that the right to terminate this Agreement under
this Section 13.1.2 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;
13.1.3. NON-FULFILLMENT OF NCR'S CONDITIONS. By NCR, if any of the
conditions set forth in Section 3.2 becomes incapable of
fulfillment and is not waived by NCR;
13.1.4. NON-FULFILLMENT OF BEA'S CONDITIONS. By BEA, if any of the
conditions set forth in Section 3.3 becomes incapable of
fulfillment and is not waived by BEA;
13.1.5. GOVERNMENTAL ORDER. By either NCR or BEA, if any
Governmental Authority with jurisdiction over such matters
shall have issued a Governmental Order restraining,
enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby and such order, decree,
ruling or other action shall have become final and
unappealable, provided, however, that the provisions of this
Section 13.1.5 shall not be available to any party unless
such party shall have used its
39
reasonable best efforts to oppose any such Governmental
Order or to have such Governmental Order vacated or made
inapplicable to the transactions contemplated by this
Agreement; or
13.1.6 CHANGE IN CONTROL OF BEA. By NCR at any time prior to the
Closing upon a Change of Control of BEA.
13.2. PROCEDURE UPON TERMINATION PRIOR TO CLOSING. In the event of
termination or abandonment pursuant to Section 13.1 hereof, written
notice thereof shall be given to the other party hereto and the
transactions contemplated by this Agreement shall be terminated
and/or abandoned, without further action by BEA or NCR. If the
transactions contemplated by this Agreement are terminated and/or
abandoned as provided herein, each party will redeliver all
documents, work papers, confidential information and other material
of the other party relating to the transactions contemplated hereby,
whether obtained before or after the execution of this Agreement, to
the party furnishing the same. A party hereto who shall have
satisfied in full all of the obligations of such party under this
Agreement which were to have been satisfied by such party prior to
the Closing and who shall have not breached any representation,
warranty, covenant or agreement of such party contained in this
Agreement shall not have any liability or further obligation to the
other party to this Agreement.
14. MISCELLANEOUS
14.1. PUBLICITY. Each of the parties acknowledges the importance of
appropriate disclosures in positioning the relationship between the
two companies to the distribution channel, the press, customers and
others.
14.1.1. PRESS RELEASE. Within one business day following the
Execution Date, BEA and NCR will jointly issue a press
release regarding the execution of this agreement in a form
mutually agreed by and between BEA and NCR.
14.1.2. PUBLIC STATEMENT. Within thirty (30) days after the
Execution Date, BEA and NCR shall issue a mutually agreed
upon public statement of direction for the integration and
migration of the Software customers.
14.1.3. WEBSITE ANNOUNCEMENT. Within thirty (30) days following the
Closing Date, BEA shall add a description of the Software as
a BEA product to a prominent location on BEA's website.
40
14.1.4. PROMOTION. During the 12-month period following the Closing
Date, NCR shall use its commercially reasonable efforts to
advertise and promote BEA's products in NCR's various
corporate marketing activities, including web sites,
advertising, and general marketing.
14.1.5. SPEECHES. Within a reasonable time following the Closing
Date, BEA shall cause keynote speeches at prominent software
industry events to be given by BEA's CEO and other BEA
Senior Executives describing the benefits to BEA resulting
from adding the Software to BEA's product portfolio.
14.1.6. CUSTOMER VISITS. Promptly following the Execution Date, BEA
and NCR Senior Executives shall make joint visits to key BEA
and NCR customers to articulate first-hand the benefits of
the consummation of the transactions contemplated hereby.
14.1.7. SALES. BEA shall continue to promote and sell the Software
with similar efforts made for BEA's product until the
Successor Software becomes commercially available (including
any enhancements or modifications thereto developed pursuant
to the Consulting Agreement).
14.1.8. XXXXXX XXXXX RELEASES. Each of the parties agrees that until
six (6) months following the Closing, no press release or
other disclosures by company representatives shall conflict
with the initial press releases approved by the parties
pursuant to Section 14.1.1 hereof without the prior written
consent of the other party, such consent not to be
unreasonably withheld or delayed. Approval shall be deemed
to have been given if there is a written response to a
proposed release or disclosure is not delivered to the
requesting party within two (2) business days after delivery
of a request for such approval.
14.2. NOTICES. All notices, requests, demands and other communications
which are required or may be given pursuant to the terms of this
Agreement shall be in the English language, in written or electronic
form and shall be deemed delivered (i) on the date of delivery when
delivered by hand, (ii) on the date of transmission when sent by
facsimile transmission during normal business hours with written
confirmation of receipt, (iii) one day after dispatch when sent by
overnight courier maintaining records of receipt, or (iv) three days
after dispatch when sent by certified mail, postage prepaid, return-
receipt requested; provided that, in an any such case, such
communication is addressed as follows:
41
If to NCR:
XXX Xxxxxxxxxxx
0000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxx Xxxx, Esq.
Senior Vice President and General Counsel
XXX Xxxxxxxxxxx
0000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to BEA:
BEA Systems, Inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
14.3. RELATIONSHIP OF THE PARTIES. It is understood and agreed that each
of the parties hereto is an independent contractor, and that neither
party is, or shall be considered to be, by virtue of this Agreement,
an agent or representative of the other party for any purpose.
14.4. ASSIGNMENT. Neither party may assign this Agreement except in
connection with a merger, consolidation, or sale of all or
substantially all of the assigning party's relevant business or
assets, or with the prior written consent of the other party.
Notwithstanding the foregoing to the contrary, BEA may assign any of
its rights or obligations hereunder to BEA International, a Cayman
Islands corporation, or any other one or more of BEA's Subsidiaries.
BEA acknowledges that it shall continue to be obligated if and to the
extent that a BEA assignee under this paragraph 14.4 fails to perform
the obligations that BEA has assigned. Any attempted assignment in
violation of this Section 14.4 without consent shall be null and
void. Where required, no party shall unreasonably withhold or delay
consent.
42
14.5. BINDING EFFECT. This Agreement shall be binding on all parties
hereto, and shall be binding upon and inure to the benefit of each
party and its respective permitted successors and assigns.
14.6. WAIVER; MODIFICATION; AMENDMENT. No term or provision hereof will be
considered waived by either party, and no breach excused by either
party, unless such waiver or consent is in writing signed on behalf
of the party against whom the waiver is asserted. No consent by
either party to, or waiver of, a breach by either party, whether
express or implied, will constitute a consent to, waiver of, or
excuse of any other different, or subsequent, breach by either
party. This Agreement, including the Schedules and Exhibits attached
hereto may not be modified or amended except by an instrument in
writing duly signed by or on behalf of the parties hereto.
14.7. FORCE MAJEURE. Each of the parties hereto shall exert diligence in
performing its obligations under this Agreement, but neither shall
be liable in any manner whatsoever for failure to perform or delay
in performing such obligations, if and to the extent and for so long
as such failure or delay in performance or breach is due to natural
disasters, strikes or labor disputes, natural forces, or other acts
of God or cause reasonably beyond the control of such party. Any
party desiring to invoke this Section 14.7 shall notify the other in
writing of such desire and shall use reasonably efforts and due
diligence to resume performance of its obligations.
14.8. UNITED NATIONS. The parties expressly exclude, if applicable, the
application of the United Nations Convention on Contracts for the
International Sale of Goods.
14.9. SEVERABILITY. If any part of this Agreement is found invalid or
unenforceable, that part will be amended to achieve as nearly as
possible the same economic and practical effect as the original
provision and the remainder of this Agreement will remain in full
force and effect.
14.10. NO INTERPRETATION AGAINST DRAFTER. The terms and provisions of this
Agreement shall not be construed against the drafter or drafters
hereof. All parties hereto agree that the language of this Agreement
shall be construed as a whole according to its fair meaning and not
strictly for or against any of the parties hereto.
14.11. GOVERNING LAW; ARBITRATION. This Agreement shall be governed and
enforced in accordance with the substantive laws of the State of
New York, without regard to any such laws or regulations that may
direct the application of the law of any other jurisdiction. Any
controversy, claim or dispute between the parties arising out of or
relating to this
43
Agreement or any Related Agreement or any breach hereof or thereof
shall be referred to final and binding resolution by the BEA and
NCR senior executives who have authority to reach agreement on any
matters in dispute upon written request by either party specifying
in reasonable detail the nature of the dispute. In the event that
such BEA and NCR senior executives are unable to resolve the
dispute within thirty (30) days after the initial request for
dispute resolution, the dispute shall be settled by final and
binding arbitration before a sole arbitrator in the headquarters
city of the non-initiating party pursuant to the then-current
Commercial Rules of the American Arbitration Association and the
federal substantive and procedural law of arbitration. Judgment
upon any award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. The arbitrator will not have the
power to award punitive or exemplary damages or any damages
excluded by, or in excess of, any damage limitations expressed in
this Agreement. Each party will bear its own attorney's fees and
costs related to the arbitration. Unless otherwise determined by
the arbitrator, the costs and expenses of the arbitration shall be
borne equally by the parties.
14.12. ENTIRE AGREEMENT. This Agreement, together with the Schedules and
Exhibits attached hereto, constitutes the entire agreement between
the parties relating to this subject matter and supersedes all
prior or simultaneous representations, discussions, negotiations,
and agreements with respect thereto, whether written or oral.
Without limiting the foregoing, this Agreement expressly supersedes
the Non-Disclosure and No-Use Agreement between BEA and NCR
executed on March 18, 1998.
14.13. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
14.14. TERMS GENERALLY. Whenever the context requires, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The
words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation". All references to
"party" and "parties" shall be deemed references to the parties to
this Agreement unless the context shall otherwise require. The
terms "this Agreement", "hereof", "hereunder", and similar
expressions refer to this Agreement and not to any particular
Section or other portion hereof and include any agreement
supplemental hereto. All references to Sections, paragraphs,
Schedules and Exhibits shall be deemed references to Sections of,
paragraphs of, and Schedules and Exhibits to, this Agreement unless
the context shall otherwise require. The term "or" is used in its
inclusive sense ("and/or").
44
14.15. EXPENSES. Except as otherwise expressly provided herein, all costs
and expenses, including fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with
this Agreement such costs and the transactions contemplated hereby
shall be paid by the party incurring expenses, whether or not the
Closing shall have occurred.
14.16. REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. All remedies, afforded
to the parties under this Agreement or any Related Agreement,
Applicable Law or otherwise, shall be cumulative and not
alternative. Each of the parties agrees that in the event of any
breach or threatened breach by a party of any provision of this
Agreement or any Related Agreement, the other party shall be
entitled, in addition to any other rights or remedies it may have,
to a decree or order of specific performance or mandamus to enforce
the observance and performance of such provision and an injunction
restraining such breach or threatened breach.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives, effective as of the date first above
written.
45
XXX XXXXXXXXXXX
By: _______________________________
Name: _______________________________
Title: _______________________________
BEA SYSTEMS, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
46
SCHEDULES
These Schedules are being delivered by XXX Xxxxxxxxxxx, a Maryland corporation
("NCR"), to BEA Systems, Inc., a Delaware Corporation ("BEA"), pursuant to the
Asset Purchase Agreement dated May 19, 1998 (the "Agreement") to be executed by
and between NCR and BEA, of which these Schedules are a part. Unless otherwise
defined in these Schedules, all capitalized terms used herein shall have the
meanings ascribed to them in the Agreement. Each Exhibit and Schedule attached
hereto is incorporated herein by reference and forms part of these Schedules.
SELLER'S SCHEDULES
------------------------------------------------------------------------
SCHEDULE
NUMBER DESCRIPTION
------------------------------------------------------------------------
2.5 Assumed Contracts
------------------------------------------------------------------------
2.36 Outstanding License Agreements
------------------------------------------------------------------------
2.37 Patents
------------------------------------------------------------------------
2.40 Physical Assets
------------------------------------------------------------------------
2.44 Software
------------------------------------------------------------------------
2.53 Trademarks
------------------------------------------------------------------------
6.4 NCR Customers, ISVs and Business Partners
------------------------------------------------------------------------
6.11 Employees and Consultants to Execute Waiver and
Confidentiality Agreement
------------------------------------------------------------------------
9.1 Transferred Employees
------------------------------------------------------------------------
10.4 No Consents
------------------------------------------------------------------------
10.5 Litigation
------------------------------------------------------------------------
10.8.1 No Liens
------------------------------------------------------------------------
10.8.2 Registrations
------------------------------------------------------------------------
10.8.3 Fees
------------------------------------------------------------------------
10.8.4 Necessary Programs
------------------------------------------------------------------------
10.8.5 Public Disclosure
------------------------------------------------------------------------
10.8.6 Claim to Proprietary Rights
------------------------------------------------------------------------
10.8.7 Infringement
------------------------------------------------------------------------
10.10 Adequacy of Property
------------------------------------------------------------------------
10.11.1 Licenses and Assumed Contracts
------------------------------------------------------------------------
10.12 Current Use
------------------------------------------------------------------------
BUYER'S SCHEDULES
------------------------------------------------------------------------
SCHEDULE
NUMBER DESCRIPTION
------------------------------------------------------------------------
11.5 Litigation
------------------------------------------------------------------------
47
LIST OF EXHIBITS
EXHIBIT I FORM OF CONSULTING AGREEMENT
EXHIBIT II FORM OF DISTRIBUTION AGREEMENT
Pursuant to Item 601(b)(2) of Regulation S-K, the following schedules to this
Asset Purchase Agreement have been omitted. Such schedules will be submitted to
the Securities and Exchange Commission upon request.
2.5 Patents
2.36 Outstanding License Agreements
2.37 Patents
2.40 Physical Assets
2.44 Software
2.53 Trademarks
6.4 NCR Customers, ISVs and Business Partners
6.11 Employees and Consultants to Execute Waiver
and Confidentiality Agreement
9.1 Transferred Employees
10.4 No Consents
10.5 Litigation
10.8.1 No Liens
10.8.2 Registrations
10.8.3 Fees
10.8.4 Necessary Programs
10.8.5 Public Disclosure
10.8.6 Claim to Proprietary Rights
10.8.7 Infringement
10.10 Adequacy of Property
10.11.1 Licenses and Assumed Contracts
10.12 Current Use
11.5 Litigation
Exhibit I Form of Consulting Agreement
Exhibit II Form of Distribution Agreement
