Exhibit 2.1
ASSET AND SECURITIES PURCHASE AGREEMENT
This Asset and Securities Purchase Agreement ("AGREEMENT") is made and
entered into as of September 25, 1998, by and among ODS NETWORKS, INC. a
Delaware corporation (the "COMPANY") and SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION, a Delaware corporation ("SAIC").
RECITALS
WHEREAS, SAIC desires to sell, and the Company desires to purchase, the
assets set forth herein (the "ASSETS");
WHEREAS, the Company is authorized to issue shares of the Company's
$0.01 par value common stock ("COMMON STOCK");
WHEREAS, in connection with and in consideration for the sale by SAIC to
the Company of the Assets and the payment by SAIC to the Company of One
Million Five Hundred Thousand Dollars ($1,500,000.00) in cash at Closing (as
hereinafter defined), the Company shall issue to SAIC (i) one million six
hundred thousand (1,600,000) shares ("SHARES") of the Company's Common Stock,
(ii) a warrant to purchase an additional seven hundred fifty thousand
(750,000) shares of the Company's Common Stock at an exercise price of $8.00
per share (the "$8.00 WARRANT"), exercisable at any time on or before the
date which is eighteen (18) months following the Closing, (iii) a warrant to
purchase seven hundred fifty thousand (750,000) shares of the Company's
Common Stock at an exercise price of $10.50 per share) exercisable at any
time on or before the date which is twenty-four (24) months following the
Closing (the "$10.50 WARRANT", and together with the $8.00 Warrant, the
"WARRANTS"), all as more fully described herein and the attachments hereto;
and
WHEREAS, SAIC and the Company desire to execute and enter into certain
other agreements to set forth their mutual agreements regarding the marketing
and sale of products and services by both parties, the grant back by the
Company of certain licenses to SAIC and the protection of the equity interest
in the Company that SAIC shall receive hereunder, in the form of a Software
Royalty, Grant Back and Improvements License Agreement, a Strategic Alliance
Agreement, a PartnersPlus Agreement, a Facilities Use Agreement, a
Stockholder and Voting Agreement, a Ritz Premier subcontract and a
Registration Rights Agreement all as more fully described herein and the
attachments hereto.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties hereinafter set forth, and for other good and
valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND SECURITIES
1.1 PURCHASE AND SALE OF ASSETS. Subject to the rights of the
United States Government under the contract listed on SCHEDULE 1.1 (the
"WITHHELD RIGHTS"), upon the terms and subject to the conditions set forth in
this Agreement, at the Closing (as defined below), SAIC shall sell, transfer,
assign and deliver to the Company, and the Company shall purchase and acquire
from SAIC, for the consideration hereinafter described, all right, title and
interest of SAIC, in and to the Assets, free and clear of any mortgage,
security interest, pledge, lien, charge or other encumbrance. The "ASSETS"
are as follows:
(a) the software programs contained on the CD-ROMs attached hereto
as EXHIBIT 1.1 (a) that are also known as "Computer Misuse and Detection
System" ("CMDS"), "Vulnerability Assessment System" ("VAS"), "Audit
Monitoring and Intrusion Detection System" ("AMIDS"), "Malicious Code
Detection and Eradication System" ("MCDES"), the documentation pertaining
to each of the foregoing software programs and all intellectual property
rights to the software programs and documentation vested in SAIC including,
but not limited to patents, trademarks, trade names, service marks,
copyrights, prosecution and regulatory files including any common law
rights to any of the foregoing, including the rights of SAIC under the SAIC
Invention, Copyright and Confidentiality Agreements as provided in Section
5.3(c) as such agreements may pertain to the foregoing (collectively the
"SOFTWARE"); and the trademark "CMDS"and logo (United States Reg. No.
2,085,833) and the patent application presently pending in the United
States Patent and Trademark Office [***];
(b) the value adder reseller agreement, existing advertising
contracts, maintenance and year 2000 compliance (as described in Section
4.12 below) obligations of SAIC under the purchase orders, agreements and
contracts listed on SCHEDULE 1.1(b) (collectively, the "CONTRACTS") and
unearned prepaid amounts that have been paid to or billed by SAIC under the
Contracts for maintenance services to be provided in the future that will
now be performed by ODS pursuant to the Contracts and which amounts to
$101,777.68;
(c) the personal property listed on SCHEDULE 1.1(c) hereto (the
"PERSONAL PROPERTY");
________________________
*** Indicates that material has been omitted and confidential treatment
requested therefor. All such material has been filed separately with the
Commission pursuant to Rule 24b-2.
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(d) all income, royalties, damages and payments due with respect
to any of the Assets arising on or after the Closing Date (as defined
below) and all other rights with respect thereto (including, without
limitation, rights to damages and payments for past, present or future
infringements or misappropriations, if any, of any intellectual property
rights included in the Assets) in all countries; and
(e) all causes of action, demands, judgments, claims (including
insurance claims), indemnity rights or other rights of SAIC relating to the
Assets or arising under express or implied warranties from suppliers and/or
licensors with respect to the Assets.
1.2 NO LIABILITIES OR OBLIGATIONS ASSUMED. Except as set forth
on SCHEDULE 1.2 the Company shall not, by the execution, delivery and
performance of this Agreement, or otherwise, assume or otherwise be
responsible for any liability or obligation of any nature of SAIC, or any
claims of such liability or obligation, matured or unmatured, liquidated or
unliquidated, fixed or contingent, known or unknown, whether arising out of
acts or occurrences prior to the date hereof. Without limiting the
generality of the foregoing, SAIC shall remain liable for all liabilities and
obligations to SAIC personnel with respect to any notice and continuation
coverage requirements, payroll, overtime, accrued vacation time, holiday
time, severance arrangements or workers' compensation of any nature which are
required by law or regulation that are accrued but unpaid as of the Closing
Date or which accrued as a result of the consummation of the transactions
contemplated herein.
1.3 PURCHASE AND SALE OF SHARES. In consideration of the
foregoing, subject to the terms and conditions of this Agreement, and in
reliance upon the representations, warranties and agreements herein
contained, on the Closing Date, the Company shall issue to SAIC, and SAIC
shall acquire from the Company, the Shares, the $8.00 Warrant and the $10.50
Warrant free and clear of all liens, security interests, options, rights,
mortgages, pledges, restrictions on transferability of any type (other than
restrictions on transferability as may be applicable under federal and state
securities laws or as set forth herein or therein) and SAIC shall deliver the
Assets to Company and pay on the Closing Date to the Company One Million Five
Hundred Thousand and No/100 Dollars ($1,500,000.00) (the "CASH
CONSIDERATION") by wire transfer to such account as is designated by the
Company to SAIC in writing.
ARTICLE II
CLOSING
2.1 THE CLOSING. The consummation of the sale and purchase of
the Assets, the Shares, the $8.00 Warrant and the $10.50 Warrant referred to
in Section 1.1 (the "CLOSING") shall take place on September 25, 1998 at the
offices of Xxxxxx and Xxxxx, L.L.P., 000 Xxxx Xx, Xxxxxx, Xxxxx 00000, or at
such other date, time or place as the parties hereto mutually agree, either
verbally or in writing. Such date is referred to herein as the "CLOSING
DATE" and the Closing shall be deemed to be effective as of 12:00 p.m.
midnight, Pacific Time on the Closing Date.
ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in a document of even date herewith and delivered by
the Company to SAIC prior to the execution and delivery of this Agreement
(the "COMPANY DISCLOSURE SCHEDULE"), the Company represents and warrants to
SAIC as follows:
3.1 ORGANIZATION, STANDING AND POWER. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. The Company has the corporate
power to own its properties and to carry on its business as now being
conducted and as proposed to be conducted and is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to
be so qualified and in good standing would have a material adverse effect on
the Company. Neither the Company nor any of its subsidiaries is in violation
of any of the provisions of its Certificate of Incorporation or Bylaws or
equivalent organizational documents.
3.2 CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of 80,000,000 shares of Common Stock, par value $0.01 per
share and 5,000,000 shares of Preferred Stock, par value $0.01 per share, of
which there were issued and outstanding as of the close of business on July
31, 1998, 16,887,233 shares of Common Stock and no shares of Preferred Stock.
All outstanding shares of Common Stock have been duly authorized, validly
issued, fully paid and are nonassessable and free of any liens or
encumbrances other than any liens or encumbrances created by or imposed upon
the holders thereof and have been issued in compliance with all federal and
state securities laws. The shares of Common Stock to be issued pursuant to
this Agreement, the $8.00 Warrant, the $10.50 Warrant and the shares of
Common Stock to be issued upon the exercise of either such warrant shall be
duly authorized, validly issued, fully paid and non-assessable, and free of
preemptive rights or rights of first refusal created by statute, the
Company's Certificate of Incorporation or Bylaws or any agreement to which
the Company is a party or by which it is bound and, based on the
representations of SAIC contained in Sections 4.6, 4.7 and 4.8 of this
Agreement, shall be issued in compliance with all federal and state
securities laws.
3.3 AUTHORITY. The Company has full corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The Company has taken all action required by law, its
Certificate of Incorporation and Bylaws or otherwise to authorize the
execution and delivery of this Agreement and the transactions contemplated
hereby. This Agreement and all other agreements delivered hereunder are
valid and binding agreements of the Company enforceable in accordance with
their terms, except that: (a) the enforceability of this Agreement and all
other agreements delivered hereunder may be subject to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law; and (b) the enforceability of this Agreement
and all other agreements delivered hereunder may be subject to or limited by
bankruptcy, insolvency, reorganization, arrangement, moratorium, or other
similar laws relating to or affecting the rights of creditors generally. The
execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby shall not, conflict with, or result in
any violation of, or default under (with or without notice or lapse of time,
or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under (i)
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any provision of the Certificate of Incorporation or Bylaws of the Company or
(ii) any material mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or its
properties or assets. Assuming the accuracy of the representations and
warranties of SAIC in Sections 4.6, 4.7 and 4.8 of this Agreement, no
consent, approval order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority (each a "GOVERNMENTAL ENTITY"), is required by or with
respect to the Company or in connection with the execution and delivery of
this Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except for (i) such approval, or
termination of the waiting period, as may be required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 ("HSR") prior to
exercise of either of the Warrants and (ii) such filings or registrations as
may be required under federal and state securities laws.
3.4 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has made
available to SAIC each statement, report, registration statement (with the
prospectus in the form filed pursuant to Rule 424(b) of the Securities Act),
definitive proxy statement, and other filing filed with the Securities and
Exchange Commission ("SEC") by the Company since June 30, 1998 (collectively,
the "COMPANY SEC DOCUMENTS"). In addition, the Company has made available to
SAIC all exhibits to the Company SEC Documents filed prior to the date
hereof, and shall promptly make available to SAIC all exhibits to any
additional Company SEC Documents filed prior to the Closing. As of their
respective filing dates, the Company SEC Documents were filed on a timely
basis and complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and the
Securities Act, and none of the Company SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements made therein, in light
of the circumstances in which they were made, not misleading except to the
extent corrected by a subsequently filed Company SEC Document. The financial
statements of the Company, including the notes thereto, included in the
Company SEC Documents (the "COMPANY FINANCIAL STATEMENTS") were complete and
correct in all material respects as of their respective dates, complied as to
form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto as
of their respective dates, and have been prepared in accordance with
generally accepted accounting principles applied on a basis consistent
throughout the periods indicated and consistent with each other (except as
may be indicated in the notes thereto or, in the case of unaudited statements
included in Quarterly Reports on Form 10-Qs, as permitted by Form 10-Q of the
SEC). The Company Financial Statements fairly present the consolidated
financial condition and operating results of the Company and its subsidiaries
at the dates and during the periods indicated therein (subject, in the case
of unaudited statements, to normal, recurring year-end adjustments).
3.5 ABSENCE OF UNDISCLOSED LIABILITIES. The Company has no
material obligations or liabilities of any nature (matured or unmatured,
fixed or contingent) other than (i) those set forth or adequately provided
for in the Balance Sheet included in the Company's Annual Report on Form 10-Q
for the quarterly period ended June 30, 1998 (the "COMPANY BALANCE SHEET"),
(ii) those incurred in the ordinary course of business and not required to be
set forth in the Company Balance Sheet under generally accepted accounting
principles, and (iii)
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those incurred in the ordinary course of business since the Company Balance
Sheet Date and consistent with past practice.
3.6 BROKER'S AND FINDERS' FEES. The Company has not incurred,
nor shall it incur, directly or indirectly, any liability for brokerage or
finders' fees or agents' commissions or investment bankers' fees or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
3.7 BOARD APPROVAL. The Board of Directors of the Company have
approved this Agreement and the transactions contemplated hereby. No vote or
consent of the Company's stockholders is required for the consummation of the
transactions contemplated hereby.
3.8 NO MATERIAL ADVERSE CHANGE. Since the date of the balance
sheet included in the Company's most recently filed report on Form 10-Q or
Form 10-K, the Company has conducted its business in the ordinary course and
there has not occurred: (a) any material adverse change in the financial
condition, liabilities, assets or business of the Company other than
continuing operating losses and declining stock price; (b) any amendment or
change in the Certificate of Incorporation or Bylaws of the Company; or (c)
any damage to, destruction or loss of any assets of the Company, (whether or
not covered by insurance) that materially and adversely affects the financial
condition or business of the Company.
3.9 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which the Company has received
any notice of assertion against the Company which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay any of the transactions
contemplated by this Agreement.
3.10 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by the Company herein or in any Schedule hereto, including
the Company Disclosure Schedule, or certificate furnished by the Company
pursuant to this Agreement, or the Company SEC Documents, when all such
documents are read together in their entirety, contains or shall contain at
the Closing any untrue statement of a material fact, or omits or shall omit
at the Closing to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances
under which made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SAIC
For the purposes of this Article IV, any reference to "SAIC's Knowledge"
means actual knowledge of the persons that are listed on SCHEDULE IV and no
other persons.
Except as disclosed in a document of even date herewith and delivered by
the SAIC to the Company prior to the execution and delivery of this Agreement
(the "SAIC DISCLOSURE SCHEDULE"), the SAIC represents and warrants to Company
as follows:
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4.1 CORPORATE ORGANIZATION. SAIC is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. SAIC has full corporate power and authority to carry on its
business as it is now being conducted.
4.2 AUTHORIZATION. SAIC has full corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. SAIC has taken all action required by law, its Certificate of
Incorporation and Bylaws or otherwise to authorize the execution and delivery
of this Agreement and the transactions contemplated hereby. This Agreement
and all other agreements delivered hereunder are valid and binding agreements
of SAIC enforceable in accordance with their terms, except that: (a) the
enforceability of this Agreement and all other agreements delivered hereunder
may be subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law; and (b) the
enforceability of this Agreement and all other agreements delivered hereunder
may be subject to or limited by bankruptcy, insolvency, reorganization,
arrangement, moratorium, or other similar laws relating to or affecting the
rights of creditors generally.
4.3 NO VIOLATION. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby shall
violate any provisions of the Certificate of Incorporation or Bylaws of SAIC
or violate, or be in conflict with, or constitute a default under, or cause
the acceleration of the maturity of any material debt or material obligation
pursuant to, any material agreement or material commitment to which SAIC is a
party or by which SAIC is bound, or violate any statute or law or any
judgment, decree, order, regulation or rule of any court or governmental
authority.
4.4 BROKERS AND FINDERS. SAIC has not incurred, nor shall it
incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
4.5 CORPORATE APPROVAL. All necessary corporate actions have
been taken by SAIC for the approval of SAIC to enter this Agreement and the
transactions contemplated hereby. No vote or consent of the stockholders of
SAIC is required for the consummation of the transactions contemplated hereby.
4.6 INVESTMENT INTENT. SAIC is purchasing the Shares and the
Warrants for its own account not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and SAIC has no present
intention of selling, granting any participation in, or otherwise
distributing the same, and does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participation to
such person or to any third person, with respect to any of such securities.
4.7 ACCESS TO INFORMATION. SAIC has received or has had full
access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the Shares and Warrants and
has received a copy of and reviewed to the extent SAIC deems necessary, the
Company's Annual Report on Form 10-K for the year ended December 31, 1997,
Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 1998
and June
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30, 1998, Proxy Statement dated March 20, 1998 and 1997 Annual Report to
Stockholders. SAIC has had an opportunity to ask questions of and receive
answers from the Company and to obtain additional information (to the extent
the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished
to SAIC or to which the Company has access.
4.8 ACCREDITED INVESTOR. SAIC is an "accredited investor"
within the meaning of SEC Rule 501 of Regulation D, as presently in effect.
4.9 RESTRICTED SECURITIES. SAIC understands that the Shares and
Warrants (and the shares to be issued upon exercise of the Warrants) are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the
Securities Act only in certain limited circumstances. In this connection,
SAIC represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
4.10 FURTHER LIMITATIONS ON DISPOSITION. SAIC agrees not to
offer, sell, exchange, transfer, pledge or otherwise dispose of any of the
Shares, the Warrants or shares issuable upon exercise of the Warrants except
in compliance with the Stockholder Voting Agreement and unless at that time
either:
(a) such transaction is permitted pursuant to the provisions of
Rule 144 under the Securities Act;
(b) counsel representing SAIC reasonably satisfactory to the
Company shall have advised the Company in a written opinion letter
reasonably satisfactory to the Company and the Company's counsel, and upon
which the Company and its counsel may rely, that no registration under the
Securities Act is required in connection with the proposed sale, transfer
or other disposition;
(c) a registration statement under the Securities Act (a
"REGISTRATION STATEMENT") covering such securities proposed to be sold,
transferred or otherwise disposed of, describing the manner and terms of
the proposed sale, transfer or other disposition, and containing a current
prospectus, is filed with the SEC and made effective under the Securities
Act;
(d) an authorized representative of the SEC shall have rendered
written advice to SAIC (sought by SAIC or counsel to the undersigned SAIC,
with a copy thereof and of all other related communications delivered to
the Company) to the effect that the SEC will take no action, or that the
staff of the SEC will recommend that the SEC take no action, with respect
to the proposed offer, sale, exchange, transfer, pledge or other
disposition if consummated; or
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(e) all certificates representing such securities deliverable to
SAIC and any certificates subsequently issued with respect thereto or in
substitution therefor shall bear a legend that such securities may only be
sold or disposed of in accordance with (i) the provisions of Rule 144 under
the Securities Act, (ii) pursuant to an effective Registration Statement or
(iii) pursuant to an exemption provided by the Securities Act. The
Company, at its reasonable discretion, may cause stop transfer orders to be
placed with its transfer agent with respect to the certificates for such
securities but not as to the certificates for any part of such securities
as to which said legend is no longer required.
4.11 EXCLUSIVE WARRANTIES REGARDING SOFTWARE. The exclusive
warranties of SAIC with respect to the Software are: (a) SAIC owns all right,
title and interest in and to versions 3.5, 3.5.1 and 4.0 of the CMDS software
program and has the right to sell, transfer and convey it's right, title and
interest in the same to ODS in accordance with the provisions of this
Agreement; (b) versions 3.5, 3.5.1 and 4.0 of the CMDS software program are
otherwise provided "AS IS" except as provided below in Section 4.12; and (c)
all other Software is provided to the Company "AS IS" with any and all faults
and with no warranty against title, patent, trademark, copyright, trade
secret infringement or other infringement of the rights of a third party.
To the extent applicable, SCHEDULE 4.11 lists: (i) the software programs
on the CD-ROMs attached to Exhibit 1.1(a); (ii) the jurisdiction(s) in which
an application for patent or application for registration of each Software
program has been made, including the respective application numbers and
dates; (iii) the jurisdiction(s) in which each Software program has been
patented or registered, including the respective patent or registration
numbers and dates; (iv) all material licenses, sublicenses and other
agreements to which SAIC is a party pertaining to the origin of the Software
or any component thereof that SAIC has Knowledge of; (v) the material
licenses, sublicenses and other agreements of which SAIC has Knowledge and to
which SAIC is a party and pursuant to which any other party is authorized to
use, exercise, or receive any benefit from the Software; (vi) all parties to
whom SAIC has delivered copies of source code included in the Software,
whether pursuant to an escrow arrangement or otherwise, or parties who have
the right to receive such source code; and (vii) the written assignments
obtained by SAIC from SAIC consultants and SAIC employees who contributed to
the creation or development of the Software of any rights they may have with
respect to such creation or development of the Software.
SAIC has not brought any actions or lawsuits alleging (i) infringement
of the Software or (ii) breach of any license, sublicense or other agreement
authorizing another party to use the Software. SAIC has not entered into any
agreement granting any third party the right to bring infringement actions
with respect to, or otherwise to enforce rights with respect to, the
Software.
To SAIC's Knowledge, no person has asserted or threatened to assert any
claims with respect to the Software (i) contesting the right of SAIC or any
subsidiary of SAIC to use, exercise, sell, license, transfer or dispose of
the Software or (ii) challenging the ownership, validity or enforceability of
the Software.
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To SAIC's Knowledge, no Software is subject to any outstanding order,
judgment, decree or stipulation related to or restricting in any manner the
licensing, assignment, transfer or conveyance thereof by SAIC.
Notwithstanding anything to the contrary stated in or inferred from this
Agreement, with respect to the Software SAIC makes no representation or
warranty with respect to infringement nor is any indemnification obligation
on the part of SAIC to be inferred.
4.12 YEAR 2000 COMPLIANCE. To SAIC's Knowledge and as except as
set forth on the SAIC Disclosure Schedule, provided that all hardware and
software products used with the CMDS software program properly exchange date
data with the CMDS software program, the CMDS software program will (i)
handle date information before, during, and after January 1, 2000, including
but not limited to accepting date input, providing date output, and
performing calculations on dates or portions of dates; (ii) function
accurately and without interruption before, during, and after January 1,
2000, without any change in operations associated with the advent of the new
century; (iii) respond to two-digit year-date input in a way that resolves
the ambiguity as to century in a disclosed, defined, and predetermined
manner, and (iv) store and provide output of date information in ways that
are unambiguous as to century. Notwithstanding the foregoing, SAIC
acknowledges and agrees that (i) the CMDS software program does not identify
or remedy Year 2000 problems in third party systems or other products or
applications not provided or supplied by the Company and (ii) the CMDS
software program operates with the date information it receives; thus, if
incorrect date information is provided by the user, the system or from any
other external product or other source, this information will be used by the
CMDS software program as received. The foregoing Year 0000 Xxxxxxxx of the
Company shall not apply to Year 2000 problems caused by such external sources.
4.13 ASSETS OTHER THAN SOFTWARE. The Personal Property is
provided to the Company "AS IS." Upon consummation of the transactions
contemplated by this Agreement and all other agreements delivered hereunder,
the Company will acquire good and marketable title to, and will become the
legal beneficial owner of, the Personal Property, free and clear of all
taxes, mortgages, pledges, liens, security interests, encumbrances or charges
of any kind. To SAIC's Knowledge, SAIC is not (nor is any other party) in
material default under, nor does any event, circumstance or situation exist
which, with the passage of time will cause a default under any material
lease, Contract, material license or other material agreement relating to or
constituting any of the Assets under which any person, firm, corporation or
other entity is or may be entitled to assert any rights against any of the
Assets.
ARTICLE V
COVENANTS
5.1 FURTHER ASSURANCES.
(a) Upon the terms and subject to the conditions hereof, each of
the parties hereto agrees to use commercially reasonable efforts to take or
cause to be taken all actions and to do or cause to be done all things
necessary, proper or advisable to
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consummate the transactions contemplated by this Agreement shall use
commercially reasonable efforts to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and
filings to be obtained in connection with the transactions
contemplated by this Agreement.
(b) In the event SAIC or the Company, as the case may be, is
unable to obtain, prior to the Closing, any consents, approvals, waivers or
other authorizations to transfer to the Company any Asset, SAIC and the
Company will cooperate with each other in order to obtain such consents,
approvals, waivers or other authorizations at the earliest practicable
date. In each instance where such consents, approvals, waivers or other
authorizations cannot be obtained prior to the Closing, SAIC shall use
commercially reasonable efforts to enter into such alternative arrangements
and agreements with the Company as may be appropriate in order to permit
the Company to realize, receive and enjoy substantially similar rights and
benefits and to enable the Company utilize the Assets as proposed until the
consents, approvals, waivers or other authorizations are obtained. If,
after the exercise of diligent effort, any such consents, approvals,
waivers or other authorizations are not obtained, SAIC agrees to cooperate
with the Company in any reasonable arrangements designed to provide, to the
extent reasonably practicable, for the benefit of the Company any and all
rights of SAIC in and to such asset. Nothing in this Section 5.1(b) shall
be construed to be a waiver by the Company of any condition set forth in
Article VII.
(c) SAIC shall provide the Company with all reasonably requested
and available information in order for the Company to pursue or defend the
Company's rights to the Assets.
5.2 PRESERVATION OF RECORDS. After the Closing, both parties
agree to preserve such books, records and filings relating to the Assets as
may be appropriate or required by applicable law.
5.3 EMPLOYMENT OF SAIC PERSONNEL.
(a) SAIC agrees that the Company may, but is not hereby obligated
to, solicit for employment and hire the personnel identified on SCHEDULE
5.3 (a) hereto and SAIC agrees to provide commercially reasonable
assistance to the Company in such solicitation and hiring.
(b) Except as provided herein, all SAIC employees who accept the
employment offer of the Company ("TRANSFERRED PERSONNEL") shall be subject
to the terms and conditions of employment that the Company has with
employees in comparable positions. The Company represents and warrants
that it will provide to each of the Transferred Personnel compensation and
benefits, taken as a whole, that will be substantially comparable to, or
greater than, the compensation and benefits such Transferred Personnel were
receiving from SAIC immediately preceding their employment by the Company.
During the first eighteen (18) months of the employment of any Transferred
Personnel, no such Transferred Personnel shall be subject to
11
relocation outside of San Diego County California unless such Transferred
Personnel agrees to such relocation. The Company agrees to provide all
Transferred Personnel with stock options or other stock-based incentive
compensation.
(c) Only with respect to the Software, SAIC hereby transfers and
assigns to the Company the rights of SAIC, if any, with respect to any
employees or consultants of SAIC who authored any of the Software
including, but not limited to the rights of SAIC under any SAIC Invention,
Copyright and Confidentiality Agreement between SAIC and any employees but
only as the SAIC Invention, Copyright and Confidentiality Agreement
pertains to the Software; provided, however, that any such personnel will
not be encouraged or requested by the Company to make any disclosure of the
identity of licensees of the Software that have not been disclosed to the
Company by SAIC or with respect to matters that are not directly related to
the Software. Notwithstanding the foregoing, the parties agree that SAIC
shall retain the right to freely use for any purpose the residuals
resulting from access to or work with the Software, provided such residuals
will not be used to create computer programs that perform substantially the
same functions in substantially the same way, to achieve the same or
substantially the same result as the Software. The term "residuals" means
technical information related to the Software in non-tangible form, which
may be retained by persons who have had access to the Software, including
ideas, concepts, know-how, or techniques contained therein. Neither party
shall have any obligation to limit or restrict the assignment of such
persons or to pay royalties for any work resulting from the use of
residuals. Nothing in the foregoing shall, however, be deemed to be the
grant of a license under the copyrights and patent application conveyed
under this Agreement.
(d) For a period of five (5) years from the date of this
Agreement, the Company shall notify SAIC of the termination of the
employment by the Company or its successors or assigns of any Transferred
Personnel ("TERMINATION OF EMPLOYMENT"), no matter what the reason was for
the Termination of Employment. Such notice shall be sent to the attention
of SAIC's Stock Programs Department, Attention: Xxxxx Xxxxxxx, 00000 Xxxxxx
Xxxxx Xxxxx, X/X X0, Xxx Xxxxx, XX 00000, within ten (10) days after the
date of the Termination of Employment and shall state the date of the
Termination of Employment and last known address, home telephone number and
e-mail address (if known by the Company) of such Transferred Personnel. If
the Termination of Employment was due to death or disability of the
Transferred Personnel, the notice shall so state if the Company is not
restricted by law from disclosing. The notice will not state the reason,
if any, for the Termination of Employment.
(e) Effective at the close of business on the Closing Date, all
Transferred Personnel shall cease to be covered by SAIC's employee welfare
benefit plans, including plans, programs, policies and arrangements which
provide medical and dental coverage, life and accident insurance and
disability coverage (collectively, "WELFARE PLANS"). SAIC shall retain
responsibility for all Welfare Plans claims incurred by all Transferred
Personnel (and their dependents) on or prior to the Closing Date. For
purposes of this paragraph, a claim shall be deemed to have been incurred
on the date treatment is
12
rendered except as to claims resulting from hospital confinement
commencing on or prior to the Closing Date.
(f) The Company acknowledges and agrees that SAIC may enter into
consulting agreements with certain of the Transferred Personnel for the
purpose of incentivizing such employees to remain as employees of the
Company following the Closing Date; provided, however, that no Transferred
Personnel shall perform services for SAIC while they are employed by the
Company unless a Vice President of Company has agreed in writing to the
performance of such services in advance.
5.4 PAYROLL; ACCRUED VACATION; SICK LEAVE. SAIC shall pay all
Transferred Personnel all wages to which they are entitled through the
Closing Date at its regular pay date. As of the Closing Date, SAIC shall pay
to the Transferred Personnel for all vacation time and sick leave accrued to
the Transferred Personnel as required by law and consistent with SAIC
policies.
5.5 NO HIRING OF EMPLOYEES. For a period of one (1) year from
the Closing Date, neither party shall solicit, offer employment to or hire
any current employee of the other party or any person who was an employee of
the other party during the nine (9) month period preceding the date of
solicitation, offer of employment or hiring of the former employee of the
other party.
5.6 NO REQUEST TO DISCLOSE. Except as provided in Section 5.3
(c) above, neither party shall solicit, request or encourage any employee or
former employee of the other to disclose confidential information of the
other party; provided, however, that information directly related to the
Software may be disclosed by Transferred Personnel to the Company.
ARTICLE VI
CONDITIONS TO SAIC'S OBLIGATION TO CLOSE
The obligations of SAIC to the Company under this Agreement are subject
to the fulfillment by the Company on or before the Closing of each of the
following conditions, unless waived by SAIC in writing:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Article III shall be true on and as of
the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing Date.
6.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the
Closing Date.
6.3 COMPLIANCE CERTIFICATE. The Chairman of the Board,
President or a Vice President of the Company shall deliver to SAIC at the
Closing a certificate certifying that the conditions specified in Sections
6.1 and 6.2 have been fulfilled and stating that, except as set
13
forth in the Company Disclosure Schedule hereto, there has been no material
adverse change in the business, affairs, prospects, operations, properties,
assets or conditions of the Company since June 30, 1998 other than continuing
operating losses and declining stock price, such certificate being
substantially in the form of EXHIBIT 6.3.
6.4 BOARD OF DIRECTORS. Effective as of the Closing, the Board
of Directors of the Company shall consist of not more than six (6) members
and shall be comprised of the persons listed on SCHEDULE 6.4 hereto.
6.5 XXXX OF SALE. The Company and SAIC shall have entered into
a Xxxx of Sale substantially in the form attached hereto as EXHIBIT 6.5.
6.6 SOFTWARE ROYALTY, GRANT BACK AND IMPROVEMENTS LICENSE
AGREEMENT. The Company and SAIC shall have entered into a Software Royalty,
Grant Back and Improvements License Agreement substantially in the form
attached hereto as EXHIBIT 6.6.
6.7 STRATEGIC ALLIANCE AGREEMENT. The Company and SAIC shall
have entered into a Strategic Alliance Agreement substantially in the form
attached hereto as EXHIBIT 6.7.
6.8 PARTNERSPLUS AGREEMENT. The Company and SAIC shall have
entered into a PartnersPlus Agreement substantially in the form attached
hereto as EXHIBIT 6.8.
6.9 FACILITIES USE AGREEMENT. The Company and SAIC shall have
entered into a Facilities Use Agreement substantially in the form attached
hereto as EXHIBIT 6.9.
6.10 STOCKHOLDER AND VOTING AGREEMENT. The Company and SAIC
shall have entered into a Stockholder and Voting Agreement substantially in
the form attached hereto as EXHIBIT 6.10.
6.11 $8.00 WARRANT TO PURCHASE COMMON STOCK. The Company shall
have executed and delivered to SAIC the $8.00 Warrant substantially in the
form attached hereto as EXHIBIT 6.11.
6.12 $10.50 WARRANT TO PURCHASE COMMON STOCK. The Company shall
have executed and delivered to SAIC the $10.50 Warrant substantially in the
form attached hereto as EXHIBIT 6.12.
6.13 RITZ PREMIER SUBCONTRACT. The Company shall have executed
and delivered to SAIC a subcontract to the contract known by the parties as
the Ritz Premier contract.
6.14 REGISTRATION RIGHTS AGREEMENT. The Company and SAIC shall
have executed and entered into the Registration Rights Agreement
substantially in the form attached hereto as EXHIBIT 6.14.
14
6.15 PATENT, COPYRIGHT AND TRADEMARK ASSIGNMENT. The Company and
SAIC shall have executed and entered into the Patent, Copyright and Trademark
Assignment substantially in the form attached hereto as EXHIBIT 6.15.
6.16 STOCK CERTIFICATE. The Company shall have duly issued and
delivered to SAIC a stock certificate for the Shares in accordance with the
provisions of this Agreement.
6.17 NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other legal or regulatory restraint
or prohibition preventing the consummation of the transactions contemplated
by this Agreement shall be in effect, nor shall any proceeding brought by an
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, seeking any of the foregoing be
pending; nor shall there be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
consummation of the transactions contemplated by this Agreement, which makes
the consummation of the transactions contemplated by this Agreement illegal.
In the event an injunction or other order shall have been issued, each party
agrees to use its reasonable efforts to have such injunction or other order
lifted.
6.18 GOVERNMENTAL APPROVAL. The Company and SAIC shall have
timely obtained from each Governmental Entity all approvals, waivers and
consents, if any, necessary for consummation of the transactions contemplated
by this Agreement and the several transactions contemplated hereby, and
required to be obtained on or before the Closing Date.
ARTICLE VII
CONDITIONS TO THE COMPANY'S OBLIGATION TO CLOSE
The obligations of the Company to SAIC under this Agreement are subject
to the fulfillment on or before the Closing of each of the following
conditions, unless waived by the Company in writing:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of SAIC contained in Article IV hereof shall be true on and as of
the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing Date.
7.2 PERFORMANCE. SAIC shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing
Date.
7.3 COMPLIANCE CERTIFICATE A duly authorized executive Vice
President of the SAIC shall deliver to the Company at the Closing a
certificate certifying that the conditions specified in Sections 7.1 and 7.2
have been fulfilled.
7.4 PAYMENT OF CONSIDERATION. SAIC shall have paid and
delivered the Cash Consideration specified in Section 1.3.
15
7.5 XXXX OF SALE. The Company and SAIC shall have entered into
a Xxxx of Sale substantially in the form attached hereto as EXHIBIT 6.5.
7.6 SOFTWARE ROYALTY, GRANT BACK AND IMPROVEMENTS LICENSE
AGREEMENT. The Company and SAIC shall have entered into a Software Royalty,
Grant Back and Improvements License Agreement substantially in the form
attached hereto as EXHIBIT 6.6.
7.7 STRATEGIC ALLIANCE AGREEMENT. The Company and SAIC shall
have entered into a Strategic Alliance Agreement substantially in the form
attached hereto as EXHIBIT 6.7.
7.8 PARTNERSPLUS AGREEMENT. The Company and SAIC shall have
entered into a PartnersPlus Agreement substantially in the form attached
hereto as EXHIBIT 6.8.
7.9 FACILITIES USE AGREEMENT. The Company and SAIC shall have
entered into a Facilities Use Agreement substantially in the form attached
hereto as EXHIBIT 6.9.
7.10 STOCKHOLDER AND VOTING AGREEMENT. The Company and SAIC
shall have entered into a Stockholder and Voting Agreement substantially in
the form attached hereto as EXHIBIT 6.10.
7.11 RITZ PREMIER SUBCONTRACT. SAIC shall have executed and
delivered to the Company a subcontract to the contract known by the parties
as the Ritz Premier contract.
7.12 REGISTRATION RIGHTS AGREEMENT. The Company and SAIC shall
have executed and entered into the Registration Rights Agreement
substantially in the form attached hereto as EXHIBIT 6.14.
7.13 PATENT, COPYRIGHT AND TRADEMARK ASSIGNMENT. The Company and
SAIC shall have executed and entered into the Patent, Copyright and Trademark
Assignment substantially in the form attached hereto as EXHIBIT 6.15.
7.14 THIRD PARTY CONSENTS. SAIC shall have obtained the consents
or approvals of those persons or entities whose consent or approval are
required for the consummation of the transactions contemplated hereunder.
7.15 NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other legal or regulatory restraint
or prohibition preventing the consummation of the transactions contemplated
by this Agreement shall be in effect, nor shall any proceeding brought by an
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, seeking any of the foregoing be
pending; nor shall there be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
consummation of the transactions contemplated by this Agreement, which makes
the consummation of the transactions contemplated by this Agreement illegal.
In the event an
16
injunction or other order shall have been issued, each party agrees to use
its reasonable efforts to have such injunction or other order lifted.
7.16 GOVERNMENTAL APPROVAL. The Company and SAIC shall have
timely obtained from each Governmental Entity all approvals, waivers and
consents, if any, necessary for consummation of the transactions contemplated
by this Agreement and the several transactions contemplated hereby and are
required to be obtained on or before the Closing Date.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
8.1 SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the parties as contained in this Agreement (including the
Disclosure Schedules) shall survive the Closing and shall terminate on
September 25, 1999; provided that there shall be no limitation period for
matters involving fraud or intentional misrepresentation.
8.2 STATEMENTS AS REPRESENTATIONS. All statements contained in
the Company Disclosure Schedule and any certificate delivered pursuant to
this Agreement shall be deemed representations and warranties within the
meaning of Section 8.1 hereof.
8.3 INDEMNIFICATION BY THE COMPANY Subject to the limitations
set forth in this Article VIII, the Company hereby agrees to indemnify,
defend and hold harmless SAIC, any subsidiary, director, officer, employee,
agent or representative of SAIC (individually, an "SAIC INDEMNITEE" and
collectively, "SAIC INDEMNITEES") from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including, without limitation, interest, penalties, attorneys'
fees and expenses (collectively, "DAMAGES") asserted against, resulting from,
imposed upon or incurred by the SAIC Indemnitees or any SAIC Indemnitee,
resulting from, or arising out of any breach of any representation, warranty
or agreement of the Company, contained in or made pursuant to this Agreement.
8.4 INDEMNIFICATION BY SAIC. Subject to the limitations set
forth in this Article VIII, SAIC hereby agrees to indemnify, defend and hold
harmless the Company, any subsidiary, director, officer, employee, agent or
representative of the Company (individually, an "COMPANY INDEMNITEE" and
collectively, "COMPANY INDEMNITEES") from and against all Damages asserted
against, resulting from, imposed upon or incurred by the Company Indemnitees
or any Company Indemnitee, resulting from, or arising out of any breach of
any representation, warranty or agreement of SAIC, contained in or made
pursuant to this Agreement.
8.5 LIMITATION OF LIABILITY.
17
(a) NEITHER PARTY SHALL HAVE ANY LIABILITY WITH RESPECT TO ITS
OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, EXEMPLARY,
INCIDENTAL OR PUNITIVE DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
(b) IN NO EVENT SHALL COMPANY MAKE ANY CLAIM AGAINST SAIC UNLESS
THE ACTUAL AGGREGATE DIRECT DAMAGES INCURRED BY COMPANY ARISING FROM OR IN
CONNECTION WITH THIS AGREEMENT THAT ARE PROXIMATELY CAUSED BY SAIC EXCEED
ONE MILLION DOLLARS ($1,000,000.00) AND ANY SUCH CLAIM SHALL BE LIMITED IN
ANY EVENT TO THE AMOUNT OF SUCH DAMAGES IN EXCESS OF ONE MILLION DOLLARS
($1,000,000.00); PROVIDED, HOWEVER, THAT SUCH LIMITATIONS SHALL NOT BE
APPLICABLE TO CLAIMS BASED ON FRAUD OR INTENTIONAL MISREPRESENTATION.
(c) IN NO EVENT SHALL THE LIABILITY OF EITHER PARTY ARISING FROM
OR IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE EXCEED TWO MILLION SEVEN
HUNDRED FIFTY THOUSAND DOLLARS ($2,750,000.00); PROVIDED, HOWEVER, THAT
SUCH LIMITATIONS SHALL NOT BE APPLICABLE TO CLAIMS BASED ON FRAUD OR
INTENTIONAL MISREPRESENTATION.
(d) THESE LIMITATIONS OF LIABILITY ARE EXPRESSLY BARGAINED FOR
PORTIONS OF THE CONSIDERATION FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 AMENDMENT AND MODIFICATIONS. This Agreement may be amended,
modified and supplemented only by written agreement between the parties
hereto which states that it is intended to be a modification of this
Agreement.
9.2 WAIVER OF COMPLIANCE. Any failure of the Company or SAIC to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing by the other party, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
9.3 EXPENSES. The parties agree that all fees and expenses
incurred by them in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party incurring such fees and
expenses, including, without limitation, all fees of counsel, actuaries and
accountants.
18
9.4 REMEDIES WAIVER. All rights and remedies existing under
this Agreement are cumulative to and not exclusive of, any rights or remedies
otherwise available under applicable law. No failure on the part of any
party to exercise or delay in exercising any right hereunder shall be deemed
a waiver thereof, nor shall any single or partial exercise preclude any
further or other exercise of such or any other right. No right or remedy of
a party shall be deemed waived unless expressly made a term, covenant or
condition in this Agreement.
9.5 NOTICES. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or by commercial
delivery service, sent by facsimile transmission with confirmation of
receipt, or mailed by certified or registered mail (return receipt requested)
with postage prepaid, to the parties at the following address (or such other
address for a party as shall be specified by like notice):
if to the Company, to:
Xx. X. Xxxx Xxxxxx
Chairman, President and Chief Executive Officer
ODS Networks, Inc.
0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
FAX: 000-000-0000
with a copy to:
Xx. Xxxxxxx Xxxxxxx
Chief Financial Officer
ODS Networks, Inc.
0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
FAX: 000-000-0000
if to SAIC, to:
Xxxxxxx X. Xxxxxxx, Senior Vice President
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, X/X X0-X
Xxx Xxxxx, XX 00000
FAX: 000-000-0000
19
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Associate General Counsel
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, X/X X0
Xxx Xxxxx, XX 00000
FAX: 000-000-0000
9.6 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned
by any of the parties hereto without the prior written consent of the other
party.
9.7 PUBLICITY. Neither the Company nor SAIC shall make or
issue, or cause to be made or issued, any announcement or written statement
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the other
parties. This provision shall not apply, however, to any announcement or
written statement required to be made by law or the regulations of any
federal or state governmental agency or by obligations pursuant to any
listing agreement with any national securities exchange or with the NASD,
except that the party required to make such announcement shall, whenever
practicable, consult with the other party concerning the timing and content
of such announcement before such announcement is made.
9.8 SEVERABILITY. If any portion of this Agreement shall be
deemed illegal, void or unenforceable by a court of competent jurisdiction,
the remaining portions will continue in full force and effect and the
application of such provision to other persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto.
9.9 ARBITRATION OF DISPUTES. The parties agree that any
controversy or claim (whether such controversy or claim is based upon or
sounds in statute, contract, tort or otherwise) arising out of or relating to
this Agreement, any performance or dealings between the parties, or any
dispute arising out of the interpretation or application of this Agreement,
which the parties are not able to resolve, shall be settled exclusively by
arbitration in Dallas, Texas by a single arbitrator pursuant to the American
Arbitration Association's Commercial Arbitration Rules then in effect and
judgment upon the award rendered by the arbitrator shall be entered in any
court having jurisdiction thereof and such arbitrator shall have the
authority to grant injunctive relief in a form similar to that which a court
of law would otherwise grant. The arbitrator shall be chosen from a panel of
licensed attorneys having at least fifteen (15) years of professional
experience who are familiar with the subject matter of this Agreement. The
arbitrator shall be appointed within thirty (30) days of the date the demand
for arbitration was sent to the other party. Discovery shall be permitted in
accordance with the Federal Rules of Civil Procedure. If an arbitration
proceeding is brought pursuant to this Agreement, the prevailing party shall
be entitled to recover reasonable attorneys' fees, costs and necessary
disbursements incurred in addition to any other relief to which such party
may be entitled.
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9.10 GOVERNING LAW. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in accordance with the
laws of the State of Delaware (excluding its choice of laws rules).
9.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.12 HEADINGS. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
9.13 THIRD PARTIES. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or
corporation other than the parties hereto and their successors or assigns,
any rights or remedies under or by reason of this Agreement.
9.14 FURTHER ASSURANCES. Each of the parties hereto agrees that
from time to time, at the request of any of the other parties hereto and
without further consideration, it will execute and deliver such other
documents and take such other action as such other party may reasonably
request in order to consummate more effectively the transactions contemplated
hereby.
9.15 SCHEDULES AND EXHIBITS. The Exhibits and Schedules to this
Agreement are deemed incorporated in this Agreement and may contain
information that is not expressly required to be disclosed by this Agreement.
9.16 ENTIRE AGREEMENT. This Agreement, including the Exhibits
and Schedules hereto, the other documents and certificates delivered pursuant
to the terms hereof, set forth the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein, and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any officer, employee or representative of any party hereto, including but
not limited to the Agreement In Principal For Purchase Of ODS Networks, Inc.
Common Stock of July 14 signed by Xxxxxxx X. Xxxxxxx on behalf of SAIC and
signed by X. Xxxx Xxxxxx on behalf of the Company and the Agreement In
Principal For Purchase Of ODS Networks, Inc. Common Stock of July 16 signed
by Xxxxxxx X. Xxxxxxx on behalf of SAIC and signed by X. Xxxx Xxxxxx on
behalf of the Company. This Agreement has been negotiated by the parties and
their respective counsel and will be interpreted fairly and in accordance
with its terms and without strict construction in favor of or against either
party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereto duly
authorized, all as of the day and year first above written.
21
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
--------------------------------------
Title: Senior Vice President
-------------------------------------
ODS NETWORKS, INC.,
a Delaware corporation
By: /s/ X. Xxxx Xxxxxx
----------------------------------------
Name: X. Xxxx Xxxxxx
--------------------------------------
Title: President
-------------------------------------
22
LIST OF SCHEDULES AND EXHIBITS
Company Disclosure Schedule
SAIC Disclosure Schedule
Schedule 1.1 Withheld Rights
Schedule 1.1(a) Software CD-ROMs
Schedule 1.1(b) Contracts
Schedule 1.1(c) Assets
Schedule 1.2 Liabilities Being Assumed by the Company
Schedule IV List of SAIC Employees Constituting SAIC's Knowledge
Schedule 4.11 Lists Regarding the Software
Schedule 5.3(a) SAIC Personnel to be Offered Employment by the Company
Exhibit 6.3 Company Compliance Certificate
Exhibit 6.4 Members of the Board of Directors
Exhibit 6.5 Xxxx of Sale
Exhibit 6.6 Software Royalty, Grant Back and Improvements License Agreement
Exhibit 6.7 Strategic Alliance Agreement
Exhibit 6.8 PartnersPlus Agreement
Exhibit 6.11 $8.00 Warrant
Exhibit 6.12 $10.50 Warrant
Exhibit 6.14 Registration Rights Agreement
Exhibit 6.15 Patent, Copyright and Trademark Assignment
Exhibit 7.3 SAIC Compliance Certificate
