TRANSACTION AGREEMENT
TRANSACTION AGREEMENT, dated as of February 7, 2001 (the "Agreement"),
by and among Vertex Interactive, Inc., a New Jersey corporation ("Buyer"),
Renaissance Software, Inc., a Delaware corporation and wholly-owned subsidiary
of Buyer ("Renaissance"), and Pitney Xxxxx Inc., a Delaware corporation
("Seller").
WHEREAS, Seller, through its TranScape division, has developed and owns
the Acquired Assets (as defined herein);
WHEREAS, Renaissance, a wholly-owned subsidiary of the Buyer, has
developed a complementary set of supply chain execution software applications
known as RenSoftOMS and RenSoftWMS, which together with the transportation
management software product acquired from Seller hereunder is collectively
referred to as the "SCE Suite";
WHEREAS, the Buyer desires to acquire the Acquired Assets and assume
certain liabilities, as set forth herein;
WHEREAS, the Buyer, in consideration for the transfer to it of the
Acquired Assets, proposes to (i) issue and sell to the Seller an aggregate of
1,356,852 shares of Series A Convertible Preferred Stock, par value $.01 per
share (the "Preferred Stock"), of the Buyer and (ii) assume the Assumed
Liabilities (as defined herein);
WHEREAS, each share of Preferred Stock is convertible (subject to
adjustment) into one share of common stock, par value $.005 per share (the
"Common Stock"), of the Buyer;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the parties hereto are entering into (i) that certain Reseller
Agreement, in the form attached hereto as Exhibit A (the "Reseller Agreement"),
relating to the distribution by the Seller of the SCE Suite, which shall have as
a component thereof the Acquired Assets, and (ii) that certain Services
Agreement, in the form attached hereto as Exhibit B (the "Services Agreement"),
relating to certain post-closing interim matters;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" shall mean any Person who is an "affiliate" as defined in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Acquired Assets" has the meaning set forth in Section 2.1(b) of this
Agreement.
"Assumed Liabilities" has the meaning set forth in Section 2.3 of this
Agreement.
"Board of Directors" means the Board of Directors of Buyer.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"Buyer" shall have the meaning set forth in the Preamble of this
Agreement.
"Buyer Indemnified Party" has the meaning set forth in Section 8.1 of
this Agreement.
"Buyer Intellectual Property" has the meaning set forth in Section 4.14
of this Agreement.
"Buyer Plans" means each Plan which Buyer maintains or to which Buyer
makes contributions.
"Buyer SEC Reports" has the meaning set forth in Section 4.9 of this
Agreement.
"Buyer Software" means any computer software programs, source code,
object code, data and documentation, including, without limitation, any computer
software programs that incorporate and run Buyer's pricing models, formulae and
algorithms.
"Buyer Stock Options" has the meaning set forth in Section 4.7 of this
Agreement.
"Certificate of Designations" means the Certificate of Designations
with respect to the Preferred Stock adopted by the Board of Directors and duly
filed with the Secretary of State of the State of New Jersey on or before the
Closing Date substantially in the form attached hereto as Exhibit C.
"Claims" has the meaning set forth in Section 4.5 of this Agreement.
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"Closing" has the meaning set forth in Section 3.1 of this Agreement.
"Closing Date" has the meaning set forth in Section 3.1 of this
Agreement.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Commission" means the United States Securities and Exchange Commission
or any similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" has the meaning set forth in the Preamble of this
Agreement.
"Commonly Controlled Entity" means any entity which is under common
control with Buyer or Seller, as the case may be, within the meaning of Code
section 414(b), (c), (m), (o) or (t).
"Condition of Buyer" means the assets, business, properties, operations
or condition (financial or otherwise) of Buyer and its Subsidiaries, taken as a
whole.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument to which such Person is a
party or by which it or any of its property is bound.
"Conquest Intellectual Property" has the meaning set forth in Section
5.9 of this Agreement.
"Conquest Product Development Employees" has the meaning set forth in
Section 5.8(a) of this Agreement.
"Conquest Trademark" shall mean the trademark CONQUEST.
"Copyrights" means any foreign or United States copyright registrations
and applications for registration thereof, and any non-registered copyrights.
"Distribution Agreement" has the meaning set forth in the Preamble of
this Agreement.
"Environmental Laws" means federal, state, local and foreign laws,
principles of common laws, civil laws, regulations, and codes, as well as
orders, decrees, judgments or injunctions, issued, promulgated, approved or
entered thereunder relating to pollution, protection of the environment or
public health and safety.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules promulgated and rulings issued thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Excluded Assets" has the meaning set forth in Section 2.2 of this
Agreement.
"Foreign Employees" has the meaning set forth in Section 9.2(e) of this
Agreement.
"GAAP" means United States generally accepted accounting principles in
effect from time to time.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Indemnified Party" has the meaning set forth in Section 8.3 of this
Agreement.
"Indemnifying Party" has the meaning set forth in Section 8.3 of this
Agreement.
"Intellectual Property" when used herein shall mean all Patents,
Trademarks, Copyrights, technology, know-how and processes.
"Internet Assets" means any Internet domain names and other computer
user identifiers and any rights in and to sites on the worldwide web, including
rights in and to any text, graphics, audio and video files and html or other
code incorporated in such sites.
"Knowledge" means the knowledge of Buyer or Seller, as the case may be,
or its respective Subsidiaries after due inquiry.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences).
"Losses" has the meaning set forth in Section 8.1 of this Agreement.
"Minimum Amount" has the meaning set forth in Section 8.5(b) of this
Agreement.
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"Orders" has the meaning set forth in Section 4.2 of this Agreement.
"Patents" means any foreign or United States patents and patent
applications, including any divisions, continuations, continuations-in-part,
substitutions or reissues thereof, whether or not patents are issued on such
applications and whether or not such applications are modified, withdrawn or
resubmitted.
"Permits" has the meaning set forth in Section 4.6(b) of this
Agreement.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"Plan" means any employee benefit plan, arrangement, policy, program,
agreement or commitment (whether or not an employee plan within the meaning of
Section 3(3) of ERISA), including, without limitation, any employment,
consulting or deferred compensation agreement, executive compensation, bonus,
incentive, pension, profit-sharing, savings, retirement, stock option, stock
purchase or severance pay plan, any life, health, disability or accident
insurance plan, whether oral or written, whether or not subject to ERISA, as to
which Seller or Buyer, as the case may be, or any Commonly Controlled Entity of
Seller or Buyer, as the case may be, has or in the future could have any direct
or indirect, actual or contingent liability.
"Preferred Stock" has the meaning set forth in the Preamble of this
Agreement.
"Registration Rights Agreement" means the Registration Rights Agreement
substantially in the form attached hereto as Exhibit D.
"Requirements of Law" means, as to any Person, any law, statute,
treaty, rule, regulation, right, privilege, qualification, license or franchise
or determination of an arbitrator or a court or other Governmental Authority or
stock exchange, in each case applicable or binding upon such Person or any of
its property or to which such Person or any of its property is subject or
pertaining to any or all of the transactions contemplated or referred to herein.
"SCE Suite" shall have the meaning set forth in the Preamble of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Seller" shall have the meaning set forth in the Preamble of this
Agreement.
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"Seller Indemnified Party" has the meaning set forth in Section 8.2 of
this Agreement.
"Seller Intellectual Property" has the meaning set forth in Section 5.9
of this Agreement.
"Seller Plans" has the meaning set forth in Section 5.8(b) of this
Agreement.
"Services Agreement" has the meaning set forth in the Preamble of this
Agreement.
"Software" means computer software programs, source code, object code,
data and documentation, including, without limitation, any computer software
programs that incorporate or run pricing models, formulas and algorithms.
"Stock Equivalents" means any security or obligation which is by its
terms convertible into or exchangeable or exercisable for shares of common stock
or other capital stock, and any option, warrant or other subscription or
purchase right with respect to common stock or such other capital stock.
"Subsidiaries" means, as of the relevant date of determination, with
respect to any Person, a corporation or other Person of which 50% or more of the
voting power of the outstanding voting equity securities or 50% or more of the
outstanding economic equity interest is held, directly or indirectly, by such
Person.
"Tax" or "Taxes" means any federal, state, local, foreign and other
taxes, charges, fees, levies or other assessments, however designated,
(including, without limitation, income, profits, gains, windfall profits,
alternative, minimum, accumulated earnings, personal holding company, capital
stock, premium, estimated, excise, sales, use, license, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
social security, stamp, registration, documentation and environmental taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto,
imposed by any federal, state, local or foreign government.
"Tax Returns" means all reports, estimates, information returns,
statements and other documents (including any related or supporting information)
filed or required to be filed with any Tax authority in connection with the
determination, assessment, collection, or administration of any Taxes.
"Trade Secrets" means any trade secrets, research records, processes,
procedures, manufacturing formulae, technical know-how, technology; blue prints,
designs, plans, inventions (whether patentable and whether reduced to practice),
invention disclosures and improvements thereto.
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"Trademarks" means any foreign or United States trademarks, service
marks, trade dress, trade names, brand names, designs and logos, slogans,
corporate names, domain names, product or service identifiers, whether
registered or unregistered, and all registrations and applications for
registration thereof.
"Transferred Shares" has the meaning set forth in Section 2.6 of this
Agreement.
"Transaction Documents" means, collectively, this Agreement, the
Reseller Agreement, the Services Agreement, the Certificate of Designation and
the Registration Rights Agreement.
ARTICLE II
SALE OF ASSETS; PURCHASE PRICE
2.1 Purchase and Sale of the Acquired Assets; License of Conquest
Patents.
(a) Subject to the terms and conditions of this Agreement, at
the Closing, the Seller agrees to sell, assign, transfer, convey and deliver to
the Buyer, and the Buyer agrees to purchase and accept from the Seller, all of
the right, title and interest of the Seller, to the Acquired Assets (as defined
below), free and clear of all Liens. Except for the Acquired Assets, the Buyer
shall not acquire any other asset of the Seller whether or not used in
connection with the Acquired Assets (the "Excluded Assets").
(b) The "Acquired Assets" shall consist of (i) the integrated
logistics solutions for multi-carrier order processing and shipment management
Software of the Seller that is marketed by the Seller under the Conquest
Trademark and the Copyrights, Trade Secrets, and Software that are owned by
Seller and used in connection with the business of Seller relating thereto and
(ii) certain fixed assets. As of the Closing Date, the parties hereto agree that
the Acquired Assets shall include the items set forth in Schedule 2.1(b).
(c) Buyer hereby grants to Seller, for no consideration, a
fully paid-up license with respect to the Trade Secrets, if any, that become the
property of Buyer pursuant to this Agreement for use other than with respect to
the Acquired Assets. Seller shall not use the Trade Secrets to recreate the
Conquest Software or a replacement of the Conquest Software. Furthermore, Seller
shall not disclose the Trade Secrets to any third party absent an attendant
duty, in conformance with Seller's practices, but no less than reasonable
practices under the circumstances, to maintain the trade secret status thereof.
Buyer shall execute and deliver such instruments and take other such action as
may be reasonably required and requested by Seller to carry out the license made
pursuant to this Section.
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(d) At the Closing, the parties will enter into the certain
Patent License Agreement, in the form attached hereto as Exhibit E (the "Patent
License Agreement"), relating to the license by Seller to Buyer of certain
intellectual property which relates to the Acquired Assets.
2.2 Excluded Assets. For clarification, Excluded Assets include,
without limitation:
(a) except as provided in Section 2.1(b), any Trademarks,
Copyrights, Software, Patents and other intellectual property of the Seller, or
any registrations or applications for registration for any of the foregoing; and
(b) all assets of the Seller's and its Subsidiaries'
businesses other than the Acquired Assets.
2.3 Assumed Liabilities. (a) Except as expressly set forth below, the
Buyer shall not assume any liabilities or obligations arising from or related to
the Acquired Assets, whether such liabilities or obligations are matured or
unmatured, absolute or contingent, accrued, liquidated or unliquidated, and
whether or not required to be disclosed on a balance sheet prepared in
accordance with GAAP. The Buyer hereby assumes the following liabilities and/or
obligations (collectively the "Assumed Liabilities"):
(i) all liabilities and obligations to the extent
arising out of or resulting from the Buyer's ownership or use of the Acquired
Assets from and after the Closing Date;
(ii) all liabilities and obligations incurred on or
after the Closing Date to the extent arising out of or resulting from Buyer's
offer of employment to all of the Conquest Product Development Employees; and
(iii) all liabilities incurred under Buyer Plans
arising from Buyer's employment of any Conquest Product Development Employees on
and after the Closing Date (to the extent such Conquest Product Development
Employees accept employment and begin working at Buyer), including liability
under Sections 4980B of the Code or Sections 601-607 of ERISA.
(b) Notwithstanding any other provision of this Agreement to
the contrary, none of the following shall be Assumed Liabilities:
(i) all liabilities and obligations to the extent
arising out of or resulting from Seller's ownership or use of the Acquired
Assets prior to the Closing Date;
(ii) all liabilities and obligations relating to the
Excluded Assets; and
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(iii) all liabilities and obligations relating to (x)
Seller Plans (including any severance plans, programs or arrangements) and (y)
any contract, agreements or arrangements between Seller (or any Affiliate of
Seller) and any Conquest Product Development Employee.
2.4 Conveyance. At the Closing, the conveyance, transfer and assignment
of the Acquired Assets by the Seller to the Buyer shall be effected by the
delivery by the Seller to the Buyer and by the Buyer to the Seller of:
(a) a duly executed Instrument of Assignment and Assumption in
the form attached hereto as Exhibit F; and
(b) such other good and sufficient duly executed instruments
of conveyance, transfer, assignment and assumption as shall be necessary to vest
in the Buyer (i) all of the right, title and interest of the Seller in the
Acquired Assets and (ii) the obligations and liabilities contemplated to be
assumed by the Buyer hereunder.
2.5 Further Assurances. Subsequent to the date hereof, each party
hereto shall, from time to time, at the request of any other party and without
further cost or expense to the party making the request, execute and deliver
(and, if appropriate, file) or cause to be executed and delivered (and, if
appropriate, filed) such other instruments of conveyance and transfer as any
other party may reasonably request, and continue to use the reasonable efforts
to obtain any consents, approvals, authorizations and waivers necessary in
order to more effectively consummate the transactions contemplated herein.
2.6 Purchase Price. Subject to the terms and conditions herein set
forth, at the Closing, in consideration for the transfer to the Buyer of the
Acquired Assets, the Buyer will assume the Assumed Liabilities and will issue to
the Seller 1,356,852 shares of Preferred Stock (the "Transferred Shares").
2.7 Allocation of Purchase Price. As soon as practicable after the
Closing Date, and in any event within sixty (60) days of such date, Buyer shall
prepare and submit to Seller a computation of the allocation of the purchase
price among the Acquired Assets. Seller shall have full opportunity to review
such allocation for twenty (20) days after receipt of such allocation from
Buyer. Seller may dispute any items in the allocation. Unless Seller delivers
notice to Buyer on or prior to the 20th day after receipt by Seller of the
allocation specifying any dispute with the allocation, Seller shall be deemed to
have accepted and agreed to the allocation, and the allocation shall be final.
If Seller so notifies Buyer of any objection to the allocation, Seller and Buyer
shall, during the twenty (20) day period following such notice of dispute,
attempt to resolve their differences and any resolution by them as to any
disputed items shall be final, conclusive and binding on the parties. If at the
end of the resolution period there remain any disputed items, then all such
remaining disputed items shall be submitted to an independent third party
mutually acceptable to both parties for resolution. Such independent party shall
resolve any disputed items within twenty (20) days of its appointment thereby
and resolution by such independent party shall be conclusive, binding and final
on the parties hereto. For purposes of determining Buyer's basis in the
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Acquired Assets and gain or loss recognized by Seller with respect to the sale
of the Acquired Assets to Buyer, Buyer and Seller covenant and agree that the
aggregate purchase price shall be allocated by them among the Acquired Assets
consistent with the allocation, and the parties further agree that they shall
file all Tax Returns and related forms (including, without limitation, Form
8594) in accordance with the final allocation and shall not make any
inconsistent written statement or take any inconsistent position on any Tax
Returns, in any refund claims, or during the course of any Internal Revenue
Service or other Tax audit.
2.8 Certificates of Designations. The Transferred Shares shall have the
preferences and rights set forth in the Certificate of Designations
ARTICLE III
CLOSING
3.1 Closing. The closing of the sale and the transfer of the Acquired
Assets and the Transferred Shares (the "Closing") shall take place at the
offices of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, at 10:00. a.m., local time,
on the date hereof, or at such other time, place and date that the parties may
agree in writing (the "Closing Date"). On the Closing Date: (a) the Seller shall
execute and deliver the Assignment and Assumption Agreement and (b) the Buyer
shall deliver to Seller a certificate or certificates in definitive form and
registered in the name of Seller, representing the Transferred Shares in
consideration for the transfer to it of the Acquired Assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer and Renaissance represent and warrant to Seller as follows:
4.1 Corporate Existence and Power. Buyer and each Buyer Subsidiary (a)
are corporations duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (b) have all requisite power and
authority to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently, or is proposed to
be, engaged; (c) are duly qualified as a foreign corporations, licensed and in
good standing under the laws of each jurisdiction in which its ownership, lease
or operation of property or the conduct of its business requires such
qualification, except to the extent such failure would not reasonably be
expected to have a material adverse effect on the Condition of Buyer; and (d)
have the corporate power and authority to execute, deliver and perform its
obligations under this Agreement and each of the other Transaction Documents. No
jurisdiction, other than those referred to in clause (c) above, has claimed, in
writing or otherwise, that Buyer or any Buyer Subsidiary (i) is required to
qualify as a foreign corporation or other entity therein, or (ii) is required to
file any Tax Returns therein. Neither Buyer nor any Buyer Subsidiary owns or
leases property in any jurisdiction other than its jurisdiction of incorporation
and the jurisdictions referred to in clause (c) above.
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4.2 Authorization; No Contravention. The execution, delivery and
performance by Buyer and Renaissance of this Agreement and each of the other
Transaction Documents and the transactions contemplated hereby and thereby (a)
have been duly authorized by all necessary corporate action of Buyer and
Renaissance; (b) do not contravene the terms of the Certificate of Incorporation
or the By-laws of Buyer or Renaissance; (c) do not violate, conflict with or
result in any breach, default or contravention of (or with due notice or lapse
of time or both would result in any breach, default or contravention of), or the
creation of any Lien under, any Contractual Obligation of Buyer or Renaissance
or any Requirement of Law applicable to Buyer or Renaissance; and (d) do not
violate any judgment, injunction, writ, award, decree or order of any nature
(collectively, "Orders") of any Governmental Authority against, or binding upon,
Buyer or Renaissance, excluding from the foregoing clauses (c) and (d)
violations, conflicts, breaches, defaults, contraventions and creation of Liens
which, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the Condition of Buyer or on the ability of
Buyer or Renaissance to consummate the transactions contemplated by this
Agreement.
4.3 Governmental Authorization; Third Party Consents. Except as set forth
in Schedule 4.3, no approval, consent, compliance, exemption, authorization or
other action by, or notice to, or filing with, any Governmental Authority or any
other Person, and no lapse of a waiting period under a Requirement of Law, is
necessary or required in connection with the execution, delivery or performance
(including, without limitation, the sale, issuance and delivery of the
Transferred Shares) by, or enforcement against, Buyer or Renaissance of this
Agreement and the other Transaction Documents or the transactions contemplated
hereby and thereby.
4.4 Binding Effect. This Agreement and each of the other Transaction
Documents have been duly executed and delivered by Buyer and Renaissance, and
constitute the legal, valid and binding obligations of Buyer and Renaissance,
enforceable against Buyer and Renaissance in accordance with their terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
4.5 Litigation. Except as set forth on Schedule 4.5 and except as disclosed
in Buyer SEC Reports, there are no actions, suits, proceedings, claims,
complaints, disputes, arbitrations or investigations (collectively, "Claims")
pending or, to the Knowledge of Buyer, threatened, at law, in equity, in
arbitration or before any Governmental Authority against Buyer or any Buyer
Subsidiary that, individually or in the aggregate, has resulted or could
reasonably be expected to result in a material adverse change in the Condition
of Buyer. No Order has been issued by any court or other Governmental Authority
against Buyer or any Buyer Subsidiary purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any of the other
Transaction Documents.
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4.6 Compliance with Laws.
(a) Buyer and each Buyer Subsidiary is in compliance with all material
Requirements of Law and all Orders issued by any court or Governmental Authority
against Buyer or such Buyer Subsidiary, as the case may be, in all respects,
except to the extent such failure to comply would not reasonably be expected to
have a material adverse effect on the Condition of the Buyer. To Buyer's
Knowledge, there is no existing or proposed Requirement of Law which could
reasonably be expected to prohibit or restrict Buyer or any Buyer Subsidiary
from, or otherwise materially adversely affect Buyer or any Buyer Subsidiary in
conducting its business in any jurisdiction in which it now conducts or
proposes, to conduct its business, except to the extent such prohibition or
restriction would not reasonably be expected to have a material adverse effect
on the Condition of the Buyer.
(b) (i) Buyer and each Buyer Subsidiary has all material licenses,
permits and approvals of any Governmental Authority (collectively, "Permits")
that are necessary for the conduct of the business of Buyer and each Buyer
Subsidiary; (ii) such Permits are in full force and effect; and (iii) no
violations are or have been recorded in respect of any Permit, except as could
not really be expected to have a material adverse effect on the Condition of
Buyer.
4.7 Capitalization.
(a) The authorized capital stock of the Buyer consists of (i)
seventy-five (75) million shares of Common Stock and (ii) two (2) million shares
of Preferred Stock. After giving effect to the transactions contemplated by this
Agreement, (i) 31,074,954 shares of Common Stock are issued and outstanding, all
of which were validly issued and are fully paid, nonassessable and not subject
to preemptive rights, (ii) 10,000 shares of Common Stock were held in the
treasury of the Buyer or by the Buyer Subsidiaries, (iii) 7,870,673 shares of
Common Stock were reserved for issuance upon exercise of outstanding Buyer Stock
Options and (iv) 1,356,852 shares of Preferred Stock are issued and outstanding,
all of which were validly issued, and are fully paid, nonassessable and not
subject to preemptive rights. Except as set forth above, as of the Closing Date,
no shares of capital stock or other voting securities of the Buyer were issued,
reserved for issuance or outstanding. Except for agreements or arrangements in
connection with options to purchase an aggregate of 7,870,673 shares of Common
Stock ("Buyer Stock Options"), there are no options, warrants, calls, conversion
rights, stock appreciation rights, redemption rights, repurchase rights or other
rights, agreements, arrangements or commitments of any character to which the
Buyer is a party or by which the Buyer is bound obligating the Buyer to issue or
sell any shares of capital stock of, other equity interests in, or securities
exchangeable for or convertible into capital stock or other equity interests in,
the Buyer. The Transferred Shares, when issued and sold to Seller after payment
therefor, and the shares of Common Stock when issued upon conversion of the
Preferred Stock, will be duly authorized, validly issued, fully paid and
non-assessable, will be issued in compliance with the registration and
qualification requirements of all applicable federal, state and foreign
securities laws and will be free and clear of all other Liens. All of the issued
and outstanding shares of Common Stock
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are all duly authorized, validly issued, fully paid and non-assessable, and were
issued in compliance with the registration and qualification requirements of all
applicable federal, state and foreign securities laws.
(b) Buyer is the owner of all of the outstanding shares of capital
stock of Renaissance. All of such shares of capital stock are duly authorized,
validly issued, fully paid and non-assessable, and were issued in compliance
with the registration and qualification requirements of all applicable federal,
state and foreign securities laws. Except as set forth on Schedule 4.7(b), there
are no options, warrants, conversion privileges, subscription or purchase rights
or other rights presently outstandinging to purchase or otherwise acquire any
authorized but unissued, unauthorized or treasury shares of capital stock or
other securities of, or any proprietary interest in, Renaissance, and there is
no outstanding security of any kind convertible into or exchangeable for such
shares or proprietary interest.
4.8 No Default or Breach; Contractual Obligations. Except for the
Contractual Obligations disclosed in Schedule 4.8 (the "Renaissance Contractual
Obligations"), copies of which have been made available to the Seller, there is
no Contractual Obligation that is material to the business, financial condition
or results of operations of Renaissance. Each of the Renaissance Contractual
Obligations constitutes a valid and legally binding obligation of the parties
thereto, enforceable in accordance with its terms, and is in full force and
effect, except to the extent the failure to be so valid, binding or enforceable,
individually or in the aggregate, has not and could not reasonably be expected
to result in a material adverse change on the Condition of the Buyer. Neither
the Buyer nor any Buyer Subsidiary, nor to the Buyer's Knowledge, any other
person, is in violation of or in default under (nor does there exist any
condition which with the passage of time or the giving of notice would cause
such a violation of or default under) any Renaissance Contractual Obligation,
except for violations or defaults that, individually or in the aggregate, have
not resulted and could not reasonably be expected to result in a material
adverse change on the Condition of Buyer.
4.9 SEC Filings Financial Statements. (a) The Buyer has filed all forms,
reports, schedules, statements and other documents (including all exhibits,
annexes, supplements and amendments to such documents) required to be filed by
it under the Exchange Act and the Securities Act since January 1, 1998 (the
"Buyer SEC Reports"). The Buyer SEC Reports, including any financial statements
or schedules included or incorporated therein by reference, at the time they
were filed, (i) complied in all material respects with the requirements of the
Exchange Act or the Securities Act or both, as the case may be, applicable to
those Buyer SEC Reports and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated or
necessary in order to make the statements made in those Buyer SEC Reports, in
the light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated balance sheets included in or
incorporated by reference into the Buyer SEC Reports (including the related
notes and schedules) fairly presented, in all material respects, the
consolidated financial position of the Buyer as of the dates set forth in those
consolidated balance sheets. Each of the
13
consolidated statements of income and of cash flows included in or incorporated
by reference into the Buyer SEC Reports (including any related notes and
schedules) fairly presented, in all material respects, the consolidated results
of operations and cash flows, as the case may be, of the Buyer and the
consolidated Buyer Subsidiaries for the periods set forth in those consolidated
statements of income and of cash flows (subject, in the case of unaudited
quarterly statements, to notes and normal year-end audit adjustments that will
not be material in amount or effect), in each case in conformity with GAAP
(except, in the case of unaudited quarterly statements, as permitted by Form
10-Q of the SEC) consistently applied throughout the periods indicated. All of
such balance sheets and statements 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.
(c) Except as and to the extent set forth on the consolidated balance
sheet of the Buyer and the consolidated Buyer Subsidiaries as of September 30,
2000 including the related notes, neither the Buyer nor any Buyer Subsidiary has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on a balance
sheet or in the related notes prepared in accordance with GAAP, except for
liabilities or obligations that, individually or in the aggregate, could not
reasonably be expected to result in a material adverse change in the Condition
of the Buyer.
4.10 Taxes. To the best Knowledge of Buyer (a) Buyer has paid or reserved
for all Taxes shown on its Tax Returns which have come due and are required to
be paid by it on and through the date hereof, other than Taxes being disputed by
Buyer in good faith for which adequate reserves have been made in accordance
with GAAP and which are shown on the financial statements of Buyer; (b) Buyer
has timely filed or caused to be filed all Tax Returns that it is required to
file on and through the date hereof (including all applicable extensions), and
all such Tax Returns are accurate and complete in all material respects; (c)
with respect to all Tax Returns of Buyer, (i) there is no unassessed Tax
deficiency proposed or threatened against Buyer which is material in amount and
has not been reserved for and (ii) no audit or other administrative or judicial
proceeding is in progress with respect to any Tax Returns, no extension of time
is in force with respect to any date on which any Tax Return was or is to be
filed and no waiver or agreement is in force for the extension of time for the
assessment or payment of any Tax; and (d) there are no Liens for Taxes on the
assets of Buyer. For federal income tax purposes, Buyer is an association
taxable as a corporation. Buyer is not a "collapsible corporation" within the
meaning of Section 341(b) of the Code.
4.11 No Material Adverse Change; Ordinary Course of Business. Since
September 30, 2000, there has not been any material adverse change, nor any
event or development which could reasonably be expected to result in a material
adverse change on the Condition of Buyer.
4.12 Private Offering. No form of general solicitation or general
advertising was used by Buyer or its representatives in connection with the
offer or sale of the Transferred Shares. No registration of the Transferred
Shares, pursuant to the
14
provisions of the Securities Act or any state securities or "blue sky" laws,
will be required by the offer, sale or issuance of the Transferred Shares. Buyer
agrees that neither it, nor anyone acting on its behalf, shall offer to sell the
Transferred Shares or any other securities of Buyer so as to require the
registration of the Transferred Shares pursuant to the provisions of the
Securities Act or any state securities or "blue sky" laws, unless such
Transferred Shares or other securities are so registered.
4.13 Employee Benefit Plans. Except as would not have a material adverse
effect on Buyer, each Buyer Plan (and related trust, insurance contract or fund)
has been established and administered in accordance with its terms, and complies
in form and in operation with the applicable requirements of ERISA and the Code
and other applicable Requirements of Law. Except as would not have a material
adverse effect on Buyer, all contributions (including all employer contributions
and employee salary reduction contributions) which are due have been paid to
each Buyer Plan. Each Buyer Plan that is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
since its adoption; each trust created under any such Plan is exempt from tax
under Section 501(a) of the Code and has been so exempt since its creation.
4.14 Buyer Intellectual Property.
(a) (i) Buyer and each Buyer Subsidiary is the owner of all, or has
the license or right to use, sell and license all of, the material Copyrights,
Patents, Trade Secrets, Trademarks, Internet Assets, software and other
proprietary rights (collectively, "Buyer Intellectual Property") that are
necessary for its business as presently conducted or contemplated in its
business plan, free and clear of all Liens.
(ii) None of the Buyer Intellectual Property is subject to any
outstanding Order, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand is pending or, to the Knowledge of Buyer,
threatened, which challenges the validity, enforceability, use or ownership of
the item.
(iii) Buyer and each Buyer Subsidiary have substantially
performed all obligations imposed upon it under all Intellectual Property
licenses, sublicenses, distributor agreements and other agreements under which
Buyer or Buyer Subsidiary is either a licensor, licensee or distributor, and is
not, nor to the Knowledge of Buyer is any other party thereto, in breach of or
default thereunder in any respect, nor is there any event which with notice or
lapse of time or both would constitute a default thereunder except as could not
be expected to have a material adverse effect on the Condition of Buyer. All of
the material Intellectual Property licenses are valid, enforceable and in full
force and effect in all material respects, and will continue to be so on
identical terms immediately following the Closing except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
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(iv) Other than as set forth on Schedule 4.14(a)(iv), none of
the Intellectual Property currently sold or licensed by Buyer or any Buyer
Subsidiary to any Person or used by or licensed to Buyer by any Person infringes
upon or otherwise violates in any material respect any Intellectual Property
rights of others.
(v) Except as set forth on Schedule 4.14(a)(v), no litigation is
pending and no Claim has been made against Buyer or any Buyer Subsidiary or, to
the Knowledge of Buyer, is threatened, contesting the right of Buyer or any
Buyer Subsidiary to sell or license to any Person or use the Intellectual
Property presently sold or licensed to such Person of used by Buyer or any Buyer
Subsidiary.
(b) Except as set forth on Schedule 4.14(b), to the Knowledge of
Buyer, no Person is infringing upon or otherwise violating the Intellectual
Property rights of Buyer or any Buyer Subsidiary.
4.15 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
with the transactions contemplated hereby based on any agreement, arrangement or
understanding with Buyer or any action taken by the Buyer.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
The sale of the Acquired Assets to Buyer pursuant to this Agreement shall,
except as otherwise expressly provided in this Agreement or the other
Transaction Agreements, be without any representations or warranties of any kind
or nature, express or implied, as to the title to, or the condition, value or
quality of, the Acquired Assets and, except as otherwise expressly provided in
this Article V of this Agreement or the other Transaction Agreements, Seller
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE,
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE ACQUIRED
ASSETS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF
ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT.
Seller hereby represents and warrants to Buyer as follows:
5.1 Existence and Power. Seller (a) is a corporation duly organized and
validly existing under the laws of the jurisdiction of its formation and (b) has
the requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and each of the other Transaction Documents to
which it is a party.
5.2 Authorization; No Contravention. The execution, delivery and
performance by Seller of this Agreement and each of the other Transaction
Documents to which it is a party and the transactions contemplated hereby and
thereby, (a) have been duly authorized by all necessary corporate action, (b) do
not contravene the terms of
16
Seller's organizational documents, or any amendment thereof, and (c) do not
violate, conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation of Seller or any
Requirement of Law applicable to Seller, and (d) do not violate any Orders of
any Governmental Authority against, or binding upon, Seller, excluding from the
foregoing clauses (c) and (d) violations, conflicts, breaches, defaults,
contraventions and creation of Liens which, individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on the
Condition of Seller or on the ability of Seller to consummate the transactions
contemplated by this Agreement.
5.3 Governmental Authorization; Third Party Consents. No approval, consent,
compliance, exemption, authorization or other action by, or notice to, or filing
with, any Governmental Authority or any other Person, and no lapse of a waiting
period under any Requirement of Law, is necessary or required in connection with
the execution, delivery or performance (including, without limitation, the
purchase of the Transferred Shares) by, or enforcement against, Seller of this
Agreement and each of the other Transaction Documents to which it is a party or
the transactions contemplated hereby and thereby.
5.4 Binding Effect. This Agreement and each of the other Transaction
Documents to which it is a party have been duly executed and delivered by the
Seller and constitutes the legal, valid and binding obligations of the Seller,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
5.5 Purchase for Own Account. The Transferred Shares to be acquired by
Seller pursuant to this Agreement are being or will be acquired for its own
account and with no intention of distributing or reselling such Transferred
Shares or any part thereof in any transaction that would be in violation of the
securities laws of the United States of America, or any state, without
prejudice, however, to the rights of Seller at all times to sell or otherwise
dispose of all or any part of such Transferred Shares under an effective
registration statement under the Securities Act, or under an exemption from such
registration available under the Securities Act, and subject, nevertheless, to
the disposition of Seller's property being at all times within its control. If
Seller should in the future decide to dispose of any of such Transferred Shares,
Seller understands and agrees that it may do so only in compliance with the
Securities Act and applicable state securities laws, as then in effect. Seller
agrees to the imprinting, so long as required by law, of a legend on
certificates representing all of its Transferred Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES
17
LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
SUCH LAWS.
5.6 Restricted Securities. Seller understands that the Transferred Shares
will not be registered at the time of their issuance under the Securities Act
for the reason that the sale provided for in this Agreement is exempt pursuant
to Section 4(2) of the Securities Act and that the reliance of Buyer on such
exemption is predicated in part on Seller's representations set forth herein. In
the event that Seller desires to transfer the Transferred Shares to a third
party at any time that the foregoing legend is required, Seller shall provide
Buyer, prior to such transfer, with reasonable assurances that such transfer can
be made in a manner that would not violate the Securities Act.
5.7 Broker's, Finder's or Similar Fees. There are no brokerage commissions,
finder's fees or similar fees or commissions payable by Seller in connection
with the transactions contemplated hereby based on any agreement, arrangement or
understanding with Seller or any action taken by Seller.
5.8 Employee Matters.
(a) Schedule 5.8(a) hereto lists the names and titles of each of the
employees of Seller whom Buyer has agreed to offer employment in accordance with
the provisions of this Agreement (the "Conquest Product Development Employees").
A true and complete list of (i) the current salary of each such Conquest Product
Development Employee and (ii) the average cost allocated to each such Conquest
Product Development Employee with respect to benefits shall be provided to
Vertex on or before the Closing Date.
(b) (i) Schedule 5.8(b) hereto lists each Plan, whether formal or
informal and whether legally binding or not, that Seller maintains or to which
Seller contributes covering any of the Conquest Product Development Employees
(the "Seller Plans"). Seller has no material liability under any Plan covering
any of the Conquest Product Development Employees other than Seller Plans.
Except as set forth on Schedule 5.8(b), neither Seller nor any Commonly
Controlled Entity maintains or contributes to or has within the preceding six
(6) years maintained or contributed to, or may have any liability with respect
to any Plan subject to Title IV or ERISA or Section 412 of the code or any
"multiple employer plan" within the meaning of the code or ERISA. Seller has
previously delivered or made available to Buyer summaries of the Seller Plans
and represents that each Seller Plan (and related trust, insurance contract or
fund) has been established and administered in all material respects in
accordance with its terms, and complies in all material respects in form and in
operation with the applicable requirements of ERISA and the Code and other
applicable Requirements of Law. All contributions (including all employer
contributions and employee salary reduction
18
contributions) which are due have been paid to each Seller Plan; (ii) No Claim
with respect to the administration or the investment of the assets of any Seller
Plan (other than routine claims for benefits) having any material effect is
pending; and (iii) Each Seller Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and, to the best of Seller's
knowledge, has been so qualified during the period since its adoption; each
trust created under any such Plan is exempt from tax under Section 501(a) of the
Code and has been so exempt since its creation.
5.9 Seller Intellectual Property. (a) (i) Seller is the owner of all, or
has a valid and binding license or right to use, sell and license all of, the
material Copyrights, Trade Secrets and Software that are used in connection with
the business relating to the Acquired Assets (collectively, the "Conquest
Intellectual Property"), free and clear of all Liens.
(ii) Schedule 5.9(a)(ii) sets forth a complete and accurate list
of all of the Conquest Intellectual Property owned by, and filings and
applications for any Conquest Intellectual Property filed by, Seller. None of
the Conquest Intellectual Property listed on Schedule 5.9(a)(ii) is subject to
any outstanding Order, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand is pending or, to the Knowledge of Seller,
threatened, which challenges the validity, enforceability, use or ownership of
the item nor, to the Knowledge of Seller, is there any basis for the foregoing.
All of the Conquest Intellectual Property is in full force and effect.
(iii) Schedule 5.9(a)(iii) sets forth a complete and accurate list
of all of the Conquest Intellectual Property licenses, sublicenses, distributor
agreements and other agreements under which Seller is either a licensor,
licensee or distributor, except such licenses, sublicenses and other agreements
relating to off-the shelf software, which is commercially available on a retail
basis and used solely on the computers of Seller. Seller has substantially
performed all obligations imposed upon it thereunder, and is not, nor to the
Knowledge of Seller is any other party thereto, in breach of or default
thereunder in any respect, nor is there any event which with notice or lapse of
time or both would constitute a default thereunder. All of the Conquest
Intellectual Property licenses listed on Schedule 5.9(a)(iii) are valid,
enforceable and in full force and effect, and will continue to be so on
identical terms immediately following the Closing except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
(iv) Except as set forth on Schedule 5.9(a)(iv), none of the
Conquest Intellectual Property currently sold or licensed by Seller to any
Person or used by or licensed to Seller by any Person infringes upon or
otherwise violates any Intellectual Property rights of others.
(v) Except as set forth on Schedule 5.9(a)(v), no litigation is
pending and no Claim has been made against Seller or, to the Knowledge of
19
Seller, is threatened, contesting the right of Seller to sell or license to any
Person or use the Conquest Intellectual Property presently sold or licensed to
such Person or used by Seller, nor to the Knowledge of Seller, is there any
basis for the foregoing.
(b) Except as set forth on Schedule 5.9(b), to the Knowledge of Seller,
no Person is infringing upon or otherwise violating the Conquest Intellectual
Property rights of Seller.
(c) None of the Trade Secrets included in the Conquest Intellectual
Property have been disclosed by Seller to any third party absent an attendant
duty, in conformance with Seller's practices, but no less than reasonable
practices under the circumstances, to maintain the trade secret status thereof.
(d) The Software included in the Conquest Intellectual Property that is
commercially available is not contaminated by material bugs, viruses, or other
harmful computer programming code. The Software included in the Conquest
Intellectual Property functions substantially in accordance with its
specifications and documentation listed on Schedule 5.9(d).
5.10 Compliance with Laws. Seller is not in material violation of any
federal, state or local, statute, law, rule, decree, ordinance, regulation or
order and, has not, in connection with the Acquired Assets, received any
complaint or notice from any governmental authority, alleging that Seller has
violated in any material respects any law, rule, regulation, order, licensing
requirement, authorization or judicial or administrative decision.
5.11 Acquired Assets. Seller has good, record and marketable title in fee
simple to the Acquired Assets (other than the Conquest Intellectual Property
which is covered in Section 5.9).
5.12 Insurance. Seller has in full force insurance policies with respect to
the Acquired Assets to insure against all risks and liabilities to an extent and
in a manner customarily insured against by Persons operating comparable
properties, assets or businesses.
5.13 Litigation. There is no action, suit or proceeding pending or, to
Seller's Knowledge, threatened against Seller that questions the validity of
this Agreement or the right of Seller to enter into this Agreement or to
consummate the transactions contemplated hereby, nor is Seller aware that there
is any basis for the foregoing.
ARTICLE VI
CONDITIONS TO THE OBLIGATION
OF SELLER TO CLOSE
The obligation of Seller to transfer the Acquired Assets at the Closing and
to purchase the Transferred Shares and perform any obligations hereunder shall
be
20
subject to the satisfaction or waiver by Seller, of the following conditions on
or before the Closing Date.
6.1 Representations and Warranties. The representations and warranties of
the Buyer contained in Article IV hereof shall be true and correct in all
material respects (except for any such representations and warranties which are
qualified by their terms by a reference to materiality or material adverse
effect, which representations as so qualified shall be true and correct in all
respects) at and on the Closing Date as if made at and on such date.
6.2 Compliance with this Agreement. The Buyer shall have performed and
compiled in all material respects with all of its agreements set forth herein
that are required to be performed by the Buyer on or before the Closing Date.
6.3 Officer's Certificate. The Seller shall have received a certificate
from the Buyer, in form and substance reasonably satisfactory to the Seller,
dated the Closing Date, and signed by the Chief Executive Officer and Chief
Financial Officer of the Buyer; certifying as to the matters set forth in
Section 6.1 and 6.2.
6.4 Secretary's Certificate. Seller shall have received a certificate from
Buyer, in form and substance reasonably satisfactory to Seller, dated the
Closing Date and signed by the Secretary or an Assistant Secretary of Buyer,
certifying (a) that Buyer is in good standing with the Secretary of State of the
State of New Jersey, (b) that the attached copies of the Certificate of
Incorporation, the By-laws, and resolutions of the Board of Directors of Buyer
approving this Agreement and each of the other Transaction Documents and the
transactions contemplated hereby and thereby, are all true, complete and correct
and remain unamended and in full force and effect and (c) as to the incumbency
and specimen signature of each officer of Buyer executing this Agreement, each
other Transaction Document and any other document delivered in connection
herewith on behalf of Buyer.
6.5 Filing of Certificate of Designations. The Certificate of Designations
shall have been duly filed by Buyer with the Secretary of State of the State of
New Jersey in accordance with the General Corporation Law of the State of New
Jersey, and Buyer shall have received evidence of such filing in form and
substance reasonably satisfactory to Seller.
6.6 Transferred Shares. Buyer shall have delivered to Seller certificates
in definitive form representing the Transferred Shares.
6.7 Transaction Documents. Buyer shall have duly executed and delivered the
other Transaction Documents to which it is a party.
6.8 Opinion of Counsel. Seller shall have received an opinion of Xxxxxxx X.
Xxxxx, dated the Closing Date, relating to the transactions contemplated by or
referred to herein, substantially in the form attached hereto as Exhibit G.
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6.9 Consents and Approvals. All consents, exemptions, authorizations,
or other actions by, or notice to, or filings with, Governmental Authorities and
other Persons in respect of all Requirements of Law and with respect to those
Contractual Obligations of the Buyer which are necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Buyer of this Agreement and each of the other Transaction Documents
shall have been obtained and be in full force and effect, and the Seller shall
have been furnished with appropriate evidence thereof and all applicable waiting
periods shall have expired without any action being taken or threatened which
would have a material adverse effect on the Condition of the Buyer.
ARTICLE VII
CONDITIONS TO THE OBLIGATION
OF BUYER TO CLOSE
The obligation of Buyer to issue and sell the Transferred Shares and
the obligation of Buyer to perform its other obligations hereunder shall be
subject to the satisfaction or waiver by Buyer of the following conditions on or
before the Closing Date:
7.1 Representations and Warranties. The representations and warranties
of the Seller contained in Article V hereof shall be true and correct in all
material respects (except for any such representations and warranties which are
qualified by their terms by a -reference to materiality or material adverse
effect, which representations as so qualified shall be true and correct in all
respects) at and on the Closing Date as if made at and on such date.
7.2 Compliance with this Agreement. The Seller shall have performed and
compiled in all material respects with all of its agreements set forth herein
that are required to be performed by the Seller on or before the Closing Date.
7.3 Officer's Certificate. The Buyer shall have received a certificate
from the Seller, in form and substance reasonably satisfactory to the Buyer,
dated the Closing Date, and signed by an officer of Seller; certifying as to the
matters set forth in Section 7.1 and 7.2.
7.4 Secretary's Certificate. Buyer shall have received a certificate
from Seller, in form and substance reasonably satisfactory to Buyer, dated the
Closing Date and signed by the Secretary of Seller, certifying (a) that Seller
is in good standing with the Secretary of State of the State of Delaware, (b)
that the attached copies of the Certificate of Incorporation and the By-laws are
all true, complete and correct and remain unamended and in full force and
effect and (c) as to the incumbency and specimen signature of each officer of
Seller executing this Agreement, each other Transaction Document and any other
document delivered in connection herewith on behalf of Seller.
22
7.5 Transaction Documents. Seller shall have duly executed and
delivered the other Transaction Documents to which it is a party.
7.6 Consents and Approvals. All consents, exemptions, authorizations,
or other actions by, or notice to, or filings with, Governmental Authorities and
other Persons in respect of all Requirements of Law and with respect to those
Contractual Obligations of the Seller which are necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Seller of this Agreement and each of the other Transaction
Documents shall have been obtained and be in full force and effect, and the
Buyer shall have been furnished with appropriate evidence thereof and all
applicable waiting periods shall have expired without any action being taken or
threatened which would have a material adverse effect on the Condition of the
Seller.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Sellers. Subject to the terms and conditions of
this Article VIII, Seller agrees to indemnify and hold harmless the Buyer, its
officers, directors, shareholders and Affiliates and the successors and assigns
of each of them (the party or parties being indemnified collectively referred to
herein as the "Buyer" Indemnified Party") from and against each and every
demand, claim, loss, liability, damages, cost and expense (including, without
limitation, interest, penalties, and reasonable attorneys' fees and
disbursements) (collectively, "Losses") imposed upon or incurred by the Buyer
Indemnified Party, directly or indirectly resulting from or arising out of (i)
any breach of any representation or warranty of Seller contained herein and any
actual or threatened action or proceeding in connection therewith, (ii) any
failure to comply with any covenant or other agreement of Seller contained
herein and any actual or threatened action or proceeding in connection
therewith, (iii) any claim or demand for commission or other compensation
arising out of the transactions contemplated by this Agreement by any broker,
finder or agent claiming to be entitled thereto, or (iv) any liability or
obligation not assumed by Buyer pursuant to Section 2.3. Each matter for which
Seller has agreed to provide indemnification pursuant to this Section 8.1 is
hereinafter referred to individually as a "Claim" and collectively as the
"Claims."
8.2 Indemnification by Buyer. Subject to the terms and conditions of
this Article VIII, Buyer agrees to indemnify and hold harmless the Seller, its
respective shareholders, officers, directors and Affiliates and the permitted
successors and assigns of each of them (the party or parties being indemnified
collectively referred to herein as the "Seller Indemnified Party") from and
against all Losses imposed upon or incurred by the Seller Indemnified Party,
directly or indirectly resulting from or arising out of (i) any breach of any
representation or warranty of Buyer contained herein and any actual or
threatened action or proceeding in connection therewith (ii) any failure to
comply with any covenant or other agreement of Buyer contained herein and any
actual or threatened action or proceeding in connection therewith, (iii) any
claim or demand for commission or other compensation arising out of the
transactions contemplated by this Agreement by
23
any broker, finder or agent claiming to be entitled thereto or (iv) any Assumed
Liability. Each matter for which Buyer has agreed to provide indemnification
pursuant to this Section 8.2 is hereinafter referred to individually as a
"Claim" and collectively as the "Claims."
8.3 Notification. Each party to be indemnified under this Article VIII
(the "Indemnified Party") shall, promptly after the receipt of notice of the
commencement of any Claim against such Indemnified Party in respect of which
indemnity may be sought from the other party or parties (the "Indemnifying
Party") I under this Article VIII, notify the Indemnifying Party in writing of
the commencement thereof. The omission of any Indemnified Party to so notify the
Indemnifying Party of any such action shall not relieve the Indemnifying Party
from any liability which it may have to such Indemnified Party (a) other than
pursuant to this Article VIII or (b) under this Article VIII unless, and only to
the extent that, such omission results in the Indemnifying Party's forfeiture of
substantive rights or defenses, or such Indemnified Party is otherwise
materially prejudiced. In case any such Claim shall be brought against any
Indemnified Party, and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to assume the
defense thereof at its own expense by so notifying the Indemnified Party within
twenty (20) Business Days of receipt of the notice of the commencement of any
Claim, with counsel satisfactory to such Indemnified Party in its reasonable
judgment; provided, however, that any Indemnified Party may, at its own expense,
retain separate counsel to participate in such defense at its own expense. If
the Indemnifying Party does not provide notice to the Indemnified Party of its
assumption of the defense of a Claim within twenty (20) Business Days of notice
of the commencement of a Claim, the Indemnified Party shall have the right to
employ counsel in connection with the defense of such Claim; provided, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one counsel to all Indemnified Parties; provided, further, that in the event the
Indemnified Party has hired counsel in connection with the defense of a Claim
after the Indemnifying Party has failed to deliver notice in the manner
described above, the Indemnifying Party may, at any time thereafter, assume the
defense of a Claim (and terminate any liability for the Indemnified Party's
counsel, except for the payment of such counsel's fees and expenses incurred
prior to such assumption) by providing notice to the Indemnified Party.
Notwithstanding the foregoing, in any Claim in which both the Indemnifying
Party, on the one hand, and an Indemnified Party, on the other hand, are, of are
reasonably likely to become, a party, such Indemnified Party shall have the
right to employ separate counsel and to control its own defense of such Claim
if, in the reasonable opinion of counsel to such Indemnified Party, either (x)
one or more defenses are available to the Indemnified Party that are not
available to the Indemnifying Party or (y) a conflict or potential conflict
exists between the Indemnifying Party, on the one hand, and such Indemnified
Party, on the other hand, that would make such separate representation
advisable; provided, however, that the Indemnifying Party (i) shall not be
liable for the fees and expenses of more than one counsel to all Indemnified
Parties and (ii) shall reimburse the Indemnified Parties for all of such fees
and expenses of such counsel incurred in any action between the Indemnifying
Party and the Indemnified Parties or between the Indemnified Parties and any
third party, as such expenses are incurred. The Indemnifying Party agrees that
it will not, without the prior written consent
24
of the Indemnified Party, settle, compromise or consent to the entry of any
judgment in any pending or threatened Claim relating to the matters contemplated
hereby (if any Indemnified Party is a party thereto or has been actually
threatened to be made a party thereto) unless such settlement, compromise or
consent (i) includes an unconditional release of each Indemnified Party from all
liability arising or that may arise out of such Claim and (ii) does not require
any action other than the payment of money. The Indemnifying Party shall not be
liable for any settlement of any Claim effected against an Indemnified Party
without its written consent, which consent shall not be unreasonably withheld.
8.4 Contribution. If the indemnification provided for in this Article
VIII from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Losses referred to herein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions which
resulted in such Losses, as well as any other relevant equitable considerations.
The relative faults of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the Losses referred to above shall be deemed to include, subject to
the limitations set forth in this Article VIII, any legal or other fees, charges
or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
8.5 Limitations on Indemnification. Notwithstanding anything to the
contrary set forth in this Agreement, the indemnification provided for in
Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) No liability shall be enforced against the Indemnifying
Party to the extent of any insurance proceeds received by any Indemnified Party
with respect to such Losses. If any Indemnified Party receives any such
insurance proceeds after the Indemnifying Party shall have made any payment to
any Indemnified Party with respect to such Losses, any Indemnified Party shall
promptly return such payment to the Indemnifying Party to the extent of such
insurance proceeds received.
(b) No indemnification payment for any Losses shall be made by
Seller or Buyer, as the case may be, pursuant to Section 8.1(i) or 8.2(i)
hereof, respectively, except to the extent that the aggregate amounts which
would otherwise be payable pursuant to either such Section relating to such
Losses exceed $100,000 (the "Minimum Amount"), and such Minimum Amount shall be
deducted from the aggregate amount payable under Section 8.1(i) or 8.2(i), as
the case may be, with respect to damages payable pursuant to such Sections of
this Agreement.
25
(c) Each of the Seller and the Buyer shall not be obligated to
pay any amount for indemnification under Sections 8.1(i) and 8.2(i),
respectively, in excess of $10,000,000.
(d) This Article VIII shall be the sole and exclusive basis of
any remedy each party may have against the other party for a breach of or
violation of a representation, warranty, covenant or agreement under this
Agreement or any agreement contemplated hereby and each party hereby waives any
claim (other than under this Article VIII) it may have against the other party
with respect to a breach of any such representation, warranty, covenant or
agreement unless such breach or violation is a result of fraud or intentional or
willful misrepresentation by a party hereto.
ARTICLE IX
COVENANTS OF THE PARTIES
9.1 Reservation of Common Stock. Buyer shall at all times reserve and
keep available out of its authorized shares of Common Stock, solely for the
purpose of issue or delivery upon conversion of the Transferred Shares, as
provided in the Certificate of Designations, the maximum number of shares of
Common Stock that may be issuable or deliverable upon such conversion. Such
shares of Common Stock are duly authorized and, when issued or delivered in
accordance with the Certificate of Designations, shall be validly issued, fully
paid and non-assessable. Buyer shall issue such shares of Common Stock, in
accordance with the terms of the Certificate of Designations, and otherwise
comply with the terms hereof and thereof. -
9.2 Matters Related to Employees.
(a) Buyer agrees that on the Closing Date it will offer
employment to each of the Conquest Product Development Employees listed on
Schedule 5.8(a), at levels of total compensation and benefits (which shall
include base salary, bonus opportunity and benefits) that are substantially
similar in the aggregate to the total compensation paid and benefits provided to
comparable employees of Buyer immediately prior to Closing; provided, however,
that Buyer agrees to offer Conquest Product Development Employees who are "key
employees," as mutually determined by Buyer and Seller, with total compensation
and benefits, including options with respect to Buyer stock, that are
substantially similar in the aggregate to the total compensation, benefits and
incentives paid or provided to such key employees by Seller immediately prior to
the Closing. Buyer agrees that it will make severance payments to each Conquest
Product Development Employee whose employment is terminated by Buyer other than
for performance or conduct reasons, or by reason of death or disability, after
the Closing Date but on or prior to the first anniversary of the Closing Date,
in an amount equal to one week of such Conquest Product Development Employee's
then current base salary for each full year of such Conquest Product Development
Employee's service with Seller and its Affiliates prior to the Closing Date and
with Buyer after the Closing Date. Seller agrees that it has paid, prior to the
Closing Date, or will pay within ten (10) days of the Closing Date, all of its
respective obligations for all accrued salaries, bonuses, sales
26
commissions and other compensation due and payable in accordance with Seller's
normal payroll practices, including all applicable taxes resulting therefrom,
and for all accrued and unused vacation days which have been earned by Conquest
Product Development Employees prior to the Closing Date (the "Accrued
Compensation"). In no event shall Buyer have any liabilities or obligations with
respect to the Accrued Compensation. Buyer shall use its best efforts to ensure
that Conquest Product Development Employees who accept employment with Buyer are
eligible for immediate participation in the Buyer Plans. Buyer shall credit
Conquest Product Development Employees who accept employment with Buyer with
service credit with Seller for eligibility and vesting purposes under the Buyer
Plans, except that with respect to the Buyer's vacation policy service credit
shall be recognized for all purposes.
(b) Buyer will provide each of the Conquest Product
Development Employees who become an employee of Buyer with medical,
hospitalization and pharmacy coverage after such employee becomes an employee of
Buyer, subject to the terms of the applicable Buyer Plans. Buyer shall waive any
applicable waiting periods related to such coverage to the extent such waiting
periods were satisfied under Seller Plans.
(c) Seller shall have no responsibility for any medical
expenses of any Conquest Product Development Employee incurred after the Closing
Date. Buyer shall have no responsibility for any medical expenses of any
Conquest Product Development Employee incurred prior to such employee becoming
an employee of Buyer and, if a Conquest Product Development Employee does not
become an employee of Buyer, then Buyer shall-have no responsibility for any
medical expenses of such Conquest Product Development Employee. For purposes of
this paragraph, a medical expense will be deemed to have been incurred when an
individual is provided with medical care that gives rise to a medical expense
covered under the applicable plan and, in the case of a hospital stay, when the
individual is admitted to the hospital, and not when the individual is formally
billed, charged, or pays for the medical care. Seller shall retain any and all
obligations to provide COBRA continuation coverage to any current or former
Conquest Product Development Employee who incurs, or has incurred, a "qualifying
event" on or prior to the Closing Date.
(d) Nothing herein shall impair or limit Buyer's right to
discharge, lay off or hire employees or otherwise to manage the operations
relating to the Acquired Assets. Nothing herein shall limit Buyer's ability or
right to terminate or modify any Plan, including, without limitation, any Plan
providing medical, hospitalization and/or pharmacy coverage. Notwithstanding any
provision of this Article IX to the contrary, Seller shall retain any and all
liabilities pursuant to any Seller Plans, and Buyer shall have no liability in
connection with any Seller Plans.
(e) Notwithstanding anything to the contrary in this
Agreement, the Conquest Product Development Employee listed on Schedule 9.2(e)
(the "Foreign Employee") shall remain an employee of Seller until the completion
of the processing of the necessary visa or other immigration applications for
such person. The
27
salaries and benefits of such Foreign Employee shall be paid by Seller in the
manner and for the period of time set forth in the Services Agreement.
9.3 Publicity. Except as may be required by any applicable law, none of
the parties hereto shall issue a publicity release or public announcement or
otherwise make any disclosure concerning this Agreement or the transactions
contemplated hereby, without prior approval by the other parties hereto (which
approval shall not be unreasonably withheld). If any announcement is required by
law to be made by any party hereto, prior to making such announcement such party
will deliver a draft of such announcement to the other parties and shall give
the other parties an opportunity to comment thereon.
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations and Warranties. The representations
and warranties made herein shall survive the execution and delivery of this
Agreement (i) until the third anniversary of the Closing Date with respect to
Sections 4.14 and 5.9, and (ii) until the second anniversary of the Closing Date
in the case of all other representations and warranties.
10.2 Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
-or certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(i) if to Buyer:
Vertex Interactive, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Telecopy: 000-000-0000
Attention: Joint Chief Executive Officer
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxx X. X'Xxxxxx, Esq.
28
(ii) if to Renaissance:
Renaissance Software, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telecopy: 000-000-0000
Attention: Chief Executive Officer
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxx X. X'Xxxxxx, Esq.
(iii) if to Seller:
Pitney Xxxxx Inc.
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX. 00000-0000
Telecopy: 000-000-0000
Attention: Xxxxx Xxxxx, Vice President and
Chief Financial Officer
with a copy to:
Pitney Xxxxx Inc.
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX. 00000-0000
Telecopy: (000) 000-0000
Attention: Vice President and General Counsel
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
All such notices, demands and other communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial courier service; five (5)
Business Days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is mechanically
29
acknowledged, if telecopied. Any party may by notice given in accordance with
this Section 10.2 designate another address or Person for receipt of notices
hereunder.
10.3 Successors and Assigns; Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties hereto. Seller may not assign any of its rights or
obligations under this Agreement or the other Transaction Documents without the
written consent of Buyer except that Seller may by notice to Buyer assign such
rights to any of its Affiliates, provided that any such Affiliate agrees in
writing to be bound by all of the terms, conditions and provisions thereof.
Buyer may not assign any of its rights under this Agreement without the written
consent of Seller except that Buyer may by notice to the Seller direct that the
Acquired Assets be transferred to a wholly-owned Subsidiary of Buyer. Except as
provided in Article VIII, no Person other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of this
Agreement.
10.4 Amendment and Waiver.
(a) No failure or delay on the part of Buyer or Seller in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by Buyer or Seller from the terms of any provision
of this Agreement, shall be effective (i) only if it is made or given in writing
and signed by Buyer and Seller, and (ii) only in the specific instance and for
the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on Buyer in any
case shall entitle Buyer to any other or further notice or demand in similar or
other circumstances.
10.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
10.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
10.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
10.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of
30
any such provision in every other respect and of the remaining provisions hereof
shall not be in any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof.'
10.9 Rules of Construction. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
10.10 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto, the other Transaction Documents and the letter dated as of
February 7, 2001 from Seller to RenSoft are intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. There are no restrictions,
promises, representations, warranties or undertakings, other than those set
forth or referred to herein or therein. This Agreement, together with the
exhibits and schedules hereto, and the other Transaction Documents supersede all
prior agreements and understandings between the parties with respect to such
subject matter.
10.11. Expenses. Except as otherwise provided in this Agreement, each
party will pay its own costs and expenses incurred in connection with the
negotiation, execution and closing of this Agreement and the transactions
contemplated hereby.
10.12 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement
31
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Transaction Agreement on the date first written above.
PITNEY XXXXX INC.
By: Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
VERTEX INTERACTIVE, INC.
By:
-----------------------------------------
Name:
Title:
RENAISSANCE SOFTWARE, INC.
By:
-----------------------------------------
Name:
Title:
[Transaction Agreement]
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Transaction Agreement on the date first written above.
PITNEY XXXXX INC.
By:
-------------------------------------
Name:
Title:
VERTEX INTERACTIVE, INC.
By: Xxxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxxx Xxxx
Title: Joint Chief Executive Officer
RENAISSANCE SOFTWARE, INC.
By: Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Operating Officer
[Transaction Agreement]
Pitney Xxxxx Inc.
Schedules to Transaction Agreement
These schedules have been prepared and delivered in accordance with the
Transaction Agreement, dated as of February 7, 2001 (the "Transaction
Agreement"), among Vertex Interactive, Inc., a New Jersey Corporation ("Buyer"),
Renaissance Software, Inc., a Delaware corporation and wholly-owned subsidiary
of Buyer ("Renaissance"), and Pitney Xxxxx Inc., a Delaware corporation
("Seller"). Terms defined in the Transaction Agreement and not otherwise defined
in these Schedules are used herein as defined in the Transaction Agreement.
Section 2.1(b)(i)
Acquired Assets
The following to the extent they exist for Conquest v. 2.5 (commercially
available), Conquest v. 2.6 (not commercially available) and Conquest v. 3.0
(not commercially available):
1. Source code for Conquest Transportation Module, Conquest Logistics Module,
and Conquest Export Only
2. Electronic records for demonstration purposes relating to Conquest and
related scripts
3. Object code for Conquest software
4. User Guide for Conquest software
5. Non-registered copyrights associated with items 1-4
6. Trade Secrets associated with items 1-4
Section 5.8(a)
Conquest Product Development Employees
Name Title
--------------------------------------------------------------------------------
Xxxxxxx, Xxxx Engineer
Xxxxxxxxx, Xxxxx Engineer Mng
Xxxxxxxx, Xxxxxx Staff Engineer
Xxxxxxx, Xxxx Engineer
Xxxx, Xxx Xx. Engineer
Daily, Xxxxxxx Product Plan Mgr
Xxxxxxxx, Xxxxxx Engineer Mng
Xxx, Xxxxxx Dir. of Eng
Xxxxx, Xxxx Engineer
Xxxxxxx, Xxxxxxxxxxx Engineer
Xxxx, Xxxxx Staff Engineer
Xxx, Xxxx Product Architect
Xxxx, Xxxx Engineer
Xxxxxx, Xxxxxxxx Product Architect
Xxxxxxx, Xxxxxxx Tech Advisor.
Xxxxxxxxxxxx, Xxxx Engineer
Xxxxx, Xxxxxx Xx. Engineer
Xxxx, Xxx Xx. Engineer
Xxxxxx, Xxxxx Xx. Engineer
Xxxx, Xxxxxxx Engineer Mng
Xxxx, Xxxx Staff Engineer
Xxxxxxxxx, Xxxx Engineer
Xxxxxxx, Xxxxx Xx. Log Cert. Special
Xxxxxxxxx, Xxxxx Test Manager
Xxxxxx, Xxxx Engineer
Xxxxx, Xxx Engineer
Xx, Xxxx Engineer
Xxxx, Xx Xxxx Staff Engineer
Xxxxxxxx, Xxxxxxxxx Log Cert. Special
Ring Liu Asst. Engineer
Xxxxxxx, Xxxxx Xx. Log Data Analyst
Xxxxxx, Xxxx Engineer
Xxxxx, Xxxxxx Xx. Log Data Analyst
Xxxxx, Xxxx Xx. Log Data Analyst
Xxxxxxx-X'Xxxx, Xxxxx Xx. Log Data Analyst
Sections 5.8(b)
Employee Plans
1. Pitney Xxxxx Pension Plan
2. Pitney Xxxxx 401(k) Plan
3. Pitney Xxxxx Long Term Disability Plan
4. Pitney Xxxxx Medical Plan
5. Pitney Xxxxx Dental Plan
6. Pitney Xxxxx Prescription Drugs Plan
7. Pitney Xxxxx Short Term Disability Policy
8. Pitney Xxxxx Life Insurance Plan
9. Pitney Xxxxx Flexible Benefits Plan
10. Pitney Xxxxx Travel Accident Plan
11. Pitney Xxxxx Accidental Death and Dismemberment Plan
12. Pitney Xxxxx Health Care Spending Account
13. Pitney Xxxxx Dependent Care Account
14. Pitney Xxxxx Employee Stock Purchase Plan
15. Pitney Xxxxx Educational Assistance Program
16. Pitney Xxxxx Xxxxxxxxx Pay Plan _
17. Pitney Xxxxx Workers' Compensation Supplemental Pay Policy
18. Pitney Xxxxx Adoption Benefit
19. Group Legal Services Benefit
20. Financial Planning Services Benefit
21. Pitney Xxxxx Stock Option Program
22. Matching Gifts Program
23. Scholarship Program
24. Vacation Policy
25. Holiday Pay Policy
26. Marriage Leave (1 week paid leave)
27. Maternity Leave (1 week paid leave)
28. Pitney Xxxxx Dividend Reinvestment Policy
Section 5.9(a)(ii)
Conquest Intellectual Property
See Schedule 2.1(b)(i).
Section 5.9(a)(iii)
Conquest Intellectual Property Licenses, Distributor
Agreements and Other Agreements
29. Product Integration Agreement, dated November 22, 2000, between Microsoft
and TranScape
30. Software Marketing Agreement, dated January 18, 2000, between Dangerous
Goods Council and Pitney Xxxxx Inc.
31. Integrated Reseller Agreement, dated May 30, 2000, between WebMethods, Inc.
and TranScape
32. Non-Exclusive Sales Agency Agreement, dated March 16, 2000, between ALK
Associates, Inc. and Pitney Xxxxx Inc.
33. Data Agreement, signed by the parties on Sept. 17, 1997 and Oct. 17. 1997,
between Southern Motor Carriers and TranScape
34. OEM Agreement dated May 28, 1993, as amended, between Symantec Corporation
and Pitney Xxxxx (agreement has expired; amendment under negotiation)
35. Software Product Reseller Agreement, dated May, 29, 1998, between Sterling
Commerce (Mid America), Inc. and TranScape
36. Cooperative Marketing Agreement, dated August 18, 2000, between Robocom
Systems International Inc. and Pitney Xxxxx Inc.
37. Software Marketing Cooperation Agreement, dated April 20, 1998, between MK
Group, a unit of Computer Associates International, Inc. (MK Group n/k/a
interBiz Supply Chain Group) and Pitney Xxxxx Inc.
38. Value Added Remarketing Agreement, dated June S, 0000, xxxxxxx Xxxx Xxxx
Systems, Inc. and Pitney Xxxxx Inc.
39. Licenses of the Conquest software to Pitney Xxxxx customers
40. Rumba Software from NetManage, Inc. is acquired by Pitney Xxxxx in
connection with CONQUEST pursuant to the standard license agreement
provided by NetManage
Section 5.9(a)(iv)
Conquest Intellectual Property - Infringements
None.
Section 5.9(a)(v)
Conquest Intellectual Property - Litigation
None.
Section 5.9(b)
Conquest Intellectual Property - Third Party Infringements
None.
Section 5.9(d)
Conquest Intellectual Property - Specifications and Documentation
1. Conquest User Guide rev. C - March 2000.
Schedule 9.2(e)
Foreign Employees
Xing, Liu
Buyer Disclosure Schedule to the
Transaction Agreement
dated as of February 7, 2001
by and among
VERTEX INTERACTIVE, INC.
RENAISSANCE SOFTWARE, INC.
and
PITNEY XXXXX INC.
(the "Transaction Agreement")
This Disclosure Schedule, dated as of February 7, 2001 is being
delivered by Vertex Interactive, Inc., a New Jersey corporation ("Buyer"),
pursuant to the Transaction Agreement dated as of February 7, 2001 (the
"Transaction Agreement") among the Buyer, Renaissance Software, Inc., a Delaware
corporation ("Renaissance") and Pitney Xxxxx Inc., a Delaware corporation
("Seller"). The parties acknowledge and agree that the inclusion of any item in
this Disclosure Schedule will not be determinative as to whether such item is
"material." Capitalized terms not otherwise defined herein are used as defined
in the Transaction Agreement.
Schedule 4.3
Governmental Authorization; Third Party Consents
None.
Schedule 4.5
Litigation
None.
Schedule 4.7(a)
Capitalization
None.
Schedule 4.7(b)
Capitalization
None.
Schedule 4.8
No Default or Breach; Contractual Obligations
Renaissance has contracts which provide licensed software and implementation and
modification services. The major contracts are with the following entities.
California Distribution Center
Con Agra, Inc.
Foodbrands America
XxXxxx Company
Volvo Trucks North America
Xxxxx Xxxxxxxx
General printing office - US Government
Xxxxxx Xxxxxxxx, Inc.
Xxxxxxxx Instruments, Inc.
Collezione Europa
Formica Corp.
Schedule 4.14
Buyer Intellectual Property
(a)(iv) None.
(a)(v) None.
(b) None.
EXECUTION COPY
-------------------------------------------------------------------------------
AUTHORIZED MARKETING PROGRAM
RESELLER AGREEMENT
among
RENAISSANCE SOFTWARE, INC.,
VERTEX INTERACTIVE, INC.
and
PITNEY XXXXX INC.
----------------------------
dated as of February 7, 2001
----------------------------
TABLE OF CONTENTS
Page
----
1. Definitions ................................................................1
2. Appointment ................................................................6
2.1 Appointment ............................................................6
2.2 Status as PB ...........................................................6
2.3 Independent Status .....................................................7
2.4 Agents .................................................................7
2.5 RenSoft Activities .....................................................7
2.6 Transition Period ......................................................7
3. Certain Independent and Mutual Activities ..................................8
3.1 Existing Customers; Prospects ..........................................8
3.2 Marketing Reports .....................................................10
3.3 Quarterly Review ......................................................10
3.4 Programming Reviews ...................................................10
3.5 Legal Notices .........................................................11
3.6 Site Visits ...........................................................11
3.7 Marketing Materials; Branding .........................................11
3.8 Additional Arrangements ...............................................12
3.9 Third Party Relationships .............................................12
4. Rights to Intellectual Property ...........................................12
4.1 License Grant .........................................................12
4.2 Trademark/Tailoring ...................................................14
4.3 Copyright .............................................................14
4.4 Protection of Proprietary Rights ......................................15
4.5 Source Code Escrow ....................................................15
5. Support and Training; Implementation Services .............................15
5.1 Sales Support .........................................................15
5.2 Training ..............................................................15
5.3 User Training .........................................................15
5.4 Product Sales Training ................................................15
5.5 Maintenance Support ...................................................16
5.6 Implementation Services(a) ............................................18
5.7 Support and Training for TMS ..........................................18
6. Additional Duties, Responsibilities and Activities of PB ..................20
6.1 Sales Promotion .......................................................20
6.2 Marketing .............................................................20
6.3 RenSoft Research and Development ......................................20
6.4 Marketing Materials ...................................................21
Page
----
6.5 Sales Support Staff ...................................................21
6.6 Forecasts of Future Sales . ...........................................21
7. Additional Duties, Responsibilities and Activities of RenSoft .............21
7.1 RenSoft Responsibilities ..............................................21
7.2 Other Software ........................................................22
7.3 System Upgrades .......................................................22
7.4 Customer Training Materials ...........................................22
7.5 Sales Tools ...........................................................22
7.6 Customer References ...................................................23
7.7 Development Work ......................................................23
7.8 Level of Service ......................................................23
8. Warranties of RenSoft .....................................................23
8.1 Warranties & Representations ..........................................23
9. Product Shipments .........................................................24
9.1 New PB Customers ......................................................24
9.2 Fulfillment by RenSoft ................................................24
9.3 Fulfillment by PB .....................................................24
10. Confidentiality, Proprietary Information and Proprietary Rights ...........25
10.1 RenSoft Proprietory Information ......................................25
10.2 PB Duties ............................................................25
10.3 PB Proprietary Information ...........................................26
11. Pricing; Compensation; Refunds ............................................27
11.1 Pricing. .............................................................27
11.2 Royalty Fees .........................................................28
11.3 Royalty Fee Renegotiation ............................................28
11.4 Payment Terms ........................................................28
11.5 Customer Billing . ...................................................29
11.6 Quarterly Reporting ..................................................29
11.7 Audit ................................................................29
11.8 Refunds ..............................................................29
11.9 Certain Amendments ...................................................29
12. Term and Termination ......................................................30
12.1 Term .................................................................30
12.2 Termination ..........................................................30
12.3 Self-Support .........................................................30
12.4 Rights and Obligations of the Parties on Termination .................31
12.5 Limitation on Liability ..............................................31
12.6 Term .................................................................32
13. Change of Control .........................................................32
13.1 Change of Ownership ..................................................32
Page
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13.2 Default, Bankruptcy, Cease Operations ................................32
14. Indemnity .................................................................32
14.1 Indemnification by PB ................................................32
14.2 Indemnification by RenSoft ...........................................32
14.3 Notification .........................................................33
14.4 Contribution .........................................................34
15. General ...................................................................34
15.1 Entire Agreement .....................................................34
15.2 Notices ..............................................................35
15.3 Force Majeure ........................................................36
15.4 Continuing Obligations ...............................................36
15.5 Severability .........................................................36
15.6 Language .............................................................36
15.7 Applicable Law .......................................................37
15.8 Assignment ...........................................................37
AUTHORIZED MARKETING PROGRAM
RESELLER AGREEMENT
This AGREEMENT is made this 7th day of February, 2001 among Renaissance
Software, Inc., having its principal place of business at 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxx Xxxxxxx, Xxx Xxxx 00000 (hereinafter referred to as "RemSoft");
Vertex Interactive, Inc., having its principal place of business at 00 Xxxxx
Xxxxxx, Xxxxxxx, Xxx Xxxxxx, 00000 (hereinafter referred to as "Vertex" and with
RenSoft as the "Vertex Parties"); and Pitney Xxxxx Inc., having its principal
place of business at 0 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000 (hereinafter referred
to as "PB").
RECITALS
A. The Vertex Parties are the beneficial owner or licensee of all
intellectual property rights of the Licensed Software (as defined herein) (other
than certain patent rights, to which Vertex has a license) and RenSoft is a
wholly-owned subsidiary of Vertex;
B. The Vertex Parties are desirous of having independent parties in
certain vertical markets and geographic areas promoting the licensing and use of
the Licensed Software; and
C. PB is desirous of selling, implementing, and maintaining the
Licensed Software and its derivatives in the Reseller Area.
In consideration of their mutual covenants and agreements contained
herein, and the mutual benefits to be derived therefrom, the parties, intending
to be legally bound, hereby covenant and agree as follows:
1. Definitions.
"Active Marketing Report" when used herein shall have the meaning set
forth in Section 3.1.
"Adjustment" when used herein shall have the meaning set forth in
Section 11.9.
"Affiliate" shall mean, with respect to any Person, a Person that,
directly or indirectly, or through one or more intermediaries, owns or controls,
is owned or controlled by, or is under common ownership or common control with,
such Person. As used herein, "ownership", with respect to any Person, shall mean
the beneficial ownership of more than fifty percent (50%) of the equity
securities or interests of (or issued by) such Person.
"Agreement" when used herein means this Agreement and any annex,
exhibit, attachment, schedule, addendum, modification or amendment hereto,
unless the context otherwise indicates.
"Business Day" when used herein means any day other than a Saturday,
Sunday or other day on which commercial banks in the State of New York are
authorized or required by law or executive order to close.
"Carrier Data" when used herein means the carrier data and associated
application changes, including updates thereto, and their medium of system
interface for the purpose of adding, supplementing or changing corner data
resident within or associated with the Licensed Software.
"Claim" or "Claims" when used herein shall have the meaning ascribed
thereto in Section 14.1.
"Customer" when used herein means any past, present or potential user
of the Licensed Software or of services related to the Licensed Software offered
by RenSoft or PB.
"Implementation Services" when used herein means project management,
the Conference Room Pilot Event and follow up activities, interface analysis and
creation, data conversion analysis and creation, user training, and go-live
support.
"Indemnified Party" or "Indemnifying Party" when used herein shall have
the meaning ascribed thereto in Section 14.3.
"Intellectual Property" when used herein shall mean all patents,
trademarks, tradenames, copyrights, technology, know-how and process used in or
necessary to use the Software.
"Licensed Software" when used herein means that software identified on
Schedule A. From time to time the Vertex Parties will announce New Versions,
enhancements, upgrades, program temporary fixes (PTFs), and new modules, which,
without any further action required by the parties hereto, shall be deemed to be
incorporated in Schedule A and part of the Licensed Software.
"Losses" when used herein shall have the meaning ascribed thereto in
Section 14.1.
"Maintenance", "Maintenance Services", and/or "Maintenance Support"
when used herein shall have the meanings ascribed thereto in Section 5.5 and
Addendum B.
"Modification Services" when used herein means identification,
documentation, summary and detail use case development, coding and testing of
the modifications.
"Modifications" when used herein means programmic changes to the
Licensed Software that change or enhance its functionality.
2
"Modified Licensed Software" when used herein means the Licensed
Software and the addition of any/all modifications performed by, or authorized
to be performed by, RenSoft.
"Net Sales Revenues" when used herein means the revenues received by PB
for the final license fee negotiated between PB and the Customer for the
Licensed Software under orders signed by PB and the Customer after the date of
this Agreement, minus all applicable fees owed any Third Party with respect to
Third Party Components.
"New Version" when used herein means any improved, modified or
corrected new version of the Licensed Software, including any program
documentation relating thereto.
"Normal Contract Rates" when used herein shall have the meaning set
forth in Schedule B to this Agreement.
"Person" when used herein shall mean any general partnership, limited
partnership, corporation, limited liability company, association, individual or
other entity, and the heirs, executors, administration, legal representatives,
successors and assigns of such Person as the context may require.
"PB" when used herein shall have the meaning assigned thereto in the
preamble.
"PB License Agreement" when used herein means a written agreement
between PB and a PB Customer that governs the Customer's rights to use the
Software and defines both parties' responsibilities and that provides RenSoft
(who shall be given the opportunity to review such agreement), in all material
respects, substantially the same protection with respect to the Software as is
provided to it in the RenSoft License Agreement, except as otherwise
contemplated by this Agreement.
"PB Proprietary Information" when used herein means all written and/or
printed information belonging to and/or provided in any form by PB which is
disclosed to the Vertex Parties, including but not limited to, processes;
technical information; know-how and data; computer programs (including source
codes and other program code, user interfaces, databases, displays and menu
screens); test data; accounting and financial data; marketing materials; user
documentation; system documentation; installation guides; pricing and market
data; salaries; business affairs; business plans and strategies; contracts;
research and development notes; and/or information which is identified to the
Vertex Parties as copyrighted, a trade secret, or otherwise proprietary to PB.
PB Propriety Information shall not include anything which:
(i) was previously known to RenSoft, free of any obligations of
confidentiality owed to PB;
(ii) is disclosed to RenSoft by a third party which has the right
to make said disclosure without any obligation of confidentiality owed to PB;
3
(iii) is or becomes lawfully available to the public;
(iv) is disclosed by RenSoft pursuant to a law or governmental,
court, administrative or regulatory authority; or
(v) is developed independently by RenSoft without the benefit or
use of PB Proprietary Information.
"Pitney Xxxxx Indemnified Party" when used herein shall have the
meaning ascribed thereto in Section 14.2.
"Program Documentation" when used herein means the user manuals,
technical manuals, installation manuals and other information to be made
available by RenSoft in either printed or machine readable form.
"Prospect(s)" when used herein means any Person whose contracting
office and install site for the Licensed Software is located in the Reseller
Area and has been identified as a possible Customer by either of the parties. In
order for a Person to be identified as a possible Customer, the following
information must be provided, in accordance with Section 3.1, for such Person:
name of the Person; division name or other similar information, if applicable;
city and state in which Person is located; name and title of person contacted;
date of such contact; the Licensed Software for which the Person is a possible
Customer; and confirmation that the Person has stated that it has budgeted for
the Licensed Software.
"Recoupment Amount" when used herein shall have the meaning set forth
in Schedule B to this Agreement.
"Recommended License Fees" when used herein means the suggested license
fees for use of the Licensed Software as set forth in Schedule A hereto and as
modified, as provided in this Agreement, from time to time.
"Remain exclusive" when used herein shall have the meaning ascribed
thereto in Section 3.1.
"RenSoft" when used herein shall have the meaning ascribed thereto in
the preamble.
"RenSoft Content" when used herein shall have the meaning ascribed
thereto in Section 4.3.
"RenSoft License Agreement" when used herein means a written agreement
between RenSoft and a RenSoft Customer that governs the Customer's rights to use
the Software and defines both parties' responsibilities, attached hereto as
Schedule D.
"RenSoft Preferential Maintenance Rate" when used herein shall have the
meaning set forth in Schedule B to this Agreement.
4
"RenSoft Preferential Royalty Rate" when used herein shall have the
meaning set forth in Schedule B to this Agreement.
"RenSoft Proprietary Information" when used herein means all written
and/or printed information belonging to and/or provided in any form by RenSoft
which is disclosed to PB, including but not limited to, processes; technical
information; know-how and data; computer programs (including source codes and
other program code, user interfaces, databases, displays and menu screens); test
data; accounting and financial data; marketing materials; user documentation;
system documentation; installation guides; pricing and market data; salaries;
business affairs; business plans and strategies; contracts; research &
development notes; and/or information which is identified to PB as copyrighted,
a trade secret, or otherwise proprietary to RenSoft. RenSoft Proprietary
Information shall not include anything which:
(i) was previously known to PB, free of any obligations of
confidentiality owed to RenSoft;
(ii) is disclosed to PB by a third party which has the right to
make said disclosure without any obligation of confidentiality owed to RenSoft;
(iii) is or becomes lawfully available to the public;
(iv) is disclosed by PB pursuant to a law or governmental, court,
administrative or regulatory authority;
(v) is developed independently by PB without the benefit or use of
RenSoft Proprietary Information.
"Reseller Area" when used herein means the geographic area identified
in Schedule C.
"Sale", "purchase", or "sell" when used herein means the process used
to license and the licensing of the Software.
"Services" when used herein includes but is not limited to installation
and implementation service and support; Maintenance Support; user training;
technical training; technical and software Modification assistance;
Modifications and interface development.
"Software" when used herein means the Licensed Software and the
Modified Licensed Software.
"Third Party" when used herein means an agreed upon Person that, based
on the parties' agreement, requires some portion of the license fee to be paid
to said Person.
"Third Party Component" means any component or software that RenSoft
and PB agree shall be considered a Third Party Component; provided, that in no
event
5
shall a Third Party Component be any software or other component that is
integral to the Licensed Software. RenSoft and PB agree that: (a) third-party
software sold by PB as of the date of this Agreement with or in association with
the CONQUEST`TM' transportation management software product, including the other
software referred to in Section 7.2 of this Agreement, is not considered Third
Party Components for purposes of this Agreement; and (b) there is no Third Party
Component that is a part of the Licensed Software as of the date of this
Agreement.
"TMS" when used herein means the transportation management software
product marketed and sold by PB immediately prior to the date of this Agreement
under the name CONQUEST.
"Trademark" and "Copyright" when used herein shall have the meanings
ascribed thereto in the Xxxxxx Trademark Act, 15 U.S.C. `SS'1127, and under
United States copyright law, 17 U.S.C. `SS'101, respectively.
"Transaction Agreement" when used herein means the Transaction
Agreement among Vertex, RenSoft and PB entered into simultaneously with the
execution and delivery of this Agreement.
"Vertex" when used herein shall have the meaning assigned thereto in
the preamble.
"Vertex Indemnified Parties" when used herein shall have the meaning
ascribed thereto in Section 14.1.
"Vertex Parties" when used herein shall have the meaning assigned
thereto in the preamble.
2. Appointment.
2.1 Appointment. Subject to the terms and conditions of this
Agreement, the Vertex Parties hereby grant to PB in the Reseller Area a
non-exclusive right to sell, market, demonstrate, license and support the
Software to Prospects and Customers. PB hereby accepts such grant to sell,
market, demonstrate, license and support the Licensed Software in the Reseller
Area and agrees to devote such time and attention to the foregoing activities as
is commercially reasonable in its sole discretion. PB and RenSoft shall
co-operate and work together in a commercially reasonable manner to promote
licenses and sell the Software and Services.
2.2 Status as PB. Both parties agree that the Software shall be
presented by PB as the "Pitney Xxxxx Supply Chain Solutions Powered by RenSoft
Interactive." PB at all times shall maintain a RenSoft copyright acknowledgment
identified in each and every document or printed and electronic materials where
such acknowledgment is appropriate. PB may, at its election, use its own
trademarks and trade names for the individual components of the Licensed
Software, including, without
6
limitation the trademark CONQUEST for the transportation management component of
the Licensed Software.
2.3 Independent Status. In providing the Licensed Software and
Services to Prospects and Customers, it is expressly understood and agreed that
PB will act pursuant to this Agreement for its own account and in its own name
and shall be an independent reseller of the Licensed Software and related
services. Unless otherwise agreed to by the parties, neither party, nor any of
such party's directors, officers, agents or employees, shall be, or shall be
considered, an agent, employee or legal representative of the other for any
purpose. Neither party is granted, and shall not exercise, the right or
authority to assume or create any obligation or responsibility, including
without limitation contractual obligations and obligations based on warranties
or guarantees, on behalf of or in the name of the other. Nothing contained in
this Agreement shall be construed to constitute PB, on the one hand, or RenSoft
or Vertex, on the other hand, as a partner, joint-venturer, co-owner, employee
or agent of the other, and none of them shall hold itself out as such.
Notwithstanding the foregoing, PB is authorized to provide warranties to its
Customers with respect to the Licensed Software that substantially conform to
those provided by RenSoft in the RenSoft License Agreement (or any successor
document thereto that RenSoft may hereafter use) and RenSoft shall be given the
opportunity to review PB's standard warranties that it intends to present to
Customers prior to their initial use by PB.
2.4 Agents. PB agrees that any appointment of an agent of PB to
assist in the selling of the Licensed Software shall be subject to the prior
written approval of RenSoft, which shall not be unreasonably withheld. It is
understood and agreed that arrangements with third parties for generation of
sales leads or for cooperative marketing efforts shall not be considered to be
appointment of an agent. Nothing in this Agreement shall prohibit PB from
taking, and PB is expressly permitted to take, any action necessary to fulfill
its obligation with respect to any agreement or obligation with respect to the
Licensed Software disclosed to either of the Vertex Parties.
2.5 RenSoft Activities. PB acknowledges that its appointment
herein does not preclude or limit RenSoft from activities in the Reseller Area.
Both parties agree that if RenSoft uncovers a Prospect and same is not
identified in PB's Active Marketing Report (as defined herein), RenSoft shall
have exclusive rights to said Prospect in accordance with Section 3.1. If a
Prospect has been identified in PB's Active Marketing Report, RenSoft shall take
no further action, and such Prospect shall remain exclusive to PB.
2.6 Transition Period. The parties recognize that there will need
to be a commercially reasonable transition period after the date of this
Agreement during which PB will exercise reasonable diligence to achieve its
compliance with those provisions of this Agreement that it cannot reasonably be
expected to comply with immediately after the date of this Agreement -- e.g.,
incorporation of copyright verbiage in marketing materials, revision of PB's
existing license agreements with Customers with respect to the Licensed
Software.
7
3. Certain Independent and Mutual Activities.
3.1 Existing Customers; Prospects.
(a) PB and RenSoft agree that the following customers,
Customers and Prospects shall remain exclusive to PB and RenSoft, respectively,
as follows:
(i) With respect to RenSoftTMS, all current PB customers
of its ConquestTM, Fulfillment' Solutions or Ascent' software (as shown
on a list previously provided by PB to RenSoft and acknowledged by
RenSoft as having been received) shall remain exclusive to PB.
(ii) With respect to RenSoftOMS, RenSoftWMS or the suite
of those two products together with RenSoftTMS, the following shall
remain exclusive to PB:
(A) all current PB customers of its Conquest
software;
(B) all current PB customers identified on the list
delivered by PB to RenSoft on or prior to the date of this
Agreement entitled "Active/Strategic Accounts on which PB is
engaged in SCE sales efforts" (which list is acknowledged by
RenSoft as having been received), which customers are considered
PB Prospects under this Agreement; and
(C) for a period of ninety (90) days after the date
of this Agreement, all other current PB customers of TranScape
products identified by PB in writing on the list delivered by PB
to RenSoft on or prior to the date of this Agreement (which list
is acknowledged by RenSoft as having been received). By the end of
such ninety (90)-day period, PB shall identify to RenSoft, in
writing, those customers on such list that qualify as a PB
Prospect and only such customers shall thereafter remain exclusive
as a PB Prospect. If during such ninety (90)-day period, RenSoft
has also identified any such PB customer as a RenSoft Prospect,
the decision regarding exclusivity shall be decided by the RenSoft
and PB Directors of Marketing and/or Presidents as set forth in
clause (g)(v) below.
(iii) With respect to RenSoftTMS, RenSoftOMS and
RenSoftWMS, the following shall remain exclusive to RenSoft:
(A) all current RenSoft customers of RenSoftOMS or
RenSoftWMS and all current Prospects for any of such products (all
as shown on a list previously provided by RenSoft to PB and
acknowledged by PB as having been received).
8
(b) On an ongoing basis, PB and RenSoft shall each maintain,
update and provide to the RenSoft Marketing Database Administrator (DBA) the
lists referred to above as they relate to Prospects on a daily basis (such
updated lists being referred to as the "Active Marketing Report"); provided
however that, subject to clause (g)(iii) below, RenSoft's Active Marketing
Report may be provided to PB on a weekly basis. Updates shall include any new
Prospects for the Licensed Software and shall identify any Prospects that
become actual Customers (i.e., only Prospects to which Licensed Software has
been sold, as opposed to potential users of such Software or related services).
Prospects shall also remain exclusive to the party providing the same.
(c) For purposes of this Agreement, "remain exclusive" shall
mean:
(i) with respect to RenSoft, that TranScape shall not
offer to sell or sell any Licensed Software to any RenSoft Customer or
Prospect or solicit any such Customer or Prospect for such a sale; and
(ii) with respect to PB, that RenSoft shall not offer to
sell or sell any Licensed Software to any TranScape Customer or
Prospect or solicit any such Customer or Prospect for such a sale.
(d) A current customer of either of PB or RenSoft referred
to in clauses (a)(i), (a)(ii)(A) or (a)(iii) (as to current RenSoft customers
only) above, shall remain exclusive for the entire term of this Agreement. Once
a Prospect becomes an actual Customer of either PB or RenSoft, such Customer
shall remain exclusive for the entire term of this Agreement. A Prospect shall
remain exclusive until the earliest of the following:
(i) such Prospect becomes a Customer;
(ii) two (2) years from the date such Prospect is first
identified on RenSoft's or PB's Active Marketing Report and submitted
to the RenSoft DBA (as set forth below); or
(iii) such Prospect is identified as a "loss"
opportunity (i.e., the RenSoft or TranScape marketing director has
determined that the sale to the Prospect has been lost to a competitor
or that the sale opportunity will not result in a signed contract with
the Prospect within the two (2)-year period referred to in clause (ii)
above) or, for any other reason, as a closed lead in a party's Active
Marketing Report and so submitted.
(e) RenSoft and PB agree to promptly identify a Prospect as
a "loss" opportunity or as closed lead promptly after such determination can
reasonably be expected to be made. Inadvertent solicitations by direct mail
marketing or similar campaigns shall not be considered a breach of this Section;
provided that such solicitations do not result in a sale to the target of such
solicitation.
9
(f) The parties agree that the Customer and Prospect lists
are confidential and shall be treated as such and are subject to the provisions
of Section 10. PB and RenSoft shall each provide the other with the appropriate
Prospect information via an electronic update tool determined by RenSoft and
reasonably acceptable to PB.
(g) The parties shall determine the exclusivity of the
Prospect by the following process:
(i) RenSoft and PB shall submit their respective Active
Marketing Report to RenSoft's DBA and the DBA shall enter the data in
such Reports in the database created and maintained solely for such
purpose.
(ii) The DBA shall notify PB of successful upload of the
updated information.
(iii) The DBA shall cross-reference each party's
Prospects against the other party's existing lists of customers (for
which such other party has exclusivity), Customers and Prospects and
provide each party with a daily report of the results of such
cross-referencing.
(iv) If a party's new Prospects do not exist on such
existing lists of the other party, said Prospect shall remain exclusive
to the party providing such Prospect until such time as it is
identified as a "loss" opportunity or as a closed lead.
(v) If RenSoft and PB disagree as to the exclusivity of
any Prospect or there are overlaps in the lists provided by RenSoft and
PB, RenSoft's and PB's Directors of Marketing shall attempt to
determine and resolve the conflict. If such Directors are unable to
resolve the disagreement, the conflict shall escalate to TranScape's
and RenSoft's Presidents.
3.2 Marketing_Reports. PB and RenSoft shall adhere to the RenSoft
"best practice" methodology for lead tracking and reporting. PB and RenSoft
shall on a daily basis provide the other party with new leads and report whether
any previously reported leads are "closed", via an electronic interface. PB
agrees to implement said interface between its internal Lotus Notes System and
the RenSoft lead tracking system. Any costs incurred by any party as a result of
this activity shall be paid for by the party incurring such costs.
3.3 Quarterly Review. The parties shall meet on a quarterly basis
to review, with respect to the Licensed Software, pricing, sales, sales
opportunities, existing markets, new market opportunities, marketing plans,
competition, product research and development and other agenda items identified
and agreed upon by both parties.
3.4 Programming Reviews. The parties shall meet periodically as
appropriate to review needed revisions to the Licensed Software, including,
without
10
limitation, corrections of defects in the code, and to discuss and reasonably
agree upon the appropriate timetable and priority for such revisions.
3.5 Legal Notices. The parties shall promptly advise each other
of any legal notices served on them which might reasonably be expected to affect
the other in connection with its activities under this Agreement.
3.6 Site Visits. The parties shall reasonably assist and
cooperate with each other during Customer site visits.
3.7 Marketing Materials; Branding.
3.7.1 Marketing Materials. RenSoft shall submit to PB for
comment all marketing materials intended to be used by RenSoft with respect to
Licensed Software for PB's prior comment and, with respect to any use of the
PB's name or logo or any other PB trademark, trade name or other proprietary
intellectual property right, PB's prior written approval.
3.7.2 PB Tailoring. (i) PB and RenSoft shall jointly agree
on branding guidelines and implementation of the PB brand within the Licensed
Software. Unique items in the PB version shall include PB branding and
references to PB that may be appropriate in on-line Help files. Both parties
agree that the Licensed Software sublicensed by PB to any of its Customers
pursuant to the terms of a PB License Agreement can include PB's name and/or
logo, provided RenSoft agrees to the design and placement of same. Such approval
by RenSoft shall not be unreasonably withheld prior to distribution. RenSoft
shall authorize or object to marketing materials presented by PB, within ten
(10) business days of receipt of such materials by RenSoft or such materials
shall be deemed to have been authorized.
(ii) RenSoft will provide an electronic version of all
technical documentation for the Licensed Software. PB may provide a
cover sheet and logo for documentation, which RenSoft will include in
such documentation as requested by PB. PB may elect to include
references to PB in place of RenSoft throughout such documentation, but
shall be responsible for such work. For user manuals and capability
brochures: (A) RenSoft will provide a soft copy and will add the PB
logo and other relevant references as requested by PB or (B) PB may
elect to make such additions itself. RenSoft will provide soft copies
of use cases. RenSoft will tailor software, at PB's request, to include
PB logos, etc., but will have right to xxxx PB for such service if the
cost to RenSoft to provide such services are substantial.
3.7.3 User Documentation. RenSoft shall maintain and provide
electronic versions of all user documentation for the Licensed Software. PB and
RenSoft shall jointly agree on branding guidelines and implementation of the PB
brand within such documentation. RenSoft shall apply the PB brand in accordance
with such guidelines.
11
3.8 Additional Arrangements. Each party shall use commercially
reasonable efforts to enter into additional arrangements with respect to the
licensing to, and resale by, PB (or its Affiliates) of (i) other products of
Vertex and its Affiliates that currently exist, within six (6) months of the
signing of this Agreement; and (ii) future products of Vertex and its Affiliates
as they may be developed or acquired in an appropriate time period so that PB
may sell such products no later than their launch by Vertex, its Affiliates or
any other Person who acquires rights to such products from Vertex or its
Affiliates. The parties shall meet on an ongoing basis, as reasonably requested
by any party, to discuss the arrangements contemplated by this Section. Such
arrangements shall be on terms similar to those contained in this Agreement,
with such changes as are necessary or appropriate because of differences
relating to the products being resold.
3.9 Third Party Relationships. The parties recognize that they
have existing relationships, or may consider entering into new relationships,
with third parties with respect to the development or improvement of the
Licensed Software. The parties will discuss such relationships with each other,
promptly after the date of this Agreement as to existing relationships and prior
to entering into any new relationships after the date of this Agreement, and
shall consider, in good faith, how they can best structure such relationships
so that they are in the parties' best mutual interests.
4. Rights to Intellectual Property.
4.1 License Grant. Subject to the terms and conditions of this
Agreement, RenSoft and Vertex hereby grant to PB in the Reseller Area a fully
paid-up, royalty-free (subject only to Section 11 of this Agreement),
non-transferable, nonexclusive license to the Licensed Software and
Demonstration Product under any applicable patents, copyrights, trademarks and
trade secrets belonging to either of the Vertex Parties or which either of the
Vertex Parties has acquired, or may acquire, which license encompasses, without
limitation:
(i) Right to Distribute and Sublicense. The right and
license to reproduce, distribute and transmit, directly or indirectly,
the Software for the purpose of selling the Licensed Software to
Customers, and the right to sublicense to Customers the right to use
the Software in executable code form, as per the terms and conditions
of an executed PB License Agreement.
(ii) Demonstration System License. The right and license
to use and reproduce, in the Reseller Area, demonstration copies of the
Licensed Software, together with systems documentation, user guides and
related materials (collectively, the "Demonstration Product") for
marketing, sales, training and support purposes only. RenSoft shall
provide PB with such number of copies of the Demonstration Product as
PB may reasonably request for its sales and service personnel
(including a master copy (and updates thereof, as available) for
copies that can be installed on lap-top computers and that will be used
by PB exclusively for demonstration purposes).
12
(iii) Source Code License. The right and license to use
and reproduce, in the Reseller Area, the source code for the Software,
as the same may be changed from time to time, solely to perform
Services, including, without limitation, Maintenance, Modification and
other support services, for Customers. Said license shall hereinafter
be referred to as the Master License. RenSoft shall deliver the Master
License code, with any development, test and configuration tools,
utilities and documentation associated therewith, to PB promptly after
the date of this Agreement and thereafter whenever there is any change
in such code or other materials. PB agrees that the Master License code
shall at all times remain in the possession of PB and PB, under no
circumstances, shall provide access to any third party, other than the
parties' Customer(s). PB further agrees that it shall not provide any
Master License source code to any Customer or Prospect unless the
appropriate PB License Agreement and its payment terms are met.
(iv) Archival Copies. The right and license to reproduce
the Software and related documentation for PB's reasonable archival
purposes.
4.1.1 Reservation of Rights. Subject to the rights and
licenses granted to PB herein, RenSoft shall retain all right, title and
interest in and to the Software and Demonstration Product (except for the
patents under which RenSoft is licensed by PB), and all enhancements and
upgrades thereto, including all rights under applicable, copyrights, trademarks
and trade secrets. All rights not expressly granted by RenSoft to Pitney Xxxxx
are reserved by RenSoft. In no event shall PB incorporate any portion of the
RenSoft Master License source code into any other product it distributes,
develops or markets without the express prior written consent of RenSoft.
4.1.2 Modifications. The parties agree that any
Modifications required by the Customer shall be performed by RenSoft, or a
certified systems integrator of RenSoft's choice, as a subcontractor for PB. In
the event however, that RenSoft requests PB to perform, and PB agrees to
perform, Modifications to the Licensed Software ("Pitney Xxxxx Modifications"),
the Vertex Parties hereby xxxxx XX the right and license to create such
derivative works. PB acknowledges that Pitney Xxxxx Modifications shall not be
warranted in any manner by RenSoft. In addition, PB acknowledges that any
Customer support required for Pitney Xxxxx Modifications is exclusively the
responsibility of PB. Furthermore, any Pitney Xxxxx Modifications shall remain
the exclusive property of RenSoft. PB agrees to assign to RenSoft from time to
time, without any further consideration, the entire right, title and interest it
may have in and to any Pitney Xxxxx Modifications and any and all renewals and
extensions thereof, and to execute any instruments reasonably necessary to
execute and file any application or applications and do all other lawfully
permitted acts to further the prosecution and protection of intellectual
property rights related to such Pitney Xxxxx Modifications with the same legal
force and effect as if executed by RenSoft.
4.1.3 Translations and National Versions. PB agrees that any
translations and/or national versions of the Licensed Software, in whole or in
part,
13
whether created and/or maintained by RenSoft or PB, are and shall remain the
sole proprietary property of RenSoft. PB agrees to assign to RenSoft from time
to time, without any further consideration, the entire right, title and interest
it may have in and to any translations or national versions and any and all
renewals and extensions thereof, and to execute any instruments reasonably
necessary to execute and file any application or applications and do all other
lawfully permitted acts to further the prosecution and protection of
intellectual property rights related to such translations or national versions
with the same legal force and effect as if executed by RenSoft. If PB has
created or maintained any such translations and/or national versions and RenSoft
wishes to use such translations and/or national versions, RenSoft shall pay PB a
reasonable fee, to be negotiated, with respect to such use.
4.1.4 Finalization of License Agreements. RenSoft and PB
agree that the PB License Agreement and PB's maintenance agreement shall
include, in all material respects, terms substantially similar to those included
in the RenSoft License Agreement and the Maintenance Agreement attached hereto
as Addendum B that are necessary to protect RenSoft's rights in the Licensed
Software and to limit RenSoft's maintenance obligations consistent with the
terms of this Agreement. The PB License Agreement shall be signed by the
Customer and PB, and if required by the Customer, by RenSoft as an accommodation
to the Customer (e.g., to confirm that PB has the requisite rights to the
Licensed Software).
4.2 Trademark/Tailoring.
4.2.1 Ownership of Trademarks and Trade Names. PB
acknowledges that the trademarks and/or trade names for the Licensed Software
listed on Schedule 4.2.1 hereto are owned by RenSoft. Except as otherwise
provided herein, all Licensed Software sold or provided by PB shall bear
RenSoft's trademarks and trade names. PB agrees not to remove, obliterate or
alter any copyright notice or trademark or trade name received from RenSoft.
4.2.2 Reciprocal Trademark License. The Vertex Parties
hereby grant to PB a non-exclusive, royalty free license to use, reproduce, and
display the RenSoft trademarks and tradenames solely as required for the
purposes of this Agreement. PB hereby grants to RenSoft a non-exclusive, royalty
free license to use, reproduce, and display the PB trademarks and tradenames
solely as required for the purposes of this Agreement.
4.3 Copyright.
4.3.1 Marketing Material. PB agrees to incorporate as part
of its marketing materials for the Licensed Software, RenSoft copyright verbiage
of the Licensed Software ("RenSoft Content"), which shall be provided to PB upon
request and shall not be subject to change without written acceptance by
RenSoft, which acceptance shall not be unreasonably withheld. Willful
non-compliance with this section, which is not cured within 30 days of receiving
written notice from RenSoft is a material breach of this Agreement.
14
4.3.2 Content License. Subject to and in accordance with the
terms and conditions of this Agreement, the Vertex Parties hereby grant to PB a
royalty-free, non-exclusive license for the Term, solely for the purpose of
marketing and selling the Licensed Software, to reproduce, distribute, and
modify the RenSoft Content.
4.4 Protection of Proprietary Rights. PB and RenSoft each agrees to
co-operate with and assist the other, at the other's expense, in the protection
of trademarks, patents, or copyrights owned by or licensed to RenSoft or PB,
respectively, and shall inform the other party immediately of any infringements
or other improper action with respect to such trademarks, patents, or copyrights
that shall come to the attention of PB or RenSoft, as the case may be.
4.5 Source Code Escrow. Upon written request of PB, at PB's expense, a
copy of the source code for each module of Software (and any New Versions
thereof, as they may become available) will be placed in escrow and will be made
available to PB to use, reproduce, modify and distribute in the event that the
Vertex Parties are unable to properly support it.
5. Support and Training; Implementation Services.
5.1 Sales Support. RenSoft shall, through July 31, 2001, provide sales
support at the request of PB at no charge, except for reimbursement of RenSoft's
reasonable travel related expenses. If beyond said period, PB requires and
requests additional sales support, RenSoft shall provide same at a daily rate of
$600.00, plus reasonable travel related expenses. PB agrees to reimburse RenSoft
for any reasonable travel related expenses within fifteen (15) days of receipt
of adequate documentation in support thereof.
5.2 Training.
5.2.1 During normal business hours, RenSoft shall provide PB, at
no charge, with reasonable access to its marketing and product support personnel
to answer questions regarding the Software or Services.
5.3 User Training. RenSoft shall provide user training at a RenSoft
facility to familiarize PB with the Licensed Software and to facilitate PB's
knowledge and capability to implement such Software. The initial training
obligation hereunder shall be provided at no charge to PB and shall include
fifteen (15) days of instruction for RenSoftWMS and RenSoftOrder (which shall
include five (5) days of technical, architecture and database training). Beyond
said training, PB may request additional training days at a cost of $500.00 per
day. Approval of said request shall not be unreasonably withheld by RenSoft. If
any such training is provided at a site other than a RenSoft facility, PB agrees
to reimburse RenSoft for any reasonable travel related expenses within fifteen
(15) days of receipt of adequate documentation in support thereof. PB may retain
copies of all training materials for future use.
5.4 Product Sales Training. RenSoft shall provide PB, at no charge,
with up to five (5) days of in-depth product sales training. Such training shall
15
include, for RenSoftWMS and RenSoftOrder, strategic vision/direction
presentations by RenSoft executives; sales training (process, tools, strategies,
etc.); and product training, including a product overview (value proposition,
functionality, market segmentation, competitive position), a product
demonstration with detailed feature descriptions and demonstrations focusing on
value/benefit and differentiation, packaging (modules, options, platforms,
certified interfaces, etc.) and business practices (customer commitment and
implementation process). Such training shall be provided at a mutually agreed
upon site; provided that if such training is provided at a site other than a
RenSoft facility, PB agrees to reimburse RenSoft for any reasonable travel
related expenses within fifteen (15) days of receipt of adequate documentation
in support thereof. PB may retain copies of all training materials for future
use.
5.4.1 RenSoft shall also provide day-to-day, on-site product
training to two (2) lead PB support professionals (product demonstrators) at
RenSoft's New York location at no charge. The PB professionals shall work under
the supervision of RenSoft's Vice President of Customer and Product Support,
participate in marketing and sales activities to include but not be limited to
completion of RFP/RFIs; prospect phone meetings; prospect site "walk-thru's";
Placeware demonstrations; live product demonstrations; training sessions, etc.
The result of this activity shall be the "certification" of the PB professional
as a RenSoft demonstrator. All travel related expenses incurred by the PB
professional in performing his/her duties under the direction of RenSoft are the
responsibility of PB.
5.4.2 PB resources shall also be allowed and at no charge, at its
request, to "shadow" RenSoft personnel and other resources during a reasonable
number of RenSoft installations and provision of other Services RenSoft may
perform for its or PB's Customers, with the costs of the PB resources being
borne by PB.
5.4.3 RenSoft shall advise PB, at its request, of other training
that may be desirable with respect to the Licensed Software and Services which
may be available from other Persons.
5.4.4 PB personnel shall be entitled to attend, at no charge, any
standard training RenSoft provides to its own personnel or to those of its other
resellers and/or licenses or other third parties with respect to New Versions or
new RenSoft products. RenSoft will provide PB with reasonable advance notice of
all such training sessions.
5.5 Maintenance Support.
5.5.1 PB shall offer to its Customers Maintenance Support for the
Licensed Software under terms which shall be substantially in accordance with
the material terms of the Maintenance Agreement attached as Addendum B of
Addendum A hereto.
During the warranty period for the Licensed Software and thereafter
with respect to maintenance agreements between PB and its Customers, PB shall
provide
16
Levels I and II Maintenance Support and RenSoft shall, on behalf of PB, provide
Level III Maintenance Support to PB's Customers. For purposes of this Agreement,
the Levels of Maintenance Support include the activities listed below:
Level I: Receive and log customer calls; identify problem; create
scenarios to reproduce problem; functional and technical
trouble shooting; answer customer questions; provide
educational instruction/support; resolve as many issues as
possible; update customer of status of problem resolution;
assign severity.
Level II: Functional and technical troubleshooting; environment
testing; determine if problem is bug based on the ability to
create a reproducible test case; update customer of status
of problem resolution; provide technical support for
modified programs to the extent PB performed the
modifications; assign severity; collect and forward
appropriate materials to RenSoft in a timely fashion to aid
it in its provision of Level III support.
Level III: Reproduce problem and verify bug; create fix and distribute
back to PB to distribute to customer; support for all base
programs of the Licensed Software; support for all modified
programs to the Licensed Software except to the extent that
PB performed the modifications; develop future versions of
the Licensed Software; abide by response times defined in
Addendum B (Maintenance and Maintenance Charges).
5.5.2 (a) PB will pay RenSoft as a service fee for its provision
to PB's Customers of Level III Maintenance Support for Licensed Software fifty
percent (50%) of the gross revenues received by PB from such Customers for such
Maintenance Support, except as otherwise provided in Schedule B. During the
warranty period for the Licensed Software, RenSoft will provide such Support at
no charge. PB shall xxxx its Customers for all such Maintenance Support. PB
shall pay RenSoft, within fifteen (15) days after each calendar month, such
amounts as are due to it with respect to revenues received by PB during such
calendar month. By way of clarification of the foregoing, if a Customer has paid
for Maintenance Support on a monthly basis, PB will pay RenSoft such amount as
is due to it with respect to such monthly payment within fifteen (15) days
after the calendar month in which such monthly payment was received by PB; and
if a Customer has paid in advance for a period of time up to a year (e.g.,
quarterly or annually), PB will pay RenSoft such amount as is due to it with
respect to such advance payment within fifteen (15) days after the calendar
month in which such advance payment was received by PB.
(b) With respect to PB's Maintenance Support agreements
relating to its Conquest product that were entered into prior to the date
17
of this Agreement and terminate or expire after the date of this Agreement,
PB will pay RenSoft fifty percent (5O%) of the gross revenues received
under such agreements, in accordance with the time schedule set forth in
subsection (a) above; provided, however, within fifteen (15) days after the
date of this Agreement, PB shall pay RenSoft fifty percent (50%) of any
revenues already received under such agreements prior to the date of this
Agreement with respect to periods of time after the date of this Agreement,
5.5.3 On a semi-annual basis, PB and RenSoft shall conduct a
review of customer support procedures, actual call logs and resolution
activities. If such review indicates that the provision of Maintenance Support
to PB's customers is such that, during any sustained period of time, PB is not
providing Levels I and II Maintenance Support and RenSoft is not providing Level
III Maintenance Support, the parties may negotiate a different percentage of
revenues for Maintenance Support received by PB from its Customers that is to be
paid by PB to RenSoft as a service fee. Such percentage could range from zero
percent (0%) in the case where RenSoft is providing no support to one hundred
percent (100%) in the case where RenSoft is providing all support.
5.6 Implementation Services. (a) PB shall, at its discretion, offer
its Customers implementation of, and Implementation Services with respect to,
the Licensed Software. PB shall be entitled to enter into separate arrangements
with Customers when providing services related to the implementation of the
Licensed Software and for the development of modified/custom software related to
the Licensed Software (except as restricted herein). PB shall be solely
responsible for any warranties it provides to Customers in conjunction with said
services except to the extent that such warranties have been authorized by
RenSoft. If RenSoft is requested to perform Implementation Services, the
applicable rates are those defined in Exhibit B of the RenSoft License Agreement
attached hereto as Schedule D. Notwithstanding the foregoing, RenSoft shall, at
PB's request, assist PB, to the extent requested, with each of the first three
(3) installations for each of RenSoftOMS and RenSoftWMS, for which assistance PB
will pay RenSoft at a discounted rate, to be negotiated in good faith. RenSoft
shall provide PB with assistance in future installations at its standard rates.
(b) If PB is requested by RenSoft to perform Implementation
Services in connection with the license by RenSoft to third parties of the
Licensed Software, the applicable rates are those as defined on Schedule F
attached hereto.
5.7 Support and Training for TMS.
5.7.1 Sales Support. PB shall, through July 31, 2001, provide
sales support for TMS at the request of RenSoft at no cost, except for
reimbursement of PB's reasonable travel related expenses. If beyond said period,
RenSoft requires and requests additional sales support, PB shall provide same at
a daily rate of $600.00, plus reasonable travel related expenses. RenSoft agrees
to reimburse PB
18
for any reasonable travel related expenses within fifteen (15) days of receipt
of adequate documentation in support thereof.
5.7.2 Training.
(i) During normal business hours, PB shall provide RenSoft
with reasonable access to its marketing and product support personnel to
answer questions regarding TMS.
(ii) PB shall provide user training at a PB facility to
familiarize RenSoft with TMS and to facilitate RenSoft's knowledge and
capability to implement TMS. The initial training obligation hereunder
shall be provided at no charge to RenSoft and shall include up to two five
(5) day classes of user training for TMS and up to one five (5) day class
of technical training for TMS. RenSoft and PB will discuss and agree on the
exact number of training days (up to such limits) that are necessary for
RenSoft. Beyond said training, RenSoft may request additional training days
at a cost of $500.00 per day. Approval of said request shall not be
unreasonably withheld by PB. If any such training is provided at a site
other than a PB facility, RenSoft to reimburse PB for any reasonable travel
related expenses within fifteen (15) days of receipt of adequate
documentation in support thereof.
(iii) PB shall provide RenSoft with up to three (3) days of
in-depth product sales training for TMS. Such training shall include,
strategic vision/direction presentations by TranScape executives; sales
training (process, tools, strategies, etc.); and product training,
including a product overview (value proposition, functionality, market
segmentation, competitive position), a product demonstration with detailed
feature descriptions and demonstrations focusing on value/benefit and
differentiation, packaging (modules, options, platforms, certified
interfaces, etc.) and business practices (customer commitment and
implementation process). Such training shall be provided at a mutually
agreed upon site; provided that if such training is provided at a site
other than a PB facility, RenSoft agrees to reimburse PB for any reasonable
travel related expenses within fifteen (15) days of receipt of adequate
documentation in support thereof. RenSoft may retain copies of all training
materials for future use.
(iv) PB shall also provide day-to-day, on-site product
training to two (2) lead RenSoft support professionals (product
demonstrators) at a PB facility. The RenSoft professionals shall work under
the supervision of a TranScape employee, participate in marketing and
sales activities to include but not be limited to completion of RFP/RFIs;
prospect phone meetings; prospect site "walk-thru's"; Placeware
demonstrations; live product demonstrations; training sessions, etc. All
travel related expenses incurred by the RenSoft professionals in performing
his/her duties under the direction of PB are the responsibility of RenSoft.
19
(v) RenSoft resources shall also be allowed, at its
request, to "shadow" PB personnel and other resources during a reasonable
number of PB installations for TMS and provision of other Services PB may
perform.
5.7.3 Certain Materials. PB shall provide RenSoft with copies of
(i) product training materials and sales training materials relating to
Conquest, (ii) the installation guide for Conquest software and (iii) the
service manual for Conquest software, and, in each case, from time to time,
updated versions of the foregoing as they become available. RenSoft shall
provide PB with copies of (i) product training materials and sales training
materials relating to RenSoftOMS and RenSoftWMS, (ii) the installation guide for
RenSoftOMS and RenSoftWMS and (iii) the service manual for RenSoftOMS and
RenSoftWMS, and (iv) the user guide and technical documentation for RenSoftOMS,
RenSoftWMS and RenSoftTMS and, in each case, from time to time, updated versions
of the foregoing as they become available.
6. Additional Duties, Responsibilities and Activities of PB.
6.1 Sales Promotion. PB shall market the Licensed Software as set
forth in Section 2.1 . PB shall not have any right or authority to make any
representation concerning the Licensed Software substantially beyond or
materially different from those identified herein or in the documentation
provided by RenSoft.
6.2 Marketing. PB shall have the right to determine the nature and
extent of its own marketing efforts. PB shall work proactively on individual
sales opportunities on which it considers it commercially reasonable to so do.
The parties shall jointly evaluate and consider the development of certain
marketing materials and campaigns for the Licensed Software (i.e. sales
literature, press releases, direct mail pieces, display advertising, seminars,
business partner development, etc.). Marketing materials representing the
Licensed Software must receive RenSoft written authorization (which shall not be
unreasonable withheld) prior to distribution or publication. RenSoft shall
authorize or object to marketing materials presented by PB within ten (10)
business days of receipt of such materials by RenSoft or such materials shall be
deemed to have been authorized by RenSoft.
6.3 RenSoft Research and Development.
6.3.1 PB shall, at its election, participate in the Research and
Development process of the Licensed Software as follows:
(i) provide RenSoft's Vice President of Customer and
Product Support with documented information of new and revised functional
requests for components of the Licensed Software;
(ii) attend product review sessions;
(iii) receive, analyze and review New Version release
notes;
20
(iv) provide other necessary documentation for recommended
changes, to include, but not be limited to, screen design, process flows,
interface requirements, etc.; and
(v) prepare "use" cases for those functional areas that
were suggested by PB and accepted by RenSoft.
6.3.2 RenSoft agrees to provide PB with adequate advance notice
of product review sessions, copies of proposed notes and changes and other
research and development activities so that PB may fully participate as provided
herein. PB agrees that any/all expenses that it incurs as a result of the above
activities are its responsibility.
6.3.3 PB shall be able to have a representative be a member of,
attend and participate fully in all meetings of any committees of RenSoft that
make the decisions with respect to the development of new products or changes in
existing products (i.e., the "Enterprise Research and Development Audit
Committee").
6.4 Marketing Materials. PB must incorporate as part of its marketing
materials for the Licensed Software, RenSoft copyright verbiage of the Licensed
Software, which shall be provided to PB upon request and shall not be subject to
change without written acceptance by RenSoft, which acceptance shall not be
unreasonably withheld. Willful non-compliance with this section, which is not
cured within 30 days of receiving written notice from RenSoft is a material
breach of this Agreement.
6.5 Sales Support Staff. PB shall maintain an adequate and competent
sales and support staff that will complete RenSoft training for the Licensed
Software. The intended result of training is to ensure that appropriate PB
personnel, in their assigned area(s) of expertise, are thoroughly knowledgeable
of the features and specifications of the Licensed Software so as to enable PB
to perform its obligations hereunder.
6.6 Forecasts of Future Sales. PB shall maintain complete records
necessary to provide RenSoft with forecasts of future sales and modification
activities with respect to the Licensed Software. The parties agree that within
thirty (30) days of execution of this Agreement, an agreed upon report form
shall be defined to provide RenSoft with such forecasts.
7. Additional Duties Responsibilities and Activities of RenSoft.
7.1 RenSoft Responsibilities. During the term of this Agreement,
RenSoft shall be responsible for and perform for and provide to PB in support of
the licenses granted under this Agreement:
(i) ongoing research & development with respect to the
Licensed Software;
21
(ii) RenSoft versions of marketing materials for the
Licensed Software;
(iii) technical maintenance service for the base code of
the Licensed Software;
(iv) technical and user maintenance service for any
modified functions performed;
(v) certain training and education of PB's personnel as it
relates to the Licensed Software;
(vi) system documentation, user guides, related materials
and timely updates of same;
(vii) guidance on the topical classes/knowledge that PB
employees must have to sell and support the Licensed Software (i.e., java,
websphere, etc.); and
(viii) the timely and accurate development, release and
distribution to customers of Carrier Data.
7.2 Other Software. Without limiting the foregoing, RenSoft shall be
responsible for supplying PB and its Customers with all data and interfaces
associated with or related to TMS, including, without limitation, rate data and
other Carrier Data and associated application changes, mileage information,
HazShipper, database programs, EDI translators and retail compliance kits.
Unless otherwise agreed to by RenSoft and PB, the cost to the Customer for such
items shall be included in the license fee that is charged to the Customer.
7.3 System Upgrades. RenSoft shall provide PB all future upgrades,
enhancements, or New Versions of the Licensed Software, together with all
related documentation, at no cost and as soon as they are available. RenSoft is
not responsible, unless otherwise identified in the Customer's Maintenance
Agreement, for the incorporation of the "System Upgrades" to the Customers'
Licensed Software.
7.4 Customer Training Materials. Promptly after the date of this
Agreement and thereafter in a timely fashion, RenSoft shall provide PB with
copies of all standard customer training materials and examples of customized
training materials with respect to the Licensed Software, as such materials may
exist from time to time throughout the term of this Agreement. PB is hereby
authorized to modify and use such materials to conduct Customer training
sessions at Customer locations or other locations.
7.5 Sales Tools. Promptly after the date of this Agreement and
thereafter in a timely fashion, RenSoft shall provide PB with all appropriate
and necessary sales tools and data available to RenSoft and needed by PB to
effectively market and sell the Licensed Software, including, without
limitation, fact finders, ROI calculation information, RFP data library (e.g.,
descriptions of product architecture,
22
features, and capabilities), product/feature presentations and collateral,
demonstration copies of software (with appropriate data and scripts), boiler
plate project plans and templates or examples of Conference Room Pilot Summary
Documents, updates to all of the foregoing as they are prepared, and such other
items as PB may reasonably request that RenSoft has available.
7.6 Customer References. During the eighteen (18) month period
following the date of this Agreement, RenSoft shall use its reasonable efforts
and shall cooperate with PB so that PB shall have available to it for its
marketing and sale of Licensed Software references from, and testimonials by,
RenSoft Customers.
7.7 Development Work. Attached hereto as Schedule E is a milestone
schedule for the development of Versions 2.6 and 3.0 (the latter also known as
eQuest) of TMS and certain other development work related to TMS. RenSoft agrees
that it will use its best efforts to complete such development work in
accordance with Schedule E so that such Versions and the other work on such
Schedule will be available to PB for launch in a timely manner in accordance
with such Schedule. Towards that end, RenSoft agrees that the people who were
formerly employed by PB, either as employees or otherwise, and who are employed
by RenSoft pursuant to the Transaction Agreement will be utilized in a
commercially reasonable manner to complete such development. The foregoing shall
not prevent RenSoft from reassigning such employees to other tasks as long as
the overall level of commitment by RenSoft to such development is not
diminished.
7.8 Level of Service. Without limiting RenSoft's obligations to
provide any other services hereunder in a timely and reasonable manner, RenSoft
shall perform the responsibilities set forth in this Section 7.1, 7.2 and 7.6 in
a professional and timely manner in accordance with industry standards.
8. Warranties of RenSoft.
8.1 Warranties & Representations.
The Vertex Parties hereby represent and warrant to PB as follows:
8.1.1 The Vertex Parties are the beneficial owner or licensee of
all intellectual property rights of the Licensed Software. With respect to the
Licensed Software: (i) the Vertex Parties are the sole and exclusive owner of
the entire and unencumbered right, title and interest in and to thereof,
excepting the patent rights which are licensed to it by PB, (ii) the Vertex
Parties have no knowledge of the existence of any Intellectual Property held by
any other Person that would preclude the Vertex Parties from using and licensing
the Licensed Software to PB, (iii) no claims have been made, and the Vertex
Parties have no knowledge of any claim that is likely to be made, that the use
by the Vertex Parties does or may violate the rights of any Person, and (iv)
none of the Intellectual Property or proprietary information comprising the
Licensed Software has been adjudged invalid or unenforceable and is valid and
enforceable, and there are no prior or other uses thereof which to the Vertex
Parties' best knowledge could
23
lead to any such Intellectual Property or proprietary information becoming
invalid or unenforceable.
8.1.2 The Licensed Software shall conform to all specifications
as currently published by the Vertex Parties, and as published in the future
from time to time by the Vertex Parties, in its user guides and documentation or
same will be corrected by the Vertex Parties at no charge to PB. Modifications
to the Licensed Software for which the Vertex Parties are responsible shall
conform to all specifications and requirements therefor or same will be
corrected by the Vertex Parties at no charge to PB within a commercially
reasonable period of time. THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES
WHETHER EXPRESSED OR IMPLIED AND WHETHER OF MERCHANTABILITY, FITNESS OF PURPOSE
OR OTHERWISE. THE LICENSED SOFTWARE TO BE LICENSED ARE DELIVERED WITH NO FURTHER
WARRANTY FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY
NATURE WHATSOEVER.
8.1.3 No security measures (other than the serialization of the
Software to the Server) have been incorporated in the Software which would
impair its use and operation except such measures as are disclosed in writing to
PB.
8.1.4 The Software is free of all liens and title encumbrances,
and substantially conform to all specifications as same may be published by the
Vertex Parties in its then current user guides and documentation.
8.1.5 All representations and warranties contained herein shall
survive any delivery, acceptance, payment, termination or expiration of a
purchase order and shall run to PB, its Affiliates, successors, assigns,
Customers and users of its products.
9. Product Shipments.
9.1 New PB Customers. RenSoft and PB agree that RenSoft shall be
promptly made aware of the location and name of all new PB Customers and the
number and type of servers (including serial numbers) on which the Licensed
Software is to be installed prior to such installation.
9.2 Fulfillment by RenSoft. RenSoft shall be responsible for
fulfillment of RenSoftWMS and/or RenSoftOrder to PB's Customers, at no charge to
PB for the fulfillment process or for the Licensed Software, documentation or
other materials provided to the Customer, by providing the Customer the
available user and technical documentation, in conjunction with installation
instructions and the contracted Licensed Software in the appropriate electronic
media.
9.3 Fulfillment by PB. PB shall fulfill all Customer orders of
RenSoftTMS, at no charge to RenSoft for the fulfillment process or for the
Licensed Software documentation or other materials provided to the Customer, by
providing the Customer the available user and technical documentation, in
conjunction with installation instructions and the contracted Licensed Software
for said software in the appropriate
24
electronic media. RenSoft reserves the right, when it solely determines and upon
adequate and appropriate advance written notice to PB, to fulfill its Customer
orders of RenSoftTMS.
10. Confidentiality, Proprietary Information and Proprietary Rights.
10.1 RenSoft Proprietory Information. RenSoft may provide RenSoft
Proprietary Information to PB; and PB may provide PB Proprietary Information to
RenSoft. Such Proprietary Information is and shall remain the sole and exclusive
property of the providing party, notwithstanding any access to such Proprietary
Information provided hereunder.
10.2 PB Duites. PB hereby agrees that it shall treat and hold the
RenSoft Proprietary Information in the manner described below and shall take all
actions necessary to protect the confidentiality of the RenSoft Proprietary
Information.
10.2.1 PB shall treat and hold the RenSoft Proprietary
Information as confidential. The RenSoft Proprietary Information may be used by
PB only in connection with its activities contemplated by this Agreement. PB
shall not disclose the RenSoft Proprietary Information to any third party, other
than to its and its Affiliates' employees and to third parties who have agreed
to confidentiality provisions substantially similar to those in this Agreement
and who, in each case, have a need to know for purposes of such activities.
10.2.2 Except as allowed in Section 4 hereof, PB shall not:
(i) Copy or reproduce the RenSoft Proprietary Information
in whole or in part;
(ii) Sell, assign, lease, sub-license or transfer, in whole
or in part, the RenSoft Proprietary Information to any other person or
entity (other than to its Affiliates which shall be bound by the terms of
this Section 10), without the prior written consent of RenSoft.
10.2.3 PB acknowledges that the Master License source code is
RenSoft Proprietary Information, and is especially valuable to RenSoft, and that
the value of the Licensed Software may be substantially reduced or destroyed by
unauthorized use or disclosure of such source code.
10.2.4 Except as may be otherwise provided in this Agreement, all
RenSoft Proprietary Information made available to PB, including copies thereof,
shall be returned to RenSoft upon the termination of this Agreement.
10.2.5 PB agrees that if it learns of any breach of the
confidentiality or non-disclosure provisions of this Agreement, it shall, within
a reasonable period of learning of any such breach, notify RenSoft in writing of
the breach, specifying fully the nature and manner of the breach. PB further
agrees to co-operate fully with RenSoft in any investigations and legal actions
relating to such breach,
25
including legal actions for injunctive or other equitable relief, in order to
eliminate and cure the breach.
10.2.6 Acknowledging that the damages sustainable by RenSoft as a
consequence of any willful breach of PB's material obligations under this
Section may be difficult to measure in monetary terms, PB hereby agrees that
RenSoft shall be entitled to seek equitable relief in addition to damages
resulting from said breach by PB, its officers, authorized agents, or employees.
10.2.7 Without limiting the foregoing, RenSoft Proprietary
Information obtained pursuant to Section 3.1 will only be shared with employees
of PB on a need to know basis and solely for the purposes contemplated by such
section.
10.3 PB Proprietary Information. RenSoft hereby agrees that it
shall treat and hold the PB Proprietary Information in the manner described
below and shall take all actions necessary to protect the confidentiality of the
PB Proprietary Information.
10.3.1 RenSoft shall treat and hold the PB Proprietary
Information as confidential. The PB Proprietary Information may be used by
RenSoft only in connection with its support of PB's activities under this
Agreement. RenSoft shall not disclose PB Proprietary Information to any third
party, other than its employees with a need to know in connection with such
support.
10.3.2 Except as allowed in Section 4 hereof, RenSoft shall not:
(i) Copy or reproduce the PB Proprietary Information in
whole or in part;
(ii) Sell, assign, lease, sub-license or transfer, in whole
or in part, the PB Proprietary Information to any other person or entity
(other than its Affiliates which shall be bound by the terms of this
Section 8), without the prior written consent of PB.
10.3.3 Except as may be otherwise provided in this Agreement, all
PB Proprietary Information made available to RenSoft, including copies thereof,
shall be returned to PB upon the request of PB and, in any event, upon the
termination of this Agreement.
10.3.4 RenSoft agrees that if it learns of any breach of the
confidentiality or non-disclosure provisions of this Agreement, it shall, within
a reasonable period of learning of any such breach, notify PB in writing of the
breach, specifying fully the nature and manner of the breach. RenSoft further
agrees to co-operate fully with PB in any investigations and legal actions
relating to such breach, including legal actions for injunctive or other
equitable relief, in order to eliminate and cure the breach.
26
10.3.5 Acknowledging that the damages sustainable by PB as a
consequence of any willful breach of RenSoft's material obligations under this
Section may be difficult to measure in monetary terms, RenSoft hereby agrees
that PB shall be entitled to seek equitable relief in addition to damages
resulting from said breach by RenSoft, its officers, authorized agents, or
employees.
10.3.6 Without limiting the foregoing, PB Proprietary Information
obtained pursuant to Section 3.1 will only be shared with employees of RenSoft
on a need to know basis and solely for the purposes contemplated by such
section.
11. Pricing; Compensation; Refunds.
11.1 Pricing.
11.1.1 Except as otherwise provided herein, PB agrees RenSoft
shall have the right to determine the Recommended License Fees for the Licensed
Software. The parties agree that on a quarterly basis a review of the then
current pricing shall result. Both parties agree that the Recommended License
Fees shall be presented to the Customer, and, except as otherwise provided
herein, any deviation from or discounting of said fees shall be agreed upon by
both parties prior to finalization of any PB License Agreement. Recommended
Licensee Fees set forth on Schedule A shall remain in place through December 31,
2001. Beyond such date RenSoft reserves the rights to change the Recommended
License Fees, at its discretion after prior consultation with PB, and shall
provide PB 90 days notice of said change(s). RenSoft and PB reserve the right to
suggest changes to the Recommended License Fees for any reason, including,
without limitation, as a result of market demand or ability to pay, either on a
case-by-case basis or on an ongoing basis.
11.1.2 RenSoft and PB agree that the license fees with respect to
RenSoft TMS shall be discussed and mutually agreed upon as soon as practicable
after the date of this Agreement.
11.1.3 PB agrees that it shall not reduce the Recommended
License Fees to Prospects by an amount greater than fifteen percent (15%) on
RenSoftOrder and RenSoftWMS, and no greater than twenty-four (24%) on RenSoftTMS
without the prior written consent of RenSoft, which consent shall not be
unreasonably withheld.
11.1.4 RenSoft warrants that all the prices and terms it has
granted herein are equal to or better than the prices and/or terms being offered
by RenSoft to any other similarly situated reseller. If during the term of this
Agreement, RenSoft enters into an arrangement with any other similarly situated
reseller which provides better prices or terms, this Agreement shall be deemed
amended to provide the same to PB and notice of such arrangement shall be given
to PB immediately. RenSoft further warrants that it will not offer prices lower
than its Recommended License Fee to its Customers without prior consultation
with PB.
27
11.1.5 RenSoft and PB agree that the recommended maintenance
fees for the suite of Licensed Software or for RenSoftOMS or RenSoftWMS sold
individually shall be twenty percent (20%) of the Recommended License Fee for
such product and that such recommended maintenance fees shall be presented to
the Customer. Except as otherwise provided herein, any deviation from or
discounting of said fees shall be agreed upon by RenSoft and PB prior to
finalization of any maintenance agreement. PB may reduce the maintenance fee for
any of such products to an amount no less than fifteen percent (15%) of the
Recommended License Fee without RenSoft's prior consent. Any reduction to lesser
amount shall require RenSoft's prior consent, which consent shall not be
unreasonably withheld. RenSoft and PB shall agree on the recommended maintenance
fee for RenSoftTMS when sold as a stand-alone product and the permitted
discounts therefrom as soon as possible after the date of this Agreement.
11.2 Royalty Fees. For all PB sales of the Licensed Software, the
royalty fees for same shall be those defined in Schedule B herein.
11.3 Royalty Fee Renegotiation. At such time as royalties and
other amounts (including for Modifications, Maintenance and otherwise) received
by RenSoft in respect of the Licensed Software reach (i) $7.5 million in the
aggregate with respect to the year ending December 31, 2001 or (ii) $13.0
million in the aggregate with respect to the year ending December 31, 2002, the
parties shall meet at PB's request to renegotiate in good faith the royalties to
be paid by PB to RenSoft under this Agreement.
11.4 Payment Terms. (a) PB shall pay RenSoft royalties due under
this Agreement with respect to Net Sales Revenues from sales of Licensed
Software as part of a supply chain execution suite of products within ten (10)
days of receipt of such Revenues from the Customer. PB shall pay RenSoft
royalties due under this Agreement with respect to Net Sales Revenues from sales
of the RenSoftTMS Licensed Software (whether sold under such name, the trademark
CONQUEST or otherwise) as a stand-alone product through PB's Mailing Systems
Division sales force on a quarterly basis within fifteen (15) days after the
close of the calendar quarter in which such Revenues were received from the
Customer. Under PB's current practice when a customer wishes to lease
CONQUEST`TM' software through Pitney Xxxxx Credit Corporation ("PBCC"), PBCC
pays the PB Global Mailing Systems division the full license fee due when the
Customer enters into a lease for CONQUEST with PBCC. Under such practice, PB
will pay RenSoft the royalty due for the sale of CONQUEST when PBCC makes such
payment to the PB Global Mailing Systems division. PB and RenSoft will discuss
the timing of PB's royalty payments to RenSoft if: (a) such practice with PBCC
for CONQUEST should change; (b leasing or other financing is arranged through
an entity other than PBCC; or (c) PB sells RenSoftOMS or RenSoftWMS Licensed
Software in transactions in which leasing or other financing is involved (either
through PBCC or otherwise and whether based on payment on achievement of
milestones or otherwise).
(b) All fees shall be remitted in US dollars.
Payment of all/any sums due under this Agreement shall be made in full
without
28
deduction of taxes, charges and other duties that may be imposed, except in
so far as any such deduction may be credited in full by RenSoft against
RenSoft's own tax or other liabilities.
11.5 Customer Billing. The parties agree that all Customer billing
for sales made by PB (including, without limitation, Modifications to be made by
RenSoft in connection with such sales) shall be the responsibility of PB. In
such cases whereby the Customer requests that RenSoft xxxx directly for
Modifications, the parties shall agree to that process.
11.6 Quarterly Reporting. PB agrees that it will provide RenSoft a
report of collected Net Sales Revenues subject to this Agreement no later than
thirty (30) days after the close of each calendar quarter. In the event that no
such Net Sales Revenues have been collected by PB during any calendar quarter,
PB shall not be required to file a report to RenSoft for said calendar quarter.
11.7 Audit. Either party may, at its own expense and upon fifteen
(15) business days notice have an independent auditor or, in the case of an
audit by PB, PB's internal audit staff review, during normal business hours, the
other's records for the purpose of verifying the Net Sales Revenues, fee
payments, reimbursement of travel and other expenses and other amounts due under
this Agreement. The parties agree that any such independent auditor shall be a
Certified Public Accountant or Chartered Accountant from an independent
accounting firm and that any such independent auditor will be identified to the
party being audited and approved by such party prior to such review. Said
approval shall not be unreasonably withheld. No audit shall be performed more
than once in any calendar year and no records shall be audited by a party that
are more than two (2) calendar years old or that were available for audit at the
time of any prior audit by such party.
11.8 Refunds. If PB provides any refund, credit or similar
adjustment (collectively, an "Adjustment") to a Customer and wishes to receive a
refund from RenSoft of the royalty paid with respect thereto, RenSoft and PB
shall discuss the reasons for such Adjustment and negotiate in good faith
whether it is appropriate for PB to receive such a refund from RenSoft.
Notwithstanding the foregoing: (a) RenSoft and PB do not expect any Adjustments
to be made in respect of Services already delivered to a Customer; and (b)
RenSoft shall refund to PB royalties and other amounts paid by PB to RenSoft
when the related Adjustment is required by action of a governmental authority or
a formal dispute resolution process.
11.9 Certain Amendments. To the extent that any Licensed Software
is licensed outside of North America (which shall include the United States of
America, Canada and Mexico), the parties shall agree as to what provisions of
this Agreement, if any, need to be amended in connection therewith.
29
12. Term and Termination.
12.1 Term. Unless terminated as provided in Section 12.2 below or
by mutual written consent, this Agreement shall continue in full force and
effect for an initial term expiring December 31, 2003. After such initial term,
the term of this Agreement shall be automatically renewed for two (2)
successive, two (2) year terms unless otherwise mutually agreed upon by both
parties or PB provides written notice of non-renewal to RenSoft at any time.
12.2 Termination. This Agreement may be terminated prior to the
expiration of the initial or any renewal term, by prior written notice to the
other party as follows:
12.2.1 By either party, effective immediately, if the other
party should become the subject of any voluntary or involuntary bankruptcy,
receivership, or other insolvency proceedings or make an assignment or other
arrangement for the benefit of its creditors, or goes into liquidation, or if
such other party should be nationalized or have any of its material assets
expropriated;
12.2.2 By RenSoft or PB, effective immediately, if the other
party should sell, assign, delegate, or transfer any of its rights and
obligations under this Agreement without notifying PB or RenSoft, respectively,
of such sale, assignment, delegation or transfer; or by PB, effectively
immediately, if an event specified in Section 13 occurs.
12.2.3 By RenSoft, effective immediately, if PB should
materially breach the terms of any provision of this Agreement and has not cured
such breach within thirty (30) days after receipt of written notice thereof from
RenSoft;
12.2.4 By PB, effectively immediately, if RenSoft shall
materially breach the terms of any provision of this Agreement and has not cured
such breach within thirty (30) days after receipt of written notice thereof from
PB; or
12.2.5 By PB, at any time on thirty (30) days prior written
notice to RenSoft.
12.3 Self-Support. Notwithstanding anything to the contrary
provided for in this Agreement, to the extent that PB elects to provide
self-support or any manner of Customer support to any of its Customers with a
valid paid PB License Agreement, the license granted to PB herein for support
and maintenance purposes shall survive any termination or expiration of this
Agreement. Further, any warranties and indemnities made to PB shall survive any
termination or expiration of this Agreement, and PB's sublicense to customers of
the right to use the Licensed Software shall survive termination.
30
12.4 Rights and Obligations of the Parties on Termination. The
following provisions shall apply on the termination or expiration of this
Agreement:
12.4.1 PB shall cease all sales and other activities for
which it is licensed under this Agreement with respect to the Licensed Software
and immediately cease all use of RenSoft Proprietary Information previously
furnished by RenSoft and then in PB's possession except as otherwise provided in
this Agreement.
12.4.2 All indebtedness of PB to RenSoft and of RenSoft to
PB, not including any such disputed indebtedness as evidenced by written notice
of same from either party to the other and received by the other party before or
promptly after the termination or expiration date of this Agreement, shall
become immediately due and payable without further notice or demand, which is
hereby expressly waived.
12.4.3 PB shall remove from its property and immediately
discontinue all use, directly or indirectly, of the RenSoft trademarks. PB shall
further certify in writing to RenSoft that PB has completely terminated its use
of any and all such trademarks.
12.4.4 The parties shall remove from their respective
property and immediately return to the other all Proprietary Information of the
other party except as otherwise provided in this Agreement. The parties shall
further certify in writing to each other that they have returned all Proprietary
Information belonging to the other party in their possession as required by this
Agreement.
12.4.5 Notwithstanding the foregoing, PB shall be permitted
to retain RenSoft Proprietary Information to the extent and for the period of
time needed to fulfill obligations under agreements with Customers relating to
the Licensed Software.
12.4.6 In the event of termination by PB under Section 12.2.1
or 12.2.2, PB shall be entitled to retain the Master License source code for
purposes of supporting and maintaining the Licensed Software.
12.5 Limitation on Liability. Under no circumstances shall either
party be liable to the other by reason of termination or non-renewal of this
Agreement for compensation, reimbursement, or damages for:
(i) loss of prospective compensation or consequential
damages;
(ii) goodwill or loss thereof; or
(iii) expenditures, investments, leases, or any type
of commitment made in connection with the business of such party or in
reliance on the existence of this Agreement.
31
12.6 Term. Notwithstanding anything to the contrary in paragraphs
12.1 through 12.5 upon termination of this Agreement, the rights provided under
this Agreement shall remain in effect for a period of three (3) months from the
effective date of termination to permit PB to meet its obligations with respect
to outstanding proposals and sales in progress for the Licensed Software.
13. Change of Control.
13.1 Change of Ownership. Should the source code or the rights to
sell the Licensed Software be sold by either of the Vertex Parties, or should
Vertex sell RenSoft or should RenSoft sell a substantial portion of its assets
relating to this Agreement, or should RenSoft determine to withdraw from selling
or licensing the Licensed Software, PB shall retain all rights under this
Agreement provided it is not in material breach of any provision of this
Agreement. PB shall have the right to renegotiate the terms and conditions of
this Agreement if RenSoft has been purchased or has sold the rights to the
Licensed Software to another party.
13.2 Default, Bankruptcy, Cease Operations. Should either of the
Vertex Parties become the subject of any voluntary or involuntary bankruptcy,
receivership or other insolvency proceedings or make an assignment or other
arrangement for the benefit of creditors, or goes into liquidation, PB shall
continue to operate under the terms and conditions of this Agreement until such
time as the bankruptcy agent and PB negotiate a fair and equitable ownership
transfer of the Licensed Software.
14. Indemnity.
14.1 Indemnification by PB. Subject to the terms and conditions of
this Section, PB agrees to indemnify and hold harmless the Vertex Parties, its
officers, directors, shareholders and Affiliates and the successors and assigns
of each of them (the party or parties being indemnified collectively referred to
herein as the "Vertex Indemnified Parties") from and against each and every
demand, claim, loss, liability, damages, cost and expense (including, without
limitation, interest, penalties, and reasonable attorneys' fees and
disbursements) (collectively, "Losses") imposed upon or incurred by the Vertex
Indemnified Parties, directly or indirectly resulting from or arising out of (i)
any breach of any representation or warranty of PB contained herein and any
actual or threatened action or proceeding in connection therewith, (ii) any
failure to comply with any covenant or other agreement of PB contained herein
and any actual or threatened action or proceeding in connection therewith, or
(iii) any claim made by Customer(s) which are the result of Services provided by
PB to such Customer(s) or unauthorized warranties made by PB to such
Customer(s). Each matter for which PB has agreed to provide indemnification
pursuant to this Section is hereinafter referred to individually as a "Claim"
and collectively as the "Claims."
14.2 Indemnification by RenSoft. Subject to the terms and
conditions of this Section, the Vertex Parties agree to indemnify and hold
harmless PB, its respective shareholders, officers, directors and Affiliates and
the permitted successors
32
and assigns of each of them (the party or parties being indemnified collectively
referred to herein as the "Pitney Xxxxx Indemnified Party") from and against all
Losses imposed upon or incurred by the Pitney Xxxxx Indemnified Party, directly
or indirectly resulting from or arising out of (i) any breach of any
representation or warranty of either of the Vertex Parties contained herein and
any actual or threatened action or proceeding in connection therewith (ii) any
failure to comply with any covenant or other agreement of either of the Vertex
Parties contained herein and any actual or threatened action or proceeding in
connection therewith, (iii) any claim alleging unfair competition, infringement,
or misappropriation of any patents, trademarks, copyrights, trade secrets or
other confidential proprietary information belonging to any third parties,
arising out of the distribution or use by PB or any of its Customers of the
Licensed Software; (iv) any Services provided by either of the Vertex Parties to
a Customer; or (v) any breach of any warranty made by either of the Vertex
Parties or, to the extent authorized by RenSoft, by PB to a Customer. Each
matter for which a Vertex Party has agreed to provide indemnification pursuant
to this Section is hereinafter referred to individually as a "Claim" and
collectively as the "Claims."
14.3 Notification. Each party to be indemnified under this Section
(the "Indemnified Party") shall, promptly after the receipt of notice of the
commencement of any Claim against such Indemnified Party in respect of which
indemnity may be sought from the other party or parties (the "Indemnifying
Party") under this Section, notify the Indemnifying Party in writing of the
commencement thereof. The omission of any Indemnified Party to so notify the
Indemnifying Party of any such action shall not relieve the Indemnifying Party
from any liability which it may have to such Indemnified Party (a) other than
pursuant to this Section or (b) under this Section unless, and only to the
extent that, such omission results in the Indemnifying Party's forfeiture of
substantive rights or defenses, or such Indemnified Party is otherwise
materially prejudiced. In case any such Claim shall be brought against any
Indemnified Party, and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to assume the
defense thereof at its own expense by so notifying the Indemnified Party within
twenty (20) Business Days of receipt of the notice of the commencement of any
Claim, with counsel satisfactory to such Indemnified Party in its reasonable
judgment; provided, however, that any Indemnified Party may, at its own expense,
retain separate counsel to participate in such defense at its own expense. If
the Indemnifying Party does not provide notice to the Indemnified Party of its
assumption of the defense of a Claim within twenty (20) Business Days of notice
of the commencement of a Claim, the Indemnified Party shall have the right to
employ counsel in connection with the defense of such Claim; provided, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one counsel to all Indemnified Parties; provided further, that in the event the
Indemnified Party has hired counsel in connection with the defense of a Claim
after the Indemnifying Party has failed to deliver notice in the manner
described above, the Indemnifying Party may, at any time thereafter, assume the
defense of a Claim (and terminate any liability for the Indemnified Party's
counsel) by providing notice to the Indemnified Party. Notwithstanding the
foregoing, in any Claim in which both the Indemnifying Party, on the one hand,
and an Indemnified Party, on the other hand, are, or are reasonably likely to
become, a party, such Indemnified Party shall have the right to employ separate
counsel and to control its own
33
defense of such Claim if, in the reasonable opinion of counsel to such
Indemnified Party, either (x) one or more defenses are available to the
Indemnified Party that are not available to the Indemnifying Party or (y) a
conflict or potential conflict exists between the Indemnifying Party, on the one
hand, and such Indemnified Party, on the other hand, that would make such
separate representation advisable; provided, however, that the Indemnifying
Party (i) shall not be liable for the fees and expenses of more than one counsel
to all Indemnified Parties and (ii) shall reimburse the Indemnified Parties for
all of such fees and expenses of such counsel incurred in any action between the
Indemnifying Party and the Indemnified Parties or between the Indemnified
Parties and any third party, as such expenses are incurred. The Indemnifying
Party agrees that it will not, without the prior written consent of the
Indemnified Party, settle, compromise or consent to the entry of any judgment in
any pending or threatened Claim relating to the matters contemplated hereby (if
any Indemnified Party is a party thereto or has been actually threatened to be
made a party thereto) unless such settlement, compromise or consent (i) includes
an unconditional release of each Indemnified Party from all liability arising or
that may arise out of such Claim and (ii) does not require any action other than
the payment of money. The Indemnifying Party shall not be liable for any
settlement of any Claim effected against an Indemnified Party without its
written consent, which consent shall not be unreasonably withheld.
14.4 Contribution. If the indemnification provided for in this
Section from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Losses referred to herein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions which
resulted in such Losses, as well as any other relevant equitable considerations.
The relative faults of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the Losses referred to above shall be deemed to include, subject to
the limitations set forth in this Section, any legal or other fees, charges or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
15. General.
15.1 Entire Agreement. This Agreement represents the entire
agreement between the parties on the subject matter hereof and supersedes all
prior discussions, agreements, and understandings of every kind and nature
between them. No modification of this Agreement, unless otherwise provided
herein, will be effective unless in writing and signed by both parties.
34
15.2 Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:
(i) if to Buyer:
Vertex Interactive, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Telecopy: 000-000-0000
Attention: Xxxxx X. Xxxxxx
Chief Operating Officer
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxx X. X'Xxxxxx, Esq.
(ii) if to Renaissance:
Renaissance Software, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telecopy: 000-000-0000
Attention: Chief Executive Officer
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxx X. X'Xxxxxx, Esq.
(iii) if to Seller:
Pitney Xxxxx Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxx, XX. 06484-4705926-0700
Telecopy: 000-000-0000
Attention: Xxxxxxx Xxxxx, President TranScape
35
with a copy to:
Pitney Xxxxx Inc.
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX. 00000-0000
Telecopy: (000) 000-0000
Attention: Vice President and General Counsel
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
15.3 Force Majeure. Neither party shall be in default hereunder by
reason of any failure or delay in the performance of any obligation under this
Agreement where such failure or delay arises out of any cause beyond its
reasonable control and without the fault or negligence of such party. Such
causes shall include, without limitation, storms, floods, other acts of God,
fires, explosions, riots, war or civil disturbance, strikes or other labor
unrest, embargoes and other governmental actions or regulations that would
prohibit such party from ordering or furnishing Software or from performing any
other aspects of the obligations hereunder, delays in transportation, sabotage,
and liability to obtain necessary labor, supplies, or manufacturing facilities.
Both parties hereby agree that the party unable to perform to this Agreement due
to the reasons contained in this paragraph shall advise the other party of same
at the first possible opportunity.
15.4 Continuing Obligations. The Parties agree that neither the
termination nor the expiration of this Agreement shall relieve either of them
from their obligations of confidentiality noted herein regarding Proprietary
Information and hereby agree such obligations will survive the termination or
expiration of this Agreement for a period of three (3) years.
15.5 Severability. The illegality or un-enforceability of any
provision of this Agreement shall not effect the validity and enforceability of
the remaining and legal or enforceable provisions hereof.
15.6 Language. The English language version of this Agreement
shall govern and control any translations of this Agreement into any other
language. The clause and paragraph headings in this Agreement are for ease of
reference only and shall no be taken into account in the construction or
interpretation of the clause or paragraph to which they refer. Words importing
the singular meaning shall, where the context so admits, include the plural
meaning and vice versa. Words denoting natural persons include corporations and
firms and all such words shall be construed to be interchangeable in that
manner.
36
15.7 Applicable Law. This Agreement shall be construed, enforced
and performed in accordance with the internal laws of the State of New York in
the United States of America without reference to the principles of conflicts of
laws.
15.8 Assignment. No party may assign any of its rights or delegate
any of its duties under this Agreement without the prior written consent of the
other parties hereto, except that PB may, without consent, assign or sublicense
its rights under this Agreement, in whole or in part, to any PB Affiliate which
intends to market, distribute, sell, service or otherwise perform activities
contemplated under this Agreement in any country within the Reseller Area and
either party may assign its rights and delegate its duties to a successor to
such party's entire business relating to this Agreement.
37
IN WITNESS THEREOF, the parties hereto have signed this Agreement the
date and year first written above by their duly authorized representatives.
PITNEY XXXXX INC. RENAISSANCE SOFTWARE INC
By: Xxxxxxx X. Xxxxx By:
___________________________________ ___________________________________
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxx
Title: President Title: Chief Operating Officer
TranScape Division
VERTEX INTERACTIVE, INC
By: ___________________________________
Name: Xxxxxxxx Xxxx
Title: Joint Chief Executive Officer
[Reseller Agreement
IN WITNESS THEREOF, the parties hereto have signed this Agreement the
date and year first written above by their duly authorized representatives.
PITNEY XXXXX INC. RENAISSANCE SOFTWARE INC
By: By: Xxxxx X. Xxxxxx
___________________________________ ___________________________________
Name: Name: Xxxxx X. Xxxxxx
Title: Title: Chief Operating Officer
VERTEX INTERACTIVE, INC
By: Xxxxxxxx Xxxx
___________________________________
Name: Xxxxxxxx Xxxx
Title: Joint Chief Executive Officer
[Reseller Agreement
SCHEDULE A
LICENSED SOFTWARE
RECOMMENDED LICENSE FEE
For use of:
RenSoftWMS (all functions either paper-based, Radio Frequency, or a mixed
implementation by function by warehouse)
o Receiving
o Putaway
o Cross-docking
o Cycle Counts
o Replenishments
o Pick Planning
o Picking
o Shipping
o Quality Control
o Inventory Control
o Moves
RenSoftOMS
o Customer Order Entry
o Remote Order Entry- Sales force
o Call Center Order Entry
o Inventory Availability
o On-line Catalogue, Buying History, Pricing / Discounting --
Specials and Promotions
License in Perpetuity for either of the above products
License in Perpetuity
Number of Users for Total Users Annual Maintenance Charge
--------------- ------------------- -------------------------
10 $100,000 $20,000
25 $175,000 $35,000
50 $250,000 $50,000
75 $350,000 $70,000
100 $450,000 $90,000
150 $550,000 $110,000
250 $750,000 $150,000
250+ Special Bid Special Bid
Note: users in excess of that identified herein shall require a special bid
S-A-1
RenSoftTMS
Conquest Feature Summary (Current Version)
o Client/Server architecture
o SQL 7 Database*
o Microsoft Windows NT / 2000*
o Enterprise integration tools (including Rumba*)
o eQuery
o Order Interface
o Pack Verification
o Compliance (including EDI trading kit*)
o Export Documentation
o Shipment Planning
o Shipment Processing
o Hazardous Goods Processing*
o PC Miler*
o Carrier Evaluation - IntelliShop*
o Partner Communications
o Business Rule Automation
o Reporting
eQuest Feature Summary (Version 3.0)
o Thin-client architecture
o SQL 7 Database*
o Windows 2000*
o Internet Explorer 5.0*
o Enterprise integration tools
o XML Roundtrip (XML in and out with carrier evaluation)
o eQuery
o Up Front Rating (rate quotes)
o Shipment Processing
o PC Miler*
o Carrier Evaluation - IntelliShop*
o Partner Communications
o Business Rule Automation
o Reporting
License fees to be agreed pursuant to Section 11.1.2 of the
Agreement.
* Third party or PB-owned software which is not a part of the Licensed Software.
S-A-2
SCHEDULE B
RESELLER ROYALTY FEES
PB shall pay RenSoft as royalties for the rights granted under this
Agreement with respect to the Licensed Software forty (40%) of PB's Net Sales
Revenues.
Notwithstanding the above and the provisions of Section 5.5.2, until
the royalties received by RenSoft from the date of this Agreement and the
payments for services for provision of Maintenance Support to PB's Customers
shall equal the salary and benefit expenses (at the PB level) incurred during
2001 and January 2002 on account of RenSoft's employment of the Conquest Product
Development Employees (as such term is defined in the Transaction Agreement) (up
to an aggregate amount equal to $2,964,000) (the "Recoupment Amount"), RenSoft
shall be entitled to receive a royalty and payments for such services the
following:
1. During calendar year 2001:
(a) until RenSoft has received the lesser of the Recoupment Amount
or $2,764,000 in the aggregate during 2001 in royalties and payments for
services for provision of Maintenance Support, royalties paid at the RenSoft
Preferential Royalty Rate and payments for such services at the RenSoft
Preferential Maintenance Rate; and thereafter,
(b) no royalties and no payments for such services until the exact
amount of payments due to RenSoft at the Normal Contract Rates have been paid to
RenSoft for the aggregate of all royalties and payments for such services during
2001; and thereafter,
(c) royalties and payments for such services at the Normal
Contract Rates.
2. During calendar year 2002 and thereafter:
(a) until RenSoft has received the Recoupment Amount in the
aggregate since the date of this Agreement in royalties and payments for
services for provision of Maintenance Support, royalties at the RenSoft
Preferential Royalty Rate and payments for such services at the RenSoft
Preferential Maintenance Rate; and thereafter,
(b) no royalties and no payments for such services until the exact
amount of payments due to RenSoft at the Normal Contract Rates have been paid to
RenSoft for the aggregate of all royalties and payments for such services since
the date of this Agreement; and thereafter,
(c) royalties and payments at the Normal Contract Rates.
S-B-1
3. For purposes of this Agreement:
"RenSoft Preferential Royalty Rate" shall mean sixty-five percent (65%)
of Net Sales Revenues;
"RenSoft Preferential Maintenance Rate" shall mean sixty-five percent
(65%) of the revenues received by PB under its Maintenance Support agreements
referred to in Addendum B; and
"Normal Contract Rates" shall mean forty percent (40%) of Net Sales
Revenues as a royalty under this Agreement and payments for services for
provision of Maintenance Support equal to fifty percent (50%) of the revenues
received by PB under its Maintenance Support agreements referred to in Addendum
B.
4. It is the intent of the parties that the provisions of this Schedule
B shall allow RenSoft to cover its costs for: (a) the salary and benefit
expenses (at the PB level) incurred during 2001 and January 2002 on account of
RenSoft's employment of the existing Conquest Product Development Employees (as
such term is defined in the Transaction Agreement) and of certain new employees
to be hired for development of RenSoftTMS; or (b) the salary and benefit
expenses or payments for RenSoft employees who may be hired in place of such
persons referred to in clause (a). If RenSoft does not incur such costs, then
RenSoft and PB shall renegotiate the terms of this Schedule B as it applies to
payments to RenSoft at other than the Normal Contract Rates.
S-B-2
SCHEDULE C
RESELLER AREA
The Reseller Area is the world.
S-C-1
SCHEDULED
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is entered into on this month, day, 20001 by and between
Renaissance Software Inc ("Licensor") with its principal place of business at
0000 Xxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxx Xxxx 00000, xxxxxxxxxxxxxxxxxxxxxxxxxx
with its principal place of business at xxxxxxxxxxxxxxxxxxxxxxxxxx, Gxxxxxxxxx,
XX 11111 (hereinafter referred to as Licensee).
WHEREAS, Licensor is a developer of certain software applications
including the software products specified on Exhibit A ("Licensed Software");
WHEREAS, Licensor desires to grant a non-exclusive, non-transferable
license for the Licensed Software, and Licensee desires to license the use of
the Licensed Software on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:
1. Definitions.
"Licensed Software" means that group of programs named and outlined in
Exhibit A herein. Licensed Software is referred to as "base" software consisting
of programs and files already engineered by the Licensor.
"Modifications" means any changes made by the Licensor to the Licensed
Software, approved by the Licensee, that require change(s) or extensions to
existing objects.
"Modified Licensed Software" means that software resulting from
Modifications to the Licensed Software performed by the Licensor.
"Software" means, collectively, the Licensed Software and the Modified
Licensed Software.
"Core User" - A "core" user is defined as a log in identification and
password that has access to the Licensed and/or Modified Licensed Software and
is considered an "internal" employee of the Licensee, or an authorized designee
of the Licensee.
"Non-Core User" - A "non-core" user is defined as a log in
identification and password that has limited access to the Licensed and/or
Modified Licensed Software and is considered an "external" user of the Licensee.
These Users axe generally customers, vendors and other trading community
partners. Limited access is further defined as full inquiry and 3 functional
applications.
2. License.
Licensor shall deliver the Licensed Software to Licensee for use as
provided below. Subject to the terms and conditions of this Agreement, Licensor
grants to Licensee a non-exclusive, non-transferable, perpetual, license to
(i) install and internally use the Licensed Software on the number of
servers specified on Exhibit A; and
(ii) modify, and create derivative works ("Modified Licensed Software")
based upon, the source code of the Licensed Software and use the Modified
Licensed Software pursuant to subparagraph (a) above. Licensee, at its
discretion, may modify the Licensed Software. Said modifications by Licensee
shall not be covered by the warranty terms of this Agreement or any future
Maintenance Agreement between the parties.
Licensee agrees to pay Licensor for the Licensed Software in accordance
with the terms and conditions set forth in Section 2. Upon final payment of the
Licensed Software, the Licensee shall receive as part of this Agreement the
source code for the Licensed Software.
Except as provided herein, Licensee is not authorized to offer for sale
or use, with or without charge, any versions of the Licensed Software available
to any person for any reason, nor is the Licensee permitted to make copies of,
print, translate, use or display any of the Licensed Software without the prior
written consent of Licensor except for "back-up" and disaster recovery purposes.
Licensee recognizes that any and all work performed hereunder or
pursuant to any "Change Order," including but not limited to modified programs,
user or technical documentation, conversion and interface programs, standards
and procedures, project control plans, status reports, and system design, shall
remain the property of the Licensor.
Licensed Software shall be deemed to include any updates and upgrades of
the Licensed Software received by Licensee under the maintenance service
purchased from Licensor. The rights granted to Licensee shall apply to any
affiliate or subsidiary of Licensee that agrees in writing with Licensor to be
bound by the terms of this Agreement.
3. Implementation Services.
Licensor shall furnish to Licensee certain implementation services in
connection with the delivery and installation of the Licensed Software
("Implementation Services"). Implementation services are identified in Exhibit B
and further described in the Statement of Work attached as Exhibit C.
Implementation Services include but are not limited to the following:
S-D-2
"Business Consulting" - consulting services including the preparation of
business studies, advice or guidance relating to either Licensee business and/or
Licensor's application software, including any discussions required to determine
Licensee software modification requirements;
"Account Manager" - responsibility for overseeing all aspects of the
implementation and for the proper direction and timeliness of the project;
"Project Management" - services including any task related to the
management of the project, such as assisting in the development of a Project
Control Plan, using project management tools to create/modify/update the Project
Control Plan, directing all activities including but not limited to education,
training, data conversion, specification documents, etc., attending project
meetings, discussing project progress internally or with Licensee personnel,
taking corrective action, documenting project status and any project
correspondence and controlling the installation of the Licensed Software;
"System Analysis" - services performed during a modification design
session, business study, or Conference Room Pilot for the purpose of defining
modification and/or interface requirements. A description of results arising
from said session(s) are outlined in a Summary Use Case (SuC) document. Once
any/all of the SuCs are approved in writing by the Licensor, the Licensor shall
further develop Detailed Use Case specifications (DuC) and deliver same to the
Licensee for its review and approval.
"Technical Design" - the transferring of the DuC specification(s) to a
detailed design specifications for proper interpretation of the requirement by
the programmer.
"Programming" - the coding and compilation into a machine readable form
of the modifications;
"Quality Control" - developing and executing test plans and unit testing
of a program or set of programs normally performed by personnel other than the
author of the program to verify that the program or set of programs function
according to the approved specifications;
"System Testing" - the final testing of the completed Licensed Software
prior to acceptance testing by Licensee.
Both parties agree that if additional or different services are required
by Licensee, the Licensee shall be requested to make said request in writing.
Licensee shall be required to execute either a Change Order or a Statement of
Work when requesting said services, whichever is appropriate.
S-D-3
4. Payment for the Licensed Software and Implementation Services.
Licensee shall pay to Licensor a licensee fee for use of the Licensed
Software defined in Exhibit A the sum of $xxx,xxx.00. In addition, the Licensee
shall pay the Licensor the sum of $xxx,xxx.00 for the Implementation Services.
Licensee shall pay Licensor for the Licensed Software and Implementation
Services as follows:
(i) The sum of $xxx,xxx.00 upon the execution of this
Agreement, receipt of which is hereby acknowledged; and
(ii) The sum of $xxx,xxx.00 upon the installation of the
Exhibit A software. Any use of the Licensed Software by the Licensee, including
but not limited to training sessions; use at the Conference Room Pilot, business
design sessions, GAP analyses; data conversion and mapping; Licensee performed
modification, constitutes installation. The use of the Licensed Software subject
to this paragraph does not require installation on the Licensee server.
(iii) The sum of $xxx,xxx.00 for Implementation Services
further defined in Exhibit C.
5. Other Licensor Services.
As mutually agreed by the parties, Licensor may develop modification(s)
and additional services beyond those identified in this Agreement. In connection
with each such project, the parties will enter into a separate Statement of Work
substantially similar to the attached Exhibit C.
Modification and interface support if required as a result of this
Agreement, or any subsequent Change Order, or Statement of Work, is further
defined in Addendum A attached herein.
6. Other Payment Provisions.
(a) In addition to its other payment obligations hereunder,
Licensee shall reimburse Licensor for any travel-related expenses as a result of
this Agreement or any subsequent Statement of Work, or Change Order. On a
monthly basis, Licensor will submit appropriate documentation detailing such
expenses. Any travel time required to perform the Implementation Services will
be billed as actual time and at the rate identified in the Statement of Work.
(b) All amounts herein, unless otherwise expressly noted, are
stated and payable in United States Dollars. Any sales or personal property
taxes or value-added taxes, use taxes, excise taxes or duties or other similar
taxes or charges payable under this Agreement and interest and penalties thereon
shall be the obligation of Licensee. Licensor shall be responsible for its
income taxes arising out of this Agreement.
S-D-4
(c) Except as otherwise noted, all sums owed hereunder by
Licensee to Licensor shall be due and payable fifteen (15) days from the date of
Licensor's invoice without reduction or offset for returns or similar items. In
the event any payment is not made when due, Licensor may defer shipment of
additional Licensed Software until all outstanding amounts are paid. Any such
action by Licensor shall not give rise to any claim by Licensee for breach of
this Agreement.
7. Work Schedule.
Both parties shall make their best efforts to complete each project
specified in this Agreement or any other Statement of Work in a reasonable
period of time. Each party acknowledges that changes to a Statement of Work may
be necessary and may occur as a result of a Conference Room Pilot, modification
design session(s), and/or Change Order(s), and may result in a change to the
Project Control Plan. Licensee and Licensor will each agree in writing to any
changes to the scope of this Agreement or any Statement of Work.
8. Warranty.
Licensor warrants that the Licensed Software shall execute and process
during the warranty period as defined in this Section. The warranty period for
the Licensed Software initiates upon the execution of this Agreement and remains
in effect for a period not to exceed ninety (90) days after the installation of
the Licensed Software.
During the warranty period, the Licensor shall provide product and
maintenance support services specified in this Agreement, at no additional cost,
and shall ensure that the Licensed Software complies with the Warranties
provided in this Agreement.
Licensor shall provide Maintenance Support, if accepted by Licensee,
between the hours of 8:00 am to 6:00 PM Eastern Standard Time (EST) Monday -
Friday.
9. Maintenance and Maintenance Charges.
Maintenance Support.
Beyond the warranty period, the Licensor shall provide Maintenance
Support upon Licensee acceptance of the Maintenance terms and conditions defined
herein.
Maintenance Support shall commence immediately after the warranty
period (and upon receipt of payment) and shall remain in effect for a term of 12
consecutive months.
In consideration of Maintenance Support, Licensee shall pay Licensor an
amount equal to 20% of the license fee for the Licensed Software as defined in
Exhibit A herein. Payment for the first year of Maintenance Support shall be
fixed at $xxx,xxx.00.
S-D-5
Licensor shall continue Maintenance Support in the second and
subsequent years upon payment by Licensee of the annual maintenance fee.
Licensor agrees not to increase annual maintenance by more than 10% over the
previous year's fee.
Maintenance Service & Support.
During the Maintenance Support period, Licensor shall attempt to
respond to issues identified by Licensee within a reasonable time. The
determination and classification of reported issues by the Licensee shall be
made by the Licensor's Customer Service Department (CSD). CSD shall evaluate and
identify each issue into Severity Levels 1-3. CSD shall maintain and provide
Licensee with an Open Issues Status Report on a timely basis.
Licensor shall not be responsible for interruptions in the system which
are a result of machine failure or software supplied by vendors other than
Licensor, improper preparation of input data, modification(s) performed by
Licensee or an agent thereof, or attempts to use the Licensed Software in a
manner for which it was not intended.
Severity Levels.
Severity Level 1
(i) Any problem that results in significant data corruption
errors.
(ii) An error resulting in program malfunction that severely
restricts the use of the Licensed Software for many key users and which does not
have a reasonable work-around solution.
(iii) An error resulting in program malfunction that restricts
the use of the Licensed Software for many key users of the system, but has a
reasonable work-around solution.
Severity Level 2
(i) An error resulting in program malfunction that restricts
the use of the Licensed Software for a limited number of users and has a
reasonable work around-solution and does not restrict or impair the operational
flow of the business.
(ii) Report/printed output errors and screen inquiry errors
that do not impact the user from performing his work, or do not restrict the
operational flow of the business.
Severity Level 3
(i) Grammatical errors.
S-D-6
Turn Around Times.
Licensor shall use its best efforts at all times to resolve all
reported problems. Turnaround times shall be provided to the Licensee as part of
the Open Issues Status Report. All Severity Level 1 issues shall be given the
highest priority with problem determination and resolution on an expeditious
basis. In the event the Licensed Software incurs a Severity Level 1 fault,
Licensor shall immediately provide the Licensee with the steps being taken to
correct said fault. If a correction cannot be provided expeditiously, Licensor
shall use its best efforts to provide a temporary restoration of the Licensed
Software pending the issuance of a correction to Licensee.
Maintenance Support shall be limited to telephone, mail, Internet, or
Electronic Customer Support response(s). On-site support shall be provided upon
written request of Licensee and the execution of, or in conjunction with a
Statement of Work.
Error correction under this Agreement is provided under the condition
that Licensee:
(i) provides adequate information in respect to any
malfunction in the Licensed Software,
(ii) incorporates all fixes issued by Licensor, and
(iii) has not otherwise modified the Licensed Software.
If Licensee request that Licensor correct an error by providing on-site
assistance, Licensee shall be billed for appropriate time and travel-related
expenses.
If Licensor determines that error corrections must be performed
on-site, the related services are not billable to Licensee.
Version Releases
Version releases to the Licensed Software may be issued periodically by
Licensor and shall consist of additional and enhanced functions. Version
releases shall incorporate all of the Enhancements and PTF's which have been
issued since the previous release.
Version releases shall be provided in source code format on an "as is"
basis with successful implementation depending solely on the Licensee's ability
to integrate new program source to the Licensed Software.
Upgrades
Upgrades to the Licensed Software may be issued periodically by
Licensor and shall consist of additional and enhanced functions. Upgrades shall
incorporate functional and technical capability not provided in the last Version
Release but were deemed required prior to the next Version Release.
S-D-7
Upgrades shall be provided in source code format on an "as is" basis
with successful implementation depending solely on the Licensee's ability to
integrate new program source to the Licensed Software.
Program Temporary Fixes (PTF's)
PTF's are scheduled additions to the Licensed Software, which include
all or part of the following:
o fixes to previously reported "bugs" to the Licensed
Software,
o technical upgrades to the Licensed Software
o esthetic changes to the Licensed Software.
Licensee shall be advised of PTF's made to the Licensed Software during
the term of this Agreement and Maintenance Support. Licensee may accept or
reject PTF's to the Licensed Software at the time the PTF is offered. If said
Licensee accepts PTF, the PTF shall become part of the Licensed Software.
PTFs shall be provided in source code format on an "as is" basis with
successful implementation depending solely on Licensee ability to integrate new
program source to the Licensed Software.
Internet and/or Electronic Customer Support (IECS)
I/ECS service shall provide a remote communication from Licensor's
office to a Licensee identified office, to provide:
(i) access to Licensee equipment to aid problem resolution,
and
(ii) issuance of priority PTF's.
I/ECS shall utilize a standard connection over the Licensor's existing
telephone or value-added network. Licensee shall reimburse Licensor for any/all
communication costs incurred as a result of I/ECS. (Licensor's monthly VAN
charges are not subject to reimbursement by Licensee.)
Communications beyond those identified herein are at the complete
expense of the Licensee, including but not limited to set-up, wiring,
communications hardware and software, Licensor time, testing of communications,
etc.
If Licensee request another method of communication other than that
defined herein, a charge shall be made for any additional costs related to the
set-up and provisions of this service.
S-D-8
Licensor shall not be held responsible for the results of any
malfunctions of any part of the communication link.
It is Licensee responsibility to determine the access allowed to its
equipment. Licensor accepts no responsibility for any problems or consequential
loss caused directly or indirectly by Licensor personnel or any other third
parties when providing this service.
10. Warranties and Indemnification.
All aspects of the Licensed Software, including without limitation
programs and methods of processing, will remain the sole and exclusive property
of Licensor and shall not be sold, revealed, disclosed or otherwise
communicated, directly or indirectly, by Licensee to any person, company or
institution whatsoever other than as set forth herein. It is expressly
understood that no title to or ownership of the Licensed Software, or any part
thereof, is hereby transferred to Licensee. Notwithstanding the above, Licensee
shall have the right to make available to other parties any such information
about the Licensed Software (other than source code) which is necessary to
conduct its daily business.
EXCEPT FOR THOSE WARRANTIES SET FORTH IN THIS AGREEMENT, LICENSOR MAKES
NO OTHER WARRANTIES, EXPRESS OR IMPLIED INCLUDING WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL LICENSOR BE LIABLE FOR
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF A BREACH OF ANY
PROVISION OF THIS AGREEMENT.
LICENSOR DOES NOT WARRANT THAT THE SOFTWARE IS ERROR FREE, FUNCTIONS
CONTAINED IN THE SOFTWARE WILL MEET LICENSEE'S REQUIREMENTS, OR THAT THE
SOFTWARE WORKS WITH ANY THIRD PARTY SOFTWARE OR HARDWARE, OTHER THAN THAT
SPECIFICALLY EXPRESSED WITHIN THIS AGREEMENT.
11. Indemnity.
Licensor warrants that it owns and possesses all rights and interest in
the Licensed Software necessary to enter into this Agreement, and shall
indemnify and hold Licensee, its agents and employees, harmless from any loss,
damage or liability for infringement of any United States [or the patent laws of
any other country in which the Licensor shall install the Software for the
Licensee] patent right or copyright or other property right with respect to the
use of the Licensed Software delivered hereunder; provided that Licensee permits
Licensor to defend, compromise or settle any claim or infringement and gives
Licensor reasonable assistance to enable Licensor to do so.
Licensor will indemnify, defend and hold Licensee harmless against any
and all loss, damage, expense (including reasonable attorney's fees) arising
from
S-D-9
infringement of the Licensed Software or any third party's copyright or other
intellectual property right, provided Licensee:
(i) make no admission relating to any such alleged
infringement, but promptly notifies Licensor of the circumstances, and
(ii) permit Licensor to have sole control of defending any
action arising out of the alleged infringement through legal advisers to be
selected by Licensor and shall have absolute right to negotiate and settle any
litigation on behalf of itself and of Licensee, and
(iii) shall give Licensor all such assistance and information
as Licensor shall reasonably require in its defense of any such action, at the
expense of Licensor on a time and material basis.
If any such alleged infringement is made or, in Licensor's opinion, is
likely to be made, Licensee agrees to permit Licensor, at its option and
expense, to replace or modify the materials causing the allegations or potential
allegation, provided Licensee is able to derive the contemplated operating and
application benefits from the replaced or modified materials as it did from the
Licensed Software.
The extent of Licensor's liability under this warranty, TO THE
EXCLUSION OF ALL OTHER REMEDIES IN CONTRACT, TORT; OR OTHERWISE, shall be
limited to the correction or replacement as soon as reasonable of any defective
item(s) in the physical media at Licensor's own cost and expense, provided
written notice of such defective item(s) is given to Licensor during the
warranty period.
THE MAXIMUM LIABILITY OF LICENSOR OR ITS SUPPLIERS FOR ANY CLAIMS
ARISING OUT OF THIS LICENSE BASED UPON THE SOFTWARE, REGARDLESS OF THE FORM OF
ACTION, SHALL NOT EXCEED THE AMOUNT ACTUALLY PAID TO LICENSOR WHETHER SUCH
LIABILITY. ARISES FROM ANY CLAIM BASED ON CONTRACT, WARRANTIES, TORT, OR
OTHERWISE. NOTWITHSTANDING THE FOREGOING, LICENSOR AND ITS SUPPLIERS SHALL NOT
BE LIABLE FOR ANY INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING DAMAGES OF LOSS OF DATA, LOSS OF BUSINESS,
PROFITS, OR THE LIKE) EVEN IF LICENSOR OR ITS REPRESENTATIVES HAVE BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
The foregoing warranties and indemnification shall not apply where an
infringement is caused by any modification of, or adaptation to the Licensed
Software not made or approved in writing by or on behalf of Licensor.
12. Restricted Rights.
The Licensor retains all rights not expressly stated in this Agreement.
To the extent applicable, if the Licensed Software and any other materials
delivered in
S-D-10
connection with or associated with Licensed Software, including documentation
("Documentation") is acquired by or on behalf of a unit or agency of the United
States Government, the Government agrees that such Licensed Software or
Documentation is "commercial computer software" or "commercial computer software
documentation" and that, absent a written agreement to the contrary, the
Government's rights with respect to such Software or Documentation are limited
by the terms of this Agreement and pursuant to FAR 'ss'12.212(a) and/or DFARS
'ss'227.7202-1(a)."
13. Confidentiality.
Licensee and Licensor each agree to hold in confidence any information
and material which is related to either party's business or is designated as
proprietary and confidential, herein or otherwise, by either party in connection
with the performance of obligations contemplated by this Agreement. Each party
agrees not to make use of such designated information and material other than
for its performance under this Agreement. Proprietary and confidential
information includes information of whatever kind or nature, including, but not
limited to programs, source codes, magnetic media and all drawings, diagrams,
flow charts, specifications and business information, disclosed or made known to
Licensee by Licensor, and disclosed or made known to Licensor by Licensee, as
the case may be, as a consequence of or in connection with the services rendered
pursuant to the Agreement, and information related to research, development,
pricing, trade secrets, customer lists, salaries or business affairs of the
parties to this Agreement, but shall not include:
(a) that which at the time of disclosure is in the public
domain, or
(b) that which Licensee can show was in his possession at the
time of disclosure and was not acquired from Licensor, or
(c) that which Licensor can show was in his possession at the
time of disclosure and was not acquired from Licensee, or
(d) that which Licensee and/or Licensor can show was received
by him from a third party who did not require that it be held in confidence and
who did not acquire it wrongfully.
The parties' obligations of Confidentiality under this Agreement shall
survive termination of this Agreement.
Except as otherwise provided herein, upon termination of this
Agreement, each party shall immediately return all material containing such
proprietary and confidential information, including any copies or facsimiles
thereof, to the other party.
It is agreed by and between parties that during the period of
performance by Licensor and for a two (2) year period subsequent to the
Licensee's acceptance of the
S-D-11
Software, each party shall refrain from employing any person or persons employed
by the other party.
Proprietary Rights.
Licensee acknowledges and agrees that nothing herein grants Licensee
any ownership rights to the Software, or any trademarks, copyrights, trade
secrets and patents relating thereto or any right to use the source code to the
Licensed Software. All copies of Software in any form are and shall remain the
property of Licensor. Licensee shall have no rights to the Software except as
set forth herein. Licensee shall not reverse engineer, disassemble, decompile or
make any unauthorized copies of the Software or any portion thereof.
Proprietary Notices.
Licensee agrees to reproduce and include the copyright and other
proprietary notices on all copies of the Software and documentation which
Licensee is permitted to make. Licensee shall not attach, remove or disfigure
any Licensor's marks on the Software and shall not attach any additional marks
to the Software. Licensee shall not attach the Licensor's marks to any other
products other than the Software. Licensee agrees not to alter or remove or
obscure any copyright or other proprietary notices on or in the Software or
related documentation or materials.
14. Taxes.
Licensee agrees to pay any taxes arising out of this Agreement and the
transaction contemplated herein, including, but not limited to, any sales, use
or personal property taxes. Licensee agrees to promptly remit to Licensor the
amount of any such taxes, upon delivery of a notice indicating the amount due
and identifying the appropriate taxing authority. This provision does not apply
to any income taxes on the net proceeds of this transaction levied on Licensor.
15. General.
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, subsidiaries and affiliates. Neither
party shall assign or permit its interest in this Agreement to be assigned
without the prior written consent of the other party, except that either party
may assign this Agreement to one of its affiliates as long as the assignee
agrees in writing to be bound by this Agreement.
Nothing in this Agreement shall be deemed to create an
employer-employee, principal-agent, joint venture or partnership relationship
between parties.
Any notices or other communications required or permitted hereunder
shall be deemed given when received by certified or registered mail, return
receipt requested, postage prepaid, addressed to the parties at their addresses
hereinbefore set forth or at such other addresses as may from time to time be
designated in writing.
S-D-12
The laws of the State of New York and the laws of the United States
shall govern this Agreement in all respects. Notwithstanding the laws of any
other jurisdiction, the Software may be subject to restrictions and controls
imposed by the United States Export Administration Act and the regulations
thereunder, and, therefore, no copy of the Software may be exported or
re-exported to any country that is at the time of export included in the US
Department of Commerce's list of countries to which exportation is restricted or
prohibited unless that exportation is authorized specifically by a special
license issued to Licensee at License's cost, pursuant to the Export
Administration Regulations of the Department of Commerce or any other United
States government agency controlling the export or re-export of software.
The failure by either of the parties to this Agreement to insist upon
strict performance of any of the terms hereof shall not be considered a waiver
of such terms, nor shall it prohibit either party thereafter from insisting upon
strict performance of any term of this Agreement.
This writing including the exhibits hereto, constitutes the entire
agreement between the parties with respect to the subject matter hereof, and
supersedes and is in lieu of all other agreements or arrangements of the
parties, either oral or in writing. No changes in, additions to or modifications
or amendments of this Agreement shall be binding unless in writing and signed by
an authorized officer, agent or representative of each of the parties of this
Agreement.
S-D-13
IN WITNESS THEREOF, the parties hereto have signed this Agreement the
date and year first written above by their duly authorized representatives.
PITNEY XXXXX INC. RENAISSANCE SOFTWARE INC
By: Xxxxxxx X. Xxxxx By:
------------------------------- -------------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxx
Title: President Title: Chief Operating Officer
TranScape Division
VERTEX INTERACTIVE, INC
By:
-------------------------------------
Name: Xxxxxxxx Xxxx
Title: Joint Chief Executive Officer
[Reseller Agreement]
IN WITNESS THEREOF, the parties hereto have signed this Agreement the
date and year first written above by their duly authorized representatives.
PITNEY XXXXX INC. RENAISSANCE SOFTWARE INC
By: By: Xxxxx X. Xxxxxx
------------------------------- -------------------------------------
Name: Name: Xxxxx X. Xxxxxx
Title: Title: Chief Operating Officer
VERTEX INTERACTIVE, INC
By: Xxxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxxx Xxxx
Title: Joint Chief Executive Officer
[Reseller Agreement]
EXHIBIT A
Software Description
RenSoft-WMS - (all functions either paper-based, Radio Frequency, or a
combination)
o Receiving
o Putaway
o Cross-docking
o Cycle Counts
o Replenishments
o Pick Planning
o Picking
o Shipping
o Quality Control
o Inventory Control
o Moves
o Issues
RenSoft-Order
o Customer Order Entry
o Remote Order Entry Sales force
o Call Center Order Entry
o Inventory Availability
o On-line Catalogue, Buying History, Pricing / Discounting - Specials
and Promotions
License in Perpetuity
License in Perpetuity
Number of Users for Total Users
--------------- ---------------
10 $100,000
25 $175,000
50 $250,000
75 $350,000
100 $450,000
150 $550,000
250 $750,000
250+ Special Bid
E-A-1
-----------------
Included with software:
...1-800 Hot line support (during maintenance and warranty support)
...Source code
...Technical documentation
...User documentation
Optional Language
The use of the Licensed Software under the terms and conditions of this
Agreement shall be limited to xxx "core" users in the (????????) location. The
Licensed Software will be installed on YYYY Server with (Oracle/DB? database)
running ccccccc Operating system.
Enterprise License - Licensee retains the option to execute an
Enterprise License (hereinafter referred to as an Enterprise License). The
Enterprise License provides the Licensee with unlimited sites and unlimited
users per site for the Licensed Software, the Modified Licensed Software
(hereinafter referred to as the "Software"), and/or any changes made by the
Licensor to the Software.
Non-core Users. Additional "user" licensing may be required if the
Licensee needs remote access to the Licensed Software. User licenses may be
added in increments of five (5), or a multiple thereof.
License in Perpetuity vs. License in Annuity
License in Annual
Perpetuity for License in Annuity Maintenance
Number of Users Total Users per User Charge
--------------- ----------- -------- ------
10 $100,000 $3,333 $ 20,000
25 $175,000 $2,000 $ 35,000
50 $250,000 $1,667 $ 50,000
75 $350,000 $1,555 $ 70,000
100 $450,000 $1,500 $ 90,000
150 $550,000 $1,222 $110,000
250 $750,000 $1,000 $150,000
250+ Special Bid Special Bid Special Bid
E-A-2
EXHIBIT B
RENSOFT RECOMMENDED IMPLEMENTATION SERVICES
Account and Project Managers - $200.00 per hour
Consultants:
o Business
o Warehouse......$175.00 p/h
Conference Room Pilot - required personnel
o Business Analyst - $175.00 p/h
o Account or Project Manager - $200.00 p/h
o Product Specialist - $175.00 p/h
User and/or Technical Training
($2500 per session. Sessions limited to 10 students.)
Data Conversion
Interface Analysis
o Business Analyst - same as above
On-site support after "go live"
o Rate based on type of individual
Customer Service - except training
o Quality Control
o Problem recognition ...$150.00 p/h
Modification Services:
o Programming - $175.00 p/h
o Quality Control - $150.00 p/h
o Use Case Development - System Analysis - $175.00 p/h
System Design - $175.00 p/h
o Case Modeling - $175.00 p/h
o Documentation
- technical writers ... $150.00 p/11
E-B-1
NOTE: Recommended Implementation Services are not a fixed bid. It have been
provided based on experience of implementations of similar size and duration.
Licensee shall pay for only that time it has consumed. Licensor shall identify
to Licensee if/when additional implementation services are required to complete
the project defined herein.
E-B-2
EXHIBIT C
STATEMENT OF WORK
1. FOR THE PURPOSE OF THIS AGREEMENT:
1.1 TIME is billed at the applicable rate as outlined in Section 3.2
of this Agreement.
1.2 MATERTAL(s) are defined as Licensor products that are delivered
to the Licensee, including but not limited to user manuals, technical manuals,
source listings, database designs, mapping forms, flow charts, etc.
Materials) when billed are of non-incidental nature, such as additional
user manuals, technical guides, etc. Written approval is required prior to
issuance of said materials.
1.3 LICENSED SOFTWARE is defined as the software identified in
Exhibit A of this Agreement.
1.4 MODIFIED LICENSED SOFTWARE is defined as the Licensed Software as
modified by the Licensor.
1.5 IMPLEMENTATION SERVICES are defined, but are not limited to the
services identified in Section 4 of this Agreement.
1.6 EXPENSES (if/when applicable) shall be invoiced in accordance
with the following guidelines:
o Airfare: Economy Class
o Car (Personal): $.31 per mile, billable from office to airport
o Car (Rented): National (Full Size)
o Taxi: Actual Cost
o Meals: Not to exceed $45.00/per day
o Lodging: Sheraton or equivalent
o Telephone: Charges for modem connect time (actual)
o Telephone (Personal): Two (2) per day. Not to exceed $9.00
E-C-1
o Miscellaneous: As incurred, but pre-approved by Licensee
Expenses reflect actual charges due upon receipt. All required
documentation shall be included when invoiced.
2. STATEMENT OF WORK
2.1 Licensor shall provide the Implementation Services (hereinafter
referred to as Services) identified in Exhibit B to Licensee to be used at their
discretion.
2.2 Licensor shall assign a Project Manager to be the primary point
of contact with both the Licensee and Licensor. The Licensor Project Manager
shall oversee the project, coordinate all Licensor activities, and conduct
weekly status meetings with Licensee management.
2.3 Licensor if requested, shall assume direct and complete
responsibility for all modifications to the Licensed Software.
2.4 Licensor shall also assign an Account Manager whose
responsibility is to oversee, facilitate and coordinate all responsibilities of
Licensor described in this Agreement.
3. SERVICE RATE
3.1 Any/all Licensor services performed are subject to the billing
rate defined below. Services are not restricted to any number, duration, or
type. All Services provided are fully supported and warranted by Licensor as to
quality and standardization.
3.2 Travel time required (if applicable) to perform any Services
shall be billed at $75.00 per hour.
3.3 STRUCTURE. The rate for this project is defined as:
Account Manager 200.00
Project Manager 200.00
System Analyst 175.00
System Designer 175.00
Business/Warehouse Consultant 175.00
Programmer 175.00
Customer Service 150.00
Technical Writer 150.00
E-C-2
Product Specialist 175.00
Director Product Support 200.00
User Training Session = $2500 per
(10 students max)
4. INVOICE PROCEDURES
4.1 The Licensee agrees that the Services outlined in this SOW shall
be billed and paid for in the following manner:
Services:
o $xx,xxx.00 on or before the initial use of
any of the Implementation Services; and
o $xx,xxx.00 upon consumption of one-half of
the Services, provided services are required
by the Licensee to complete implementation.
4.2 In the event that the Licensee requires additional support days
beyond this SOW, a revised agreement outlining the new required days shall be
executed by both parties.
4.3 The Licensee shall be billed for travel-related expenses as
outlined in Section 1.6 of this SOW.
Licensor shall provide Licensee with a monthly report, "Audit of
Consumed Services" that reflects the consumption of time in reference to this
Statement of Work. Said report shall include the date of the performed task(s),
the tasks) performed, and the Licensor person performing said task.
E-C-3
ADDENDUM A
DESIGN AND ACCEPTANCE OF MODIFICATIONS
As part of any future modification and/or interface requirements
process, the parties shall complete an agreed upon sessions (said session can be
a CRP, business design session, GAP analysis, etc.) at a time and place
convenient to both parties. Both parties recognize that the use of the Licensed
Software may be required to complete any of these sessions. The Licensor
methodology requires said sessions) to analyze, define, and document the
Licensee's business process flows; discuss and identify any potential changes
required to the Licensed Software as a result of said session; attempt to
eliminate any modification by identifying a "better" process to perform said
function, and when necessary, define any required modification(s) to the
Licensed Software.
The Licensed Software and any modification or custom programs developed
by the Licensor for the Licensee under this Agreement shall hereinafter be
referred to as the Modified Licensed Software.
Licensor shall provide as a deliverable of the Session, a Summary Use
Case Document that is to be reviewed and accepted by the Licensee prior to the
continuation of the modifications) process.
Upon acceptance of the Summary Use Cases by the Licensee, the Licensor
shall further develop Detailed Use Cases for each modified function. The
Licensee shall review, comment, and finally approve each Detailed Use Case. Upon
such approval, the Licensor shall perform the following:
o develop and review with the Licensee, a realistic Project Control
Plan (PCP) defining the project timeline, tasks, responsibilities
of parties, deliverables and time frame for each individual task
and project duration. The PCP shall be the tool by which both
parties manage the implementation of the Software.
o Licensor shall determine if the Modified Licensed Software shall be
delivered to the Licensee in a phased approach. Licensee reserves
the right to request that the Modified Licensed Software be
delivered as a completed system and not in units.
o The Detailed Use Cases shall be provided to the Licensor's Customer
Service Department for the purpose of developing/modifying the
"test plans". Test plans are required to perform both unit and
integrated system testing. Test plans, at the request of the
Licensee, shall be provided for their use.
o Licensor shall provide a fixed bid for the modification/interface
task.
A-A-1
o The Detailed Use Case(s) shall be provided to the technical
analysts to initiate Case Modeling.
Case Models and process flows shall be developed by the Licensor as part
of its methodology. Said documents are internal-Licensor documents and are
required prior to any programming of the Detailed Use Case. Case Models and
process flows are not reviewed with Licensee and therefore do not require review
and acceptance by Licensee.
During each phase of the modification/interface process, both parties
shall meet on a regular basis to evaluate the progress of the Project and to
determine if the Project is on schedule. If the Project is not on schedule, the
parties shall take the necessary actions to ensure a timely, coordinated "go
live" date.
Both parties agree that in order to successfully complete the
modification/interface requirements, the Licensee shall provided a project team
who are familiar with the desired business process flows; shall provide the
necessary data required to develop each Use Case; shall timely review and
approve each Use Case, and shall assign the necessary personnel to be trained on
the Modified Licensed Software.
Acceptance Testing. For the purpose of this section, the classification
of faults into severity levels will be those identified in Section 9.
Acceptance testing shall be performed by Licensee for a period of up to
thirty (30) days from delivery of the Modified Licensed Software. During the
acceptance test period, Licensor shall use its best effort to correct reported
faults. There will be no charge for correction of faults identified during the
period of acceptance testing except in those cases that the Licensee requests
on-site support to provide. At the acceptance test period, Licensee shall accept
or reject the Modified Licensed Software (accompanied by reasons for rejection)
in writing. Failure to communicate in writing within a 30 day period shall
constitute acceptance. Failure by Licensee to complete acceptance testing shall
not be considered a reason for non-acceptance.
If Licensee does not accept the Modified Licensed Software, Licensor
shall have a reasonable time to cure reported faults. At the end of the
acceptance test period, Licensee shall communicate in writing to Licensor its
acceptance or rejection of the Modified Licensed Software.
Modification/Interface services that are requested by the Licensee are
subject to a Statement of Work. Licensee, as part of said SOW, shall pay for the
services in the following manner:
o 40% of the service level, on or before the initiation of the task;
o 30% of the service level acceptance of the Detailed Use Case;
o 30% upon the completion of the task.
A-A-2
ADDENDUM B
MAINTENANCE AND MAINTENANCE CHARGES
Maintenance Support
Beyond the warranty period the Licensor shall provide Maintenance
Support upon Licensee acceptance of the Maintenance terms and conditions defined
herein. Maintenance Support shall commence upon Licensee's acceptance of this
Addendum and shall continue for an agreed upon term.
In consideration of Maintenance Support, Licensee shall pay Licensor an
amount equal to [ ]% of the license fee for the Licensed Software as defined in
Exhibit A herein. Payment for the first year of Maintenance Support shall be
fixed at $xxx,xxx.00.
Warranty and Maintenance Service & Support
During Maintenance Support, Licensor shall attempt to respond to issues
identified by Licensee within a reasonable time. The determination and
classification of reported issues by the Licensee shall be made by the
Licensor's Customer Service Department (CSD). CSD shall evaluate and identify
each issue into Severity Levels 1-3. CSD shall maintain and provide Licensee
with an Open Issues Status Report on a timely basis.
Licensor shall not be responsible for interruptions in the system which
are a result of machine failure or software supplied by vendors other than
Licensor, improper preparation of input data, modification(s) performed by
Licensee or an agent thereof, or attempts to use the Licensed Software in a
manner for which it was not intended.
Severity Levels
Severity Level 1.
(i) Any problem that results in significant data corruption
errors.
(ii) An error resulting in program malfunction that severely
restricts the use of the Licensed Software for many key users and which does not
have a reasonable work-around solution.
(iii) An error resulting in program malfunction that restricts
the use of the Licensed Software for many key users of the system, but has a
reasonable work-around solution.
A-B-1
Severity Level 2
(i) An error resulting in program malfunction that restricts the
use of the Licensed Software for a limited number of users and has a reasonable
work around-solution and does not restrict or impair the operational flow of the
business.
(ii) Report/printed output errors and screen inquiry errors that
do not impact the user from performing his work, or do not restrict the
operational flow of the business.
Severity Level 3
(i) Grammatical errors.
Turn Around Times
Licensor shall use its best efforts at all times to resolve all reported
problems. Turnaround times shall be provided to the Licensee as part of the Open
Issues Status Report. All Severity Level 1 issues shall be given the highest
priority with problem determination and resolution on an expeditious basis. In
the event the Licensed Software incurs a Severity Level 1 fault, Licensor shall
immediately provide the Licensee with the steps being taken to correct said
fault. If a correction cannot be provided expeditiously, Licensor shall use its
best efforts to provide a temporary restoration of the Licensed Software pending
the issuance of a correction to Licensee.
Maintenance Support shall be limited to telephone, mail, or Electronic
Customer Support response(s). On-site support shall be provided upon written
request of Licensee and the execution of, or in conjunction with a Statement of
Work.
Error correction under this Agreement is provided under the condition
that Licensee:
(i) provides adequate information in respect to any malfunction
in the Licensed Software,
(ii) incorporates all fixes issued by Licensor, and
(iii) has not otherwise modified the Licensed Software.
If Licensee request that Licensor correct an error by providing on-site
assistance, Licensee shall be billed for appropriate time and travel-related
expenses.
If Licensor determines that error corrections must be performed on-site,
the related services are not billable to Licensee.
A-B-2
Version Releases
Version releases to the Licensed Software may be issued periodically by
Licensor and shall consist of additional and enhanced functions. Version
releases shall incorporate all of the Enhancements and PTF's which have been
issued since the previous release.
Version releases shall be provided in source code format on an "as is"
basis with successful implementation depending solely on the Licensee's ability
to integrate new program source to the Licensed Software.
Program Temporary Fixes (PTF's)
PTF's are scheduled upgrades to the Licensed Software which include all
or part of the following:
o fixes to previously reported "bugs" to the Licensed Software,
o technical upgrades to the Licensed Software
o functional upgrades to the Licensed Software.
Licensee shall be advised of PTF's made to the Licensed Software during
the term of this Agreement and Maintenance Support. Licensee may accept or
reject PTF's to the Licensed Software at the time the PTF is offered. If said
PTF is accepted by Licensee, the PTF shall become part of the Licensed Software.
PTFs shall be provided in source code format on an "as is" basis with
successful implementation depending solely on Licensee ability to integrate new
program source to the Licensed Software.
Electronic Customer Support (ECS)
ECS service shall provide a remote communication from Licensor's office
to a Licensee identified office, to provide:
(i) access to Licensee equipment to aid problem resolution, and
(ii) issuance of priority PTF's.
ECS shall utilize a dial-up connection over the standard telephone
network. Licensee shall reimburse Licensor for any/all communication costs
incurred as a result of ECS. Communications beyond those identified herein are
at the complete expense of the Licensee, including but not limited to set-up,
wiring, communications hardware and software, Licensor time, testing of
communications, etc.
A-B-3
If Licensee request another method of communication other than the
dial-up connection described, a charge shall also be made for any additional
costs related to the set-up and provision of this service.
Licensor shall not be held responsible for the results of any
malfunctions of any part of the communication link.
It is Licensee responsibility to determine the access allowed to its
equipment. Licensor accepts no responsibility for any problems or consequential
loss caused directly or indirectly by Licensor personnel or any other third
parties when providing this service.
A-B-4
SCHEDULE E
eQUEST MILESTONE SCHEDULE
[ATTACHED]
S-E-1
SCHEDULE F
PB IMPLEMENTATION SERVICES
Installation Services ................. $1,250 per day ($156 per hour)
Project Management .................... $1,250 per day ($156 per hour)
Customer Training ..................... $750 per day ($94 per hour) at PB site
Travel expenses would be in addition to the above prices
S-F-1
EXECUTION COPY
SERVICES AGREEMENT
SERVICES AGREEMENT ("Agreement"), dated as of February 7, 2001, by and
among PITNEY XXXXX INC., a Delaware corporation ("Seller"), RENAISSANCE
SOFTWARE, INC., a Delaware corporation ("RenSoft"), and VERTEX INTERACTIVE,
INC., a New Jersey corporation ("Buyer").
WHEREAS, the Seller, RenSoft and Buyer are parties to the Transaction
Agreement, executed and delivered simultaneously with this Agreement
("Transaction Agreement"), pursuant to which, among other things, the Seller is
purchasing shares of Series A Convertible Preferred Stock, par value $0.01 per
share, of Vertex in consideration for the transfer to RenSoft of the Acquired
Assets (as defined in the Transaction Agreement);
WHEREAS, the Seller is the tenant under the Office Lease Agreement dated
as of February 2, 1996, the Office Lease Agreement dated as of October 1, 1998,
and the Office Lease Agreement dated as of August 1, 1999 (collectively, and as
the same may be amended or modified, the "Lease"), in each case, between Valley
Office Partners, as landlord (the "Landlord"), and the Seller, as tenant, which
together demise certain floors at the building known as 00000 Xxxxxxx Xxx.
Xxxxx, Xxxxxxxxxxx, XX 00000-0000 (the "Premises"), a portion of which is
currently utilized by Seller in connection with its business relating to the
Acquired Assets;
WHEREAS, RenSoft desires that the Seller (i) grant it a license to
occupy a portion of the Premises and (ii) continue to provide selected
administrative, corporate
2
support and other services as described herein to RenSoft, and the Seller is
willing to do so on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, capitalized terms used and not defined herein have the
respective meanings ascribed thereto in the Transaction Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties agree as follows:
1. Interim Services. From the date of this Agreement and for the period
of time described on Annex A to this Agreement with respect to each of the
services set forth on Annex A, the Seller shall provide, or cause an affiliate
to provide, to RenSoft the services set forth on Annex A in the manner and at a
relative level of service consistent in all material respects with that provided
by the Seller immediately prior to the date of this Agreement, or to its own
employees after the date of this A agreement.
2. Office Space. The Seller hereby grants to RenSoft a license to occupy
approximately six thousand (6,000) square feet of office space (the "Temporary
Space") at 00000 Xxxxxxx Xxx. Xxxxx, Xxxxxxxxxxx, XX 00000-0000 (the "Premises")
from the date hereof until the earlier of (i) the date on which RenSoft shall
vacate the Premises, (ii) the date of the termination of the Lease and (iii) the
date which is six (6) months from the date hereof, subject to any extensions to
which the parties may agree to in writing (the "Term"); provided, that Seller
shall not be obligated to pay the Landlord any amount greater than the amount
Seller pays pursuant to the Lease on the date hereof as a result of the license
granted to RenSoft under this Section 2. The parties agree that' RenSoft shall
have the right to enter into independent negotiations with the Landlord
regarding RenSoft's lease of the Temporary Space as primary tenant.
3
The Seller agrees to use its reasonable efforts to arrange for the
availability of the Temporary Space contemplated in this Section. RenSoft agrees
to cooperate with the Seller and to execute any instruments reasonably requested
by the Seller or Landlord in connection with RenSoft's occupation of the
Temporary Space. Furthermore, RenSoft will cooperate with, and assist the Seller
in making the Temporary Space physically separate from the rest of the Premises,
including, without limitation, relocating to adequate substitute space within
the Premises or constructing appropriate barriers, which shall be accomplished
within three (3) months of the date hereof (or such longer period as the parties
may agree).
RenSoft agrees that its use and occupancy of the Temporary Space shall
be at all times subject to, and RenSoft covenants and agrees that it shall at
all times comply with, all of the terms, conditions and provisions of the Lease.
RenSoft agrees that it will not sub-license the Temporary Space. RenSoft further
covenants and agrees that it will use the Temporary Space solely as offices for
the development of integrated supply chain solutions and cause its employees to
comply with all of the Seller's security and loss prevention procedures and
other rules, regulations and policies relating to the Premises and/or persons
working at or visiting the same, existing on the date hereof or hereinafter
adopted. Furthermore, except as contemplated by the Transaction Agreement,
RenSoft and Buyer agree that they will not solicit for employment, or make any
offer of employment to, any employee of Seller located at the Premises during
the Term and for one year thereafter.
3. Utilities to be Provided The Seller shall arrange for utilities,
heat, air conditioning, and cleaning services for the Temporary Space during
normal business
4
hours and, if available and at the Seller's sole expense, after normal business
hours, in the same manner and to the same extent it arranges such services for
the remainder of the Premises.
4. Payment for License and Services. As payment for the license for the
Temporary Space being provided in Section 2, RenSoft shall pay to the Seller a
monthly fee, payable on the date hereof and thereafter in advance on the first
day of each month, of ten thousand dollars ($10,000) (the "Base Fee") for each
month of the entire Term, except that the fee for the first month of the Term
shall be $7,500. Any future leasehold improvements made to the Temporary Space
during the Term shall be at the sole expense of RenSoft and any abandonments of
improvements will remain with the leasehold. RenSoft shall pay Seller for the
other services provided hereunder at the rates set forth in Annex A hereto.
5. Payments, Default.
(a) The Seller will invoice RenSoft for the Base Fee and any other
amounts or fees, and any sales taxes applicable thereto, on a monthly basis. All
invoices shall be due and payable within fifteen (15) days of the date of the
invoices, except that (i) amounts due with respect to the Base Fee shall be paid
on the first day of every month in accordance with Section 4 and (ii) amounts
due with respect to the RenSoft Contract Employees referred to on Annex A may,
at the election of the Seller, be paid by "services-in-kind" performed by
RenSoft, with the determination of the value of such services to be by mutual
agreement of the Seller and RenSoft.
(b) All payments due under this Agreement shall be paid by RenSoft
when due and payable. If RenSoft fails to make payment when due, RenSoft
5
shall pay interest on the unpaid balance of the undisputed amounts due at a rate
equal to one percentage point above the prime rate being charged by CitiBank in
New York, New York as of the close of business on the date the payment becomes
due.
(c) In the event that RenSoft fails to make payment of any undisputed
amounts due under this Agreement within five (5) days of the date that the
Seller delivers written notice of the failure to make such payment, then,
notwithstanding any other provision contained in this Agreement, the Seller may
terminate the license and provision of services being provided pursuant to this
Agreement.
6. Partial Termination. Any and all of the services provided by the
Seller and its affiliates hereunder are only terminable earlier than the period
specified on Annex A by RenSoft upon ten (10) days prior written notice to the
Seller. As soon as reasonably practicable, but in no event later than ten (10)
days following receipt of any such notice, the Seller shall advise RenSoft as to
whether termination of such service will require the termination or partial
termination of, or otherwise affect the provision of, other services specified
on Annex A. If so, RenSoft may withdraw its termination notice. Otherwise, such
termination shall be final and RenSoft shall be required to pay to the Seller
the prorated portion of the amounts accrued in the month of such termination
through the date of termination.
7. Guarantee. Vertex hereby agrees to unconditionally guarantee all of
the payment and performance obligations of RenSoft under this Agreement.
8. Assignment. This Agreement shall not be assignable in whole or in
part by any party hereto without the prior written consent of the other parties
hereto. Any attempted or purported assignment or delegation without consent will
be void.
6
Subject to the foregoing, this Agreement will be binding upon and will inure to
the benefit of the parties and their respective permitted successors and
assigns.
9. Confidentiality. Each party shall, and shall cause their affiliates
and their respective officers, directors and employees, to hold all information
relating to the business of the other party disclosed to it or to which it has
gained access or observed by reason of this Agreement confidential and will not
disclose any of such information to any party unless legally compelled to
disclose such information; provided, however, that to the extent that any of
them may become so legally compelled they may only disclose the information if
they shall first have used reasonable efforts to, and, if practicable, shall
have afforded the other party the opportunity to, obtain an appropriate
protective order or other satisfactory assurance of confidential treatment for
the information required to be so disclosed. RenSoft shall, and shall cause its
affiliates, officers, directors and employees to, refrain from seeking,
observing or using any documents, correspondence or information relating to the
Seller's business that are available on the Premises.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
11. Limitation of Liability. The Seller shall not be liable to RenSoft
or any third party for any damages whatsoever including any special,
consequential or exemplary damages (including lost or anticipated revenues or
profits relating to the same) arising from any claim relating to this Agreement
or any of the services provided hereunder, whether such claim is based on
warranty, contract, tort (including negligence
7
or strict liability) or otherwise, even if an authorized representative of the
Seller is advised of the possibility or likelihood of the same. In addition, the
Seller shall not be liable to RenSoft or any third party for any direct damages
arising from any claim relating to this Agreement or any of the services
provided hereunder or required to be provided hereunder, except to the extent
that such direct damages are caused by the gross negligence or willful
misconduct of the Seller.
12. Indemnification. RenSoft will indemnify and hold harmless the Seller
and the Seller's directors, officers, employees, affiliates, successors and
assigns (the "Seller Indemnitees") from and against all actions, causes of
action, suits, claims, complaints, demands, litigations or legal, administrative
or arbitral proceedings or investigations, losses, liabilities, damages,
deficiencies, judgments, assessments, fines, settlements, costs or expenses
(including interest, penalties and fees, reasonable expenses and disbursements
of attorneys, experts and consultants) incurred by any Seller Indemnitee in any
action or proceeding between such Seller Indemnitee and RenSoft or between such
Seller Indemnitee and any third party or otherwise, based upon, arising out of
or otherwise in respect of (i) any acts or omissions of the Seller in performing
the services hereunder, except to the extent that such acts or omissions involve
the gross negligence or willful misconduct of such Seller Indemnitee and (ii)
any acts or omissions of RenSoft, its directors, officers, employees,
affiliates, successors or assigns, arising from, in connection with or otherwise
relating to the occupation by RenSoft of the Premises, except for any acts or
omissions of RenSoft requested by the Seller.
8
13. Insurance. RenSoft shall maintain liability insurance and xxxxxxx'x
compensation insurance at levels that are consistent with other companies that
operate in the same industry.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Notices. Unless otherwise indicated herein, all notices, requests,
demands or other communications to the respective parties hereto shall be deemed
to have been given or made when deposited in the mail, when sent by registered
or certified mail, return receipt requested, postage prepaid, if sent by means
of overnight delivery service, when delivered to such service, or if sent by
facsimile, when received, in each case, by the respective party at the following
address:
(i) if to Vertex:
Vertex Interactive, Inc.
00 Xxxxx Xxxxxx Xxxxxxx,
Xxx Xxxxxx 00000-0000
Telecopy: 000-000-0000
Attention: Chief Executive Officer
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxx X. X' Xxxxxx, Esq.
9
(ii) if to RenSoft:
Renaissance Software, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telecopy: 000-000-0000
Attention: Chief Executive Officer
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxx X. X'Xxxxxx, Esq.
(iii) if to Pitney Xxxxx:
Pitney Xxxxx Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxx, XX. 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxx, President TranScape
with a copy to:
Pitney Xxxxx Inc.
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX. 00000-0000
Telecopy: (000) 000-0000
Attention: Vice President and
General Counsel
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
16. Modification Nonwaiver, Severability. Neither this Agreement nor
any part hereof may be changed, altered or amended orally. Any modification must
be by written instrument signed by the parties. Failure by any party to exercise
promptly
10
any right granted herein or to require strict performance of any obligation
imposed hereunder shall not be deemed a waiver of such right. If any provision
of this Agreement is held ineffective for any reason, the other provisions shall
remain effective.
17. Force Majeure. The Seller shall not be responsible or liable to
RenSoft for any loss or damage arising out of any delay in, or interruption of,
the performance of the Seller's obligations pursuant to this Agreement resulting
from any causes that are beyond the Seller's reasonable control; provided, that
Seller shall use commercially reasonable efforts to mitigate the effects of any
such cause.
18. Interpretation. The headings and captions contained in this
Agreement and in Annex A are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. The use of the word
"including" herein shall mean "including without limitation."
19. No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
person.
20. Entire Agreement. This Agreement and the other Transaction
Documents contain the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, whether written or oral, relating to such subject
matter.
21. Relationship of Parties. Except as specifically provided in this
Agreement or in Annex A, none of the parties shall act or represent or hold
itself out as having authority to act as an agent or partner of the other
parties, or in any way bind or commit the other party to any obligations.
Nothing contained in this Agreement shall be
11
construed as creating a partnership, joint venture, agency, trust or other
association of any kind, each party being individually responsible only for its
obligations as set forth in this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first set forth
above.
VERTEX INTERACTIVE, INC.
By:
------------------------------------------
Name:
Title:
RENAISSANCE SOFTWARE, INC.
By:
------------------------------------------
Name:
Title:
PITNEY XXXXX INC.
By: Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
[Services Agreement]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first set forth
above.
VERTEX INTERACTIVE, INC.
By: Xxxxxxxx Xxxx
------------------------------------------
Name: Xxxxxxxx Xxxx
Title: Joint Chief Executive Officer
RENAISSANCE SOFTWARE, INC.
By: Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Operating Officer
PITNEY XXXXX INC.
By:
------------------------------------------
Name:
Title:
[Services Agreement]
ANNEX A
TO
SERVICES AGREEMENT
---------------------------------------------------------------------------------------------------------
Services and Description Services Period Charge for Services
---------------------------------------------------------------------------------------------------------
Payroll Services
The Seller will provide to RenSoft From the date of this No fee.
with respect to the Conquest Agreement until March 1,
Development Employees 2001.
customary and standard payroll
services of the type the Seller
provides as of the date of this
Agreement. Each payroll will be
funded by the Seller, and RenSoft
shall reimburse the Seller for any
sums paid in connection with such
services pursuant to the provisions
of Section 5 herein.
---------------------------------------------------------------------------------------------------------
Telecommunications
The Seller will provide RenSoft From the date of this Applicable Rate for
with telephone and voicemail Agreement until the earlier of telecommunications
equipment and services. Seller will (x) May 1, 2001 and (y) such services. The parties
pay the telecommunications time that RenSoft is able to will mutually agree on
provider for services provided to obtain telecommunications the fee for Seller's
RenSoft, and RenSoft shall equipment and/or services provision of
reimburse the Seller for any sums directly from telecommunica- telecommunications
paid in connection with such tions providers, it being equipment.
telecommunications services understood that RenSoft shall
pursuant to the provisions of use its best efforts to establish
Section 5 herein. The Seller agrees such services and obtain such
to invoice RenSoft at the same rate equipment as expeditiously as
that the Seller paid for such possible.
services. Additionally, the Seller
shall invoice RenSoft for RenSoft's
use of Seller's telecommunications
equipment on a monthly basis.
---------------------------------------------------------------------------------------------------------
A-1
---------------------------------------------------------------------------------------------------------
Services and Description Services Period Charge for Services
---------------------------------------------------------------------------------------------------------
Information Technology
The Seller will provide RenSoft For thirty (30) days from the No fee for the first
with certain information technology date of this Agreement, or thirty (30) days from
infrastructure and support. such longer period as the the date of this
parties may agree. Agreement, after which
time a fee will be
charged, to be
negotiated in good faith
between the parties.
---------------------------------------------------------------------------------------------------------
Certain Foreign Employee
The Seller shall continue to employ Until the earlier of (i) the The salaries and
Xxxx Xxx for the period described granting or completion of the benefits for such person
under "Services Period." necessary visa transfers or incurred by the Seller.
other immigration application
for such person and
(ii) June 30, 2001.
---------------------------------------------------------------------------------------------------------
Certain Foreign Employees
The Seller shall continue to process From the date of this The reasonable costs
any necessary visa transfers and agreement until the earlier of and expenses incurred
other immigration application for (i) June 30, 2001 and (ii) the by the Seller.
the Xxxx Xxxxxxxxxxxx, Xxxxxx xxxxx or completion of the
Goyal and Xxxx Xxx (the "Foreign necessary visa transfers or
Employees"). other immigration
applications for the Foreign
Employees.
---------------------------------------------------------------------------------------------------------
RenSoft Contract Workers
At the request of RenSoft, the Until the aggregate amount The amount of the costs
Seller shall pay the costs associated due from RenSoft to be paid that RenSoft would
with certain individuals who to the Seller under this incur in connection
provide services on a contract basis provision equals $236,000 with retaining such
(the "RenSoft Contract Workers") (the "Contract Worker Cap"); individuals, up to an
and who devote all of their time to provided, that if the amount of aggregate amount equal
the development of the Licensed costs associated with the to the Contract Worker
Software. The contractor firm services to be provided by the Cap (as it may be
name, project, name, departure RenSoft Contract Workers adjusted as described
date, work weeks, cost per hour, described on Exhibit A under "Services
hours per week and total cost of the exceeds $236,000 (based on Period.")
RenSoft Contract Workers is set such Workers working normal
forth on Exhibit A hereto. 40-hour weeks through their
---------------------------------------------------------------------------------------------------------
A-2
---------------------------------------------------------------------------------------------------------
Services and Description Services Period Charge for Services
---------------------------------------------------------------------------------------------------------
respective departure dates set
forth on such Exhibit), any
excess shall be the
responsibility of Seller and the
Contract Worker Cap shall be
adjusted accordingly (with
RenSoft providing "services
in kind" with a value equal to
such excess); and further
provided, that if the amount of
costs associated with the
services to be provided by
such Workers exceeds, or is
expected to exceed, such
$236,000 for any other reason,
the parties shall discuss whose
responsibility such excess is
and whether any adjustment to
the Contract Worker Cap is
appropriate.
---------------------------------------------------------------------------------------------------------
A-3
EXHIBIT A
------------------------------------------------------------------------------------------------
Firm Project Name Departure Work Cost per Hours Per Total Cost
Date Weeks Hour Week
------------------------------------------------------------------------------------------------
GO E-Biz XML Mallet 30 Apr 13 $102 40 $53,040
------------------------------------------------------------------------------------------------
Testware Shpmt XXxx Xxxxxxx 30 Apr 13 $65 40 $33,800
------------------------------------------------------------------------------------------------
GO E-Biz Mfg/Install - Ntier America 30 Apr 13 $95 40 $49,400
------------------------------------------------------------------------------------------------
GO E-Biz Mfst Server & Car Wink 31 Mar 8 $102 40 $32,640
------------------------------------------------------------------------------------------------
Testware QA Lemeiux 30 Apr 13 $65 40 $33,800
------------------------------------------------------------------------------------------------
Testware QA XxXxxx 30 Apr 13 $65 40 $33,800
------------------------------------------------------------------------------------------------
A-1
VERTEX INTERACTIVE, INC.
CERTIFICATE OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RIGHTS OF
THE SERIES A CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.Ol PER SHARE
Pursuant to Section 14A:7-2, Corporations, General, of the New Jersey
Statutes,
The undersigned, Xxxxxxxx Xxxx, Joint Chief Executive Officer of Vertex
Interactive, Inc., a New Jersey corporation (the "Corporation"), DOES HEREBY
CERTIFY that the following resolution, creating a series of 1,356,852 shares of
Preferred Stock was duly adopted by the Board of Directors, on February 6 ,
2001:
WHEREAS, the Board of Directors is authorized, within the limitations and
restrictions stated in the Certificate of Incorporation of the Corporation, to
provide by resolution or resolutions for the issuance of shares of Preferred
Stock, par value $.O1 per share, of the Corporation, in one or more classes or
series with such voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions as shall be stated and
expressed in the resolution or resolutions providing for the issuance thereof
adopted by the Board of Directors; and
WHEREAS, it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to authorize and fix the terms of a series of Preferred
Stock and the number of shares constituting such series.
NOW, THEREFORE, BE IT RESOLVED:
1. Designation and Number of Shares. There shall be hereby created and
established a series of Preferred Stock designated as "Series A Convertible
Preferred Stock" (the "Series A Preferred Stock"). The authorized number of
shares of Series A Preferred Stock shall be 1,356,852. Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in Section 9
below.
2
2. Rank.
(a) The Series A Preferred Stock shall with respect to distributions of
assets and rights upon the occurrence of a Liquidation rank senior to (i) all
classes of common stock of the Corporation (including, without limitation, the
Common Stock, par value $.005 per share (the "Common Stock"), of the
Corporation) and (ii) each other class or series of Capital Stock of the
Corporation hereafter created which does not expressly rank pari passu with or
senior to the Series A Preferred Stock (the "Junior Stock").
(b) Notwithstanding anything to the contrary contained in the
Certificate of Incorporation of the Corporation, the vote of the holders of a
majority of the Series A Preferred Stock shall be a prerequisite to the
designation or issuance of any shares of Capital Stock ranking senior to the
Series A Preferred Stock in the event of a Liquidation.
3. Dividends. The holders of shares of Series A Preferred Stock shall not
be entitled to receive any dividends except in accordance with this Section 3.
If the Corporation declares and pays cash dividends or distributions on the
Common Stock, then, in that event, the holders of shares of Series A Preferred
Stock shall be entitled to share in such dividends or distributions on a pro
rata basis, as if their shares had been converted into shares of Common Stock
pursuant to Section 7(a) immediately prior to the record date for determining
the stockholders of the Corporation eligible to receive such dividends or
distributions.
4. Liquidation Preference.
(a) Priority Payment. Upon the occurrence of a Liquidation, the holders
of shares of Series A Preferred Stock shall be entitled to be paid for each
share of Series A Preferred Stock held thereby, out of, but only to the extent
of, the assets of the Corporation legally available for distribution to its
stockholders, an amount equal to $7.37 (as adjusted for stock splits, stock
dividends, combinations or other recapitalizations of the Series A Preferred
Stock, the "Liquidation Preference") plus, as provided in Section 3 above, all
accrued and unpaid dividends, if any, with respect to each share of Series A
Preferred Stock, before any payment or distribution is made to any Junior Stock.
If the assets of the Corporation available for distribution to the holders of
Series A Preferred Stock shall be insufficient to permit payment in full to such
holders of the sums which such holders are entitled to receive in such case,
then all of the assets available for distribution to holders of the Series A
Preferred Stock shall be distributed among and paid to such holders ratably in
proportion to the amounts that would be payable to such holders if such assets
were sufficient to permit payment in full.
(b) No Additional Payment. After the holders of all shares of Series A
Preferred Stock shall have been paid in full the amounts to which they are
entitled in paragraph 4(a), the shares of Series A Preferred Stock shall not be
entitled to any further participation in any distribution of assets of the
Corporation and the remaining assets of the Corporation shall be distributed to
the holders of Junior Stock.
3
(c) Notice. Written notice of a Liquidation stating a payment or
payments and the place where such payment or payments shall be payable, shall be
delivered in person, mailed by certified mail, return receipt requested, mailed
by overnight mail or sent by telecopier, not less than ten (10) days prior to
the earliest payment date stated therein, to the holders of record of the Series
A Preferred Stock, such notice to be addressed to each such holder at its
address as shown by the records of the Corporation.
5. Redemption. The shares of Series A Preferred Stock shall not be redeemed
or subject to redemption, whether at the option of the Corporation or any holder
thereof, or otherwise.
6. Voting Rights; Election of Director.
In addition to any voting rights provided by law, the holders of shares of
Series A Preferred Stock shall have the following rights:
(a) So long as the Preferred Stock is outstanding, each share of Series
A Preferred Stock shall entitle the holder thereof to vote, in person or by
proxy, at a special or annual meeting of stockholders, on all matters voted on
by holders of Common Stock voting together as a single class with other shares
entitled to vote thereon. With respect to any such vote, each share of Series A
Preferred Stock shall entitle the holder thereof to cast that number of votes
per share as is equal to the number of votes that such holder would be entitled
to cast had such holder converted his shares of Series A Preferred Stock into
Common Stock pursuant to Section 7(a) on the record date for determining the
stockholders of the Corporation eligible to vote on any such matters.
(b) Unless the consent or approval of a greater number of shares shall
then be required by law, the affirmative vote of the holders of at least 51% of
the outstanding shares of Series A Preferred Stock, voting separately as a
single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to authorize, adopt or
approve an amendment to the Certificate of Incorporation that would increase or
decrease the par value of the shares of Series A Preferred Stock, or alter or
change the powers, preferences or special rights of the shares of Series A
Preferred Stock, or otherwise affect the rights of the shares of Series A
Preferred Stock adversely, including, without limitation, the liquidation
preference provisions.
7. Conversion.
(a) Optional Conversion. Any holder of Series A Preferred Stock shall
have the right, at its option, at any time and from time to time, to convert,
subject to the terms and provisions of this Section 7, any or all of such
holder's shares of Series A Preferred Stock into such number of fully paid and
non-assessable shares of Common Stock as is equal to the product of the number
of shares of Series A Preferred Stock being so converted multiplied by the
quotient of (i) the Liquidation Preference divided by (ii) the conversion price
of $7.37 per share, subject to adjustment as provided
4
in Section 7(c) (such price, the "Conversion Price"). Such conversion right
shall be exercised by the surrender of certificate(s) representing the shares of
Series A Preferred Stock to be converted to the Corporation at any time during
usual business hours at its principal place of business to be maintained by it
(or such other office or agency of the Corporation as the Corporation may
designate by notice in writing to the holders of Series A Preferred Stock),
accompanied by written notice that the holder elects to convert such shares of
Series A Preferred Stock and specifying the name or names (with address) in
which a certificate or certificates for shares of Common Stock are to be issued
and (if so required by the Corporation) by a written instrument or instruments
of transfer in form reasonably satisfactory to the Corporation duly executed by
the holder or its duly authorized legal representative and transfer tax stamps
or funds therefor, if required pursuant to Section 7(h). All certificates
representing shares of Series A Preferred Stock surrendered for conversion shall
be delivered to the Corporation for cancellation and canceled by it. As
promptly as practicable after the surrender of any shares of Series A Preferred
Stock, the Corporation shall (subject to compliance with the applicable
provisions of federal and state securities laws) deliver to the holder of such
shares so surrendered certificate(s) representing the number of fully paid and
nonassessable shares of Common Stock into which such shares are entitled to be
converted and, to the extent funds are legally available therefor, an amount
equal to the accrued and unpaid dividends payable with respect to such shares in
accordance with Section 3 above. At the time of the surrender of such
certificate(s), the Person in whose name any certificate(s) for shares of Common
Stock shall be issuable upon such conversion shall be deemed to be the holder of
record of such shares of Common Stock on such date, notwithstanding that the
share register of the Corporation shall then be closed or that the certificates
representing such Common Stock shall not then be actually delivered to such
Person.
(b) Termination of Rights. On the date of such optional conversion
pursuant to Section 7(a) above, all rights with respect to the shares of Series
A Preferred Stock so converted, including the rights, if any, to receive notices
and vote, shall terminate, except only the rights of holders thereof to (i)
receive certificates for the number of shares of Common Stock into which such
shares of Series A Preferred Stock have been converted, (ii) the payment of
dividends, if any, pursuant to Section 3 above and (iii) exercise the rights to
which they are entitled as holders of Common Stock.
(c) Antidilution Adjustments. The Conversion Price, and the number and
type of securities to be received upon conversion of the Series A Preferred
Stock, shall be subject to adjustment as follows:
(i) Dividend, Subdivision, Combination or Reclassification of
Common Stock. In the event that the Corporation shall at any time or from
time to time, prior to conversion of the Series A Preferred Stock (w) pay a
dividend or make a distribution (other than a dividend or distribution in
which holders of shares of Series A Preferred Stock participate, in the
manner provided in Section 3) on the outstanding shares of Common Stock
payable in Capital Stock, (x) subdivide the outstanding shares of Common
Stock into a larger number of shares, (y) combine the outstanding shares of
Common Stock into a smaller
5
number of shares or (z) issue any shares of its Capital Stock in a
reclassification of the Common Stock (other than any such event for which
an adjustment is made pursuant to another clause of this Section 7(c)),
then, and in each such case, the Conversion Price in effect immediately
prior to such event shall be adjusted (and any other appropriate actions
shall be taken by the Corporation) so that the holder of any share of
Series A Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock or other
securities of the Corporation that such holder would have owned or would
have been entitled to receive upon or by reason of any of the events
described above, had such share of Series A Preferred Stock been converted
immediately prior to the occurrence of such event. An adjustment made
pursuant to this Section 7(c)(i) shall become effective retroactively (x)
in the case of any such dividend or distribution, to a date immediately
following the close of business on the record date for the determination of
holders of Common Stock entitled to receive such dividend or distribution
or (y) in the case of any such subdivision, combination or
reclassification, to the close of business on the day upon which such
corporate action becomes effective.
(ii) Certain Distributions. In case the Corporation shall at any
time or from time to time, prior to conversion of the Series A Preferred
Stock, distribute to all holders of shares of the Common Stock (including
any such distribution made in connection with a merger or consolidation in
which the Corporation is the resulting or surviving Person and the Common
Stock is not changed or exchanged) cash, evidences of indebtedness of the
Corporation or another issuer, securities of the Corporation or another
issuer or other assets (excluding dividends or distributions in which
holders of shares of Series A Preferred Stock participate, in the manner
provided in Section 3, and dividends payable in shares of Common Stock for
which adjustment is made under another paragraph of this Section 7(c) and
any distribution in connection with an Excluded Transaction) or rights or
warrants to subscribe for or purchase of any of the foregoing, then, and in
each such case, the Conversion Price then in effect shall be adjusted (and
any other appropriate actions shall be taken by the Corporation) by
multiplying the Conversion Price in effect immediately prior to the date of
such distribution by a fraction (x) the numerator of which shall be the
Current Market Price of the Common Stock immediately prior to the date of
distribution less the then fair market value (as determined by the Board of
Directors in the exercise of their fiduciary duties) of the portion of the
cash, evidences of indebtedness, securities or other assets so distributed
or of such rights or warrants applicable to one share of Common Stock and
(y) the denominator of which shall be the Current Market Price of the
Common Stock immediately prior to the date of distribution (but such
fraction shall not be greater than one); provided, however, that no
adjustment shall be made with respect to any distribution of rights or
warrants to subscribe for or
6
purchase securities of the Corporation if the holder of shares of Series A
Preferred Stock would otherwise be entitled to receive such rights or
warrants upon conversion at any time of shares of Series A Preferred Stock
into Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.
(iii) Other Changes. In case the Corporation at any time or from
time to time, prior to the conversion of the Series A Preferred Stock,
shall take any action affecting its Common Stock having an effect similar
to any of the actions described in any of Sections 7(c)(i) or (ii) or
Section 7(f) (but not including any action described in any such Section)
and the Board of Directors in good faith determines that it would be
equitable in the circumstances to adjust the Conversion Price as a result
of such action, then, and in each such case, the Conversion Price shall be
adjusted in such manner and at such time as the Board of Directors in good
faith determines would be equitable in the circumstances (such
determination to be evidenced in a resolution, a certified copy of which
shall be mailed to the holders of the shares of Series A Preferred Stock).
(iv) No Adjustment. Notwithstanding anything herein to the
contrary, no adjustment under this Section 7(c) need be made to the
Conversion Price if the Corporation receives written notice from holders of
a majority of the outstanding shares of Series A Preferred Stock that no
such adjustment is required.
(d) Abandonment. If the Corporation shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend or
distribution, then no adjustment in the Conversion Price shall be required by
reason of the taking of such record.
(e) Certificate as to Adjustments. Upon any adjustment in the Conversion
Price, the Corporation shall within a reasonable period (not to exceed ten (10)
days) following any of the foregoing transactions deliver to each registered
holder of Series A Preferred Stock a certificate, signed by the Chief Financial
Officer of the Corporation, setting forth in reasonable detail the event
requiring the adjustment and the method by which such adjustment was calculated
and specifying the increased or decreased Conversion Price then in effect
following such adjustment.
(f) Reorganization, Reclassification. In case of any merger or
consolidation of the Corporation or any capital reorganization, reclassification
or sale of all or substantially all of the assets of the Corporation or other
change of outstanding shares of Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value) (each, a
"Transaction"), each holder of shares of
7
Series A Preferred Stock shall be entitled to receive, upon conversion of the
Series A Preferred Stock, the number of shares of Capital Stock, other security
or other consideration or property to which the holder of the number of shares
of Common Stock deliverable upon such conversion is entitled to receive upon the
consummation of such Transaction had such conversion occurred prior to such
Transaction.
(g) Notices. In case at any time or from time to time:
(i) the Corporation shall declare a dividend (or any other
distribution) on its shares of Common Stock;
(ii) the Corporation shall authorize the granting to the holders
of its Common Stock rights or warrants to subscribe for or purchase any
shares of Capital Stock of any class or of any other rights or warrants; or
(iii) there shall be any Transaction;
then the Corporation shall mail to each holder of shares of Series A Preferred
Stock at such holder's address as it appears on the transfer books of the
Corporation, as promptly as possible but in any event at least ten (10) days
prior to the applicable date hereinafter specified, a notice stating (A) the
date on which a record is to be taken for the purpose of such dividend,
distribution or granting of rights or warrants or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or granting of rights or warrants are to be
determined, or (B) the date on which such Transaction is expected to become
effective and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their Common Stock for shares of Capital
Stock or other securities or property or cash deliverable upon such Transaction.
(h) Automatic Conversion. Each share of Series A Preferred Stock shall
automatically be converted into shares of Common Stock, based on the then
effective Conversion Price, immediately prior to the consummation of a Sale
Transaction approved by the Board of Directors.
(i) Reservation of Common Stock. The Corporation shall at all times
reserve and keep available for issuance upon the conversion of the Series A
Preferred Stock, such number of its authorized but unissued shares of Common
Stock as will from time to time be sufficient to permit the conversion of all
outstanding shares of Series A Preferred Stock, and shall take all action to
increase the authorized number of shares of Common Stock if at any time there
shall be insufficient authorized but unissued shares of Common Stock to permit
such reservation or to permit the conversion of all outstanding shares of Series
A Preferred Stock; provided that the holders of shares of Series A Preferred
Stock vote such shares in favor of any such action that requires a vote of
stockholders.
(j) No Conversion Tax or Charge. The issuance or delivery of
certificates for Common Stock upon the conversion of shares of Series A
Preferred Stock
8
shall be made without charge to the converting holder of shares of Series A
Preferred Stock for such certificates or for any tax in respect of the issuance
or delivery of such certificates or the securities represented thereby, and such
certificates shall be issued or delivered in the respective names of, or
(subject to compliance with the applicable provisions of federal and state
securities laws) in such names as may be directed by, the holders of the shares
of Series A Preferred Stock converted; provided, however, that the Corporation
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the holder of the shares of Series A Preferred Stock
converted, and the Corporation shall not be required to issue or deliver such
certificate unless or until the Person or Persons requesting the issuance or
delivery thereof shall have paid to the Corporation the amount of such tax or
shall have established to the reasonable satisfaction of the Corporation that
such tax has been paid.
8. Business Day. If any payment shall be required by the terms hereof to
be made on a day that is not a Business Day, such payment shall be made on the
immediately succeeding Business Day.
9. Definitions. As used in this Certificate of Designations, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:
"Board of Directors" means the Board of Directors of the Corporation.
"Business Day" means any day except a Saturday, a Sunday, or other day
on which commercial banks in the State of New York or the State of New Jersey
are authorized or required by law or executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock and any and
all rights, warrants or options exchangeable for or convertible into such
capital stock (but excluding any debt security whether or not it is exchangeable
for or convertible into such capital stock).
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" shall have the meaning ascribed to it in Section 2(a)
hereof.
"Conversion Price" shall have the meaning ascribed to it in Section 7(a)
hereof.
"Corporation" shall have the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
9
"Current Market Price" per share shall mean, as of the date of
determination, (a) the average of the daily Market Price under clause (a), (b)
or (c) of the definition thereof of the Common Stock during the immediately
preceding thirty (30) trading days ending on such date, and (b) if the Common
Stock is not then listed or admitted to trading on any national securities
exchange or quoted in the over-the-counter market, then the Market Price under
clause (d) of the definition thereof on such date.
"Junior Stock" shall have the meaning ascribed to it in Section 2(a)
hereof.
"Liquidation" shall mean the voluntary or involuntary liquidation under
applicable bankruptcy or reorganization legislation, or the dissolution or
winding up of the Corporation.
"Liquidation Preference" shall have the meaning ascribed to it in
Section 4(a) hereof.
"Market Price" shall mean, as of the date of determination, (a) if the
Common Stock is listed on a national securities exchange, the closing price per
share of Common Stock on such date published in The Wall Street Journal
(National Edition) or, if no such closing price on such date is published in The
Wall Street Journal (National Edition), the average of the closing bid and asked
prices on such date, as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading; or (b)
if the Common Stock is not then listed or admitted to trading on any national
securities exchange but is designated as a national market system security by
the National Association of Securities Dealers, Inc., the last trading price of
the Common Stock on such date; or (c) if there shall have been no trading on
such date or if the Common Stock is not designated as a national market system
security by the National Association of Securities Dealers, Inc., the average of
the reported closing bid and asked prices of the Common Stock on such date as
shown by the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System and reported by any member firm of the
New York Stock Exchange selected by the Corporation; or (d) if none of (a), (b)
or (c) is applicable, a market price per share determined in good faith by the
Board of Directors. Any determination of the Market Price by an appraiser shall
be based on a valuation of the Corporation as an entirety without regard to any
discount for minority interests or disparate voting rights among classes of
Capital Stock.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental body or other entity of any kind.
"Sale Transaction" shall mean (a) (i) the merger or consolidation of the
Corporation into or with one or more Persons, (ii) the merger or consolidation
of one or more Persons into or with the Corporation or (iii) the completion of a
tender offer by an unaffiliated party for at least a majority of the outstanding
shares of capital stock of the Company if, in the case of (i) or (ii), the
stockholders of the Corporation prior to such merger or consolidation do not
retain at least a majority of the voting power of the
10
surviving Person or (b) the voluntary sale, conveyance, exchange or transfer to
another Person of (i) the voting Capital Stock of the Corporation if, after such
sale, conveyance, exchange or transfer, the stockholders of the Corporation
prior to such sale, conveyance, exchange or transfer do not retain at least a
majority of the voting power of the Corporation or (ii) all or substantially all
of the assets of the Corporation.
"Series A Preferred Stock" shall have the meaning ascribed to it in
Section 1 hereof.
"Transaction" shall have the meaning ascribed to it in Section 7(f)
hereof.
11
IN WITNESS WHEREOF, the undersigned has executed and subscribed this
certificate this 6th day of February, 2001.
/s/ [ILLEGIBLE]
---------------------------------
Joint Chief Executive Officer
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of February 7, 2001 among
Vertex Interactive, Inc., a New Jersey corporation (the "Company"), and Pitney
Xxxxx Inc., a Delaware corporation ("PB"). Capitalized terms used herein but not
otherwise defined shall have the meaning ascribed to them in the Transaction
Agreement (defined below).
WITNESSETH:
WHEREAS, the Company and PB have entered into a Transaction Agreement,
dated as of the date hereof (the "Transaction Agreement"), pursuant to which
the Company is acquiring the Acquired Assets from PB in exchange for an
aggregate of 1,356,852 shares of Series A Convertible Preferred Stock, par value
$.Ol per share, of the Company (the "Preferred Stock");
NOW, THEREFORE, in consideration of the respective covenants and
conditions of the parties set forth herein and in the Transaction Agreement, and
for good and valuable consideration, the receipt and sufficiency of which are
hereby. acknowledged, the parties hereto, intending to be legally bound, agree
as follows:
1. Registration of Registrable Stock.
(a) Filing of Registration Statement. The Company shall use
commercially reasonable efforts to prepare and file within 180 days after the
date hereof, a registration statement on Form S-3 (the "Registration Statement")
with the Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the "Securities Act") covering the offering and sale of the
Registrable Stock, by any method a Designated Holder may reasonably specify. For
purposes of this Agreement, "Registrable Stock" means each of the following: (a)
any and all shares of Common Stock issued or issuable upon conversion of shares
of Preferred Stock and (b) any shares of Common Stock issued or issuable to a
Designated Holder with respect to the Registrable Securities by way of stock
dividend or stock split or in connection with the combination of shares,
recapitalization, merger, consolidation or other reorganization. "Designated
Holder" means PB and any transferee to whom Registrable Stock has been
transferred in accordance with Section 6(c) of this Agreement, other than a
transferee to whom Registrable Stock has been transferred pursuant to a
Registration Statement under the Securities Act or Rule 144 or Regulation S
under any Securities Act (or any successor rule thereto).
(b) Effectiveness; Amendments. The Company shall use commercially
reasonable efforts to file and cause to be declared effective within 180 days
from the date hereof (the "Effective Date") and, except as set forth below, to
remain effective under the Securities Act, the Registration Statement and will
prepare and file with the SEC any amendments or post-effective amendments as may
be necessary to keep the Registration Statement effective under the Securities
Act. The Company will promptly notify the Designated Holders in writing of the
date
2
on which the Registration Statement is declared effective. Notwithstanding the
foregoing, (i) the Company shall not be required to keep the Registration
Statement effective for purposes of the sale of Registrable Stock thereunder at
any time after the earlier of (A) the date on which all shares of Registrable
Stock have been sold or are no longer outstanding, and (B) the date which is two
years (plus any time for delays arising from events described in clause (ii)
below or Section 1(e) following the date hereof, and (ii) the Company shall not
be obligated to keep the Registration Statement or the prospectus included
therein (the "Prospectus") current during any period (A) of up to 60 days per
calendar year if the Company's chief executive officer advises the Designated
Holder that the Board of Directors of the Company has determined in good faith
that valid business reasons concerning a potential corporate transaction make
doing so inadvisable, or (B) when financial statements do not satisfy the
requirements of the last sentence of paragraph (b) of Rule 3-12 of Regulation
S-X (or any successor rule) to the extent, and only to the extent, that the SEC
interprets such sentence as being applicable to the continued effectiveness of
the Registration Statement.
(c) Copies of Documents. During the period that the Company has agreed
to use its reasonable efforts to cause the Registration Statement to remain
effective (the "Effectiveness Period"), the Company shall furnish to the
Designated Holder such number of copies of the Registration Statement, the
Prospectus and any amendments and supplements thereto and any documents
incorporated by reference in the Registration Statement as the Designated Holder
shall reasonably request.
(d) Blue Sky Compliance. The Company shall register or qualify or
cooperate with the Designated Holder in connection with the notification,
coordination, registration or qualification (or obtain exemption from such
registration or qualification) of the Registrable Stock under such other
securities or blue sky laws of such jurisdictions in the United States as the
Designated Holder reasonably shall request and do any and all other acts and
things which may be reasonably necessary to enable the Designated Holder to
consummate the disposition of the Registrable Stock by them under the
Registration Statement in such jurisdictions during the Effectiveness Period;
provide d, however, that in no event shall the Company be required to qualify to
do business as a foreign corporation in any jurisdiction where it is not so
qualified, to subject itself to taxation in any jurisdiction where it has not
theretofore done so or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so subject.
(e) Notification. During the Effectiveness Period, the Company shall
notify the Designated Holder promptly, and (if requested by the Designated
Holder) confirm such notice in writing, (i) of any request by the SEC or any
other regulatory authority for amendments or supplements to the Registration
Statement or the Prospectus or for additional information relating thereto, (ii)
of the issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose,
(iii) of the receipt by the Company of any notification or stop order with
respect to the suspension of the registration, qualification or exemption from
registration or qualification of any of the shares of Registrable Stock covered
by the Registration Statement for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (iv) of the happening of any
event which makes any statement made in such Registration Statement or in the
Prospectus or
3
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or which requires the making of any changes in
such Registration Statement or Prospectus so that such documents will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(f) Supplements and Post-Effective Amendments. Subject to the
provisions of clause (ii) of the third sentence of Section 1(b) above, during
the Effectiveness Period, upon the occurrence of any event contemplated by
clause (i) or (iv) of paragraph (e) above, the Company will prepare a supplement
or post-effective amendment to the Registration Statement or a supplement to the
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Stock being sold thereunder, the Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(g) Listing. The Company shall use commercially reasonable efforts to
cause the Registrable Stock covered by the Registration Statement to be listed
within 10 days following the date hereof, on each securities exchange or
securities quotation system, if any, on which similar securities issued by the
Company are then listed.
(h) Correspondence with the SEC. The Company shall, upon request from
the Designated Holder, deliver promptly to the Designated Holder copies of all
correspondence between the SEC and the Company, its counsel or auditors.
(i) Stock Certificates. The Company will cooperate with the Designated
Holder to facilitate the timely preparation and delivery of certificates
representing Registrable Stock sold under the Registration Statement, which
certificates shall not have any restrictive legends.
(j) Form S-3 Underwriting Procedures. If the holders holding a majority
of the Registrable Stock so elect, the Company shall use its reasonable best
efforts to cause the registration of the Registrable Stock pursuant to this
Agreement to be in the form of a firm commitment underwritten offering and the
managing underwriter or underwriters selected for such offering shall be the
Approved Underwriter selected in accordance with Section 1(k) below. If the
Approved Underwriter believes that the registration of all or part of the
Registrable Stock which has been requested to be included in such registration
would materially adversely affect the success of such public offering, then the
Company shall be required to reduce the number of shares to be included in the
underwritten offering, to the extent of the amount that the Approved Underwriter
believes may be sold without causing such adverse effect, pro rata among all
security holders requesting to be included in such offering.
(k) Section of Underwriters. If any registration of Registrable Stock
pursuant to this Agreement is in the form of an underwritten offering, the
Company shall select and obtain an investment banking firm of national
reputation to act as the managing underwriter of the offering (the "Approved
Underwriter"); provided, however, that in the event that the Registrable
4
Stock represents a majority of the securities being registered, then the
Approved Underwriter shall also be approved by the holders of a majority of the
Registrable Stock, such approval not to be unreasonably withheld.
2. Piggyback Registration. If at any time following the date hereof the
Company proposes to file a registration statement under the Securities Act with
respect to an offering of Common Stock (except on Form S-4 or Form S-8 or any
successor forms thereto), for its own account or for the account of others, then
the Company shall give written notice of such proposed filing to the Designated
Holder of Registrable Stock as far in advance of the anticipated filing date as
is practicable (the "Piggyback Notice"). The Piggyback Notice shall offer the
Designated Holder the opportunity to register such amount of Registrable Stock
as the Designated Holder may request (a "Piggyback Registration"); subject in
all events to the agreement of the underwriter or underwriters of the offering
contemplated by such registration statement that such shares of Registrable
Stock can be included in such registration statement without adversely affecting
such offering. Any reduction in the number of securities to be so offered shall
be (i) first, pro-rata among all security holders who are exercising "piggyback"
registration rights, based on the number of registrable securities originally
proposed to be sold by each of them, and (ii) second, pro-rata among all
security holders who are exercising "demand" registration rights pursuant to a
registration rights agreement with the Company, based on the number of
registrable securities originally proposed to be sold by each of them.
3. Obligations of the Designated Holder. Following the filing of the
Registration Statement and during any period that the Registration Statement is
effective, the Designated Holder shall:
(a) furnish each broker through whom the Designated Holder offers
Registrable Stock such number of copies of the Prospectus as the broker may
require and otherwise comply with prospectus delivery requirements under the
Securities Act;
(b) cooperate with the Company as the Company fulfills its obligations
under Section 1(d) hereof;
(c) furnish such information concerning the Designated Holder as the
Company may from time to time reasonably request;
(d) not sell under the Registration Statement during any period after
the Company has provided notice to the Designated Holder pursuant to Section
1(e)(iv) above and until the Company provides to the Designated Holder notice
that the Registration Statement no longer fails to state a material fact
required to be stated therein, misstates a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
made not misleading.
4. Expenses. The Company shall be responsible for the payment of (x)
all registration and filing fees relating to registration of the offering by the
Designated Holder of the Registrable Stock, including, without limitation,
registration and filing fees (A) with respect to
5
filings required to be made with the SEC or the National Association of
Securities Dealers and (B) with respect to registrations and filings made under
state securities or blue sky laws (y) fees and disbursements of counsel to the
Designated Holder in connection with the preparation of the Registration
Statement and the Prospectus, to the extent such fees and disbursements do not
exceed $25,000 and (z) any expenses incurred by the Company in connection with
the preparation of the Registration Statement and the Prospectus. The Designated
Holder shall be responsible for the payment of fees paid to brokers in
connection with the sale of any of the Registrable Stock.
5. Indemnification.
(a) Indemnity by the Company. The Company shall (i) indemnify and hold
harmless each Designated Holder, any officer, director, employee or agent of,
and each person who controls, the Designated Holder, within the meaning of
Section 15 of the Securities Act, against any losses, claims, damages or
liabilities,("Losses"), to which each such indemnified party may become subject,
under the Securities Act or otherwise, insofar as such Losses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement or
Prospectus, as amended or supplemented if the Company has furnished any
supplements or amendments thereto (if used during the period the Company is
required to keep the Registration Statement and Prospectus current), or any
document filed under a state securities or blue sky law (collectively,
"Registration Documents") or insofar as any Losses (or actions in respect
thereof) arise out of or are based upon the omission or alleged omission to
state in any Registration Document a material fact required to be stated therein
or necessary to make the statements made therein (in the case of a prospectus,
in the light of the circumstances under which they were made), not misleading,
and (ii) reimburse each indemnified party for all legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
Losses or actions, including any amounts paid in settlement of any litigation,
commenced or threatened, if such settlement is effected with the prior written
consent of the Company; provided, however, that the Company shall not be liable
for any Losses arising out of or based upon any untrue statement or omission
made in any Registration Document in reliance upon and in conformity with
written information furnished to the Company by or on behalf of PB expressly for
use in the preparation of the Registration Document; and provided, further, that
the Company shall not be liable to a particular indemnified party under the
indemnity agreement in this Section 5(a) with respect to the Prospectus, as
amended or supplemented, to the extent that the Loss arises from the sale of any
shares of Registrable Stock by such indemnified party to the person asserting
Loss and to which there was not sent or given, within the time required by the
Securities Act, a copy of the Prospectus as then amended or supplemented, if the
Company has previously furnished copies thereof to such indemnified party and
such Prospectus as then amended or supplemented has corrected the misstatement
or omission at issue.
(b) Indemnity by the Designated Holder. The Designated Holder shall (i)
indemnify and hold harmless the Company, any officer, director, employee or
agent of the Company, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act against any Losses to
which each such indemnified party may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions in
6
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Document, or
arise out of or are based upon the omission or alleged omission to state in any
Registration Document a material fact required to be stated therein or necessary
to make the statements made therein (in the case of a prospectus, in the light
of the circumstances under which they were made,) not misleading, and (ii)
reimburse each indemnified party for all legal or other expenses reasonably
incurred by it in connection with investigating or defending any such Losses or
action, including any amounts paid in settlement of any litigation, commenced or
threatened, if such settlement is effected with the prior written consent of the
Designated Holder; provided, however, that such indemnification or reimbursement
shall be payable only if, and to the extent that, any Losses arise out of or are
based upon an untrue statement or omission made in any Registration Document in
reliance upon and in conformity with written information furnished to the
Company by the Designated Holder expressly for use in the preparation thereof;
provided, further, that the total amount to be indemnified by such Designated
Holder pursuant to this Section 5(b) shall be limited to the net proceeds
received by such Designated Holder in the offering to which the Registration
Statement or Prospectus Relates.
(c) Procedure for Indemnification. Promptly after receipt by an
indemnified party, under Section 5(a) or 5(b), of notice of the commencement of
any action, the indemnified party shall notify the indemnifying party in writing
of the commencement thereof, if a claim in respect thereof is to be made against
an indemnifying party under any of these Sections; but the omission of such
notice shall not relieve the indemnifying party from liability which it may have
to the indemnified party under this Section 5, except to the extent that the
indemnifying party is actually prejudiced in any material respect by such
failure to give notice, and shall not relieve the indemnifying party from any
liability which it may have to any indemnified party otherwise than under this
Section 5. In case the event that an action is brought against the indemnified
party and such indemnified party notifies the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and to the extent that it chooses, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party that it so chooses, the
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof; provided however, that (i) if the indemnifying party fails to take
reasonable steps necessary to defend diligently the claim within 20 days after
receiving notice from the indemnified party that the indemnified party believes
it has failed to do so, or (ii) if the indemnified party who is a defendant in
any action or proceeding which is also brought against the indemnifying party
reasonably shall have concluded that there are legal defenses available to the
indemnified party which are not available to the indemnifying party, or (iii) if
representation of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, the indemnified party shall
have the right to assume or continue its own defense as set forth above. In no
event shall the indemnifying party be responsible for more than one firm of
counsel for all indemnified parties.
(d) Non-Exclusive Indemnity. Any indemnity agreements contained herein
shall be in addition to any other rights to indemnification or contribution
which any indemnified party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless of any investigation
made or omitted by or on behalf of any indemnified party.
7
(e) Contribution. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative fault
of the indemnifying party on the one hand and the indemnified party on the other
(determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative fault of the indemnifying party and the
indemnified party, but also the relative benefits received by the indemnifying
party on the one hand (taking into consideration the fact that the provision of
the registration rights hereunder served as an inducement to PB to enter into
the Transaction Agreement) and the indemnified party on the other, as well as
any other relevant equitable considerations. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
6. Miscellaneous.
(a) Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York without giving effect to the
choice of law principles thereof.
(b) Entire Agreement; Amendment; Waiver. This Agreement: (i) contains
the entire agreement among the parties hereto with respect to the subject matter
hereof, (ii) supersedes all prior written agreements and negotiations and oral
understandings, if any, with respect thereto, and (iii) may not be amended or
supplemented except by an instrument or counterparts thereof in writing signed
by the Company and PB. No waiver of any term or provision of this Agreement
shall be effective unless in writing signed by the party to be charged. The
waiver by any party of a breach of any term or provision of this Agreement shall
not be construed as a waiver of any subsequent breach.
(c) Binding Effect. This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective legal representatives,
successors and assigns; provided, however, that except as otherwise provided for
herein, no party hereto may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the prior written consent of
the other parties hereto. Notwithstanding the foregoing, in the event that PB
transfers at least 25% of the Registrable Stock outstanding on the date hereof
to any Person, registration rights of PB and the incidental or "piggy-back"
registration rights of PB contained herein and the other rights with respect
thereto shall be, with respect to any such Registrable Stock, automatically
transferred to such Person who is the transferee of such Registrable Stock.
8
(d) Invalidity of Provision. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
(e) Notices. All notices, requests, consents and other communications
to any party hereunder shall be in writing and shall be given either by personal
service, certified mail, return receipt requested, overnight courier or
telecopy, addressed as follows:
if to the Company, to:
Vertex Interactive, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxx X.X. Xxxx
Facsimile No.: 000-000-0000
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. X'Xxxxxx, Esq.
Facsimile No.: 000-000-0000
if to PB, to:
Pitney Xxxxx Inc.
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Vice President and General Counsel
Facsimile No.: 000-000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxx, Esq.
Facsimile No.: 212-757-3990
or to such other address as any party may hereafter specify to the other parties
hereto by notice sent in accordance with this Section 6(e). Each such notice,
request or other communication shall be effective when delivered at the address
specified in this Section 6(e).
(f) Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience of reference only and shall not control or
affect the
9
meaning or construction of any provision hereof. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto as of the date first above written.
VERTEX INTERACTIVE, INC.
By:
--------------------------------
Name:
Title:
PITNEY XXXXX INC.
By: Xxxxx Xxxxx
-----------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
[Registration Rights Agreement]
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto as of the date first above written.
VERTEX INTERACTIVE, INC.
By: Xxxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxxx Xxxx
Title: Joint Chief Executive Officer
PITNEY XXXXX INC.
By:
-------------------------------------
Name:
Title:
[Registration Rights Agreement]
Section 2.1(b)(ii)
Acquired Assets
TRANSCAPE
Detail Analysis By Asset/Year
31-Dec-0O
--------------------------------------------------------------------------------
Fixed Asset Date
Asset # Desc Acq
--------------------------------------------------------------------------------
Computers: CP0256 HARD DRIVE Feb-97
CP1290 DELL P6300/GXMT BASE Feb-98
CP1971 6-DIGITAL SYS-VAS830 Aug-98
CP1971T TAXES Aug-98
CP2209 DELL P6450-1 Oct-98
CP2453T TAXES Dec-98
CP2453 DP EN SYSTEM Dec-98
CP2575 Proln System Jan-99
CP2575T Tax Jan-99
CP2955 (21) Dell P6450 Xxx-00
XX0000 Xxxx Xxxxxxxx XXXX00 Aug-99
CP5198 Dell Power Edge 6300 Feb-00
CP5207 Latitude CPXI Pentium Feb-00
179436 Viewsonic Jun-00
179753 Dell Pentium III 800 Jun-00
179754 Dell Pentium III 800 Jun-00
179755 Dell Pentium III 800 Jun-00
179756 Dell Pentium III 800 Jun-00
CP5756 Dell 733 GX110 Jul-00
CP5957 Windows NT Aug-00
Latitude CPxJ750GT PIII Aug-00
Latitude CPxJ750GT PIII Aug-00
Latitude CPxJ750GT PIII Aug-00
Latitude CPxJ750GT PIII Aug-00
Latitude CPxJ750GT PIII Aug-00
Latitude CPxJ750GT PIII Aug-00
Latitude CPxJ750GT PIII Aug-00
Latitude CPxJ750GT PIII Aug-00
. CP6118 Dell Sep-00
CP6119 Dell Sep-00
CP6130 Computers & Peripherals Xxx-00
XX0000 Xxxx Xxxxxxx III 000 Xxx-00
XX0000 Xxxx Xxxxxxx III 000 Xxx-00
XX0000 Xxxx Xxxxxxx III 000 Xxx-00
XX0000 Xxxx Xxxxxxx III 000 Xxx-00
XX0000 Xxxx Xxxxxxx III 000 Xxx-00
XX0000 Xxxx Xxxxxxx III 933 Sep-00
Dell Poweredge Dec-00
(4) Dell PIII Dec-00
Dell Latitude Dec-00
Engineering -MN Total Computers
CP5686 Dell 733 GX110 Jun-00
CP5687 Dell 733 GX110 Jun-00
CP5689 Dell PIII 600K Jun-00
CP5690 Dell PIII 600K Jun-00
Data Services Total Computers
Grand Total Computers
Additional Items:
(5) Dell Power Edge Aug-00
(9) Dell PIII Aug-00
Power Edge Rack Aug-00
UPS Matrix Aug-00
Image Server (PBTS3) Dec-00
Dell GX200 Jan-01
Total Computers w/Additions
Office Equipment: Printer Feb-97
Tax Mar-97
High Speed Label Printer Aug-97
Sales Tax Sep-97
Engineering -MN Office Equipment
Section 2.1(b)(ii)
Acquired Assets
Desks & workface counters, bookcases, meeting tables, overhead cubby holders
(approx. 14).
29 8x8 grey cubicles with built in desks and workspaces.
38 swivel ergonomically correct office chairs.
Approx. 45 guest chairs.
40 Whiteboards.
5-6 bookshelves.
Miscellaneous desk/workspace for holding printers, PCs in test areas, etc.
