ASSET PURCHASE AGREEMENT,
DATED AS OF SEPTEMBER 30, 1999,
AMONG
FCMS, LLC
FUNDTECH CORPORATION,
STERLING COMMERCE (NORTHERN AMERICA), INC.,
STERLING COMMERCE (AMERICA), INC.
(SOLELY FOR PURPOSES OF SECTIONS 2.12(D), 3.1, 3.2, 3.4, 6.2, 6.5, 7.5 AND 7.6)
AND
STERLING COMMERCE, INC.
(SOLELY FOR PURPOSES OF SECTIONS 2.8(C), 2.12(B), (D), (E), (I), (J), (L) AND
(M), 2.13, 3.2, 3.4(A), 3.14, 5.7(C), AND (F), 5.8, 6.5, 7.5 AND 7.6)
819604 v.1
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................1
1.1 Definitions.........................................................1
ARTICLE II THE TRANSACTIONS...................................................1
2.1 Closing.............................................................1
2.2 Sale and Transfer of Assets.........................................2
2.3 Excluded Assets.....................................................3
2.4 Purchase Price......................................................4
2.5 Adjustments to the Purchase Price...................................4
2.6 Assumption of Liabilities...........................................5
2.7 Instruments of Transfer; Certain Actions............................5
2.8 Further Assurances..................................................5
2.9 Closing Deliveries by the Seller....................................6
2.10 Closing Deliveries by the Purchaser.................................7
2.11 Post-Closing Deliveries by the Seller...............................7
2.12 License to Use Certain Names........................................8
2.13.Sublease of Real Property; Transition Services......................11
2.14 Contracts for which Consents not Acquired...........................11
2.15 EDS Agreement; Contracts to be Bifurcated...........................12
2.16 Bulk Sales Laws.....................................................13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER......................14
3.1 Organization, Standing, etc. of the Seller..........................14
3.2 Authorization and Execution.........................................14
3.3 No Consents.........................................................14
3.4 Absence of Conflicts................................................14
3.5 Title to Assets.....................................................15
3.6 Effect of Transfer..................................................15
3.7 Contracts...........................................................15
3.8 Accounts Receivable.................................................16
3.9 Intellectual Property...............................................16
3.10 Litigation..........................................................18
3.11 Customers...........................................................19
3.12 Completeness of Assets..............................................19
3.13 Financial Statements................................................19
3.14 Taxes...............................................................19
3.15 Conduct of Business.................................................19
3.16 Compliance with Law; Permits........................................19
3.17 Employees; Employee Benefit Plans...................................20
3.18 No Broker's or Finder's Fees........................................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER....................21
4.1 Organization, Good Standing, and Corporate Power of the Purchaser
and Fundtech.......................................... .............21
4.2 Authorization and Execution.........................................21
4.3 No Consents.........................................................21
4.4 Absence of Conflicts................................................21
4.5 Litigation..........................................................22
4.6 No Broker's or Finder's Fees........................................22
ARTICLE V COVENANTS...........................................................22
5.2 Expenses............................................................22
5.3 Accounts Receivable.................................................22
5.4 Preservation of Books and Records...................................23
5.5 Allocation of Purchase Price........................................23
5.6 Taxes ..............................................................23
5.7 Certain Employment Matters..........................................24
5.8 Non-Competition.....................................................25
5.9 Letters to Customers................................................26
5.10 Sales Commissions...................................................26
5.11 Obligations Secured by Permitted Encumbrances.......................26
ARTICLE VI SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS;
INDEMNIFICATION; REMEDIES AND LIABILITIES.....................................26
6.1 Survival of Representations, Warranties and Agreements..............26
6.2Indemnification of the Purchaser and Fundtech.........................27
6.3Indemnification of the Seller.........................................29
6.4Procedures for Third Party Claims.....................................30
6.5Disclaimer of Warranties..............................................31
ARTICLE VII MISCELLANEOUS.....................................................31
7.1 Publicity...........................................................31
7.2 Notices.............................................................32
7.3 Amendment; Extension and Waiver.....................................34
7.4 Governing Law.......................................................34
7.5 Arbitration.........................................................34
7.6 Jurisdiction and Serviceof Process..................................35
7.7 Binding Effect; Assignment..........................................35
7.8 Severability........................................................35
7.9 No Third-Party Beneficiaries........................................36
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7.10 Counterparts........................................................36
7.11 Rules of Construction...............................................36
7.12 Entire Agreement....................................................36
INDEX OF SCHEDULES:
Schedule 1.1 - Schedule of Definitions
Schedule 1.1(a) - Disclosure Schedule
Schedule 2.2(a) - Identified Software
Schedule 2.2(b)(i) - Seller Contracts
Schedule 2.2(b)(ii) - Specified Contracts
Schedule 2.2(c)(iii) - Third Party Embedded Software Licenses
Schedule 2.2(c)(i) - Owned Tangible Assets
Schedule 2.2(c)(ii) - Leased Tangible Assets
Schedule 2.2(d) - Consents
Schedule 2.2(e) - Intellectual Property
Schedule 2.12 - Licensed Trademarks
Schedule 2.14 - Consents not Acquired
Schedule 2.15(b) - Customers under Contracts to be Bifurcated
Schedule 5.7(a) - Scheduled Employees
Schedule 5.7(b) - Prohibited Employees of Seller
Schedule 5.7(c) - Prohibited Employees of Purchaser
INDEX OF EXHIBITS:
Exhibit A - Form of Xxxx of Sale, Assignment and Assumption Agreement
Exhibit B - Closing Date Balance Sheet
Exhibit C - Form of Seller's Standard License and Service Agreement
Exhibit D - Form of MLC Group, Inc. Financing Statement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of September 30, 1999 (this
"Agreement"), is entered into among Sterling Commerce (Northern America), Inc.,
a Delaware corporation (the "Seller"), FCMS, LLC, a Delaware limited liability
company (the "Purchaser"), Fundtech Corporation, a Delaware corporation
("Fundtech"), Sterling Commerce, Inc., a Delaware corporation ("Sterling
Commerce")(Sterling Commerce being a party hereto solely for purposes of
Sections 2.8(c), 2.12(b), (d), (e), (i), (j), (l) and (m), 2.13, 3.2, 3.4(a),
3.14, 5.7(c), and (f), 5.8, 6.5, 7.5 and 7.6), and Sterling Commerce (America),
Inc., a Delaware corporation ("Sterling America")(Sterling America being a party
hereto solely for purposes of Sections 2.12(d), 3.1, 3.2, 3.4, 6.2, 6.5, 7.5 and
7.6).
RECITALS
WHEREAS, the Seller currently owns certain Transferred Assets (as
defined below) used in connection with the cash management business of the
Commerce Payments Business Unit of Seller, which business includes, among other
things, the products and modules identified in Schedule 2.2(a) (the "Cash
Management Business") and desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Seller, all of the Transferred Assets, upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, and intending to be legally bound hereby, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the terms set forth in
Schedule 1.1 shall have the respective meanings set forth therein.
ARTICLE II
THE TRANSACTIONS
2.1 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxx & Xxxxx,
L.L.P., 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx,
at 11:00 a.m. (Dallas time) on September 30, 1999 (the "Closing Date") or at
such other place or on such other date as the parties shall mutually agree.
2.2 Sale and Transfer of Assets. In accordance with the terms and
provisions set forth herein, at the Closing the Seller shall sell, assign,
transfer and deliver to the Purchaser and the Purchaser shall acquire and
accept, the following properties and assets of Seller (collectively, the
"Transferred Assets"):
(a) (i) the Software products and modules identified in
Schedule 2.2(a) (such products and modules, collectively referred to
herein as the "Identified Software"), including (i) current versions
of the Identified Software, (ii) any predecessor versions of the
Identified Software necessary to maintain the Identified Software
under agreements for maintenance services being assumed by the
Purchaser hereunder, (iii) all Software files necessary to recreate
the Identified Software; and (iv) the Software files for any work in
progress relating solely to the Identified Software (the Identified
Software and the items described in clauses 2.2(a)(i),(ii), (iii) and
(iv) and the embedded Software licensed pursuant to the applicable
Third Party Embedded Software License (as hereinafter defined)
identified in Schedule 2.2(b)(iii) are collectively referred to
herein as the "Owned Software"). By way of clarification, the parties
acknowledge that the rights of the Seller with respect to Third Party
Software are being transferred to the Purchaser pursuant to Section
2.2(b) and not this Section 2.2(a). The parties further acknowledge
that the Seller has no rights with respect to any Third Party
Software except to the extent provided for in a Third Party Embedded
Software License relating thereto;
(b) all rights and interests of the Seller in the contracts
(i) as identified in Schedule 2.2(b)(i) (collectively, the "Seller
Contracts"), (ii) as identified in Schedule 2.2(b)(ii), to the extent
the material terms and conditions of such Specified Contracts do not
vary in any material adverse respect from the Seller's Standard
License and Service Agreement for the Identified Software
(collectively, the "Specified Contracts) and (iii) as identified on
Schedule 2.2(b)(iii) (collectively, the "Third Party Embedded
Software Licenses," and together with the Seller Contracts, the
Specified Contracts and the agreements identified on Schedule
2.2(c)(ii) and Schedule 2.2(d), the "Assumed Contracts") ;
(c) all rights and interests of the Seller in any
equipment, fixtures, furniture, computers, tools, parts, supplies and
other tangible assets (i) owned by the Seller and identified in
Schedule 2.2(c)(i) or (ii) leased by the Seller and identified in
Schedule 2.2(c)(ii);
(d) all rights and interests of the Seller in any Consents,
licenses (other than Third Party Embedded Software Licenses) granted
to Seller, permits, franchises and other authorizations and telephone
numbers possessed by the Seller relating to the Transferred Assets
and identified in Schedule 2.2(d);
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(e) all rights and interests of the Seller in the General
IP of the Seller comprising a part of the Owned Software (the
"Intellectual Property"), including the Intellectual Property of the
Seller identified in Schedule 2.2(e), together with all goodwill
associated therewith;
(f) the Accounts Receivable reflected on the Closing Date
Balance Sheet attached hereto as Exhibit B, as will be adjusted by
the Final Balance Sheet;
(g) solely to the extent related to the Cash Management
Business, all rights of the Seller to enforce any non-competition
agreements, assignment of invention agreements, confidentiality
agreements and consulting agreements entered into with employees of
or consultants to the Cash Management Business; and
(h) all books and records of the Seller, whether in written
or electronic form, in each case to the extent related to the Cash
Management Business, including, but not limited to: (i) all manuals
pertaining to materials, operations, specifications, maintenance and
other matters, (ii) all catalogues, brochures, advertising materials,
purchasing and sales materials, (iii) all books and records
pertaining to sales, marketing and distribution,(iv) all price lists,
customer lists, mailing lists and credit records, (v) customer files,
(vi) support maintenance and service files, (vii) financial records
(including, without limitation, access to the outside auditors and
accountants work papers, to the extent that Seller has the right to
grant such access) , (viii) marketing collateral used solely for the
Identified Software and (ix) the data contained in the Vantive
database.
2.3 Excluded Assets. Notwithstanding the provisions of Section 2.2,
the following assets (the "Excluded Assets") are expressly excluded from the
purchase and sale contemplated hereby and, as such, are not included in the
Transferred Assets:
(a) cash and cash equivalents;
(b) accounts receivable solely arising from the Seller's
business other than the Accounts Receivable;
(c) subject to Section 2.13, any leasehold or other
interests in real estate;
(d) the business, assets, properties and Contracts of
Seller not related to the Transferred Assets;
(e) subject to Section 2.12, the names, trademarks, etc.
"Sterling Commerce," "Commerce", "COMMERCE:" and any derivatives or
designs of such names
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(including service marks), either in word form or as a design,
together with all goodwill associated therewith;
(f) any marketing gifts, trinkets or other similar
paraphernalia bearing the names "Sterling Commerce" or any
derivatives thereof (excluding marketing collateral related solely to
the Owned Software);
(g) tax credits and refunds and other rights and claims of
the Seller arising in connection with Taxes relating to the
Transferred Assets for any year or period (or portion thereof) ended
on or prior to the Closing Date;
(h) employee benefit plan arrangements, plans, programs or
agreements, including any individual plans, programs or agreements
maintained by the Seller;
(i) the charter and bylaws of the Seller and all minute
books, stock books, stock transfer ledgers and similar books and
records of the Seller; and
(j) the rights of the Seller under this Agreement,
including the Seller's right to enforce the obligations of the
Purchaser and Fundtech under this Agreement.
2.4 Purchase Price. In consideration of the sale, assignment,
transfer and delivery of the Transferred Assets described in Section 2.2, the
Purchaser shall pay the Seller a purchase price of $4,395,696 (the "Purchase
Price"), subject to adjustment as provided herein.
2.5 Adjustments to the Purchase Price. The Purchase Price in Section
2.4 shall be adjusted as follows:
(a) (i) if the Accounts Receivable as contained in the
Final Balance Sheet (the "Final Accounts Receivable") exceed the
Accounts Receivable as contained in the Closing Date Balance Sheet
(the "Closing Date Accounts Receivable"), the Purchase Price shall be
increased by the excess of the Final Accounts Receivable over the
Closing Date Accounts Receivable, and (ii) if the Closing Date
Accounts Receivable exceed the Final Accounts Receivable, the
Purchase Price shall be decreased by the excess of the Closing Date
Accounts Receivable over the Final Accounts Receivable. If any
amounts are payable hereunder, the applicable party shall promptly
pay to the other party, in cash, such amount.
(b) (i) if the Deferred Revenues as contained in the Final
Balance Sheet (the "Final Deferred Revenues") exceed the Deferred
Revenues as contained in the Closing Date Balance Sheet (the "Closing
Date Deferred Revenues"), the Purchase Price shall be decreased by
the excess of the Final Deferred Revenues over the Closing Date
Deferred Revenues, and (ii) if the Closing Date Deferred Revenues
exceed the Final Deferred Revenues, the Purchase Price shall be
increased by the excess of the Closing Date Deferred
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Revenues over the Final Deferred Revenues. If any amounts are payable
hereunder, the applicable party shall promptly pay to the other
party, in cash, such amount.
2.6 Assumption of Liabilities.
(a) In further consideration of the sale, assignment,
transfer and delivery described in Section 2.2, at the Closing,
subject to Sections 2.2 and 2.15, the Purchaser shall assume, pay,
perform and discharge, effective as of the Closing Date, the debts
and obligations of the Seller arising under the Assumed Contracts
from and after the Closing Date, except to the extent that any such
debts and obligations arise as a result of or in connection with a
breach by the Seller of the terms of such Assumed Contracts prior to
the date hereof (the "Assumed Liabilities"); and
(b) Notwithstanding anything to the contrary contained in
this Agreement, the Purchaser shall not assume, pay, perform or
discharge any debts, liabilities or obligations of the Seller other
than the Assumed Liabilities (the "Retained Liabilities").
2.7 Instruments of Transfer; Certain Actions. Concurrently with the
execution and delivery hereof, the Seller will execute and deliver to the
Purchaser the bills of sale, deeds, general conveyances, endorsements,
assignments and other instruments of sale, conveyance, transfer and delivery
referred to in Section 2.9 and shall take such actions as are commercially
reasonable to put the Purchaser in actual possession and operating control of
the Transferred Assets.
2.8 Further Assurances.
(a) The Seller hereby agrees, from time to time after the
date hereof, at the request of the Purchaser (but at the expense of
the Seller), (i) to execute, deliver, acknowledge, file and record,
or cause to be executed, delivered, acknowledged, filed and recorded,
such further bills of sale, deeds, general conveyances, endorsements,
assignments and other good and sufficient instruments of sale,
conveyance, assignment, transfer and delivery and such further
consents, certifications, affidavits and assurances as are
commercially reasonably required in order to vest in the Purchaser
all right, title and interest in and to the Transferred Assets and to
make Section 3.12 correct or otherwise to consummate and make
effective the transactions contemplated by this Agreement and (ii) to
take, or cause to be taken, all actions and do, or cause to be done,
all things, as are commercially reasonably required in order to put
the Purchaser in actual possession and operating control of the
Transferred Assets and to make Section 3.12 correct or otherwise to
accomplish the purposes of this Agreement.
(b) The Purchaser hereby agrees, from time to time after
the date hereof, at the request of the Seller (but at the expense of
the Purchaser), (i) to execute, deliver, acknowledge, file and
record, or cause to be executed, delivered, acknowledged, filed
5
and recorded, such further instruments of assumption, consents,
certifications, affidavits and assurances as are commercially
reasonably required in order to perfect the assumption by the
Purchaser of the Assumed Liabilities and make effective the
transactions contemplated by this Agreement and (ii) to take, or
cause to be taken, all actions and do, or cause to be done, all
things as are commercially reasonably required in order to otherwise
accomplish the purposes of this Agreement.
(c) To that extent that Sterling Commerce or any of its
Affiliates owns title to any of the Identified Software (and related
files) and Intellectual Property or Contracts (including rights under
the Master Agreement solely to the extent such rights relate to the
Owned Software) necessary to the operation of the Cash Management
Business as it is presently conducted (other than the Excluded
Assets, Commercial PC Software and the items set forth in Section
3.12 of the Disclosure Schedule), Sterling Commerce hereby agrees,
from time to time after the date hereof, at the request of the
Purchaser (but at the expense of the Seller), (i) to execute,
deliver, acknowledge, file and record, or cause to be executed,
delivered, acknowledged, filed and recorded, such further bills of
sale, deeds, general conveyances, endorsements, assignments and other
good and sufficient instruments of sale, conveyance, assignment,
transfer and delivery and such further consents, certifications,
affidavits and assurances as are commercially reasonably required in
order to vest in the Purchaser all right, title and interest in and
to any such Identified Software (and related files), Intellectual
Property and/or Contracts and (ii) to take, or cause to be taken, all
actions and do, or cause to be done, all things, as are commercially
reasonably required in order to put the Purchaser in actual
possession and operating control of the any such Identified Software
(and related files), Intellectual Property and/or Contracts. To the
extent that any Owned Software (and related files) and Intellectual
Property is required to be transferred to the Purchaser pursuant to
this Agreement, Sterling Commerce, Sterling America or their
Affiliates will not challenge the title or any intellectual property
rights of the Purchaser in and to such Owned Software or Intellectual
Property or any modifications to the Identified Software, except to
the extent that a modification forms the basis for such a challenge
or claim.
(d) To the extent that any assets are transferred pursuant
to Section 2.8 after the Closing Date, such assets shall be deemed to
be included in the applicable definitions set forth in this
Agreement.
2.9 Closing Deliveries by the Seller. At the Closing, the Seller
shall deliver, or cause to be delivered, to the Purchaser the following, each
dated the Closing Date (except as otherwise specified below):
(a) a duly executed copy of this Agreement;
6
(b) a duly executed copy of the Xxxx of Sale, Assignment
and Assumption Agreement between the Seller and the Purchaser,
substantially in the form attached hereto as Exhibit A (the "Xxxx of
Sale, Assignment and Assumption Agreement");
(c) copies of any and all releases, termination statements
and other documents and instruments, dated on or within five days
prior to the date hereof, as are necessary to remove and release any
Liens (other than Permitted Encumbrances), if any, which may encumber
any of the Transferred Assets;
(d) copies of the Financial Statements certified by the
Treasurer of the Seller;
(e) an opinion of Xxxxx & Xxxxx, L.L.P., counsel to the
Seller, which shall be in form and substance reasonably satisfactory
to the Purchaser; and
(f) such corporate documents as the Purchaser may
reasonably request relating to the existence of the Seller, the
authority of the Seller to enter into this Agreement and any other
matters relevant hereto, all in form and substance reasonably
satisfactory to the Purchaser.
2.10 Closing Deliveries by the Purchaser. At the Closing, the
Purchaser shall deliver, or cause to be delivered, to the Seller the following,
each dated as of the Closing Date (except as otherwise specified below):
(a) a duly executed copy of this Agreement;
(b) a wire transfer of immediately available funds in the
aggregate amount equal to $4,395,696;
(c) a duly executed copy of the Xxxx of Sale, Assignment
and Assumption Agreement;
(d) an opinion of Weil, Gotshal & Xxxxxx LLP, counsel to
the Purchaser, which shall be in form and substance reasonably
satisfactory to the Seller; and
(e) such corporate documents as the Seller may reasonably
request relating to the existence of the Purchaser, the authority of
the Purchaser to enter into this Agreement and any other matters
relevant hereto, all in form and substance reasonably satisfactory to
the Seller.
2.11 Post-Closing Deliveries by the Seller. Within 15 business days
of the Closing Date, the Seller shall prepare and deliver a final balance sheet,
as of the Closing Date, related to the
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Transferred Assets to the Purchaser (the "Final Balance Sheet"). The Purchaser
and Seller shall work jointly to prepare the Final Balance Sheet and the
Purchaser shall provide the Seller with access during normal business hours to
any books, records, working papers or other information reasonably necessary or
useful in preparing the Final Balance Sheet.
2.12 License to Use Certain Names. Upon the terms and conditions
hereinafter set forth, the Seller hereby grants to the Purchaser an exclusive
license to use the Trademarks set forth on Schedule 2.12 (the "Non-CFI
Trademarks") and a non-exclusive license to use the trademark
"COMMERCE:Connexion for the Internet" (the "CFI Trademark," and together with
the Non-CFI Trademarks, the "Trademarks")(the license to use the Trademarks is
herein referred to as the "Trademark License") in connection with the Owned
Software included in the Transferred Assets.
(a) The Trademark License shall be effective on the Closing
Date and shall remain in effect for six (6) months, unless earlier
terminated or extended in accordance with this Section 2.12. If, upon
the expiration of the initial six (6) month term of the Trademark
License, the Purchaser or Fundtech has filed an application for
registration of a trademark to be used in connection with the Owned
Software with the U.S. Patent and Trademark Office (a "Trademark
Application"), the Purchaser shall have the right to extend the term
of the Trademark License for an additional term to extend until three
(3) months after the final determination of the U.S. Patent and
Trademark Office with respect to a Trademark Application; provided,
however, that in no event shall the term of the Trademark License
exceed twelve (12) months after the Closing Date. The Purchaser shall
file a Trademark application as soon as reasonably practicable after
the Closing.
(b) During the term of the Trademark License, the Purchaser
may only use the Trademarks as follows: (i) in connection with the
Owned Software included in the Transferred Assets as the Trademarks
appear within such Owned Software and/or (ii) the Purchaser may refer
to the Owned Software included in the Transferred Assets as ". . .
formerly known as "Commerce:[insert name of product]." Subject to
Section 2.12(e), the Purchaser may use the Trademarks in connection
with the current version of the Owned Software and any new versions
released during the term of the Trademark License.
(c) The Purchaser acknowledges that the Trademarks and all
rights therein and the goodwill pertaining thereto belong exclusively
to the Seller or its Affiliates.
(d) The Purchaser shall not during the term of the
Trademark License, or thereafter, challenge the title or any rights
of the Seller in and to the Trademarks. The Seller, Sterling Commerce
and Sterling America agree that the Purchaser may adopt and use as a
trademark and apply to register with the U.S. Patent and Trademark
Office or the trademark office of any country, a trademark containing
the portion of any of the Trademarks following the "COMMERCE:" (e.g.,
"Banker" or "Wire") alone or with other words or symbols (other than
any trademarks, service marks or other marks previously owned by the
Seller or any of
8
its Affiliates) and the Seller or its Affiliates will not challenge
or oppose any such registration. In addition, in the event that any
trademarks owned by the Seller or any of its Affiliates, containing
the portion of the Trademarks following the "COMMERCE:" (the "Last
Portion") are cited against the Purchaser's registration of a
trademark by virtue of the fact that the trademark being registered
and a Trademark both contain the Last Portion, the Seller or such
Affiliate, as applicable, will use its commercially reasonable
efforts, at Purchaser's expense, to facilitate the registration of
its trademark. The Seller, Sterling Commerce and Sterling America
hereby agree that the fact that the trademark being registered by the
Purchaser contains the Last Portion shall not be deemed to be
commercially unreasonable by the Seller. The Seller, Sterling
Commerce and Sterling America understand that the Purchaser intends
to register trademarks including the Last Portion and hereby agrees
that Purchaser has a right to do so.
(e) During the term of the Trademark License, the Purchaser
shall provide the products and services relating to the Owned
Software included in the Transferred Assets in accordance with all
applicable federal, state and local laws, and the Purchaser's use of
the Trademarks shall not reflect adversely upon the good name of the
Seller or its Affililates or the Trademarks, and all such products
and services provided by the Purchaser shall be of high quality,
standard and skill. The Purchaser shall furnish to the Seller, free
of cost, for its prior written approval, examples of all pre-printed
items to be distributed generally to licensees or potential licensees
of the Owned Software by the Purchaser containing the Trademarks.
Such items shall be delivered to Xxxxxxx Xxxx, or her successor, at
the address for notices for the Seller set forth in Section 7.2, with
a copy to Xxxx Xxxx, or his successor at the same such address. The
Seller shall have seven business days after receipt of any such items
by the Purchaser within which to approve or reject such items, and
the approval of such items shall not unreasonably be withheld. If the
Seller does not approve or reject such items within such
seven-business day period, such items shall be deemed approved.
Notwithstanding the foregoing, the Purchaser shall not be required to
submit any marketing collateral developed by the Seller for the Owned
Software to the Seller or Sterling Commerce for approval prior to the
Purchaser's use of such marketing collateral in connection with the
Owned Software.
(f) If the Purchaser materially violates any of its
obligations under the terms of this Section 2.12, the Purchaser shall
immediately cease its improper use of the Trademarks upon the receipt
of written notice from the Seller. If such violation is, as
determined in the reasonable discretion of the Seller, not cured
within thirty (30) days after the receipt of such notice, the Seller
shall have the right to immediately terminate the Trademark License.
(g) After the expiration or termination of the Trademark
License, the Purchaser shall dispose of any printed marketing
collateral or other material that bears the Trademarks within five
business days after such termination.
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(h) Upon and after the expiration or termination of the
Trademark License, all rights granted to the Purchaser with respect
to the Trademarks shall forthwith revert to the Seller, and the
Purchaser shall not use the Trademarks or make any reference to the
Trademarks, whether direct or indirect.
(i) During the term of the Trademark License, the Purchaser
shall have the right to use the marketing collateral developed by the
Seller for the Owned Software provided, that the Purchaser only
distributes such marketing collateral together with a letter, the
text of which is in form and substance satisfactory to the Seller,
specifying that the Purchaser purchased the Owned Software from the
Seller and that the Purchaser is distributing such Owned Software.
Such letter or text shall be delivered to Xxxxxxx Xxxx, or her
successor, at the address for notices for the Seller set forth in
Section 7.2, with a copy to Xxxx Xxxx, or his successor at the same
such address. The Seller shall have seven business days after receipt
of any such letter or text by the Purchaser within which to approve
or reject such letter or text, and the approval of such letter shall
not unreasonably be withheld. If the Seller does not approve or
reject the such letter or text within such seven-business day period,
such letter or text shall be deemed approved.
(j) Notwithstanding the expiration or the termination of
the Trademark License, the Purchaser or Fundtech may use the name
"Sterling Commerce" or "COMMERCE:" or a derivative thereof, and
during the term of the Trademark License, the Seller may use the
non-CFI Trademarks, as may be required by law, as determined by the
filing party's counsel, to be included in filings under the federal
securities laws of the United States and other governmental filings,
but (as is practicable under the circumstances in the filing party's
commercially reasonable judgment) the Purchaser or Fundtech, as
applicable, shall consult with Sterling in advance of such use and in
disclosures to its auditors, attorneys, tax consultants, officers or
directors.
(k) Except as otherwise provided in this Section 2.12, the
Purchaser agrees that neither it nor any of its Affiliates shall use
or employ in any manner, directly or indirectly, the name "Sterling
Commerce," "Commerce" or any derivatives thereof or any names
deceptively similar thereto in any of its present or future business
operations or for any other purpose.
(l) Notwithstanding anything herein to the contrary, the
presence of any trademarks of the Seller or any Affiliate of the
Seller in the Owned Software licensed to licensees by the Seller or
the Purchaser prior to the expiration or termination of the Trademark
License or materials provided to licensees of the Owned Software
prior to the expiration or termination of the Trademark License shall
not be deemed an unauthorized use of the Seller's or any of its
Affiliates trademarks.
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(m) Notwithstanding anything herein to the contrary, the
marketing and licensing by the Seller of the product known as
"COMMERCE: Connexion for the Internet" under the trademark "COMMERCE:
Connexion for the Internet" and the use by end users of such product
in connection with such licenses shall not be deemed to be a breach
by the Purchaser or Fundtech of this Section 2.12.
(n) Until the earlier of (i) two and one-half (2 1/2) years
after the Closing Date or (ii) the date six months prior to the
expiration of the statutory period during which the Trademarks must
be used to prevent abandonment or cancellation of the Seller's
registration for any of the Trademarks after the termination of the
Trademark License, the Seller agrees that neither it nor any of its
Affiliates shall use the Non-CFI Trademarks for any business,
products or services without the written consent of the Purchaser,
which consent will not unreasonably be withheld.
2.13 Sublease of Real Property; Transition Services. To facilitate
the orderly transfer of the Transferred Assets from the Seller to the Purchaser,
from and after the Closing Date, the Seller will provide the Purchaser with a
certain portion of the space leased by the Seller at 00000 Xxxxxx Xxxxxxx,
Xxxxxx, Xxxxx, 00000, subject to the terms and conditions of the Sublease
Agreement to be entered into between the Seller and the Purchaser on the date
hereof. In addition, the Seller and Sterling Commerce, as applicable, agree to
provide the Purchaser with certain on-site services mutually agreeable to the
parties to facilitate the transition of the Transferred Assets from the Seller
to the Purchaser.
2.14 Contracts for which Consents not Acquired. The Seller agrees
that from and after the date hereof, it will take, or cause to be taken, all
commercially reasonable actions necessary to obtain as promptly as practicable
any required consents to the assignment of the Assumed Contracts identified on
Schedule 2.14 and any other Assumed Contract for which any required consent was
not acquired prior to the Closing. If and so long as any required consent to the
assignment or other transfer of any such Assumed Contract shall not have been
obtained, the Seller will (a) provide the Purchaser with such rights and
benefits under such Assumed Contracts as will not result in a violation or
breach of, or constitute a default under, the terms thereof, including
enforcement for the account of the Purchaser of any and all rights of the Seller
in respect of claims that the Seller may now or hereafter have against any other
party thereto, whether arising from the breach or cancellation thereof or
otherwise, (b) to the extent that such action will not result in a breach or
violation of, or default under, the terms of such Assumed Contracts, transfer to
the Purchaser all assets and rights, including all monies received in respect of
such Assumed Contracts and hold any such Assumed Contracts in trust for the use
and benefit of the Purchaser and (c) to the extent that the provisions of
clauses (a) and (b) above are not sufficient to transfer all of the benefits of
such Assumed Contracts (other than legal title), take such actions that are
reasonably required to transfer all of the benefits of such Assumed Contracts
(other than legal title) to the Purchaser, and the Purchaser agrees to perform,
at its sole cost and expense, all the obligations of the Seller arising
11
after the date of Closing under such Assumed Contracts provided that the
Purchaser receives all of the benefits of such Assumed Contracts.
2.15 EDS Agreement; Contracts to be Bifurcated.
(a) The Purchaser agrees that from and after the Closing
Date, it will take, or cause to be taken, all commercially reasonable
actions necessary to enter into a written agreement (the "EDS
Agreement") with Electronic Data Systems Corporation ("EDS") or an
Affiliate of EDS pursuant to which the Purchaser will license the
Owned Software to EDS or such Affiliate. The Seller agrees that
during the period commencing on the Closing Date and ending on the
earlier of (i) the effective date of such EDS Agreement or (ii) six
months after the Closing Date, the Seller will (a) provide the
Purchaser, solely to the extent they relate to the Owned Software,
with such rights and benefits under the Master Software License
Agreement (the "Master Agreement"), dated March 23, 1999 between EDS
and Sterling Commerce (Southern), Inc., Sterling Commerce (Mid
America), Inc., Sterling Commerce (America), Inc., Sterling Commerce
(Northern America), Inc. and Sterling Commerce B.V., as will not
result in a violation or breach of, or constitute a default under,
the terms thereof, including enforcement for the account of the
Purchaser of any and all rights of the Seller under the Master
Agreement in respect of claims that the Seller may now or hereafter
have against EDS with respect to the Owned Software, (b) to the
extent that such action will not result in a breach or violation of,
or default under, the terms of the Master Agreement, transfer to the
Purchaser all assets and rights, including all monies received in
respect of the Master Agreement and related to the Owned Software
thereunder and (c) to the extent that the provisions of clauses (a)
and (b) above are not sufficient to transfer to the Purchaser all of
the benefits of the Master Agreement to the extent such benefits
relate to the Owned Software (other than legal title), take such
actions that are reasonably required to transfer to the Purchaser all
of the benefits of the Master Agreement, to the extent such benefits
relate to the Owned Software. Provided EDS is not in breach under the
Master Agreement and provided that the Purchaser receives all of the
benefits of the Master Agreement as described above, then Purchaser
agrees to perform, at its sole cost and expense, the obligations of
the Seller to permit EDS to license to end users the Owned Software,
and to enter into related maintenance agreements. With respect to
existing and future licensed end users, the Purchaser agrees to
perform, at its sole cost and expense, the obligations and to assume
the liabilities of the Seller only to the extent they would have
arisen under an end user license substantially the same as Seller's
Standard License and Service Agreement.
(b) The Purchaser and the Seller agree that from and after
the Closing Date, they will take, or cause to be taken, all
commercially reasonable actions necessary for the Purchaser to enter
into a written agreement (each, "New License") with each of the
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customers set forth on Schedule 2.15(b) pursuant to which the
Purchaser will continue to license certain Owned Software currently
licensed to such customers by the Seller pursuant to the agreements
set forth on Schedule 2.15(b) (the "Bifurcation Agreements"). The
Seller agrees that during the period commencing on the Closing Date
and ending on the earlier of (i) the effective date of each such New
License or (ii) six months after the Closing Date, the Seller will
(a) provide the Purchaser, solely to the extent they relate to the
Owned Software, with such rights and benefits under the Bifurcation
Agreements, as will not result in a violation or breach of, or
constitute a default under, the terms thereof, including enforcement
for the account of the Purchaser of any and all rights of the Seller
under a Bifurcation Agreement in respect of claims that the Seller
may now or hereafter have against a party to such Bifurcation
Agreement with respect to the Owned Software, (b) to the extent that
such action will not result in a breach or violation of, or default
under, the terms of a Bifurcation Agreement, transfer to the
Purchaser all assets and rights, including all monies received in
respect of such Bifurcation Agreement and related to the Owned
Software thereunder and (c) to the extent that the provisions of
clauses (a) and (b) above are not sufficient to transfer to the
Purchaser all of the benefits of the Bifurcation Agreements to the
extent such benefits relate to the Owned Software (other than legal
title), take such actions that are reasonably required to transfer to
the Purchaser all of the benefits of each Bifurcation Agreement, to
the extent such benefits relate to the Owned Software (other than
legal title). Purchaser agrees to perform, at its sole cost and
expense, the obligations of the Seller to licensed end users under
the Bifurcation Agreements. With respect to such licensed end users,
Purchaser only assumes its obligations to the extent they would have
arisen under an end user license substantially the same as Seller's
Standard License and Service Agreement.
2.16 Bulk Sales Laws. The parties hereby waive compliance with any
applicable bulk sales laws in connection with the transfer of the Transferred
Assets. The Seller hereby agrees to indemnify, defend, and hold the Purchaser
harmless from and against any and all demands, claims, actions, causes of
action, losses, damages, liabilities, costs and expenses (including reasonable
fees and disbursements of counsel) arising out of, related to and in connection
with any failure to comply with applicable bulk sales laws in connection with
the transfer of the Transferred Assets.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLER, STERLING COMMERCE AND STERLING AMERICA
Each of the Seller, Sterling Commerce (solely with respect to Section 3.2,
3.4(a) and 3.14) and Sterling America (solely with respect 3.1, 3.2 and 3.4)
hereby represents and warrants to the Purchaser and Fundtech as follows:
3.1 Organization, Standing, etc. of the Seller and Sterling America.
The Seller is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, has all requisite corporate
power and authority to own, or with respect to the Transferred Assets specified
in Schedule 2.2(c)(ii) to lease, the Transferred Assets. Sterling America is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to execute and deliver, and perform its obligations under, this
Agreement and to consummate the transactions contemplated hereby.
3.2 Authorization and Execution. Each of the Seller, Sterling
Commerce and Sterling America has all requisite corporate power and authority to
enter into this Agreement and the Seller has all requisite corporate power and
authority to sell, convey, assign, transfer and deliver the Transferred Assets
as provided in this Agreement. The execution, delivery and performance of this
Agreement by the Seller, Sterling Commerce and Sterling America and the
consummation by each of them of the transactions applicable to each of them
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Seller, Sterling Commerce and Sterling
America. This Agreement has been duly and validly executed and delivered by the
Seller, Sterling Commerce and Sterling America and constitutes a legal, valid
and binding agreement of the Seller, Sterling Commerce and Sterling America
enforceable against each of them in accordance with its terms except to the
extent such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors' rights.
3.3 No Consents. Except as set forth in Section 3.3 of the Disclosure
Schedule, the execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby will not
require any Consent or other action by or in respect of, or declaration or
filing with, any Tribunal or any other Person.
3.4 Absence of Conflicts. The execution and delivery by the Seller of
this Agreement, the performance by it of its obligations hereunder and the
consummation by the Seller of the transactions contemplated hereby will not (a)
conflict with or result in any violation of any provision of the Seller's
charter or bylaws, each as amended to date, (b) with or without notice or the
lapse of time or both, conflict with, result in any violation or breach of,
constitute a default under, give rise to any right of termination or
acceleration pursuant to, result in any increased or additional
14
payments pursuant to, or result in being declared void or voidable, or result in
any change or amendment of, any term or provision of any note, bond, mortgage,
indenture, lease, license, Contract or other instrument to which the Seller is a
party or by which any of the Transferred Assets are or may be bound, (c) violate
any Legal Requirement applicable to the Seller or the Transferred Assets or (d)
result in the creation of, or impose on the Seller the obligation to create, any
Lien upon any of the Transferred Assets other than such minor imperfections of
title and Liens as do not materially detract from or interfere with the use of
the Transferred Assets or materially detract from the value thereof. The
execution and delivery by (a) Sterling America of this Agreement and the
performance by it of its obligations hereunder will not (i) conflict with or
result in any violation of any provision of its charter or bylaws, each as
amended to date or (ii) violate any Legal Requirement applicable to Sterling
America and (b) Sterling Commerce of this Agreement and the performance by it of
its obligations hereunder will not conflict with or result in any violation of
any provision of its charter or bylaws, each as amended to date.
3.5 Title to Assets. Except as set forth in Section 3.5 of the
Disclosure Schedule, the Seller has good and marketable title to all of the
Transferred Assets free and clear of all Liens, title imperfections, claims,
charges, levies or assessments of any kind or character, other than (i) Liens
for Taxes and other governmental charges or levies which are not yet due and
payable, (ii) mechanics', workmen's, warehousemen's, vendors' or carriers' Liens
arising in the ordinary course of business and securing sums which are not yet
due and payable and (iii) such minor imperfections of title and Liens as do not
materially detract from or interfere with the use of the Transferred Assets or
materially detract from the value thereof (any Liens referred to in clauses (i),
(ii) or (iii) above being hereinafter collectively referred to as "Permitted
Encumbrances"). Upon the sale, assignment, transfer and delivery of the
Transferred Assets in accordance with this Agreement, the Purchaser will acquire
good and marketable title thereto, free and clear of all Liens, title
imperfections, claims, charges, levies or assessments of any kind or character,
other than Permitted Encumbrances.
3.6 Effect of Transfer. The consummation of the transactions
contemplated by this Agreement will result in the Purchaser acquiring all of the
Seller's right, title and interest in and to the Transferred Assets and the
consummation of such transactions will not result in the imposition of any
debts, liabilities or obligations on the Purchaser other than the Assumed
Liabilities, and the obligations of the Purchaser under this Agreement and the
Xxxx of Sale, Assignment and Assumption Agreement.
3.7 Contracts.
(a) Except as set forth in Section 3.7(a) of the Disclosure
Schedule, each Assumed Contract is in full force and effect, and
constitutes a legal, valid and binding obligation of the Seller and
is enforceable against the Seller in accordance with its terms. The
Seller is not in breach or default under any Assumed Contract. Except
as set forth in Section 3.7(a) of the Disclosure Schedule, true and
correct copies of each Assumed Contract has been delivered to the
Purchaser.
15
(b) Except as set forth in Section 3.7(b) of the Disclosure
Schedule, each Assumed Contract is in full force and effect, and to
the knowledge of the Seller, each Assumed Contract constitutes a
legal, valid and binding obligation of the other parties thereto, and
is enforceable against each of them in accordance with its terms. To
the knowledge of the Seller, no other party to any Assumed Contract
is in breach or default thereunder, no written notice of default,
defense, offset, counterclaim, termination, cancellation or
acceleration has been received by any party thereto in connection
therewith. No event has occurred that has not been cured and that
would constitute a breach, violation or default or give rise to any
right of offset, counterclaim, termination, cancellation or
acceleration thereunder (with or without notice or lapse of time or
both).
(c) Set forth in Section 3.7(c) of the Disclosure Schedule
is a true and correct list of all Contracts currently in effect for
maintenance services and all current Third Party Contracts entered
into in the ordinary course of the Cash Management Business.
(d) Except as set forth in Section 3.7(d) of the Disclosure
Schedule (and other than the Excluded Assets), the Seller is not a
party to any transaction with an Affiliate of the Seller pursuant to
which an Affiliate of the Seller provides services or other benefits
to the Seller that (i) are essential to the operation of the Cash
Management Business as it is presently conducted or (ii) that
produces revenue for the Cash Management Business.
3.8 Accounts Receivable. All Accounts Receivable existing as of the
date hereof arose out of bona fide business transactions in the ordinary course
of business consistent with past practices (including regular credit practices).
To the knowledge of Seller, each Account Receivable constitutes a legal, valid
and binding account receivable (subject to potential customer cancellations),
and no Account Receivable is subject to any known disputes, defenses,
assignments, restrictions, counterclaims or setoffs by, any rebates, discounts
or allowances to, or any returns from, any customer. Section 3.8 of the
Disclosure Schedule sets forth a true and complete copy of the Seller's accounts
receivable aging report, dated August 31, 1999.
3.9 Intellectual Property.
(a) Except as otherwise indicated therein, Section 3.9(a)
of the Disclosure Schedule sets forth a true and complete list of all
items of Software and Intellectual Property owned by the Seller and
necessary for operation of the Cash Management Business as it is
presently conducted (collectively, the "Owned IP"). Section 3.9(a) of
the Disclosure Schedule includes, without limitation, a complete list
of all United States and foreign patents, patent applications,
registered trademarks, registered copyrights, registered trade names,
registered service marks and any other registered Intellectual
Property rights included in the Transferred Assets, and any
applications therefor ("Registered Owned IP") and specifies, where
applicable, the jurisdictions in which each item of Registered Owned
IP has been issued or
16
registered or in which an application for such issuance and
registration has been filed, including the respective registration or
application numbers and dates and the names of all registered owners.
(b) Section 3.9(b) of the Disclosure Schedule sets forth a
true and complete list of all items of Software and Intellectual
Property (other than Commercial PC Software) licensed by the Seller
(including, among other things, reference to the agreement from which
such license derives) and necessary for the operation of the Cash
Management Business (collectively, the "Licensed IP") as it is
presently conducted. The right of the Seller to use, distribute,
market and sell the Licensed IP in connection with the Transferred
Assets is evidenced by the license agreements included within the
Assumed Contracts. The Seller has delivered to the Purchaser correct
and complete copies of all license agreements for the Licensed IP.
(c) The development, license, use, sale, distribution and
modification of the Owned IP by the Seller in connection with the
Cash Management Business has not infringed any presently existing
United States patent or any other General IP rights of any other
Person or constituted an unlawful disclosure, use or misappropriation
of the rights of any other Person and the Seller has not received
notice of any such infringement, disclosure, use or misappropriation.
The Seller is not in violation of, or in default under, any Contract
or other Legal Requirement relating to the Intellectual Property
included in the Transferred Assets.
(d) Except as set forth in Section 3.9(d) of the Disclosure
Schedule, the Seller has not received notice of and there is no
pending or, to the knowledge of the Seller, threatened claims or
actions affecting the Software (and related files) or Intellectual
Property included in the Transferred Assets. None of the Software or
Intellectual Property included in the Transferred Assets is subject
to any outstanding decree, order, judgment or stipulation to which
the Seller is a party restricting in any respect the use, marketing,
distribution, sale manufacture, exploitation or licensing thereof by
the Seller.
(e) Except for the Assumed Contracts or as otherwise set
forth in Section 3.9(e) of the Disclosure Schedule, the Seller has
not granted or obligated itself to grant to any Person any license,
option or other right to develop, license, sell, distribute or modify
(including any rights under any source code escrow agreement) in any
manner, in whole or in part, any of the Owned IP.
(f) Except for the Assumed Contracts or as otherwise set
forth in Section 3.9(f) of the Disclosure Schedule, the Seller has
not entered into and is not subject to any agreement or undertaking
restricting in any respect the use, marketing, distribution, sale,
manufacture, exploitation or licensing of the Owned IP.
17
(g) Except as set forth in Section 3.9(j) of the Disclosure
Schedule, the most recently distributed commercial versions of the
Identified Software distributed to customers under the Assumed
Contracts applicable to such customers (excluding any computer
Software in the process of development and any versions distributed
as beta, test or evaluation releases) (the "Commercial Owned
Software") conforms in all material respects to the documentation and
functional and performance specifications accompanying such
Commercial Owned Software, when such Commercial Owned Software is
used in its unmodified form, from undamaged media, and in accordance
with the instructions and specifications specified in the
accompanying documentation.
(h) The Seller has not intentionally inserted into the
Identified Software and to the knowledge of the Seller, the
Identified Software does not contain any lock, timer, copy protection
feature, CPU serial number reference, disability virus, self help
code, program dependency feature or other device or software routine
(including any "back door," "time bomb," "Trojan horse," "worm,"
"drop dead device," "virus" or other computer software routines) or
hardware components designed to permit unauthorized access to,
disable, erase or otherwise harm or interrupt the continued usage of
the Identified Software.
(i) To the knowledge of the Seller, the Owned IP has not
been infringed by any Person, except as set forth on Section 3.9(i)
of the Disclosure Schedule.
(j) Except as set forth in Section 3.9(j) of the Disclosure
Schedule and only to the extent that (i) the versions of the Owned
Software identified in Section 3.9(j)(i) of the Disclosure Schedule
(the "Scheduled Software") have not been modified (excluding
modifications made by or on behalf of the Seller) and provided that
the Scheduled Software would have been Y2K Compliant but for such
modifications or (ii) the Scheduled Software is not used in
connection with other products that are not provided by the Seller or
by the Purchaser pursuant to Section 5.1 and that are not Y2K
Compliant and provided that the Scheduled Software would have been
Y2K Compliant but for the use with such products, the Scheduled
Software, is Y2K Compliant. As used xxxxxx, "X0X Compliant" means
that (i) the subject Software is capable, in all material respects of
recording, storing, processing, and presenting calendar dates falling
on or after January 1, 2000 in the same manner and with substantially
the same functionality as such subject Software records, stores,
processes and presents calendar dates falling on or before December
31, 1999, (ii) the subject Software accepts date data from other
systems and sources (whether in two digit or four digit format) and
properly recognize, calculate, sort, store, output, sequence and
otherwise process such data in a manner that eliminates any century
ambiguity and (iii) the subject Software will properly recognize,
calculate, sort, store, output, sequence and otherwise process date
data for February 29, 2000 and all subsequent leap years.
3.10 Litigation. Except as set forth on Section 3.10 of the
Disclosure Schedule, the Seller has not received notice of any claim and there
is no pending action, suit, inquiry, formal
18
or informal complaint,demands, investigation or other proceeding involving or,
to the knowledge of the Seller, affecting the Transferred Assets.
3.11 Customers. Section 3.11 of the Disclosure Schedule sets forth
each customer or group of affiliated customers accounting for 2 1/2% or more of
the revenues received by the Seller with respect to the Transferred Assets
during the 12-month period ended July 31, 1999, and the six-month period ended
July 31, 1999.
3.12 Completeness of Assets. Except as set forth in Section 3.12 of
the Disclosure Schedule, the Software (and related files) and the Intellectual
Property included in the Transferred Assets and the Assumed Contracts included
in the Transferred Assets constitute all of the Software (and related files) and
Intellectual Property and Contracts (other than the Excluded Assets and
Commercial PC Software) necessary to the operation of the Cash Management
Business as it is presently conducted. The tangible assets included in the
Transferred Assets are generally fit for the purposes for which they are
presently being used and are in good operating condition and repair, ordinary
wear and tear excepted.
3.13 Financial Statements. The Seller has furnished the Purchaser
with true and complete copies of the Seller's Financial Statements. Such
Financial Statements were prepared in accordance with GAAP, consistently applied
(except as may be indicated therein or in the notes thereto), are in accordance
with and based upon the books and records of the Seller, contain figures that
arose out of bona fide licenses, sales and deliveries of goods, performance of
services or other bona fide business transactions and are true and correct in
all material respects, except for any adjustments described therein.
3.14 Taxes Sterling Commerce has timely filed or will file in a
timely manner with the appropriate taxing authority all Tax returns required to
be filed on or prior to the Closing Date which relate to Taxes attributable to
the Transferred Assets which could result in a claim or lien against the
Transferred Assets, and Sterling Commerce has paid or will pay on the applicable
due date all Taxes reflected on any such Tax return. There are no claims for
unpaid Taxes attributable to the Transferred Assets which could result in a
claim or lien against the Transferred Assets.
3.15 Conduct of Business. Except as set forth in Section 3.15 of the
Disclosure Schedule, since June 30, 1999, the Cash Management Business has been
conducted in the ordinary course consistent with past practice only, and there
has not been any material adverse change in the business, operations, financial
condition, results of operations, properties, assets or liabilities of the Cash
Management Business. The Purchaser acknowledges that the transactions
contemplated by this Agreement are not in the ordinary course of the Cash
Management Business.
3.16 Compliance with Law; Permits. The operation of the Cash
Management Business, the conduct of the Cash Management Business as and where
such business has been or presently is conducted, and the ownership, possession
and use of the Transferred Assets used in or
19
for the Cash Management Business comply with all Legal Requirements and Orders
of any Tribunal and is not delinquent with respect to any report required to be
filed with any Tribunal applicable to the Cash Management Business except where
the failure to comply would not have, and could not reasonably be expected to
have, a Material Adverse Effect. Seller has obtained and holds all permits
required for the lawful operation of the businesses as and where such business
is presently conducted and for ownership of the Transferred Assets. The Seller
has not received notice of any violation of laws or any notice of any violation,
suspension, cancellation, or termination of any permit. No application, notice,
order, registration, qualification, waiver, consent, approval or other action is
required to be filed, given, obtained or taken by virtue of the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby in order to avoid (x) the loss of any permit or
other governmental authorization or (y) the violation or breach of, or the
default under, any regulation, order, decree or award of any Tribunal.
3.17 Employees; Employee Benefit Plans.
(a) There are no pending, or to the knowledge of the
Seller, threatened, and the Seller has not received notice of any,
investigations by any governmental agency, termination proceedings or
other claims (except for claims for benefits payable in the normal
operation of the Seller's employee benefit plans), suits or
proceedings against or involving the Seller's employee benefit plans
or asserting any rights or claims to benefits under the Seller's
employee benefit plans that would give rise to any liability on the
part of the Purchaser.
(b) None of the current or former employees of the Seller
in the Cash Management Business (the "Employees") is or was
represented in his or her capacity as an Employee by any labor
organization, nor has the Seller recognized any labor organization
nor has any labor organization been elected as the collective
bargaining agent of any Employees, nor has the Seller entered into
any collective bargaining agreement or union contract recognizing any
labor organization as the collective bargaining agent of any
Employees. There is no union organization activity involving any of
the Employees pending, or, to the Seller's knowledge, threatened, nor
has there ever been union representation involving any of the
Employees.
3.18 No Broker's or Finder's Fees. No agent, broker, investment
banker, Person or firm acting on behalf of the Seller or any of its Affiliates
or under the authority of any of them is or will be entitled to any broker's or
finder's fee or any other commission or similar fee directly or indirectly in
connection with any of the transactions contemplated in this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser and Fundtech, jointly and severally, represent and
warrant to the Seller as follows:
4.1 Organization, Standing, etc. of the Purchaser and Fundtech.
(a) The Purchaser is a limited liability company duly
organized, validly existing, and in good standing under the laws of
the State of Delaware. The Purchaser has all requisite limited
liability company power and authority to execute and deliver, and
perform its obligations under, this Agreement and to consummate the
transactions contemplated hereby.
(b) Fundtech is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware. Fundtech has all requisite corporate power and authority to
execute and deliver, and perform its obligations under, this
Agreement and to consummate the transactions contemplated hereby.
4.2 Authorization and Execution. The execution, delivery and
performance by the Purchaser and Fundtech of this Agreement and the consummation
by it of the transactions contemplated hereby has been duly and validly
authorized by all necessary limited liability company or corporate action, as
the case may be, on the part of the Purchaser or Fundtech, as applicable. This
Agreement has been duly and validly executed and delivered by each of the
Purchaser and Fundtech. This Agreement is a legal, valid and binding obligation
of the Purchaser and Fundtech enforceable against it in accordance with its
terms except to the extent such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights.
4.3 No Consents. The execution and delivery by the Purchaser and
Fundtech of this Agreement and the consummation of the transactions contemplated
hereby will not require any Consent or other action or exemption by or in
respect of, or declaration or filing with, any Tribunal or any other Person.
4.4 Absence of Conflicts. The execution and delivery by the Purchaser
and Fundtech of this Agreement, the performance by them of their obligations
hereunder and the consummation of the transactions contemplated hereby will not
(a) conflict with or result in any violation of any provision of the constituent
documents of the Purchaser or Fundtech, each as amended to date, (b) conflict
with, result in any violation or breach of, constitute a default under, give
rise to any right of termination or acceleration (with or without notice or the
lapse of time or both) pursuant to, or result in being declared void or
voidable, any term or provision of any note,
00
xxxx, xxxxxxxx, xxxxxxxxx, lease, license, Contract or other instrument to which
the Purchaser or Fundtech is a party or by which any of its properties or assets
are or may be bound or (c) violate any Legal Requirement applicable to the
Purchaser or Fundtech or its respective properties or assets.
4.5 Litigation. There is no Proceeding that is pending or, to the
knowledge of the Purchaser or Fundtech, threatened involving the Purchaser or
Fundtech that could adversely affect or prevent or delay the consummation of the
transactions contemplated by this Agreement.
4.6 No Broker's or Finder's Fees. No agent, broker, investment
banker, Person or firm acting on behalf of the Purchaser or any of its
Affiliates or under the authority of any of them is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly in connection with any of the transactions contemplated in this
Agreement.
ARTICLE V COVENANTS
5.1 Customer Survey; Refresh. The Purchaser hereby agrees that as
soon as practicable after the Closing Date, but in any event no later than
October 31, 1999, it will deliver to all end users of the Owned Software
identified in Schedule 2.2(b)(i) and Schedule 2.2(b)(ii), at the address for
such end users provided by the Seller, a copy of the most recent version
developed by the Seller of the Owned Software (the "Refresh"), together with all
related documentation and a letter, reasonably acceptable to the Seller,
describing the purpose of the delivery. The Seller and the Purchaser jointly
agree to complete, at the Seller's reasonable expense, the survey of all end
users of the Owned Software initiated by the Seller prior to the Closing to
determine which version of the Owned Software each such end user has received
and installed prior to the Closing Date. The Purchaser agrees that within thirty
(30) days after the Closing Date, it will conduct, at the Seller's reasonable
expense, a follow-up survey of all such end users to determine if such end users
have installed the Refresh. The Purchaser hereby agrees that, upon the
reasonable request of the Seller, the Seller may participate in the resolution
of any issues that may be identified as a result of such surveys.
5.2 Expenses. Subject to Article VI, the Seller and the Purchaser
shall bear their respective expenses incurred in connection with the
negotiation, preparation, execution and performance of this Agreement and the
closing of the transactions contemplated hereby, including all fees and expenses
of agents, representatives, counsel, actuaries and accountants.
5.3 Accounts Receivable. The Seller hereby agrees that, upon the
reasonable request of the Purchaser, it will sign a form of notification for
delivery by the Purchaser to all obligors in respect of the then outstanding
Accounts Receivable included in the Transferred Assets notifying them of the
assignment pursuant to this Agreement of such Accounts Receivable and that
payment in respect of such Accounts Receivable should be made directly to the
Purchaser.
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The Seller and the Purchaser each agree that from and after the date hereof,
they will hold and will promptly transfer and deliver to the appropriate party,
from time to time as and when received by them, any cash, checks with
appropriate endorsements (using their best efforts not to convert such checks
into cash), or other property that they may receive on or after the date hereof
which properly belongs to the other party, and will account to the appropriate
party for all such receipts.
5.4 Preservation of Books and Records. Until the occurrence of the
first to occur of (i) the expiration of the statute of limitations applicable to
the Purchaser or the Seller (as the case may be) with respect to its federal
income taxes for 1999 or (ii) the completion by the Internal Revenue Service of
a first audit of the tax return (whether or not consolidated) of the Purchaser
or the Seller (as the case may be) for 1999, each of the Purchaser and the
Seller will preserve and maintain the corporate, accounting, auditing, tax and
other books and records relating to the Transferred Assets that are held by it
or transferred to it on the date hereof and will make such books and records
available to each other and provide such personnel as shall be reasonably
necessary to access such information, upon reasonable notice and at reasonable
times, it being understood that the Purchaser and the Seller shall be entitled
to make copies of any such books and records as they shall deem reasonably
necessary for purposes of making the same available to appropriate tax
authorities or for other proper purposes.
5.5 Allocation of Purchase Price. The parties agree to use reasonable
efforts to allocate the consideration paid for the Transferred Assets among the
Transferred Assets as soon as practicable after the Closing. The parties agree
to make such allocation consistent with the principles of Section 1060 of the
Code, to be bound for all purposes by such allocation and to execute and file an
IRS Form 8594 and any required exhibits thereto (or other form required pursuant
to Section 1060 of the Code, or other applicable tax laws) consistent therewith.
5.6 Taxes.
(a) The Purchaser shall pay any and all Taxes payable as a
result of the sale, transfer, assignment and delivery of the
Transferred Assets pursuant to this Agreement; provided, however,
that the Purchaser shall not be liable for any Taxes which are
computed or based upon the income of the Seller.
(b) In addition, ad valorem taxes and personal property
taxes on the Transferred Assets will be determined for 1999 and
prorated between the Seller and the Purchaser as of the Closing Date.
Utility charges relating to the Transferred Assets will be prorated
between the Seller and the Purchaser as of the Closing Date. To the
extent practicable, all such prorations and payments will be made on
the Closing Date.
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5.7 Certain Employment Matters.
(a) The Purchaser will be allowed to interview, extend
offers of employment to and solicit the employment of the persons
identified on Schedule 5.7(a) (the "Scheduled Employees"). The
Purchaser will determine, in its sole discretion, which Scheduled
Employees will be extended offers of employment. The Seller will
cooperate with the efforts of the Purchaser referred to in this
Section 5.7(a) and shall not discourage any Scheduled Employee from
accepting any such offer of employment. The Seller agrees to waive
any non-compete, non-solicitation, confidentiality or similar
provisions with respect to all Scheduled Employees, to the extent
necessary for such Scheduled Employees to be employed by the
Purchaser.
(b) Except as provided in Section 5.7(a) and for the
persons identified on Schedule 5.7(b) and unless otherwise consented
to, in writing, by the Seller, which consent will not unreasonably be
withheld, during the one-year period commencing on the Closing Date,
neither the Purchaser nor Fundtech nor any of their Affiliates shall,
directly or indirectly, knowingly solicit for employment, offer
employment to or employ or retain (whether as an employee, officer,
agent, consultant, advisor or in any other capacity) any employee of
the Banking Systems division of the Seller. In addition, during the
one-year period commencing on the Closing Date, neither the Purchaser
nor Fundtech shall extend any further offers or counteroffers to the
persons identified on Schedule 5.7(b).
(c) Except for the persons identified on Schedule 5.7(c)
and unless otherwise consented to, in writing, by the Purchaser,
which consent will not unreasonably be withheld, during the one-year
period commencing on the Closing Date, (i) neither Sterling Commerce
nor any of its Affiliates shall, directly or indirectly, knowingly
solicit for employment, offer employment to or employ or retain
(whether as an employee, officer, agent, consultant, advisor or in
any other capacity) any Scheduled Employee and (ii) the Banking
Systems division of the Seller will not, directly or indirectly,
knowingly solicit for employment, offer employment to or employ or
retain (whether as an employee, officer, agent, consultant, advisor
or in any other capacity) any person employed by the Purchaser in
Dallas, Texas in the continuation of the Cash Management Business. In
addition, during the one-year period commencing on the Closing Date,
the Seller shall not extend any further offers or counteroffers to
the persons identified on Schedule 5.7(c).
(d) The Purchaser will offer all Scheduled Employees who
accept its offer of employment a group health plan, as defined in
section 607(1) of ERISA, which is substantially similar to that
currently provided by the Purchaser to its own employees.
(e) For purposes of assuming any obligations, resulting
from, in connection with or arising out of the Seller's conduct of
the Cash Management Business, the
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Seller acknowledges that neither the Purchaser nor Fundtech intends
to be a successor employer with respect to the Cash Management
Business.
(f) Neither the Purchaser nor Fundtech shall assume any
liability, and the Seller and/or Sterling Commerce, as applicable,
shall remain liable with respect to (i) any employee benefit plan
arrangements, plans, programs or agreements, including any individual
plans, programs or agreements maintained by the Seller or its
Affiliates (ii) the employment or termination of employment,
including a constructive termination, by the Seller of any individual
(including but not limited to, any Scheduled Employee) attributable
to any actions or inactions of the Seller prior to the Closing Date;
(iii) Worker Adjustment and Retraining Notification Act or any other
statutory or common law or civil law notice, severance pay,
termination pay in lieu thereof or damages arising as a result of the
termination or dismissal (including constructive termination or
dismissal), by the Seller of any or all of its employees (whether or
not a Transferred Employee) on or prior to the Closing Date, (iv) any
claims by any employee of the Seller (or any dependent thereof) for
workers compensation and/or related medical benefits incurred after
the Closing which relate to any injury or illness originating prior
to the Closing; and (v) the Purchaser or Fundtech being deemed, for
purposes of assuming any of the Seller's obligations arising out of,
resulting from, or in connection with the Seller's conduct of the
Cash Management Business, a successor employer with respect to the
Cash Management Business.
5.8 Non-Competition.
(a) In partial consideration of this Agreement, for a
period of one year after the Closing Date, neither Sterling Commerce
nor any of its direct or indirect subsidiaries (whether in existence
as of the Closing Date or subsequently formed or acquired prior to
the one-year anniversary of the Closing Date) will engage, directly
or indirectly, in a Competing Business (as hereinafter defined) in
the U.S. or Canada; provided, however, that neither Sterling Commerce
nor any such subsidiary shall be deemed to be engaged in a Competing
Business by virtue of its ownership of 10% or less of the outstanding
stock of any publicly traded corporation that is engaged in a
Competing Business; and provided further that nothing in this
Agreement shall be deemed to limit Sterling Commerce's or any such
subsidiary's ability to conduct or continue to conduct any business
related to (i) any products (other than the Owned Software and the
product known as "Connexion for the Internet") or services presently
offered by Sterling Commerce or any such subsidiary or (ii) any
products presently under development by Sterling Commerce or any such
subsidiary. As used herein, "Competing Business" shall mean the
licensing of electronic cash management software with functionality
equivalent to that of the Owned Software. If Sterling Commerce or any
such subsidiary violates this Section 5.8(a), then they shall pay any
and all reasonable attorneys' fees, costs and expenses incurred by
Fundtech and the Purchaser to enforce this provision, including any
appeals.
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(b) The Seller and Sterling Commerce agree that the
restrictions set forth in this Section 5.8 are reasonable to protect
the Purchaser's legitimate business interests. If the scope of any of
the covenants set forth in this Section 5.8 is deemed to be too broad
in any court proceeding, the court may reduce such scope to that
which it deems reasonable under the circumstances. If any part of
this Section 5.8 is held to be unenforceable for any reason, this
covenant shall be interpreted in a manner that will render it
enforceable. The parties hereto agree and acknowledge that the
Purchaser does not have any adequate remedy at law for the breach or
threatened breach by the Seller or Sterling Commerce of the
agreements set forth in this Section 5.8 and, accordingly, the Seller
and Sterling Commerce further agree that the Purchaser may, in
addition to the other remedies which may be available to it
hereunder, file a suit in equity in a court to immediately enjoin
(including, without limitation, by seeking a temporary restraining
order, preliminary injunction, and permanent injunction against) the
Seller/or Sterling Commerce from such breach or threatened breach and
the Purchaser shall not have to post a bond. The provisions of this
Section 5.8 are intended to be divisible. The Seller and Sterling
Commerce acknowledge and agree that the noncompetition provisions are
material inducements to the Purchaser entering into this Agreement
and survive the execution of this Agreement.
5.9 Letters to Customers. As soon as practicable after the Closing,
the Purchaser and Seller shall agree to the text of a letter from the Purchaser
and the Seller jointly, to be sent to the current customers of the Seller who
are parties to any of the Assumed Contracts, regarding the consummation of the
transactions contemplated by this Agreement.
5.10 Sales Commissions. From and after the Closing, the Seller shall
pay any and all sales commissions payable on revenue recognized by the Seller
with respect to the Transferred Assets and the Purchaser shall pay any and all
sales commissions payable on revenue recognized by the Purchaser with respect to
the Transferred Assets.
5.11 Obligations Secured by Permitted Encumbrances.. Within ninety
days after a request from the Purchaser or after notice of an underlying claim
with respect thereto, the Seller shall secure the discharge in full of any
Permitted Encumbrance.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND AGREEMENTS; INDEMNIFICATION;
REMEDIES AND LIABILITIES
6.1 Survival of Representations, Warranties and Agreements. All
representations and warranties contained in this Agreement or in any
certificate, document or instrument delivered pursuant to this Agreement shall
survive the Closing, the consummation of the transactions
26
contemplated hereby and any investigation made at any time by or on behalf of
any of the parties and shall continue in full force and effect for the following
periods: (a) until the expiration of all applicable statutes of limitations in
the case of the representations and warranties of (i) the Seller set forth in
Sections 3.2, 3.5 and 3.14 and (ii) the Purchaser and Fundtech set forth in
Section 4.2, and (b) until the one-year anniversary of the Closing Date in the
case of all other representations and warranties; provided, however, that this
provision shall not impair, diminish, prevent, bar or in any way limit a party's
right or ability to assert, allege, or interpose any defenses based, in whole or
in part, on the representations and warranties contained in this Agreement or in
any certificate, document or instruments delivered pursuant to this Agreement
and any agreement entered into between the parties on or after the Closing Date.
The date of the expiration of the applicable time period referenced above for
any particular representation and warranty is hereinafter referred to as the
"Expiration Date." Each covenant and agreement set forth in this Agreement to be
performed after the Closing will survive the Closing Date in accordance with its
terms.
6.2 Indemnification of the Purchaser and Fundtech. From and after the
Closing Date, the Seller and Sterling America, jointly and severally, shall
indemnify, defend and hold harmless the Purchaser and Fundtech and their
respective directors, officers, employees, agents and Affiliates (collectively
(including the Purchaser), the "Purchaser Indemnitees") against any and all
damages, losses, liabilities, settlements, costs or expenses (including legal
and other expenses reasonably incurred in investigating and defending against
the same) (collectively, "Liabilities") incurred by the Purchaser or Fundtech
arising out of, resulting from or in connection with:
(a) the breach by the Seller of any representation or
warranty of the Seller contained in this Agreement;
(b) any breach by the Seller of any agreement or covenant
of the Seller contained in this Agreement;
(c) the assertion by a party to any of the Seller Contracts
and Specified Contracts of any claim during the one-year period
commencing on the date of the execution of the applicable Seller
Contract or Specified Contract for a refund under the applicable
Assumed Contract based upon the failure of the Owned Software to
operate in the manner described in the applicable documentation;
provided, that to the extent that a Claim results from, arises out of
or in connection with the Software of a Third Party embedded in the
Owned Software, the Seller will be subrogated to any of the rights of
the Purchaser against such Third Party, to the extent that the claim
relates to the Owned Software, as long as such subrogation would not
cause a breach by the Purchaser of the license for such Third Party
Software.
(d) the assertion against, imposition upon or incurrence by
any such Purchaser Indemnitee of any Retained Liability;
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(e) the assertion by a party to any of the Seller Contracts
or Specified Contracts, or its successor or assignee, during the
one-year period commencing on the Closing Date, of any claim, demand
or cause of action, to the extent that such claim, demand or cause of
action arises in connection with, is related to or is based upon, in
whole or in part, an allegation that any unmodified version of the
Owned Software (excluding the items described in Section 2.2(a)(iv)
but including the version of the Owned Software distributed by the
Purchaser pursuant to Section 5.1) is not Y2K Compliant; provided,
that to the extent that a claim, demand or cause of action with
respect to whether the Owned Software is Y2K Compliant results from,
arises out of or in connection with the Software of a Third Party
embedded in the Owned Software, the Seller will be subrogated to any
of the rights of the Purchaser against such Third Party, to the
extent that (i) the claim relates to the Owned Software and (ii) such
subrogation does not adversely prejudice the Purchaser's rights with
respect to the Third Party and as long as such subrogation would not
cause a breach by the Purchaser of the license for such Third Party
Software.
(f) the imposition upon or incurrence by any such Purchaser
Indemnitee of any Liabilities arising from, in connection with or
related to a claim by a licensee of the Owned Software under a
Specified Contract, during the period commencing on the Closing Date
and ending on the date twelve (12) months after the termination of
the current annual maintenance term for the applicable Specified
Contract, solely to the extent that such Liabilities exceed the
amount of Liabilities that would be payable if the applicable
Specified Contract were substantially the same as the Seller's
Standard License and Service Agreement.
(g) the assertion against, imposition upon or incurrence by
any such Purchaser Indemnitee of any Liability arising from, in
connection with or related to the financing statement attached hereto
as Exhibit D.
The foregoing obligations of the Seller with respect to any breach by the Seller
of any particular representation or warranty made by the Seller shall terminate
on the Expiration Date applicable to such representation and warranty (except
that such obligations shall thereafter continue in full force and effect with
respect to any Claim of which the Seller has received written notice prior to
the Expiration Date). The obligations of the Seller under this Section 6.2 shall
only become operative and effective if and when the aggregate of all Liabilities
for which any Purchaser Indemnitees seeking indemnification under Section 6.2
exceeds $50,000 (it being understood that all such Liabilities shall accumulate
until such time as they exceed $50,000, at which time the Seller shall be
obligated to indemnify, hold harmless and defend any Purchaser Indemnitees
seeking indemnification under this Section 6.2 for the full amount of such
Liabilities, including the first $50,000). If the Seller, Sterling Commerce or
Sterling America shall at any time be liable to the Purchaser Indemnitees
pursuant to this Agreement (including this Section 6.2), notwithstanding
anything to the contrary contained herein, the cumulative amount of all
Liabilities recoverable against the Seller, Sterling Commerce, Sterling America
and their Affiliates shall not exceed, in the
28
aggregate, $4,395,696. Such maximum liability of the Seller, Sterling Commerce,
Sterling America and their Affiliates shall be reduced to the extent of any
insurance proceeds received by any of the Purchaser Indemnitees for such
Liabilities from the Seller, Sterling Commerce, Sterling America or any of its
Affiliates or any of their respective insurance carriers. The Seller, Sterling
Commerce or Sterling America shall have no liability or obligation under this
Section 6.2 to the extent any Claim by a Purchaser Indemnitee is based upon (i)
the use of any Software (and related files) and Intellectual Property
transferred to the Purchaser pursuant to this Agreement in connection with
programs not supplied by the Seller, if such Claim would have been avoided had
such Software (and related files) and Intellectual Property not been used or
combined with such other programs (ii) the use after the Closing of such
Software (and related files) and Intellectual Property not in accordance with
the related documentation if such Claim would have been avoided had such
Software (and related files) and Intellectual Property been used in accordance
with the related documentation or (iii) modifications or enhancements of any
such Software (and related files) and Intellectual Property after the Closing,
if such Claim would have been avoided had such Software (and related files) and
Intellectual Property not been so modified or enhanced.
6.3 Indemnification of the Seller. From and after the Closing Date,
the Purchaser and Fundtech, jointly and severally, shall indemnify, defend and
hold harmless the Seller and its directors, officers, employees, agents and
Affiliates (collectively (including the Seller), the "Seller Indemnitees")
against any and all Liabilities incurred by the Seller arising out of, resulting
from or in connection with:
(a) the breach by the Purchaser or Fundtech of any
representation or warranty of the Purchaser or Fundtech contained in
this Agreement;
(b) any breach by the Purchaser or Fundtech of any
agreement or covenant of the Purchaser or Fundtech contained in this
Agreement; and
(c) the assertion against, imposition upon or incurrence by
any such Seller Indemnitee of any Assumed Liability; provided, that
with respect to any individual Seller Agreement or Specified
Agreement relating to the Owned Software, the Purchaser's obligation
to indemnify, hold harmless and defend the Seller under this Section
6.2(c) shall be limited to the amount of the annual maintenance fee
payable under such Seller Contract or Specified Contract, as
applicable, but such monetary limitation shall not apply to the
extent the Owned Software is modified after the Closing Date and to
the extent such modification causes an increase in such liability or
to the extent that such Seller Agreement or Specified Agreement is
modified in any way that would result in an amount of liability
greater than the amount of the annual maintenance fee payable under
such Seller Agreement or Specified Agreement.
The foregoing obligations of the Purchaser and Fundtech with respect
to any breach by the Purchaser of any particular representation or warranty made
by the Purchaser shall terminate on the
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Expiration Date applicable to such representation and warranty (except that such
obligations shall thereafter continue in full force and effect with respect to
any Claim of which the Purchaser has received written notice prior to the
Expiration Date). The obligations of the Purchaser and Fundtech under this
Section 6.3 shall only become operative and effective if and when the aggregate
of all Liabilities for which any Seller Indemnitees seeking indemnification
under this Section 6.3 exceeds $50,000 (it being understood that all such
Liabilities shall accumulate until such time as they exceed $50,000, at which
time the Purchaser and Fundtech shall be obligated to indemnify, hold harmless
and defend any Seller Indemnitees seeking indemnification under this Section 6.3
for the full amount of such Liabilities, including the first $50,000). If the
Purchaser and Fundtech shall at any time be liable to the Seller Indemnitees
pursuant to this Agreement (including this Section 6.3), notwithstanding
anything to the contrary contained herein, the cumulative amount of all
Liabilities recoverable against the Purchaser and Fundtech shall not exceed (a)
$2,197,848, in the aggregate, with respect to (i) Liabilities arising out of,
based upon or resulting from the breach or breaches by the Purchaser and/or
Fundtech of any representation or warranty contained in this Agreement, (ii)
Liabilities arising out of, based upon or resulting from the assertion against,
imposition upon or incurrence by any Seller Indemnitee of any Assumed Liability
and (iii) any breach by the Purchaser or Fundtech of any agreement or covenant
of the Purchaser or Fundtech (other than Section 2.12) contained in this
Agreement and (b) $4,395,696 with respect to any breach by the Purchaser of
Section 2.12. Such maximum liability of the Purchaser and Fundtech shall be
reduced to the extent of any insurance proceeds received by any of the Seller
Indemnitees for such Liabilities from the Purchaser, any of its Affiliates or
any of their respective insurance carriers. Notwithstanding the foregoing, the
cumulative amount of all Liabilities recoverable against the Purchaser and
Fundtech shall not exceed $4,395,696.
6.4 Procedures for Third Party Claims. The following procedures shall
be applicable with respect to indemnification for third party claims arising
from, related to, or in connection with any provision of this Agreement.
(a) Within ten (10) business days after receipt by the
party seeking indemnification hereunder (an "Indemnitee") of written
notice of the assertion or the commencement of any claim, liability
or obligation by a Third Party, whether by legal process or otherwise
(a "Claim"), with respect to any matter within the scope of Section
6.2 or 6.3, the Indemnitee shall give written notice thereof (the
"Notice") to the Person from whom indemnification is sought pursuant
hereto (the "Indemnitor") and shall thereafter keep the Indemnitor
reasonably informed with respect thereto, provided that the failure
of the Indemnitee to give the Indemnitor notice as provided herein
shall not relieve the Indemnitor of its obligations hereunder unless
such failure results in material prejudice to Indemnitor's defense of
such Claim. In case any such Claim is brought against any Indemnitee,
the Indemnitor shall be entitled to assume the defense thereof, by
written notice of its intention to the Indemnitee within 30 days
after receipt of the Notice, with counsel reasonably satisfactory to
the Indemnitee at the Indemnitor's own expense. If the Indemnitor
shall assume the defense of such Claim, it shall not settle or
compromise any such Claim, or
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consent to the entry of any judgment relating thereto, without the
prior written consent of the Indemnitee, which consent shall not be
unreasonably withheld, if such settlement would require the
Indemnitee to admit liability or would restrict any future actions of
the Indemnitee. Notwithstanding the assumption by the Indemnitor of
the defense of any Claim as provided in this Section 6.4(a), the
Indemnitee shall be permitted to join in the defense of such Claim
and to employ counsel at its own expense. If the Indemnitor shall
fail to assume the defense of any such Claim within the prescribed
period of time, or shall notify the Indemnitee that it will not
assume the defense of any such Claim, then the Indemnitee shall
assume the defense of any such Claim (and the Indemnitor shall pay
the fees and costs incurred by the Indemnitee prior to the assumption
of such defense by the Indemnitee), in which event it may do so in
such manner as it may deem appropriate. The Indemnitor shall be
permitted to join in the defense of such Claim and to employ counsel
at its own expense and, in the case of a Claim for which the Seller
is required to indemnify, defend and hold harmless a Purchaser
Indemnitee pursuant to Sections 6.2(c), (e) or (f), the Purchaser
Indemnitee shall, as reasonably requested by the Seller, assist in
the defense of any such Claim at the expense of the Seller.
6.5 DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT OR OTHER WRITTEN AGREEMENT EXECUTED AND DELIVERED BY THE
PARTIES HERETO ON OR AFTER THE DATE HEREOF, NONE OF THE SELLER, STERLING
COMMERCE, STERLING AMERICA, THE PURCHASER OR FUNDTECH MAKES ANY REPRESENTATIONS
OR WARRANTIES, EXPRESS OR IMPLIED, TO THE OTHER PARTIES OR TO ANY OTHER PERSON,
INCLUDING WITHOUT LIMITATION WARRANTIES REGARDING TITLE, INFRINGEMENT,
MERCHANTABILITY, ORIGINALITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE
(REGARDLESS OF WHETHER THE OTHER PARTIES HAVE BEEN ADVISED, HAVE REASON TO KNOW,
OR IN FACT KNOW OF ANY SUCH PURPOSE), OR RESULTS TO BE DERIVED FROM THE USE OF
THE TRANSFERRED ASSETS, WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR
USAGE OF TRADE, OR BY COURSE OF DEALING.
ARTICLE VII
MISCELLANEOUS
7.1 Publicity. Except as may otherwise be required by law (which, in
the case of filings required under the federal securities laws of the United
States and other governmental filings, shall be determined by the filing party's
counsel), no publicity, release or announcement concerning this Agreement or the
transactions contemplated hereby or thereby shall be made without advance mutual
written approval thereof by the Seller and the Purchaser. Each party shall have
seven business days after receipt of any such publicity, release or announcement
by a party to the other party within which to approve or reject such materials,
and the approval of such materials shall not
31
unreasonably be withheld. If a party does not approve or reject such materials
within such seven-day period, such materials shall be deemed approved by such
party.
7.2 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission, sent by nationally recognized express courier or sent by
certified, registered, first-class, air mail, postage prepaid. Any such notice
shall be deemed given when actually received when so delivered personally, by
facsimile transmission or express courier or, if mailed, five days after the
date of deposit in the United States mail as follows:
If to the Purchaser, to:
Fundtech Corporation
00 Xxxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Fundtech Corporation
00 Xxxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy (which shall not constitute effective notice)
to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: (212) 310 -8430
If to the Seller to:
Sterling Commerce (Northern America), Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Attention: President
Facsimile: (000) 000-0000
32
If to Sterling America to:
Sterling Commerce (America), Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Attention: President
Facsimile: (000) 000-0000
33
with a copy (which shall not constitute effective notice)
to:
Sterling Commerce, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
or to such other address as any of the above shall have specified by notice in
accordance with the foregoing procedures.
7.3 Amendment; Extension and Waiver.
(a) This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
(b) The parties hereto may (i) extend the time for the
performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant
hereto and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall only be valid if set
forth in any instrument in writing signed on behalf of such party.
The waiver by any party hereto of any condition or of a breach of any
other provision of this Agreement shall not operate or be construed
as a waiver of any other condition or any other provision or
subsequent breach.
7.4 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to principles
of conflicts of laws.
7.5 Arbitration. Except for breaches or threatened breaches of any of
the provisions of this Agreement related to equitable relief, any dispute,
controversy, or claim arising under, related to, or in connection with, this
Agreement or the other agreements contemplated hereby shall be fully and finally
resolved by binding arbitration in accordance with this Agreement and the rules
of the American Arbitration Association ("AAA"). The arbitration shall
constitute the sole and exclusive method of adjudication of all matters between
the parties and shall be final, binding, and non-appealable. The arbitration
shall be conducted by a panel of three neutral arbitrators in accordance with
the Commercial Arbitration Rules of the AAA in a mutually agreeable location in
Dallas, Texas, if the arbitration is initiated by the Purchaser or Fundtech and
in New York City, New York, if such arbitration is initiated by the Seller,
Sterling Commerce, or Sterling America. The AAA office in the city where the
arbitration is taking place shall administer the arbitration. The three
arbitrators shall be selected pursuant to the rules of the AAA from a panel of
independent and disinterested persons who (i) are lawyers with at least ten
years of legal experience or (ii) have at
34
least ten years of former judicial experience and who are familiar with the
purchase and sale of business concerns. The parties shall be entitled to file
motions to dismiss, motions for summary judgment and make an oral presentation
and join in the arbitration any other parties to the Agreement. Unless otherwise
agreed to by the parties, the arbitration panel shall render a final award
within twelve (12) months after the arbitration panel is selected. The
arbitration and arbitrators' fees shall be divided equally between the parties.
Each party shall be solely responsible for their own attorneys' fees and costs
and the panel shall not award attorneys' fees to the prevailing party. Judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The arbitration result shall be kept confidential except
as otherwise provided by law; provided, however, that this provision shall not
prevent a party from disclosing the result to its auditors, attorneys, tax
consultants, officers or directors or in response to a valid subpoena or to
enforce or vacate the arbitration award. The arbitration panel shall have no
authority to award punitive or exemplary damages.
7.6 JURISDICTION. IF THE SELLER, STERLING COMMERCE OR STERLING
AMERICA SEEKS EQUITABLE RELIEF OR SEEKS TO ENTER AN ARBITRATION AWARD PURSUANT
TO SECTION 7.5, IT CONSENTS TO DO SO IN A COURT LOCATED IN THE SOUTHERN DISTRICT
OF NEW YORK AND IF THE PURCHASER OR FUNDTECH SEEKS EQUITABLE RELIEF OR SEEKS TO
ENTER AN ARBITRATION AWARD PURSUANT TO SECTION 7.5, IT CONSENTS TO DO SO IN A
COURT LOCATED IN THE NORTHERN DISTRICT OF TEXAS. EACH OF THE PARTIES HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT BROUGHT IN THE STATE OF TEXAS OR NEW YORK, AND
FURTHER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY CLAIM
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH STATE HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
7.7 Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors,
assigns and legal representatives. Neither this Agreement nor any rights or
obligations hereunder or thereunder may be assigned by any party hereto or
thereto without the prior written consent of the other parties hereto or
thereto; provided, however, that the Purchaser may assign its rights and
obligations under this Agreement (including by merger) to Fundtech or an
Affiliate of Fundtech without the prior consent of the Seller.
7.8 Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other document, agreement or instrument
referred to herein shall, for any reason, be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of any other provision
of this Agreement or any other such document, agreement or instrument shall not
be affected.
35
7.9 No Third-Party Beneficiaries. Nothing in this Agreement is
intended or shall be construed to give any Person, other than the parties hereto
and the other Persons referred to in Sections 6.2 and 6.3, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
7.10 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto. Signatures may be exchanged by facsimile, with original signatures to
follow. Each party hereto agrees that it will be bound by its own facsimile
signature and that it accepts the facsimile signature of the other parties
hereto.
7.11 Rules of Construction. The article and section headings and the
table of contents contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
As used in this Agreement, unless otherwise provided to the contrary, (a) all
references to days or months shall be deemed references to calendar days or
months; (b) any reference to a "Section," "Article," "Exhibit" or "Schedule"
shall be deemed to refer to a section or article of this Agreement or an exhibit
or schedule to this Agreement and (c) "to the knowledge of the Seller" shall be
deemed to mean to the actual knowledge, as of the Closing Date, of Xxxx Xxxx,
Xxxxxxxxx Xxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxx and, solely with respect to
litigation matters, the General Counsel of Sterling Commerce. The words
"hereof," "herein" and "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. The parties acknowledge and agree that each has participated
in the drafting hereof and that this Agreement will not be construed in favor of
or against either party solely on the basis of a party's drafting or
participation in the drafting of any portion of this Agreement. Information
contained in a Section or Subsection of the Disclosure Schedule (or expressly
incorporated by reference into such Section or Subsection) shall qualify only
those representations, warranties and agreements of the Seller made in the
identically numbered Section or Subsection of this Agreement, and shall not be
deemed to qualify the representations, warranties or agreements made in any
other Section or Subsection.
7.12 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) supersedes all prior documents, understandings and agreements,
oral or written, relating to this transaction and constitutes the entire
understanding of the parties with respect to the subject matter hereof.
36
IN WITNESS WHEREOF, this Agreement has been duly executed by each of
the parties as of the date first above written.
THE SELLER:
STERLING COMMERCE (NORTHERN AMERICA), INC.
By: /s/ Xxxxxxxxx X. May
------------------------------------
Name: Xxxxxxxxx X. May
------------------------------------
Title: Assistant Treasurer
------------------------------------
STERLING COMMERCE:
SOLELY FOR PURPOSES OF SECTIONS 2.8(C),
2.12(B), (D), (E), (I), (J), (L), AND (M),
2.13, 3.2, 3.4(A), 3.14, 5.7(C), 5.7(F),
5.8, 6.5, 7.5 AND 7.6
STERLING COMMERCE, INC.
By: /s/Xxxx X.X. Xxxxx
------------------------------------
Name: Xxxx X.X. Xxxxx
------------------------------------
Title: Executive Vice President
------------------------------------
00
XXXXXXXX XXXXXXX:
STERLING COMMERCE ( AMERICA), INC.
SOLELY FOR PURPOSES OF SECTIONS
2.12(D), 3.1, 3.2, 3.4, 6.2, 6.5, 7.5 AND
7.6)
By: /s/Xxxx X.X. Xxxxx
------------------------------------
Name: Xxxx X.X. Xxxxx
------------------------------------
Title: President
------------------------------------
THE PURCHASER:
FCMS, LLC
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
------------------------------------
Title: Authorized Officer
------------------------------------
FUNDTECH:
FUNDTECH CORPORATION
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
------------------------------------
Title: EVP, COO and CFO
------------------------------------
38
SCHEDULE 1.1
SCHEDULE OF DEFINITIONS
"AAA" has the meaning specified in Section 7.5.
"Accounts Receivable" means the accounts receivable and notes
receivable of the Seller arising out of the Assumed Contracts as of the Closing
Date, including any Indebtedness arising out of the Assumed Contracts and the
right to payment of any interest or finance charges or similar fees or charges
relating thereto.
"Affiliate" means, with respect to any specified Person, any other
Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
Contract or otherwise.
"Agreement" has the meaning specified in the preamble hereof.
"Assumed Contracts" has the meaning specified in Section 2.2(b).
"Assumed Liabilities" has the meaning specified in Section 2.6(a).
"Bifurcation Agreements" has the meaning specified in Section
2.15(b).
"Xxxx of Sale, Assignment and Assumption Agreement" has the meaning
specified in Section 2.9(b).
"CFI Trademark" has the meaning specified in Section 2.12.
"Cash Management Business" has the meaning specified in the Recitals.
"Claim" has the meaning specified in Section 6.4(a).
"Closing" has the meaning specified in Section 2.1.
"Closing Date" has the meaning specified in Section 2.1.
"Closing Date Accounts Receivable" has the meaning specified in
Section 2.5(a).
"Closing Date Balance Sheet" means a balance sheet, as of August 31,
1999, related to the Cash Management Business.
"Closing Date Deferred Revenues" has the meaning specified in Section
2.5(b).
"Commercial Owned Software" has the meaning specified in Section
3.9(g).
"Commercial PC Software" shall mean generally available commercial
Software, including those for word processing, accounting and similar
applications, having an individual acquisition cost of $1,000 or less and used
on personal computers owned by the Seller.
"Competing Business" has the meaning specified in Section 5.8(a).
"Confidential Information" means all proprietary or confidential
information of any type, kind or character used or held for use in connection
with the operation of the Purchaser, except that Confidential Information shall
not include such information which (a) was available to the receiving party on a
nonconfidential basis prior to its disclosure to the receiving party, (b) was
generally available to the public without the fault of the receiving party, or
(c) becomes available to the receiving party on a nonconfidential basis from a
source other than the Purchaser or the Seller, as applicable, having a right to
make such disclosure.
"Consent" means any consent, approval, permit, notice, action or
authorization of, or giving of notice to, any Person not a party to this
Agreement.
"Contract" means, with respect to any Person, any contract,
agreement, understanding or other instrument or obligation to which such Person
is a party or by which such Person or such Person's properties or assets are or
may be bound.
"Deferred Revenues" means the amount of the deferred revenues as
reflected on the Closing Date Balance Sheet, as adjusted by the Final Balance
Sheet.
"Disclosure Schedule" means the schedule set forth as Schedule 1.1(b)
which has been prepared by the Seller and sets forth, among other things,
certain information that, to the extent provided therein, qualifies the
representations, warranties and agreements of the Seller made in this Agreement.
"EDS" has the meaning specified in Section 2.15(a).
"EDS Agreement" has the meaning specified in Section 2.15(a).
"Effective Time" shall mean 12:01 a.m. on the Closing Date.
1.1-2
"Employees" has the meaning specified in Section 3.17(b).
"Excluded Assets" has the meaning specified in Section 2.3.
"Expiration Date" has the meaning specified in Section 6.1.
"Final Accounts Receivable" has the meaning specified in Section
2.5(a).
"Final Balance Sheet" has the meaning specified in Section 2.11.
"Final Deferred Revenues" has the meaning specified in Section
2.5(b).
"Financial Statements" means the following financial statements, each
prepared in accordance with GAAP, of the Cash Management Business:
(i) balance sheets dated August 31, 1999 and June 30, 1999;
and
(ii) a statement of profits and loss for the eleven month
period ended August 31, 1999 and the nine month period ended June 30,
1999.
"GAAP" means generally accepted accounting principles as in effect at
the time of the application thereof in accordance with the provisions of this
Agreement.
"General IP" shall mean (i) all domestic and foreign patents, patent
applications and patents issuing therefrom and any reissue, reexamination,
extension, revival or renewal of any patent; and (ii) all copyrights and
registration of claim to copyright and applications for registration of claim to
copyright.
"Identified Software" has the meaning specified in Section 2.2(a).
"Indebtedness" means, with respect to any Person, all obligations,
contingent or otherwise, which in accordance with GAAP would be required to be
presented upon the such Person's balance sheet as liabilities, but in any event
including liabilities secured by any Lien existing on property owned or acquired
by such Person or a subsidiary thereof, whether or not the liability secured
thereby shall have been assumed by or shall otherwise be the Person's legal
liability, capitalized lease obligations and all guarantees, endorsements and
other contingent obligations in respect of Indebtedness of other Persons.
"Indemnitee" has the meaning specified in Section 6.4(a).
"Indemnitor" has the meaning specified in Section 6.4(a).
1.1-3
"Intellectual Property" has the meaning specified in Section 2.2(e).
"Last Portion" has the meaning specified in Section 2.12(d).
"Legal Requirement" means any domestic, foreign or international law,
treaty, ordinance, statute, rule or regulation of any Tribunal or any Order.
"Liabilities" has the meaning specified in Section 6.2.
"Licensed IP" has the meaning specified in Section 3.9(b).
"Lien" means, with respect to any properties or assets, any mortgage,
pledge, hypothecation, security interest, lien, federal or state Tax lien,
assessment, levy, charge, or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or character
whatsoever in respect of such properties or assets.
"Master Agreement" has the meaning specified in Section 2.15(a).
"New License" has the meaning specified in Section 2.15(b).
"Non-CFI Trademarks" has the meaning specified in Section 2.12.
"Material Adverse Effect" means a material adverse effect on the
business, operations, financial condition, results of operations, properties,
assets or liabilities related to the Transferred Assets or the Purchaser.
"Notice" has the meaning specified in Section 6.4(a).
"Order" means any decision, judgment, order, writ, injunction,
decree, award or determination of any Tribunal.
"Owned IP" has the meaning specified in Section 3.9(a).
"Owned Software" has the meaning specified in Section 2.2(a).
"Permitted Encumbrances" has the meaning specified in Section 3.5.
"Person" means any corporation, joint stock company, limited
liability company, association, partnership, joint venture, organization,
individual, business or other trust or any other entity or organization of any
kind or character.
1.1-4
"Proceeding" means any action, suit, inquiry, formal or informal
complaint, investigation or other proceeding.
"Purchase Price" has the meaning specified in Section 2.4.
"Purchaser" has the meaning specified in the preamble hereof.
"Purchaser Indemnitees" has the meaning specified in Section 6.2.
"Registered Owned IP" has the meaning specified in Section 3.9(a).
"Retained Liabilities" has the meaning specified in Section 2.6(b).
"Scheduled Employees" has the meaning specified in Section 5.7(a).
"Scheduled Software" has the meaning set forth in Section 3.9(j).
"Seller" has the meaning specified in the preamble hereof.
"Seller Contracts" has the meaning specified in Section 2.2(b).
"Seller Indemnitees" has the meaning specified in Section 6.3.
"Software" shall mean the expression of an organized set of
instructions in a natural or coded language that is contained on a physical
media of any nature (e.g., written, electronic, magnetic, optical or otherwise)
and that may be used with a computer or other automated data processing
equipment device of any nature which is based on digital technology, to make
such computer or other device operate in a particular manner and for a certain
purpose, as well as any related documentation for such set of instructions and
its subsystems and shall include computer programs in source and object code,
test or other significant data libraries, user documentation for computer
programs, and any of the following that is contained on a physical media of any
nature and that is used in the design, development, modification, enhancement,
testing, installation, maintenance, diagnosis or assurance of the same: flow
diagrams, masks, input and output formats, file layouts, development tools,
database formats, interfaces, test programs, installation and operating
instructions, diagnostic and maintenance instructions, and other similar
materials and information.
"Specified Contracts" has the meaning specified in Section 2.2(b).
"Standard License and Service Agreement" means the standard form of
License & Service Agreement generally used by the Seller to license the
Identified Software to financial institutions and in the form attached as
Exhibit C.
1.1-5
"Taxes" means all taxes, charges, fees, levies or other similar
assessments or liabilities (including income, receipts, ad valorem, value added,
excise, property (whether real property or personal property), sales, transfer,
occupation, service, stamp, use, licensing, withholding, employment or
unemployment, payroll, share, capital, surplus, profits, franchise,
occupational, net worth or other taxes) imposed by any Tribunal, whether
computed on a separate, consolidated, unitary or combined basis or in any other
manner, and includes any interest, fines, penalties, assessments, deficiencies
or additions to tax.
"Third Party" means any Person that is not a party to this Agreement
or an Affiliate of a party to this Agreement.
"Third Party Embedded Software Licenses" has the meaning specified in
Section 2.2(b).
"Trademarks" has the meaning specified in Section 2.12.
"Trademark Application" has the meaning specified in Section 2.12(a).
"Trademark License" has the meaning specified in Section 2.12.
"Transferred Assets" has the meaning specified in Section 2.2.
"Tribunal" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency or
instrumentality of the United States or any foreign or domestic state, province,
commonwealth, nation, territory, possession, country, parish, town, township,
village or municipality.
"Y2K Compliant" has the meaning specified in Section 3.9(j).
1.1-6
EXHIBIT A
FORM OF XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of
September __, 1999, between Sterling Commerce (Northern America), Inc., a
Delaware corporation ("Grantor"), and FCMS, LLC, a Delaware limited liability
company ("Grantee"),
RECITALS
WHEREAS, concurrently with the execution and delivery hereof, Grantor
and Grantee are entering into an Asset Purchase Agreement (the "Asset Purchase
Agreement"), upon the terms and conditions of which Grantor will transfer to
Grantee certain Transferred Assets, and Grantee agreed to assume certain
liabilities of Grantor, upon the terms and subject to the conditions set forth
therein, effective as of the Effective Time;
WHEREAS, capitalized terms used herein and not defined shall have the
meanings assigned to them in the Asset Purchase Agreement; and
WHEREAS, Grantor desires to deliver to Grantee such instruments of
sale, conveyance, transfer and delivery as shall be effective to vest in Grantee
all right, title and interest in and to the Transferred Assets;
NOW, THEREFORE, for and in consideration of the purchase price
specified in Section 2.4 of the Asset Purchase Agreement, the assumption of the
Assumed Liabilities and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, Grantor hereby grants, bargains, sells, conveys, assigns, transfers,
sets over and delivers to Grantee, and Grantee hereby accepts, all of Grantor's
right, title and interest in and to the Transferred Assets, and Grantee hereby
agrees to assume, pay, perform and discharge in accordance with the terms
thereof each of the Assumed Liabilities, effective as of the Effective Time;
TO HAVE AND TO HOLD the Transferred Assets, with all of the
appurtenances thereto, unto the Grantee and its successors and assigns for its
and their use forever.
1. This Xxxx of Sale, Assignment and Assumption Agreement is made
pursuant to the Asset Purchase Agreement; provided, however, that this Xxxx of
Sale, Assignment and Assumption Agreement is subject to the limitations,
restrictions and qualifications set forth in the Asset Purchase Agreement.
2. This conveyance is made with full substitution and subrogation of
Grantee, its successors and assigns, in and to all covenants and warranties by
others heretofore given or made in respect of the interests in the Transferred
Assets conveyed in this Agreement, whether recorded or unrecorded.
3. Grantor agrees, upon the request of Grantee, to execute,
acknowledge and deliver such further conveyances, notices, releases and
acceptances and such other instruments and to take all and every such further
action as may be reasonably necessary or appropriate more fully to assure to
Grantee or its successors or assigns, all of the properties, rights, titles,
interests, estates, remedies, powers and privileges by this instrument granted,
bargained, sold, conveyed, assigned, transferred, set over and delivered, or
otherwise vested in Grantee or intended so to be; provided, however, that any
such request by Grantee shall be subject to the limitations, restrictions and
qualifications of the Asset Purchase Agreement.
4. This Xxxx of Sale, Assignment and Assumption Agreement may be
executed in several original counterparts, all of which are identical. Each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
5. This Xxxx of Sale, Assignment and Assumption Agreement shall bind
and inure to the benefit of Grantor and Grantee and their respective successors
and assigns.
6. This Xxxx of Sale, Assignment and Assumption Agreement shall be
governed by and construed in accordance with the law of the State of Texas.
C-2
IN WITNESS WHEREOF, Grantor and Grantee have executed this instrument
on the date first set forth above.
GRANTOR:
STERLING COMMERCE (NORTHERN
AMERICA), INC.
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
GRANTEE:
FCMS, LLC
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
C-3
