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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and entered into as
of the 26th day of June, 2001, by and among JDA Software Group, Inc., a Delaware
corporation ("Buyer"), and Accrue Software, Inc., a Delaware corporation
("Parent") and NeoVista Software, Inc., a California corporation ("Sub," Parent
and Sub collectively, "Seller").
RECITALS
A. Seller owns certain rights, title and interests in the "Decision
Series," "RDS Assort" and "RDS Profile" software products (as described on
Schedule 1.1(a)) but excluding the rights of Seller to use certain third party
intellectual property described on Schedule 1.1(a) (collectively, the "Acquired
Software") and related intellectual property (including without limitation all
of the trademarks related to the Acquired Software).
B. Buyer is willing to purchase, and Seller is willing to sell, all
rights, title and interests of Seller pertaining to the Acquired Software and
related intellectual property and other related assets, on the terms and subject
to the conditions set forth in this Agreement.
C. This is a technology transfer agreement within the definition
provided in California Revenue and Taxation Code Section 6011.
NOW, THEREFORE, in consideration of the mutual covenants and subject to
the terms and conditions herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES; LICENSE;
ESCROW ARRANGEMENT.
1.1 Acquired Assets. On the terms and subject to the conditions
contained in this Agreement, Seller hereby conveys, sells, assigns, transfers,
and delivers to Buyer, and Buyer hereby purchases from Seller, the Acquired
Software and all of the rights (contractual and otherwise), property and assets
of Seller existing as of the date hereof that are described below or listed and
described on Schedule 1.1 hereto, including the following (all such rights
referred to herein as the "Acquired Assets"):
(a) Intangibles. All of Seller's right, title and interest in
the Acquired Software, including without limitation (except as expressly
excluded below and on Schedule 1.1) (i) all intellectual property owned by
Seller primarily related to the Acquired Software, including all patents, patent
applications, inventions, know-how, trade secrets, source code, engineering
records and other commercially valuable information maintained by Seller as
confidential, all documents containing such information, all trade names, trade
styles, trademarks, trademark registrations and applications for trademark
registrations, and all copyrights, domain names, copyright registrations and
applications for copyright registrations used primarily in connection
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with the Acquired Software, in each case all as set forth on Schedule 1.1(a)
attached hereto but excluding the rights of Seller to use certain third party
intellectual property and software described on Schedule 1.1(a) (collectively,
"Acquired Intellectual Property"); (ii) all rights, title and interest in any
claims, causes of action, matters in dispute or judicial or arbitration
proceedings that relate to the Acquired Software or the Acquired Intellectual
Property; and (iii) all of Seller's customer lists and supply, importation and
distribution, brokers and agent lists or portion thereof, in each case relating
to the Acquired Software. Schedule 1.1(a) sets forth a listing of the Acquired
Intellectual Property as of the date of this Agreement (with a separate detailed
component listing, a listing of any intellectual property developed by any third
party, which is embedded or integrated in or used in connection with the
Acquired Intellectual Property, and a description of that part of the Acquired
Intellectual Property known as Decision Series, RDS Assort, and RDS Profile).
(b) Contracts. Each third party product provider contract,
agreement or license relating to the Acquired Intellectual Property set forth on
Schedule 1.1(b) (the "Assumed Contracts"); provided, however, no such contract,
agreement, or license for which a third party consent is required to assign such
contract, agreement, or license to Buyer shall be included within the definition
of Assumed Contract unless the required consent is obtained prior to the
Closing.
(c) Books and Records. All books, manuals, papers, and records
or portions thereof in Seller's care, custody, or control relating to any or all
of the Acquired Intellectual Property, including, without limitation, all
records and reports or portions thereof primarily relating to the development,
testing or marketing of the Acquired Software, all copies of contracts primarily
relating to the development and testing of the Acquired Software, all financial
information primarily related to the Acquired Software, and all books and
records or portions thereof received by Parent from Sub pursuant to Parent's
acquisition of Sub primarily relating to the Acquired Intellectual Property
(collectively, the "Records").
(d) Permits and Licenses. Each permit, license, consent,
right, exemption, concession, authorization, certificate, order, franchise,
determination or approval of any federal, state or municipal government (whether
domestic or foreign) or any political subdivision thereof, or any governmental
or quasi-governmental, judicial, public or statutory authority, department,
commission, board, bureau, agency, instrumentality or entity, required for the
ownership or operation of or is otherwise related to the Acquired Intellectual
Property (each, a "Governmental Approval"), to the extent that such Governmental
Approvals are transferrable by Seller. Schedule 1.1(d) sets forth Seller's good
faith listing of all Governmental Approvals, as of the date of this Agreement,
including an indication with respect to each Governmental Approval listed as to
whether such Governmental Approval is transferable by Seller.
(e) Personal Property. All tangible personal property and
leases of and other interests in tangible personal property listed on Schedule
1.1(e).
1.2 Liabilities.
(a) The Acquired Assets shall be sold and conveyed to Buyer
free and clear of all debts, mortgages, liens, deeds of trust, security
interests, pledges, restrictions, prior
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assignments, charges, claims, defects in title and encumbrances of any kind or
type whatsoever (collectively, the "Security Interests") except for those
obligations of Seller, if any, which Buyer expressly assumes as set forth on
Schedule 1.2 attached hereto (the "Permitted Encumbrances").
(b) Buyer shall not assume or be liable for any liability or
obligation or amendment or modification thereto related to the Acquired Assets
and arising or based upon facts in existence prior to the Closing (whether
written, oral, implied in Seller's ordinary course of business, or required by
law) that is not specifically set forth on Schedule 1.2. Also, Buyer shall not
assume, perform or cause to be performed any contractual obligation other than
the Assumed Contracts. Furthermore, after the Closing Date, Buyer shall not
assume or become responsible for any liability or obligation of Seller related
to any Assumed Contract for which the required consent to assignment has not
been obtained. Seller shall retain all such obligations and liabilities not
expressly assumed by Buyer hereunder. Seller hereby agrees to indemnify and hold
Buyer and its successors and assigns harmless from and against any and all
liabilities not expressly assumed by Buyer hereunder in accordance with the
terms of Section 7 below and Buyer hereby agrees to indemnify and hold Seller
and its successors and assigns harmless from and against any and all liabilities
assumed by Buyer hereunder in accordance with the terms of Section 7 below.
1.3 License Grant to Seller.
(a) Grant of License.
(i) Source Code License. Buyer hereby grants to Seller a
non-exclusive, nontransferable (except as otherwise set forth herein),
nonsublicensable, worldwide, perpetual, irrevocable (except as set forth in
subsection 1.3(e) below), royalty-free, internal-use only license to prepare
Derivative Works (as defined below) of the source code version of the Acquired
Software solely to:
(A) provide maintenance and support to those end user
customers whose names are listed on Schedule 4.6 to this Agreement as being
previously licensed to use the Acquired Software, provided that Seller may
modify the Acquired Software solely to the extent necessary to fulfill its
obligations under its existing agreements with Walgreens and Roche Molecular
referred to and described in all material respects in Section 4.6 of the
Disclosure Schedules and provided that Seller shall make no modifications,
amendments or extensions with respect to existing agreements with customers
whose business focus is primarily on the Retail Market;
(B) enhance the functionality of such Acquired
Software for use within Seller Products (as defined below), and use, execute,
reproduce, display, and perform the Acquired Software and such Derivative Works
solely to:
i) embed the Acquired Software and such
Derivative Works into and integrate them with Seller Products, and compile such
integrated code into object code to produce integrated product offerings
("Integrated Product Offerings") for resale or sublicense solely within Seller
Permitted Usage; and
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ii) provide maintenance and support to End Users
(as defined below) licensed to use the resulting Integrated Product Offerings,
and for no other purpose; and
(C) place the source code of the Acquired Software
and such Derivative Works, solely as incorporated into an Integrated Product
Offering, in escrow with a reputable third party escrow agent pursuant to an
escrow agreement between Seller, the End User, and the escrow agent, if required
by such End User as a condition to licensing the Integrated Product Offering,
provided that any such escrow agreement shall specify that:
i) such code may only be released in the event
Seller withdraws from general availability maintenance and support for such
Integrated Product Offerings, or in the event of Seller's dissolution, ceasing
to do business or filing, or having filed against it, any proceeding in
bankruptcy or for reorganization under any federal or state bankruptcy law, any
receivership of all or a substantial part of Depositor's assets or business, or
any other proceeding for debt relief, and such proceeding has not been dismissed
sixty (60) days after it has begun; provided, however, that Seller has provided
Buyer with advance written notice of any such withdrawal or proceeding for debt
relief, of any type;
ii) upon release of such code, the End User may
use such source code solely as incorporated into the Integrated Product Offering
for the sole purpose of maintaining and supporting its own use of such
Integrated Product Offering under the terms of and in accordance with the XXXX,
and for no other purpose; and
iii) such End User shall maintain such code in
strict confidentiality.
As used in this Agreement, "Derivative Work" means a translation, enhancement,
improvement, modification, or adaptation of the Acquired Software or its
Derivative Work. "Seller Products" means current and future Seller products and
services for resale or sublicense solely within Seller Permitted Usage. "Seller
Permitted Usage" means the analysis of internet and wireless communication for
the purpose of analyzing and improving the business performance of such
communication. By way of specific example and not of limitation, Seller
Permitted Usage shall not include use, integration, or combination, whether
directly or indirectly, with any application or other software solution that (A)
Posts any form of retail transaction, or (B) at the store or warehouse level,
performs analysis related to any of the following: product inventory,
transaction processing, retail pricing, promotions, space planning, assortment,
merchandise planning, store clustering or seasonal profiling. As used herein,
"Posts" means the process of creating a record of a transaction which is placed
into an entity's records.
(ii) Object Code License. Buyer hereby grants to Seller a
non-exclusive, nontransferable (except as otherwise set forth herein),
worldwide, perpetual, irrevocable (except as set forth in subsection 1.3(e)
below), royalty-free license solely to (A) reproduce copies of the object code
version of the Integrated Product Offerings, and (B) directly or through
Seller's distributors (including Seller's resellers, OEM's, and VAR's), unless
prohibited by Section 1.3(a)(iv) below, distribute and sublicense the object
code version of any
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such Integrated Product Offerings solely within Seller Permitted Usage to End
Users (except as prohibited by Section 1.3(a)(iv) below). "End Users" means
entities or individuals who have entered into a written sublicense agreement
with Seller which, at a minimum, contains the terms set forth in Section 1.3(c)
hereof. End Users do not include Buyer Class A Direct Competitors.
(iii) Confidentiality. Seller will treat the source code
of Acquired Software as Buyer Confidential Information under the terms of this
Agreement, provided that Seller may allow its subcontractors and consultants to
access such source code in order for Seller to create Derivative Works under
this Section 1.3 so long as such subcontractors and consultants agree to
maintain the confidentiality of the Acquired Software according to the
provisions set forth in Section 6.4. Seller agrees to use the same measures to
protect the confidentiality of the Integrated Product Offerings as Seller uses
to protect other Seller products, which will not be less than reasonable care.
(iv) Transferability; Limitations. Under no circumstances
may Seller distribute, resell, sublicense, or otherwise transfer or assign the
Acquired Software or its Derivative Works in any manner that enables or permits
its use in a stand-alone mode (or substantially a standalone mode, for example,
as where Seller product content represents an insubstantial portion of the
Integrated Product Offering). Except as set forth in this Section 1.3, Seller
may assign or transfer the license grants set forth in this Section 1.3 solely
to a successor to all or substantially all of the assets of Seller relating to
an Integrated Product Offering, whether by acquisition, merger, sale of assets,
or other agreement or operation of law; provided, however, that any such
successor agrees in writing to the terms and restrictions in this Section 1.3.
Notwithstanding the foregoing:
(A) under no circumstances may Seller distribute,
resell, sublicense or otherwise transfer or assign (directly or indirectly,
whether by operation of law, acquisition, merger or otherwise) any rights in any
portion of the Acquired Software or its Derivative Works, in any manner
(including, without limitation, as integrated or embedded within an Integrated
Product Offering) to any Buyer Class A Direct Competitor. A "Buyer Class A
Direct Competitor" shall mean the following entities: XX Xxxxxxx Corporation;
VNU N.V.; Armature, Ltd.; E3 Corporation; GERS, Inc.; Information Resources,
Inc.; MarketMAX, Inc.; Hemscott Group Limited (owners of nsb Retail Systems
PLC); Retek, Inc.; SVI Holdings, Inc. and TCI Solutions, Inc. and any
Affiliates, successors or assigns of such entities. As used herein, "Affiliate"
of an entity shall mean those entities that are Controlled by or under common
Control of such entity, provided that such entity shall be considered an
Affiliate only for the time during which such Control exists. "Control" shall
mean ownership or control, either directly or indirectly, of greater than fifty
percent (50%)of the voting rights of such entity. Upon written notice to Seller,
Buyer may, from time to time, and at its sole option, amend this list of Buyer
Class A Direct Competitors to include other competitors who derive a majority of
their revenue from sales to the Retail Market, as long as the total number of
Buyer Class A Direct Competitors does not exceed ten (10); provided, however,
that Buyer's addition of a Buyer Class A Direct Competitor shall not result in
Seller's being in breach of this Agreement with respect to any agreement entered
into between Seller and such Buyer Class A Direct Competitor prior to the date
Buyer notifies Seller that it has added such entity to the list of Buyer Class A
Direct Competitors. As used herein, "Retail Market" means the market for goods
and services for consumer use or consumption; and
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(B) as to Buyer Class B Direct Competitors, Seller
may:
i) sublicense the Integrated Product Offering to
a Buyer Class B Direct Competitor as an End User (but not as a distributor,
including as a reseller, OEM, or VAR); provided, however, that Seller provides
written notice to Buyer within five (5) business days after granting such
sublicense; and
ii) assign or transfer the license grants set
forth in this Section 1.3 to a Buyer Class B Direct Competitor which is a
successor to all or substantially all of the assets of Seller relating to an
Integrated Product Offering, whether by acquisition, merger, sale of assets, or
other agreement or operation of law; provided, however, that any successor
agrees in writing to the terms and restrictions in this Section 1.3, and
provided further that the license granted in Section 1.3(a)(i)(B) is limited to
using the source code version of the Acquired Software to provide maintenance
and support to End Users for those versions of the Integrated Product Offerings
that were commercially available as of the closing date of such acquisition or
merger, and for no other purpose (including, by way of example, and not of
limitation, developing Derivative Works to enhance the functionality of such
Acquired Software as integrated into such Integrated Product Offerings).
A "Buyer Class B Direct Competitor" shall mean the
following entities: Accenture; i2 Technologies, Inc.; Manugistics Group, Inc.;
Oracle Corporation and SAP AG, and any Affiliates, successors or assigns of such
entities.
(b) Derivative Works.
(i) Assignment of Ownership of Derivative Works. Seller
hereby irrevocably assigns, transfers, and conveys to Buyer all of its worldwide
right, title, and interest in and to all Derivative Works. Seller acknowledges
that it retains no right, title or interest in the Derivative Works, and agrees
not to challenge the validity of Buyer's ownership of the Derivative Works.
Buyer acknowledges that such ownership will extend only to Derivative Works and
not to any Seller Products with which such Acquired Software is integrated or
into which such Acquired Software is embedded. Buyer hereby licenses such
Derivative Works to Seller under the terms of this Section 1.3.
(ii) Delivery of Derivative Works. Upon each major
release of an Integrated Product Offering, and in no event less than once every
eighteen (18) months, Seller will deliver to DSI Technology Escrow Services,
Inc. (the "Source Code Escrow Agent"), and not to Buyer, all Derivative Works
under the terms of the Source Code Escrow Agreement attached hereto as Exhibit
J.
(iii) Infringement Actions by Seller. In the event that
Seller has knowledge or reasonably believes that a third party is infringing
upon patent, copyright or other intellectual property rights in the Derivative
Works, Seller will promptly notify Buyer in writing of such knowledge or belief.
If Seller wishes to bring an action against such third party, Seller will
request Buyer's written consent as owner of the Derivative Works, which consent
will not be unreasonably withheld by Buyer in its commercially reasonable
judgement. By way of specific example and not of limitation, it is reasonable
for Buyer to withhold its consent where
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the alleged infringing third party is a customer, significant prospect, or
business partner of Buyer. If Buyer consents to Seller's bringing such action,
Buyer will reasonably assist Seller, at Seller's expense, in bringing such
action, if Buyer's participation is required for procedural purposes, and Seller
will (A) have sole control of such action, (B) pay all expenses related to such
action, including Buyer's reasonable out-of-pocket legal expenses, and (C)
involve Buyer in all material decisions related to such action.
(c) End User Agreements. Any Integrated Product Offering must
be licensed pursuant to a written enforceable end user license agreement (the
"XXXX"), executed by Seller and each End User (or pursuant to another form of
legally enforceable XXXX), in accordance with the provisions set forth herein.
The XXXX shall contain terms and conditions that include the substance of the
following:
(i) authorization to use the Integrated Product Offering
solely within Seller Permitted Usage;
(ii) authorization to make a reasonable number of copies
of such Integrated Product Offering for backup or archival purposes only;
(iii) prohibition from any other copying of such
Integrated Product Offering;
(iv) prohibition from any lease, rental, or sublicense
(except for sublicenses to subsidiaries and Affiliates of the End User other
than Class A Direct Competitors) of the Integrated Product Offering;
(v) prohibition from any assignment or other transfer of
the Integrated Product Offering, without Seller's prior written consent
(provided, however, that Seller may, on an individual End User basis, modify the
XXXX to include the ability to assign the Integrated Product Offering to another
party in connection with the acquisition of substantially all of the assets of
such End User by such other party, whether by merger or other combination,
without Seller's prior written consent, as long as any such successor agrees to
the terms of the XXXX and as long as assignment to a Buyer Class A Direct
Competitor, according to the list of Buyer Class A Direct Competitors as of the
date of execution of the XXXX, and their respective successors, Affiliates,
assignees and transferees is specifically prohibited);
(vi) direction to destroy all copies of such Integrated
Product Offering, other than archival copies, within three months after license
termination;
(vii) prohibition from reverse assembling, reverse
compiling or translating such Integrated Product Offering except as permitted by
law without the possibility of contractual waiver; and
(viii) statements that:
(A) the Integrated Product Offering is protected by
copyright laws and is licensed; it is not sold. Seller does not pass title to
the Integrated Product Offering;
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(B) the Integrated Product Offering provided may
contain, or be an authorized derivative work of, materials licensed by a third
party, and that such third party suppliers disclaim responsibility for the
materials and their use in the Integrated Product Offering;
(C) third party suppliers of the Integrated Product
Offering disclaim all implied warranties. The disclaimer will include the
implied warranties of noninfringement, merchantability, and fitness for a
particular purpose;
(D) a limitation on liabilities to a reasonable
amount and a statement materially to the effect that the collective liabilities
of Seller/licensor and its third party suppliers are subject to the limitation
of liabilities described in the XXXX; third party suppliers disclaim all
liability for all consequential, punitive, incidental, and other indirect
damages including, but not limited to, lost profits, lost or damaged data, and
the provision of substitute goods; and third party suppliers are intended
beneficiaries of these limitations and disclaimers with rights to directly
enforce the terms of this agreement (excluding the End User's payment
obligations to Seller) without the necessity of joining Seller/licensor, and the
limitation of liabilities for Seller/licensor and its suppliers are not
cumulative; and
(E) the Integrated Product Offering is a valuable
trade secret of Seller and third party suppliers, and must be treated according
to the confidentiality provisions set forth in the XXXX.
(d) Infringement Claims. In the event that (i) a third party
claims, or is likely to claim, that the Acquired Software infringes that party's
patent, copyright or other intellectual property, or (ii) Buyer or Seller
believes a third party is infringing Buyer's patent, copyright or other
intellectual property rights in the Acquired Software, then Seller agrees to
provide reasonable assistance to Buyer, at Buyer's expense, in the defense or
prosecution of such claim, and any related settlement negotiations.
(e) Revocation and Termination of License. Notwithstanding
anything to the contrary in this Agreement, the license grant set forth in this
Section 1.3 shall be revoked and shall terminate in the event of a material
breach of Seller's obligations under this Section 1.3 and following (i) written
notice of such breach to Seller by Buyer; and (ii) failure by Seller to remedy
or cure such breach prior to expiration of the thirty (30) day period following
delivery of such notice.
(f) Sublicense of IntellNet Agreement. Buyer hereby grants
Seller a non-exclusive, nontransferable (except as otherwise set forth herein),
nonsublicensable, worldwide, perpetual, irrevocable (except as set forth in
subsection 1.3(e)), royalty-free, internal-use license to use the software that
is the subject of the License and Development Agreement between Sub and
IntellNet dated July 12, 1996 under terms and conditions of this Section 1.3
only to the extent permitted under the terms and conditions of such license and
development agreement.
(g) License Back of Certain Trade Secrets. Buyer hereby grants
Seller a non-exclusive, nontransferable (except as set forth herein),
nonsublicensable, worldwide,
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perpetual, irrevocable, royalty-free, internal-use license to use all of
Seller's customer lists and supply, importation and distribution, brokers and
agent lists or portions thereof, in each case relating to the Acquired Software,
which are conveyed to Buyer pursuant to Section 1.1(a)(iii); provided that such
information and lists are not to be used outside the Seller Permitted Usage.
2. PURCHASE PRICE.
2.1 Purchase Price. Subject to the terms and conditions of this
Agreement, and in consideration of the transfer of the Acquired Assets to Buyer,
at the Closing Buyer shall pay in cash the sum of Five Million Dollars
($4,937,500) (the "Purchase Price").
2.2 Escrow Fund. Buyer shall withhold from the Purchase Price the
sum of Five Hundred Thousand Dollars ($500,000) in cash (the "Escrow Fund") and
such Escrow Fund shall be held as collateral for Seller's indemnification
obligations pursuant to Section 7 of this Agreement. The Escrow Fund shall be
held in escrow in accordance with Section 7 of this Agreement and the Escrow
Agreement attached as Exhibit A hereto. Upon termination or payment of the
Escrow Fund, Buyer shall pay Seller the accrued interest earned upon such fund.
2.3 Allocation of Purchase Price. Schedule 2.3 sets forth the
allocation of the Purchase Price among the Acquired Assets, as determined in
accordance with Section 1060 of the Internal Revenue Code of 1986, as amended
(the "Code") and California Revenue and Taxation Code Section 6011. Buyer and
Seller shall use the allocation set forth in Schedule 2.3 in reporting the
transactions contemplated by this Agreement for all federal, state and local tax
purposes. Buyer and Seller agree to each prepare and file on a timely basis with
the Internal Revenue Service (and applicable state tax authorities)
substantially identical and supplemental Internal Revenue Service Forms 8594
(and corresponding state tax forms) consistent with the allocation set forth on
Schedule 2.3. If any tax authority challenges such allocation, the party
receiving notice of such challenge shall give the other prompt written notice
thereof and the parties shall cooperate in order to preserve the effectiveness
of such allocation.
2.4 Taxes. Any sales, purchase or use tax payable under the laws
of the states of Delaware, California or Arizona or of any city, county, or
subdivision thereof, or any other jurisdiction, which may be payable as a result
of the execution of this Agreement or the consummation of the transactions
contemplated hereby shall be paid one half by Seller and one half by Buyer. Each
of Seller and Buyer agree to indemnify the other against 50% of any such taxes
which are not included in the calculation of the Purchase Price and which the
other party is required to pay.
3. CLOSING.
3.1 Seller's Deliveries at Closing. At or prior to the purchase
and sale of the Acquired Assets (the "Closing") on the date hereof (the "Closing
Date"), Seller has delivered or caused to be delivered to Buyer the following
instruments and documents:
(a) an executed counterpart of the Xxxx of Sale, attached
hereto as Exhibit B ("Xxxx of Sale");
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(b) an executed counterpart of each assignment related to the
Assumed Contracts or copyrights, trademarks or patents included in the Acquired
Intellectual Property attached hereto as Exhibit C (the "Assignments");
(c) a certificate of the Secretary of Parent, relating to the
charter documents of Parent, the incumbency and authority of Parent's officers
who are executing this Agreement or any of the documents contemplated by this
Agreement, and resolutions of Buyer's board of directors with respect to the
transactions contemplated by this Agreement in the form attached as Exhibit D
hereto;
(d) a certificate of the Secretary of Sub, relating to the
charter documents of Sub, the incumbency and authority of Sub's officers who are
executing this Agreement or any of the documents contemplated by this Agreement,
and resolutions of Buyer's board of directors with respect to the transactions
contemplated by this Agreement in the form attached as Exhibit D hereto;
(e) any required consents of the Parent and Sub boards of
directors, stockholders or governmental authorities with respect to the
transactions contemplated by this Agreement;
(f) copies of unaudited financial information indicating the
revenue recognized in accordance with generally accepted accounting principles
and recorded for fiscal year 2001 related to the Acquired Software and an
estimate of expenses related to certain employees of Seller associated with the
Acquired Software;
(g) written releases of all Security Interests in the Acquired
Assets listed on Schedule 3.1(g) hereto.
(h) an opinion of Seller's counsel in the form of Exhibit E
hereto;
(i) an executed copy of the Escrow Agreement;
(j) appropriate documentation filed with all organizations or
entities as may be necessary to effect transfer of all domain names included
within the Acquired Assets, including, without limitation, xxx.xxxxxxxx.xxx (the
"NeoVista Website");
(k) each of the employees of Seller listed on Schedule 3.1 (k)
have executed and delivered the Stay Put Agreement in the form of Exhibit F
attached hereto; and
(l) such other instruments and documents as shall be
reasonably requested by Buyer in order to effect the transactions contemplated
hereby.
3.2 Buyer's Deliveries at Closing. At the Closing, Buyer has
delivered or caused to be delivered to Seller, or Seller's representative, the
following instruments and documents:
(a) a wire transfer of immediately available funds as follows:
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(i) $3,937,500 to the account designated by Seller;
(ii) $500,000 to a trust account with Venture Law Group,
to be held in escrow (the "VLG Escrow") pursuant to the terms and procedures
described in Schedule 3.2(a)(ii); and
(iii) $500,000 to the Escrow Fund, as described in
Section 2.2.
(b) a certificate of an officer of Buyer, relating to the
charter documents of Buyer and the incumbency and authority of the officers of
Buyer who are executing this Agreement or any document contemplated by this
Agreement in the form attached as Exhibit G; and
(c) an executed copy of the Escrow Agreement;
(d) an executed copy of the Xxxx of Sale;
(e) an executed copy of the Assignments;
(f) such other instruments and documents as shall be
reasonably requested by Seller in order to effect the transactions contemplated
hereby.
3.3 Electronic Transfer of Assets. At the Closing, all of the
Acquired Software shall be transferred electronically to a device located in
California and specified by Buyer to Seller. All other Acquired Assets that can
be transferred electronically will be electronically transmitted as set forth in
the previous sentence. No hard copies of Acquired Assets that are electronically
transmitted shall be transferred to Buyer. Hard copies of the Acquired Assets
that are not able to be electronically transferred shall be transferred to Buyer
at Closing. Exhibit H accurately indicates which Acquired Assets are being
transferred electronically and which are being transferred in hard copy.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Each of Parent and Sub
hereby, jointly and severally, represents and warrants to Buyer that, except as
expressly set forth in Seller's Disclosure Schedule delivered to Buyer by them
at or prior to the Closing (which indicates the specific subsection of this
Section 4 to which each disclosure or exception is made, and which disclosures
and exceptions shall be deemed to be representations and warranties as if made
hereunder), the following statements are true, accurate and complete as of the
date of this Agreement.
4.1 Organization and Standing.
(a) Parent is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of California.
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(c) Neither Parent nor Sub has (i) filed or had filed against
it a petition in bankruptcy or a petition to take advantage of any other
insolvency act, (ii) made an assignment for the benefit of creditors, nor (iii)
consented to the appointment of a receiver for itself or any substantial part of
its property.
4.2 Authority; Validity; Enforceability. Each of Parent and Sub
has the requisite corporate power and authority to execute and deliver this
Agreement and each other agreement to be executed and delivered by it at Closing
(the "Seller Transaction Agreements"), to consummate the transactions
contemplated hereby and thereby, and to perform its obligations hereunder. Each
Seller Transaction Agreement has been duly authorized, executed, and delivered
by or on behalf of Parent or Sub, as the case may be, and is a valid and legally
binding obligation of such party, enforceable against such party in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles. Each Seller Transaction
Agreement and Parent and Sub's consummation of the transactions contemplated
hereby and thereby have been duly approved by their respective boards of
directors. No vote or other approval of either Parent or Sub's stockholders is
required in connection with this or any of the Seller Transaction Agreements or
any of the transactions contemplated hereby or thereby.
4.3 Title; Sufficiency of Acquired Assets.
(a) Parent and Sub are the true and lawful owners of the
Acquired Assets, free and clear of any and all liens, restrictions, liabilities
and assignments of any kind other than Permitted Encumbrances, and Seller has
the full right to sell and transfer to Buyer good and marketable title to the
Acquired Assets, free and clear of any and all liens other than Permitted
Encumbrances. The delivery to Buyer of the instruments of transfer of ownership
contemplated by this Agreement will vest good and marketable title to the
Acquired Assets in Buyer, free and clear of all liens other than Permitted
Encumbrances.
(b) The Acquired Software listed on Schedule 1.1(a) together
with the excluded third party software listed on Schedule 1.1(a)(2) are the
sufficient and necessary assets for the operation of the Acquired Software.
4.4 No Conflicts.
(a) To the best of Seller's knowledge, neither Seller's
ownership and use of the Acquired Assets nor the conduct of Seller's business
relating to the Acquired Assets prior to the Closing Date (i) conflicts with any
material rights of any other person, firm or corporation, or (ii) violates,
conflicts with or will result in a default, right to accelerate or loss of
rights under, any term or provision of any lien, encumbrance, mortgage, deed of
trust, lease, license, agreement, understanding, law, ordinance, rule or
regulation, or any order, judgment or decree to which Parent or Sub is a party
or by which either Parent or Sub or its properties may be bound or affected; nor
will the giving of notice or passage of time result in any such violation,
conflict, default, right or loss of rights.
(b) The execution and delivery of the Seller Transaction
Agreements by each of Parent or Sub and the performance and consummation by
Parent or Sub of the
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transactions contemplated hereby and thereby shall not (whether upon failure to
give notice or the passage of time or otherwise) result in any conflict with,
breach or violation of or default, termination or forfeiture under (i) any term
or provision of Parent's Certificate of Incorporation or Bylaws, (ii) any term
or provision of Sub's Articles of Incorporation or Bylaws, (iii) any statute,
rule, regulation, judicial, governmental, regulatory or administrative decree,
order or judgment known to Seller to be applicable to Parent or Sub, or (iv) any
contract, agreement, lease, license, permit or other instrument to which Parent
or Sub is a party or to which any of their respective assets are subject, which
conflict, breach, violation, default, termination or forfeiture would have a
material adverse effect on Buyer's ownership of the Acquired Assets following
the Closing, or on Seller's indemnification obligations to Buyer pursuant to
Section 7, or be reasonably likely to result in the imposition on or against
Buyer or the Acquired Assets of a penalty, fee, decree, order or judgment.
(c) There is no action, suit, proceeding or investigation
pending or, to the best of Seller's knowledge, threatened against Parent or Sub
that questions the validity of any Seller Transaction Agreement or the right of
Parent or Sub to enter into any Seller Transaction Agreement or to consummate
the transactions contemplated hereby or thereby.
4.5 Other Liabilities. Other than the Assumed Contracts, neither
Parent nor Sub has any liability or obligation with respect to the Acquired
Assets under which Buyer may become obligated.
4.6 Contracts.
(a) All agreements, contracts, commitments and licenses
whether written or oral relating to the Acquired Assets (the "Contracts"), by
which Parent or Sub is bound are listed on Schedule 4.6. Complete and correct
copies or originals of all written Contracts, together with all exhibits,
attachments, schedules and amendments thereto, and summaries of all oral
Contracts have been provided to Buyer.
(b) Each Assumed Contract is a valid and legally binding
obligation of Parent and/or Sub and, to the best of Seller's knowledge, the
other parties thereto, enforceable against Parent and/or Sub and the other
parties thereto, in accordance with its respective terms. Neither Parent nor Sub
is, and to the best of Seller's knowledge, no other party to any Assumed
Contract is in material default thereunder. Neither Parent nor Sub has, and to
the best of Seller's knowledge, no other party to any Assumed Contract has,
performed any act or omitted to perform any act which act or omission, with the
giving of notice or passage of time or otherwise, will become a default under
any Assumed Contract.
(c) Neither Parent nor Sub has received any advanced, prepaid
or other payment from or on behalf of any of its customers under or with respect
to any Assumed Contract which represent payments made before an equivalent
amount of work or passage of time or similar action or event has occurred, and
there are no other funds due or that will become due to customers on any of the
Acquired Software for which Buyer may be held liable. Except as set forth in the
Assumed Contracts, neither Parent nor Sub has any written or oral agreement to
provide any warranty relating to the Acquired Software or to provide any
material change in
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functionality or other alterations in the performance of the Acquired Software
or to provide new products or technology.
4.7 Absence of Litigation, Orders, Judgments.
(a) There are no actions, suits or proceedings pending or, to
the best of Seller's knowledge, threatened which involve transactions of or
otherwise relate to the Acquired Assets, at law or in equity, or before any
arbitrator of any kind, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or other
instrumentality, domestic or foreign.
(b) There are no outstanding orders, writs, injunctions,
decrees, judgments, awards, determinations or directions, which involve
transactions of or otherwise relate to the Acquired Assets, of any court or
arbitrator or under any outstanding order, regulation or demand of any federal,
state, municipal or other governmental instrumentality, domestic or foreign.
4.8 Intellectual Property.
(a) Seller owns or has the right to use all of the Acquired
Intellectual Property, without any misappropriation or infringement of the trade
secret rights or copyrights of others. All designs, drawings, technical
specifications, source code, object code, design documents, documentation, flow
charts and diagrams incorporating, embodying or reflecting any of the Acquired
Intellectual Property at any stage of the development were written, developed
and created solely and exclusively by (i) employees of Seller (or employees of
an entity which was acquired by Seller or from which Seller acquired the
Acquired Intellectual Property) or (ii) third parties who assigned ownership of
any and all of their rights arising out of, related to or resulting from their
development and creative efforts (or employees of an entity which was acquired
by Seller or from which Seller acquired the Acquired Intellectual Property) to
Seller in valid and enforceable agreements. An accurate and complete description
of the Acquired Intellectual Property is set forth on Schedule 1.1(a). None of
the Acquired Intellectual Property is owned by any current or former employee of
Seller, nor does any such person have any other rights in any of the Acquired
Intellectual Property. Seller has taken all reasonably necessary action to
maintain and protect the intellectual property rights in the Acquired
Intellectual Property provided, however, that Buyer acknowledges that Seller has
not : (i) pursued any patent protection for the Acquired Intellectual Property,
(ii) registered any copyrights in the Acquired Intellectual Property or (iii)
registered any of the unregistered trademarks listed on Schedule 1.1. Each item
of the Acquired Intellectual Property owned or used by Seller immediately prior
to the Closing will be owned or available for use by Buyer on identical terms
and conditions immediately subsequent to the Closing. No consent or waiver from
any third party is required in order to effect the transfer and assignment of
the Acquired Intellectual Property to Buyer.
(b) To Seller's knowledge, Seller has not infringed upon or
misappropriated any intellectual property rights of others in connection with or
related to its ownership or use of the Acquired Intellectual Property. To
Seller's knowledge, the Acquired Intellectual Property does not infringe any
patent or trademark of any third party. The Acquired Intellectual Property does
not infringe a copyright or constitute a misappropriation of a trade
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secret of a third party. Neither Seller nor, to Seller's knowledge, any customer
of Seller, has ever received or has had knowledge of any credible charge,
complaint, claim, demand, or notice alleging any such infringement or
misappropriation (including without limitation any claim that, with respect to
the Acquired Intellectual Property, Seller must license or refrain from using
any intellectual property rights of any other person), or that Seller's use of
any of the Acquired Intellectual Property constitutes unfair competition. To
Seller's knowledge, no other person has infringed upon or misappropriated any of
the Acquired Intellectual Property.
(c) Each person currently or formerly employed or engaged as a
consultant or independent contractor by Seller that has or had access to
confidential information of Seller relating to the Acquired Intellectual
Property has executed a confidentiality and non-disclosure agreement which
requires such person to maintain the confidentiality of any such information.
Each person currently or formerly employed or engaged as a consultant or
independent contractor by Seller who developed or was responsible for developing
Acquired Intellectual Property has executed an agreement sufficient to cause the
assignment to Parent and/or Sub of any and all such Acquired Intellectual
Property. Other than those developers listed on Schedule 4.8(c), no other
developers (employees, consultants, independent contractors or others) have
developed or were responsible for developing the Acquired Intellectual Property.
(d) To Seller's knowledge, the Acquired Software conforms to
the design specifications and descriptions set forth in the NeoVista Assort
Release Notes, Administration Guide, User's Guide Version 2.2 (February 2000),
Accrue Decision Series Application Developer Guide and Applications Reference
Manual Version 4.0 (February 2000) and NeoVista RDS Profile Guides,
Administration Guide and User's Guide Version 1.3 (November 1998), and, to
Seller's Knowledge, contains no errors (other than those listed on Attachment A
to Schedule 4.8) in current or earlier versions of the Acquired Software
currently or formerly in use by any third parties under any agreement for which
Buyer may be held liable or for which Buyer may in any way suffer adverse
consequences. To Seller's knowledge, Seller has not received any claims or
complaints of errors or omissions, other than those disclosed on Attachment A to
Schedule 4.8, from any third parties, and knows of no reasonable basis therefor.
4.9 Employee Matters.
(a) Schedule 4.9 lists all of the employees that Buyer has
indicated to Seller that Buyer intends to consider for hire following the
Closing (the "Specified Employees"). Seller has provided to Buyer each Specified
Employee's position and salary with Seller, and all of Seller's employee benefit
plans and other arrangements available to the Specified Employees (collectively,
the "Employee Plans"). Seller has provided to Buyer complete and accurate copies
of the plan documents with respect to each of the Employee Plans (including,
without limitation, plan amendments currently under consideration, trust
documents, insurance policies or contracts, employee booklets, summary plan
descriptions and other authorizing documents, and any material employee
communications).
(b) The employment by Seller of each of the Specified
Employees is "at will," except as may be required to the contrary under
applicable law. Seller does not have any obligation with respect to any
Specified Employee (i) to provide any particular form or
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period of notice prior to termination, or (ii) to pay any severance benefits in
connection with the termination of such person's employment or service. Seller
does not owe and has not accrued any bonuses or vacation pay or retirement
benefits to any Specified Employees except as set forth on Attachment A to
Schedule 4.9.
(c) Seller is not aware of any impending resignation by or
other termination of employment of any Specified Employee.
(d) Each of the Specified Employees is either (i) a United
States citizen or has permanent residence status duly authorized and
acknowledged by the United States Immigration and Naturalization Service (the
"INS"), or (ii) has provided paperwork and documentation to support the
Specified Employee's claim that he or she is present in the United States under
a current visa issued in accordance with all of the laws, regulations and
requirements of the INS, which visa permits the holder thereof to reside in the
United States and be employed by Seller to perform the work such person is
presently performing. To the best of Seller's knowledge, there will not be any
delay or impediment to Buyer offering employment to, and employing, any of the
Specified Employees immediately following the Closing.
(e) Attachment A to Schedule 4.9 sets forth a complete and
accurate listing of all known obligations of Seller to the Specified Employees
through the Closing Date (the "Specified Employee Obligations").
4.10 No Brokers, Finders. Seller has not engaged, nor is Seller
obligated for the payment of any commission, fee or expense of, any broker or
finder in connection with the origin, negotiation or execution of this Agreement
or any of the transactions contemplated hereby for which Buyer will be
responsible for any commission, fee or expense.
4.11 No Misstatements. The copies of all instruments, agreements,
other documents and written information delivered by or on behalf of Seller to
Buyer in connection with this Agreement are and will be complete and correct in
all material respects. No representations or warranties made by Seller, Parent
or Sub in this Agreement, nor any document, written information, financial
statement, certificate or exhibit prepared and furnished by Seller to Buyer
pursuant to this Agreement, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact necessary to make
the statements or facts contained herein or therein, in light of the
circumstances in which they were made, not misleading. Schedule 1.1 is a
complete and accurate listing of all assets of Seller that are primarily related
to the Acquired Software.
4.12 Unaudited Financial Statements. The unaudited financial
information of Seller delivered to Buyer relating to the Acquired Assets reflect
revenue recognized in accordance with generally accepted accounting principles
and recorded for fiscal year 2001 related to the Acquired Software and an
estimate of expenses related to certain employees of Seller associated with the
Acquired Software and such financial information contains no material
misstatements.
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5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to Seller that the following statements are true, accurate and complete
as of the date of this Agreement.
5.1 Organization and Standing.
(a) Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) Buyer has not (i) filed or had filed against it a petition
in bankruptcy or a petition to take advantage of any other insolvency act, (ii)
admitted in writing its inability to pay its debts generally, (iii) made an
assignment for the benefit of creditors, (iv) consented to the appointment of a
receiver for itself or any substantial part of its property, or (v) generally
committed any act of insolvency (including the failure to pay obligations as
they become due) or bankruptcy.
5.2 Authority, Validity; Enforceability. Buyer has the requisite
corporate power and authority to execute and deliver this Agreement and each
other agreement to be executed and delivered by it at Closing (the "Buyer
Transaction Agreements"), to consummate the transactions contemplated hereby and
thereby, and to perform its obligations hereunder and thereunder. Each Buyer
Transaction Agreement has been duly authorized, executed, and delivered by Buyer
and is a valid and legally binding obligation of Buyer, enforceable against
Buyer in accordance with its terms.
5.3 No Conflicts.
(a) The execution and delivery of the Buyer Transaction
Agreements by Buyer and the performance and consummation by Buyer of the
transactions contemplated hereby shall not (whether upon failure to give notice
or the passage of time or otherwise) result in any conflict with, breach or
violation of or default, termination or forfeiture under (i) any term or
provision of Buyer's Certificate of Incorporation or Bylaws, (ii) any statute,
rule, regulation, judicial, governmental, regulatory or administrative decree,
order or judgment known to Buyer to be applicable to Buyer, or (iii) any
contract, agreement, lease, license, permit or other instrument to which Buyer
is a party or to which any of its assets are subject, which conflict, breach,
violation, default, termination or forfeiture would have a material adverse
effect on (A) Buyer's ability to pay to Seller the Purchase Price or (B)
satisfaction of Buyer's indemnification obligations to Seller pursuant to
Section 7.
(b) There is no action, suit, proceeding or investigation
pending or, to the best of Buyer's knowledge, threatened against Buyer that
questions the validity of any Buyer Transaction Agreement or the right of Buyer
to enter into this Agreement or to consummate the transactions contemplated
hereby.
6. COVENANTS SURVIVING THE CLOSING.
6.1 Further Assurances. From time to time, at the request of any
of the parties hereto, and without further consideration, the non-requesting
party shall execute such documents and instruments and do or cause to be done
such further acts and things as may be reasonably
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necessary or desirable to effect more fully the transfer and assignment of the
Acquired Assets, to put Buyer in possession of the Acquired Assets, or to effect
any other transactions contemplated by this Agreement in accordance with the
terms of this Agreement. In addition, after the Closing, Seller shall provide to
Buyer access to such accounting, financial and other books and records of Parent
or Sub that are not included in the Acquired Assets but are related to the
Acquired Assets which Buyer reasonably deems necessary or appropriate in
connection with its ownership, use or operation of the Acquired Assets and
Buyer's reporting obligations under generally accepted accounting principles,
Securities and Exchange Commission rules and regulations, federal, state or
other tax laws or other governmental rules and regulations.
6.2 Offer of Employment to Specified Employees. Buyer shall have
delivered, prior to the Closing Date, conditional offer letters of employment,
in the form attached hereto as Exhibit I-1, to those Specified Employees Buyer
wishes to employ. Seller shall have delivered, prior to the Closing Date,
conditional notices of termination, in the form attached hereto as Exhibit I-2,
to those Specified Employees receiving a conditional offer from Buyer. Specified
Employees will have their employment with Seller terminate automatically upon
the Closing and no such Specified Employee may be employed by Seller; provided,
however, that any Specified Employee who is hired and then terminated by Buyer
may be re-hired by Seller at any time after six (6) months following such
termination. With respect to Blossom Xxxx, Xx. Xxxx may remain an employee with
Seller for up to four (4) weeks after the Closing Date, after which time her
employment with Seller shall terminate, and Xx. Xxxx may not be re-hired by
Seller until after the six (6) month anniversary of such termination date.
Seller shall have paid all known obligations payable by it to the Specified
Employees through the Closing Date or as soon as practicable thereafter (but in
no event later than twenty (20) days from the Closing Date). If Buyer reasonably
believes that any of the obligations listed on Attachment A to Schedule 4.9 have
not been paid, Buyer shall provide Seller written notice of such alleged
non-payment and if Seller does not provide evidence of such payment within
twenty (20) days of such notice to Seller, Buyer may make a claim against the
Escrow Fund in accordance with Section 7 for the amount of any such obligation.
Buyer will set aside an aggregate of $187,500 for "Stay Bonuses" for Specified
Employees who accepted employment with Buyer and who remain employed by Buyer
for periods of time determined by Buyer in its sole discretion. Buyer shall not
be obligated to pay any portion of an allocated "Stay Bonus" to any Specified
Employee who does not remain employed by Buyer for the requisite period nor
shall Buyer be obligated to pay any allocated but unused "Stay Bonus" amounts to
any other Specified Employee. Nothing in this Agreement shall confer any rights
or remedies on any employee of Seller, including the Specified Employees and no
such employee shall be deemed a third party beneficiary to any provision of this
Agreement.
6.3 No Solicitation of Employees. For a period of twelve (12)
months after the Closing Date, Seller and Buyer agree that they shall not,
directly or indirectly, in any capacity whatsoever, recruit or solicit (with the
exception of Specified Employees), or induce or attempt to induce any such
employee to terminate or alter his or her relationship with Seller or Buyer, as
the case may be. However, the foregoing shall not prohibit either party from
hiring employees of the other party who respond to general solicitations not
directed at specific individuals, or from hiring employees of the other party
who initiate contact with such party to seek employment without having been
solicited by such party. For purposes of this Section 6.3 "general
solicitations" shall mean, (i) advertising for employment in any bulletin board
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(including electronic bulletin boards), newspaper, trade journal or other
publication available for general distribution to the public without specific
reference to any particular employees; (ii) participation in any hiring fair or
similar event open to the public not targeted at either Buyer's or Seller's
employees; and (iii) use of recruiting or employee search firms that have been
instructed by Seller not to target any employee's of Buyer or Seller.
Notwithstanding the foregoing, Buyer may not offer employment to or hire Xx.
Xxxxx Xxxxxxx under any circumstances until twelve (12) months after the date of
this Agreement and then, if Xx. Xxxxxxx is then still employed by Seller, only
upon three (3) months advance written notice to Seller (which may be given prior
to the expiration of the twelve (12) month period).
6.4 Confidentiality.
(a) Buyer will keep all Seller Confidential Information (as
defined herein) in strict confidence, and Seller will keep all Buyer
Confidential Information (as defined herein) in strict confidence. Neither Buyer
nor Seller will disclose Confidential Information (as defined herein) to others,
or take or use Confidential Information for its own purposes or the purposes of
others; provided, however, that each of Buyer and Seller may disclose
Confidential Information to its respective attorneys, accountants, financial
advisers, directors, employees and affiliates (each of Buyer and Seller may
disclose Confidential Information as applicable to this Agreement and the
Acquired Assets to the extent required by the U.S. Securities and Exchange
Commission, the Securities Act of 1933, as amended or the Securities Exchange
Act of 1934, as amended and any rules or regulations promulgated thereby or
thereunder, including Regulation FD) that need to know the specific Confidential
Information so disclosed, are informed by the disclosing party of the
confidential and proprietary nature of the Confidential Information, and agree
to keep the Confidential Information confidential and not to disclose the
Confidential Information to any other person without the prior written consent
of the non-disclosing party.
(b) "Buyer Confidential Information" shall consist of any
information, whether written (including information that is stored on
machine-readable media) or oral, regarding Buyer, its assets, its business or
the operation thereof, the Acquired Assets or the operation thereof that
previously has not been publicly released by a duly authorized representative of
Buyer, including but not limited to proprietary information, trade-secrets,
know-how, documents, competitive and market analyses, computer software or
software listings, proposals, reports, marketing plans or research, development
plans or information, pricing information, vendor lists, illustrations, concepts
and ideas and sources of such technical and business information. "Seller
Confidential Information" shall consist of any information, whether written
(including information that is stored on machine-readable media) or oral,
regarding Seller, Parent or Sub generally or its business that previously has
not been publicly released by a duly authorized representative of Seller,
including but not limited to proprietary information, trade-secrets, know-how,
documents, competitive and market analyses, computer software or software
listings, proposals, reports, marketing plans or research, development plans or
information, pricing information, vendor lists, illustrations, concepts and
ideas and sources of such technical and business information. "Confidential
Information" when used with respect to Buyer's obligations hereunder shall refer
to Seller Confidential Information and, when used with respect to Seller's
obligations hereunder, shall refer to Buyer Confidential Information. In
addition, "Confidential Information" shall include the existence and content of
this Agreement and any past and future negotiations with respect to the
transactions contemplated hereby.
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"Confidential Information" shall not include information and/or data which the
receiving party can establish (i) has become publicly known through no violation
of an obligation of non-disclosure by any person or entity; (ii) was obtained by
the receiving party from a third party through no violation of an obligation of
non-disclosure by any person or entity; (ii) was independently developed without
any use or reference to Confidential Information and through no violation of an
obligation of non-disclosure by any person or entity; (iv) has been approved for
public disclosure in writing by the disclosing party; (v) was intentionally
furnished by the disclosing party to a third party without similar restrictions
on disclosure, except in the case of a transfer of all rights therein to such
third party; (vi) has been disclosed pursuant to a requirement of law, but only
to the extent such disclosure is required; or (vii) as evidenced by written
records, was in the possession of the receiving party prior to the Closing
through no violation of an obligation of non-disclosure by any person or entity.
(c) If disclosure of Confidential Information by either party
is compelled by deposition, interrogatory, subpoena, civil investigative demand
or similar legal process, the party so compelled shall give prompt notice to the
other party so that such party may seek an appropriate protective order and/or
take any other action. In the event that a protective order is not obtained, or
that a party waives compliance with the agreements contained herein, the other
party (i) may disclose to the tribunal or other person the specific Confidential
Information or other information that, in the written opinion of counsel for
such disclosing party (a copy of which shall be promptly delivered to the
non-disclosing party), the disclosing party is legally required to disclose, and
(ii) will exercise best efforts to obtain assurance that confidential treatment
will be accorded to any such disclosed Confidential Information.
(d) The parties acknowledge that it would be difficult to
measure damage to one party from any breach of any of the agreements contained
in this Section 6.4, that injury to a party from any such breach would be
difficult to calculate, and that money damages therefore would be an inadequate
remedy for any such breach. Accordingly, if one party breaches any of the
agreements in this Section 6.4, the non-breaching party shall be entitled, in
addition to any other remedies they may have, to equitable relief, including
injunctions, specific performance or other appropriate orders to restrain any
such breach, without showing or proving any actual damage sustained.
(e) No communications, press releases, public announcements or
publicity shall be made by either party concerning this Agreement or the
transactions contemplated hereby without the prior consent and review by the
other party; provided, that either party may make any disclosure of information
that is required by applicable law or regulation or as set forth under Section
6.4(a).
6.5 California Sales and Use Taxes. Seller and Buyer agree to
comply with the California Sales and Use tax laws in all respects with respect
to the transactions contemplated by this Agreement.
6.6 Forwarding of Notices, Mail or Other Items. Seller shall
promptly, after the receipt of such items, forward to Buyer any notices, mail,
or other such items related to the Acquired Assets or any contracts or
agreements related thereto. With respect to Assumed Contracts, any payments
received that relate to bona fide invoices sent by Seller for services
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performed or products delivered prior to Closing may be retained by Seller. Any
other payments shall be promptly forwarded to Buyer.
6.7 Distribution from Seller's 401(k) Plan. To the extent that
Buyer hires any of the Specified Employees, Seller hereby agrees that it shall
cause the accounts, if any, of such Specified Employees in Seller's 401(k) Plan
to be distributed on account of the Specified Employees ceasing to be an
employee of Seller promptly in accordance with the instructions of such
Specified Employee and applicable law.
6.8 Transitional Services.
(a) Seller shall provide the full-time services of Xxxx Xxxxxx
as consultant to Buyer, without charge, until Buyer has verified the receipt of
all the Acquired Assets pursuant to the procedure described on Schedule
3.2(a)(ii).
(b) Seller agrees to place, for a period of six (6) months
from the Closing Date, a link or links on the products page of its website at
xxx.xxxxxx.xxx as appropriate and as necessary to redirect visitors to its
website searching for information on "NeoVista" or "NeoVista" products to the
NeoVista Website. Seller acknowledges that Buyer grants to Seller the right to
use the "NeoVista" trademark for the sole purpose of redirecting such visitors
during such period of time. Buyer agrees to place, for a period of six (6)
months from the Closing Date, a link or links on the Neovista Website in the
form attached hereto as Exhibit L. Buyer acknowledges that Seller grants to
Buyer the right to use Seller's trademark for the sole purpose of redirecting
such visitors and such period of time.
(c) Seller agrees to rent to Buyer and Buyer agrees to rent
from Seller, at no additional cost and for up to two (2) months after the
Closing Date, the personal property listed on Schedule 6.8(c).
(d) Buyer shall make the services of Xxxxx Xxxxxxxxxxx
available to Seller until July 31, 2001 (the "Availability Period"). Seller
shall pay Buyer for Xx. Xxxxxxxxxxx'x services at a fully loaded rate based upon
his salary, compensation and benefits. Xx. Xxxxxxxxxxx'x availability during the
above mentioned periods shall be determined at the sole discretion of Xxxxx
Xxxx, Buyer's Senior Vice President of Development. If Seller fails to pay Buyer
for the services of Xx. Xxxxxxxxxxx within thirty (30) days after the end of the
Availability Period, Buyer may make a claim against the Escrow Fund in
accordance with Section 7 for the amount of any such obligation.
6.9 Termination of Strategic Alliance Agreement. The Strategic
Alliance Agreement dated July 1, 2000 by and between JDA Software, Inc. and
Parent shall terminate effective as of the Closing Date. Parent and Buyer agree
to release, remise, acquit and discharge each other from any and all claims,
demands and/or causes of action whatsoever known or unknown, which such party
has or may have against the other party and any and all liability (including,
but not limited to, any claims, demands and/or causes of action under such
agreement) that any of such parties may have to it whether denominated claims,
demands, causes of action, obligations, damages or liabilities arising from any
and all bases, however denominated.
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6.10 Xxxxxxx & Xxxxxx Opportunity. Seller acknowledges that the
trade secrets that Buyer is acquiring includes the prospective business
opportunity with Xxxxxxx & Xxxxxx described in Exhibit M (the "Xxxxxxx & Xxxxxx
Opportunity"). Seller shall deliver to Buyer all data, notes, records,
information and other relevant materials created within the three (3) months
prior to the Closing Date with respect to the Xxxxxxx & Xxxxxx Opportunity.
Seller covenants to Buyer that Seller will not pursue the Xxxxxxx & Xxxxxx
Opportunity with Xxxxxxx & Xxxxxx.
7. INDEMNIFICATION.
7.1 Survival of Representations, Warranties, Covenants and
License. The representations and warranties, covenants and other agreements set
forth in this Agreement shall survive the consummation of the transactions
contemplated hereby for the duration of the Indemnification Period (as defined
in Section 7.6). The rights and obligations of Seller and Buyer under Section
1.3 (License Grant to Seller) shall survive the termination of this Agreement
pursuant to the terms of such Section 1.3.
7.2 Indemnification by Seller.
(a) Subject to Section 7.6, Seller shall indemnify, defend and
hold harmless Buyer from and against, and shall reimburse Buyer against and in
respect of, any and all claims, charges, suits, demands, losses, costs,
expenses, obligations, liabilities, damages, remedies, interest, penalties and
reasonable attorneys' fees and expenses (collectively, "Losses"), that Buyer
shall incur or suffer and that arise from (i) any breach or inaccuracy of any of
Seller's representations and warranties contained in any Seller Transaction
Agreement; (ii) any failure by Seller to perform or comply with any covenant or
agreement contained in any Seller Transaction Agreement or any Exhibit or
Schedule attached thereto; (iii) any obligation under any Assumed Contract
resulting from any action taken or failed to be taken by Seller prior to the
Closing and which was not disclosed to Buyer prior to the Closing or (iv) any
Derivative Works of Seller that infringes upon or misappropriates the
intellectual property of a third party. Damages in each case shall be net of the
amount of any insurance proceeds and indemnity and contribution actually
recovered by Buyer and net of 50% of the taxes described in Section 2.4 to the
extent not previously included in the Purchase Price or otherwise paid or taken
into account in calculating a payment.
(b) No due diligence or other investigation made by or on
behalf of Buyer with respect to Seller or the Acquired Assets shall be deemed to
affect Buyer's reliance on the representations, warranties, covenants and
agreements made by Seller, and shall not be deemed to be a waiver of Buyer's
rights to indemnity or reimbursement as herein provided.
7.3 Indemnification by Buyer. Subject to Section 7.6, Buyer shall
indemnify, defend and hold harmless Seller from and against, and shall reimburse
Seller against and in respect of, any and all Losses, that Seller shall incur or
suffer and that arise from (a) any breach or inaccuracy of any of Buyer's
representations and warranties contained in any Buyer Transaction Agreement; (b)
any failure by Buyer to perform or comply with any covenant or agreement
contained in any Buyer Transaction Agreement or any Exhibit or Schedule attached
thereto; or (c) Buyer's ownership, use or operation of or performance or failure
to perform under the Acquired Assets after the Closing (other than Losses for
which Seller would be required to
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indemnify or reimburse Buyer under Section 7.2). Damages in each case shall be
net of the amount of any insurance proceeds and indemnity and contribution
actually recovered by Seller and net of 50% of the taxes described in Section
2.4 to the extent not previously included in the Purchase Price or otherwise
paid or taken in account in calculating a payment. In no event shall Buyer be
obligated to indemnify, defend or hold harmless Seller from and against any
Losses with respect to a claim for wrongful termination brought against Seller
by any of the Specified Employees.
7.4 Claims for Indemnification.
(a) A party seeking indemnification hereunder (the
"Indemnitee") shall give to the party from which indemnification is sought (the
"Indemnitor") written notice (a "Claim Notice") of any claim which is subject to
the indemnity obligations set forth in this Agreement, with sufficient
promptness so as not to prejudice the Indemnitor's interests in respect of such
claim and any obligation of indemnity arising therefrom. The Claim Notice shall
set forth, to the best of the Indemnitee's knowledge, all facts and other
information with respect to the claim, including without limitation the
anticipated amount of Losses or reasonable estimate thereof. The failure to give
prompt notice shall not affect the rights of the Indemnitee to indemnity
hereunder, except to the extent that such failure either shall have materially
prejudiced the Indemnitor in the defense of such claim or shall have materially
increased the amount of the obligation of the Indemnitor. The Indemnitor
receiving a Claim Notice may object to such Claim Notice by delivering written
notice of such objection to the Indemnitee within ten (10) days after receipt of
the applicable Claim Notice. If the Indemnitor does not timely object to a Claim
Notice in accordance with paragraph (b) of this Section 7.4, the Indemnitor
shall, within fifteen (15) days after receipt of the Claim Notice, either (i)
pay the amount of the claim set forth in the Claim Notice, if a monetary amount
is involved, in accordance with this Section 7, or (ii) if a claim of a third
party is involved, have the right to assume the defense of such claim; provided,
however, that, if the amount of the claim exceeds the amount of the Indemnitor's
obligation to indemnify the Indemnitee hereunder, the Indemnitee may elect to
control the defense of such claim. Subject to the preceding sentence, the
Indemnitor shall have the exclusive right to conduct and control, through
counsel of its own choosing, the defense of any such claim or any action arising
therefrom; provided, that in conducting the defense of any such claim or action,
the Indemnitor shall, and shall cause its counsel to, consult with the
Indemnitee and counsel, if any, selected by it, and shall keep such counsel, if
any, and the Indemnitee fully advised of the progress thereof and, provided
further, that if the Indemnitee shall have elected to retain control of such
defense, the Indemnitee shall, and shall cause its counsel to, consult with the
Indemnitor and counsel, if any, selected by it, and shall keep such counsel, if
any and the Indemnitor fully advised of the progress thereof. If the Indemnitor
fails or refuses to assume the defense and control of the defense of any such
claim or action, then the Indemnitee shall conduct and control such defense. So
long as the Indemnitor is conducting the defense of any third party claim in
accordance with this Section 7.4(a), (i) the Indemnitee may retain separate
co-counsel at its sole cost and expense and participate in the defense of the
third party claim, (ii) the Indemnitee will not consent to the entry of any
judgment or enter into any settlement with respect to the third party claim
without the prior written consent of the Indemnitor (such consent not to be
withheld unreasonably) and (iii) the Indemnitor will not consent to the entry of
any judgment or enter into any settlement with respect to the third party claim
without the prior written consent of the Indemnitee (such consent not to be
withheld unreasonably and such
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consent not to be withheld at all if the judgment or settlement contains a full
release reasonably satisfactory to the Indemnitee). If the Indemnitee has
elected to conduct the defense of a third party claim because the claim is for
more than the Indemnitor's obligation hereunder, (i) the indemnitor may retain
separate co-counsel at its sole cost and expense and participate in the defense
of the third party claim and (ii) neither the Indemnitor nor the Indemnitee will
consent to the entry of any judgment or enter into any settlement with respect
to the third party claim without the prior written consent of the other party
(such consent not to be withheld unreasonably); and
(b) An Indemnitor may object to a Claim Notice by delivering
written notice to the Indemnitee (an "Objection") within ten (10) days after the
receipt of the applicable Claim Notice. If an Objection has been made, the
Indemnitor shall not be required to make any payments under this Section 7 until
such Objection is resolved under the terms of this paragraph (b) of Section 7.4.
Once an Objection has been made, the Indemnitor and Indemnitee shall attempt in
good faith to agree upon the rights of the respective parties with respect to
the claim or claims relating to the Claim Notice. Any such agreement shall be
set forth in a written memorandum signed by both parties. If the parties cannot
come to such agreement within ten (10) days after receipt by the Indemnitee of
the Objection, the matter shall be resolved by submission to arbitration in San
Diego, California. Except as specifically provided in this paragraph (b), such
matter shall be resolved in accordance with the commercial arbitration rules of
the American Arbitration Association then in effect (the "AAA Rules"), by a
single arbitrator mutually selected by the Indemnitor and Indemnitee. The
arbitrator shall be governed by and shall apply the substantive law of the State
of California and the Federal Rules of Evidence in making their determination,
and such determination shall be conclusive and binding upon the Indemnitor and
Indemnitee. Any judgment upon an award rendered by the arbitrator may be entered
in any court having jurisdiction over the subject matter thereof. If any party
initiates an action (other than arbitration under this Section 7.4) asserting
claims subject to arbitration under this Section 7, and another party
successfully stays or dismisses such action and/or compels arbitration of said
claims, the party filing said action shall pay the other party's costs and
expenses reasonably incurred in seeking such stay, dismissal and/or compelling
arbitration, including reasonable attorney's fees.
7.5 Settlements. Except as otherwise provided in Section 7.4(a),
no settlement of any claim for which indemnification is sought hereunder shall
be made without the prior written consent of both the Indemnitor and the
Indemnitee, which consent shall not be unreasonably withheld or delayed.
7.6 Limitations.
(a) Notwithstanding anything to the contrary in this Agreement
and absent the commission of fraud or intentional misrepresentation, no claim
for indemnification shall be made by an Indemnitee under this Section 7, except
with respect to Section 2.4, Section 4.3(a) (but only if, and to the extent,
such representations and warranties in Section 4.3(a) are not true and correct
to Seller's knowledge as of the Closing), the next to the last sentence of
Section 6.2 and the last sentence of Section 6.8(d), unless and until the
aggregate of all Losses of the applicable Indemnitee Group subject to
indemnification exceeds $100,000, and then such Losses shall be deemed to
include the entire $100,000 for the purposes of
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indemnification pursuant to this Agreement plus any amounts owing pursuant to
Section 2.4, Section 4.3(a) (but only if, and to the extent, such
representations and warranties in Section 4.3(a) are not true and correct to
Seller's knowledge as of the Closing), the next to last sentence of Section 6.2
and the last sentence of Section 6.8(d). "Indemnitee Group" shall mean Buyer and
Buyer's Affiliates and their respective directors, employees and agents with
respect to Buyer and Parent and Sub and their respective directors, employees
and agents with respect to Parent and Sub.
(b) Absent the commission of fraud or intentional
misrepresentation, the aggregate liability of Seller shall not exceed the amount
held in the Escrow Fund; provided, however, that Buyer may seek recourse in
excess of the amount held in the Escrow Fund and up to the Purchase Price during
the Indemnification Period (as defined below) for Seller's breach of the
representations and warranties contained in the second and third sentences of
Section 4.8(b), Seller's indemnification obligations under Section 7.2(a)(iv)
and for any Losses that may arise out of Seller's obligation to have provided
notice under the terms and conditions of any license agreements pursuant to
which Seller licensed technology for distribution and use with the Acquired
Software from third parties.
(c) The representations and warranties hereunder shall expire
on June 25, 2002 (the period starting on the Closing Date and ending on June 25,
2002 being the "Indemnification Period").
(d) Absent the commission of fraud or intentional
misrepresentation by any of the parties in connection with the transactions
contemplated by this Agreement, the foregoing indemnification provisions in this
Section 7 will be the exclusive remedy for any breach of the representations and
warranties set forth in this Agreement.
(e) All indemnification payments under this Section 7 shall be
deemed adjustments to the Purchase Price.
(f) Amounts needed to cover any indemnification claims
resolved in favor of Buyer under this Section 7 during the Indemnification
Period will be paid to Buyer out of the cash comprising the Escrow Fund,
escrowed pursuant to Section 2.2 of this Agreement and in accordance with the
terms of this Section 7. At the end of the Indemnification Period amounts that
may be needed to cover pending indemnification claims made by Buyer, in
accordance with the provisions of this Section 7, will be retained in the Escrow
Fund until such claims are resolved, and any excess of such retained amounts on
deposit in the Escrow Fund will be distributed to Seller immediately. Any
disputes concerning the Escrow Fund will be settled by arbitration as provided
in Section 7.4(b).
(g) Notwithstanding any other provision of this Agreement, in
no event will any party be entitled to recover any consequential, indirect,
punitive or exemplary damages, or damages attributable to lost profits.
8. MISCELLANEOUS.
8.1 Amendment. The parties hereto may amend this Agreement at any
time or from time to time, but only by written instrument duly authorized and
executed by each of them.
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8.2 Waiver. No waiver of any term, provision, or condition of this
Agreement, whether by conduct or otherwise, in any one of more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
term, provision, or condition or of any other term, provision, or condition of
this Agreement
8.3 Severability. If any one or more of the provisions contained
in this Agreement is held for any reason to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
8.4 Entire Agreement. This Agreement, together with each of the
other Seller Transaction Documents and Buyer Transaction Documents and the
Schedules and Exhibits attached hereto and thereto, represents the entire
agreement between the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and discussions with
respect thereto from Buyer to Seller.
8.5 Successors; Assigns. Neither party shall, without the prior
express written consent of the other party, which consent shall not be
unreasonably withheld or delayed, assign this Agreement in whole or in part,
provided, however, that, except as set forth in Section 1.3(iii), this Agreement
may be assigned by either party without the other party's consent if such
assignment is made in connection with the merger, tender offer, sale of assets
or similar transaction of or involving such assigning party. All terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by and against the respective successors and permitted
assigns of the parties hereto. Nothing in this Agreement, expressed or implied,
is intended to confer upon any person, other than the parties hereto and their
respective successors and permitted assigns, any rights or remedies under or by
reason of this Agreement.
8.6 Notices. All notices to a party shall be addressed to such
party at the address or facsimile set forth below or to such other place as may
be designated by written notice to the other party. Notice shall be deemed
received (a) immediately upon being delivered, when delivered by hand; (b) upon
receipt of confirmation, when sent by facsimile with the original thereof sent
by first-class mail, postage prepaid; (c) three (3) business days after being
sent by certified mail, postage prepaid, return receipt requested; or (d) upon
receipt of proof of delivery, when delivered by a private courier. For purposes
hereof, the addresses of the parties shall be as follows:
Seller: Accrue Software, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxx, President and CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a copy to: Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Buyer: JDA Software Group, Inc.
00000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxx, Xxxx, Xxxx & Freidenrich LLP
0000 Xxxxx XxXxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8.7 Governing Law; Jurisdiction. This Agreement shall in all
respects be construed, enforced, and given effect according to the laws of the
State of California without reference to principles of conflicts of laws. Each
of the parties hereby submits to the exclusive jurisdiction and venue of the
state and federal courts in and for the State of California for purposes of any
legal or equitable action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court, except as provided in Sections 7.4
and 7.6(e). Each of the parties hereby waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought.
8.8 Captions; Headings. The captions and headings in this
Agreement are for convenience and reference purposes only and shall not be
considered a part of or affect the construction or interpretation of any
provision of this Agreement.
8.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures will
be deemed to be original signatures for all applicable purposes.
8.10 Fees and Expenses. Except as set forth in this Section 8.10,
each party to this Agreement shall pay their own respective amounts payable for
legal, accounting and financial advisory services provided by outside advisors
and other out-of-pocket expenses incurred incident to the negotiation,
preparation and carrying out of this Agreement, the transactions and other
agreements and documents contemplated herein and therein whether or not the
transactions contemplated in this Agreement are consummated.
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8.11 General Terms. As used in this Agreement, the terms "herein,"
"herewith," and "hereof" are references to this Agreement and references to a
"Section," "subsection," "Exhibit," or "Schedule" shall mean a Section,
subsection, Exhibit, or Schedule of this Agreement, unless the context requires
otherwise. All references to a given agreement, instrument or other document
shall be a reference to that agreement, instrument or other document as
modified, amended, supplemented and restated through the date as of which such
reference is made, and reference to a law includes any amendment or modification
thereof. Any references to this Agreement shall include the Exhibits and
Schedules hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth in the Preamble hereto.
PARENT:
ACCRUE SOFTWARE, INC.,
a Delaware corporation
By: /s/ XXXXXXX XXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxx
-----------------------------------
Title: President and CEO
----------------------------------
SUB:
NEOVISTA SOFTWARE, INC.,
a California corporation
By: /s/ XXXXXXX XXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxx
-----------------------------------
Title: President and CEO
----------------------------------
BUYER:
JDA SOFTWARE GROUP, INC.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------------
Title: Co-Chairman of the Board and
Chief Executive Officer
----------------------------------
[Signature Page to Asset Purchase Agreement]
30
ASSET PURCHASE AGREEMENT
Table of Contents*
Exhibits
A Escrow Agreement
B Xxxx of Sale
C Assignments
D Accrue and NeoVista Secretary's Certificate
E Opinion of Seller's Counsel
F Stay Put Agreement
G JDA Secretary's Certificate
H List of Acquired Assets Transferred Electronically Available
Software Products
I-1 Form of Conditional Offer Letter to Specified Employees
I-2 Form of Notice of Conditional Termination to Specified
Employees
J Source Code Escrow Agreement
L Language for Website Redirection
M Xxxxxxx & Xxxxxx Opportunity
Disclosure Schedules
Schedule 1.1 Acquired Assets
Schedule 1.1(a) List of Intangibles
Schedule 1.1(d) Governmental Approvals
Schedule 1.2(a) Permitted Encumbrances
Schedule 2.3 Purchase Price Allocation
Schedule 3.1(g) Security Interest to be Released
Schedule 3.1(k) List of Specified Employees for Stay Puts
Schedule 4.6 List of Contracts
Schedule 4.8(c) List of Developers
Schedule 4.8(d) Software Errors
Schedule 4.9(a) List of Specified Employees
Schedule 4.9(e) List of Obligations to Specified Employee
Schedule 6.8(c) Equipment Rental
------------------
* The Exhibits and Schedules omitted from this filing are not considered
material to an investment decision but will be furnished supplementally to
the Securities and Exchange Commission upon request.
31
EXHIBIT A
ESCROW AGREEMENT
32
EXHIBIT B
XXXX OF SALE
33
EXHIBIT C
FORM OF ASSIGNMENTS
34
EXHIBIT D
SELLER'S SECRETARY'S CERTIFICATE
35
EXHIBIT E
FORM OF OPINION OF SELLER'S COUNSEL
36
EXHIBIT F
STAY PUT AGREEMENT
37
EXHIBIT G
BUYER'S OFFICER'S CERTIFICATE
38
EXHIBIT H
LIST OF ACQUIRED ASSETS TRANSFERRED ELECTRONICALLY
AVAILABLE SOFTWARE PRODUCTS
39
EXHIBIT I-1
FORM OF CONDITIONAL OFFER LETTER
TO SPECIFIED EMPLOYEES
40
EXHIBIT I-2
FORM OF NOTICE OF CONDITIONAL TERMINATION
TO SPECIFIED EMPLOYEES
41
EXHIBIT J
SOURCE CODE ESCROW AGREEMENT
42
EXHIBIT L
LANGUAGE FOR WEBSITE REDIRECTION
43
EXHIBIT M
XXXXXXX & XXXXXX OPPORTUNITY
44
SCHEDULE 1.1
ACQUIRED ASSETS
(a) ACQUIRED SOFTWARE AND ACQUIRED INTELLECTUAL PROPERTY
This Schedule 1.1(a) sets forth the Acquired Software and other related
intellectual property assets sold, transferred, conveyed, assigned and delivered
by Seller to Buyer, certain assets excluded from each of the Acquired Software
and Acquired Intellectual Property, and a description of that part of the
Acquired Software known as "Decision Series," "RDS-Assort" and "RDS-Profile."
1. Acquired Software:
The Decision Series software as described on Attachment A hereto, excluding the
rights to use third party intellectual property and software, as described
below, which is embedded or integrated in or used in connection with the
Decision Series software source code and product.
The RDS-Assort software as described on Attachment B hereto, excluding the
rights to use third party intellectual property and software, as described
below, which is embedded or integrated in or used in connection with the
RDS-Assort software source code and product.
The RDS-Profile software as described on Attachment C hereto, excluding the
rights to use third party intellectual property and software, as described
below, which is embedded or integrated in or used in connection with the
RDS-Profile software source code and product.
2. Third party software and intellectual property which is excluded from the
Acquired Software and the Acquired Intellectual Property:
The rights of Seller to use the following software, source code and other third
party intellectual property which is embedded or integrated in or used in
connection with the Decision Series, RDS-Assort and RDS-Profile software, as
described below, is excluded from the Acquired Software and the Acquired
Intellectual Property:
Source code files of Decisioncluster, a mining engine of the Decision
Series software, are loosely based on the Dignet algorithm originally
developed by Intellnet, Inc. (the "Intellnet IP"), which seller has
rights to use pursuant to the license and development agreement between
Sub and Intellnet, Inc. dated July 12, 1996 (the "Intellnet License"),
a copy of which has been provided to buyer. Seller's rights under the
Intellnet License will be assigned to buyer pursuant to the agreement.
The source code files incorporating the Intellnet IP are designated by
the letters "DCL" in the source code file names of the Decision Series
software.
45
Source code files of Decisionnet, a mining engine of the Decision
Series software, are based on the Cirrusnet algorithm originally
developed by Cirrus Recognition Systems, Inc. and contains some of the
original source code obtained from Cirrus Recognition Systems, Inc.
(The "Cirrus IP"), which seller has rights to use pursuant to a
software license and distribution agreement between Sub and Cirrus
Recognition Systems, Inc. dated June 4, 1996 (The "Cirrus Agreement"),
a copy of which has been provided to buyer. Seller's rights under the
Cirrus Agreement will be assigned to buyer pursuant to the agreement.
The source code files incorporating The Cirrus IP are designated by the
letters "DNN" in the source code file names of the decision series
software.
Source code files of DecisionCubist, a mining engine of the Decision
Series software, are based on the Cubist algorithm originally developed
by Rulequest Research Pty. Ltd. ("Rulequest") and contains some of the
original source code obtained from Rulequest (the "Cubist IP"), which
Seller has rights to use pursuant to the Cubist Software License
Agreement between Sub and Rulequest Research Pty Ltd. dated March 26,
1998 (the "Cubist License"), a copy of which has been provided to
Buyer. Seller's rights under the Cubist License will not be assigned to
Buyer. The source code files incorporating the Cubist IP are designated
by the letters "dcnb" in the source code file names of the Decision
Series software.
Source code files of DecisionTree, a mining engine of the Decision
Series software, are based on the C5.0 algorithm originally developed
by Rulequest and contain some of the original source code obtained from
Rulequest (the "C5.0 IP"), which Seller has rights to use pursuant to
the C5.0 Software Licensing Agreement between Sub and Rulequest
Research Pty Ltd. dated April 11, 1997 (the "C5.0 License"), a copy of
which has been provided to Buyer. Seller's rights under the C5.0
License will not be assigned to Buyer. The source code files
incorporating the C5.0 IP are designated by the letters "dtr" in the
source code file names of the Decision Series software.
Source code files of DecisionAccess, a component of the Decision Series
software used to connect databases, contain Rogue Wave software (the
"Rogue Wave Software"), which Seller has rights to use pursuant to the
Single User License Agreement between Sub and Rogue Wave Software, Inc.
dated May 9, 1997 (the "Rogue Wave License"), a copy of which has been
provided to Buyer. Seller's rights under the Rogue Wave License will
not be assigned to Buyer. The source code files incorporating the Rogue
Wave Software are designated by the letters "db" in the source code
file names of the Decision Series software.
The RDS-Profile software uses MapInfo, a third party software product,
to provide geographical maps and visualization. Seller has rights to
use MapInfo pursuant to a license agreement between Sub and MAPX (the
"MAPX License"), a copy of which has been provided to Buyer. Seller's
rights to the MAPX License will not be assigned to Buyer.
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The RDS-Profile software uses OlectraChart, a third party software
product, to provide charting and graphing. Seller has rights to use
OlectraChart pursuant to a license agreement between Sub and APEX (the
"APEX License"), a copy of which has been provided to Buyer. Seller's
rights to the APEX License will not be assigned to Buyer.
The RDS-Assort software uses Graph/FX, a third party software product,
to provide geographical maps and visualization. Seller has rights to
use Graph/FX pursuant to a license agreement with Object/FX (the
"Object/FX License"), a copy of which has been provided to Buyer.
Seller's rights to the Object/FX License will not be assigned to Buyer.
The RDS-Assort software uses a third party software product, to provide
reverse zip code lookup. Seller has rights to use ZIPFind 2.0 pursuant
to a license agreement (the "ZIPFind License"), a copy of which has
been provided to Buyer. Seller's rights to the ZIPFind License will not
be assigned to Buyer.
The following other commercially available third party software is used in
connection with the Decision Series and RDS-Profile software: LEDA-R-3.3.1,
Sybase Developer, IBM AIX, IBM Developer/DB2, Merant ODBC, HP software
unlimited, Informix Developer, OSF Development Environment (ODE), Tcl/tk
and Adobe Framemaker (such other third party software, collectively, the
"Other Software").
3. Acquired Intellectual Property
Patents:
None.
Patent Applications:
None.
Inventions, Know How, Trade Secrets:
Seller's brochures, "white papers", two copies of Seller's customer lists,
business plans and other documentation and records maintained with respect to
inventions, know how and trade secrets concerning the Decision Series,
RDS-Assort and RDS-Profile software products, wherever located.
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Source Code:
The source code described on Attachments A, B and C excluding the Intellnet IP,
Cirrus IP, Cubist IP, C5.0 IP, Rogue Wave Software and source code, MapInfo
software, Graph/FX software, OlectraChart software, ZIPFind software and the
Other Software.
Engineering Records and other Commercially Valuable Information Maintained by
Seller as Confidential:
Seller's engineering records maintained with respect to the Decision Series,
RDS-Assort and RDS-Profile software products wherever located.
Registered Trademarks and Trademark Registrations Pending:
The registered trademark properties of Seller set forth on Attachment D hereto.
Unregistered Trademarks:
DecisionNet
DecisionCubist
DecisionTree
DecisionBayes
DecisionCluster
DecisionKmeans
DecisionAR
DecisionAccess
DecisionAccess Scripting Languagae
DecisionGUI
DecisionAssistant
DSFile
DecisionMonitor
RDS-Assort
NeoVista Assort
RDS-Profile
NeoVista Profile
ProfileCheck
ProfCheck
ProfileMatch
ProfMatch
ProfileGeneration
ProfGen
ProfileShift
ProfShift
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Copyrights:
The copyrights to all source code listed on Attachments A, B and C excluding the
Intellnet IP, Cirrus IP, Cubist IP, C5.0 IP, Rogue Wave Software, MapInfo
software, Graph/FX software, OlectraChart software, ZIPFind software and the
Other Software.
Copyright Applications:
None.
Registered Copyrights:
None.
Registered Domain Names:
XXXXXXXX.XXX
4. Description of Decision Series, RDS-Assort and RDS-Profile Software:
Attachment E provides a description of that part of the Acquired Software known
as the Decision Series software.
Attachment F provides a description of that part of the Acquired Software known
as the RDS-Assort software.
Attachment G provides a description of that part of the Acquired Software known
as the RDS-Profile software.
The descriptions of the Decision Series, RDS-Assort and RDS-Profile software
contained in Attachments E, F and G are provided solely for purposes describing
the general functionality and design of such software products. No
representation or warranty is made with respect to the information contained
therein related to the performance of the software or otherwise.
(b) ASSUMED CONTRACTS
License and Development Agreement between Sub and Intellnet, Inc.
dated July 12, 1996
Software License and Distribution Agreement between Sub and Cirrus
Recognition Systems, Inc. dated June 4, 1996
Reseller Escrow Agreement between Data Securities International, Inc,
Datasage, Inc. (formerly Cirrus Recognition Systems Inc.), Sub and any
additional party signing the Acceptance Form attached to the
Agreement, effective Xxxxx 00, 0000
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(x) GOVERNMENTAL APPROVALS
None.
(e) PERSONAL PROPERTY
One Mayline electric computer desk.
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