ASSET PURCHASE AGREEMENT
BY AND AMONG:
NETMANAGE, INC.,
A DELAWARE CORPORATION;
NETWORK COMPUTING DEVICES, INC.,
A CALIFORNIA CORPORATION;
AND
NCD SOFTWARE CORPORATION,
A CALIFORNIA CORPORATION.
DATED AS OF JUNE 3, 1996
TABLE OF CONTENTS
Page
ARTICLE 1. The Transaction.. . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Assets. . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Excluded Assets. . . . . . . . . . . . . . . . . . . .2
1.3 Liabilities. . . . . . . . . . . . . . . . . . . . . .3
1.4 Purchase Price and Method of Payment. . . . . . . . . .4
1.5 Tax Matters; Bulk Sales. . . . . . . . . . . . . . . .4
1.6 Limited License to NCD to Satisfy Post-Closing Support
Obligations . . . . . . . . . . . . . . . . . . . . .4
1.7 Closing. . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE 2. Representations and Warranties of NCD. . . . . . . . . . . . .4
2.1 Organization. . . . . . . . . . . . . . . . . . . . . .5
2.2 Power, Authority and Validity. . . . . . . . . . . . .5
2.3 Title and Related Matters. . . . . . . . . . . . . . .5
2.4 Proprietary Rights and Warranty Claims. . . . . . . . .6
2.5 Contracts. . . . . . . . . . . . . . . . . . . . . . .7
2.6 Orders, Commitments and Returns. . . . . . . . . . . .8
2.7 Compliance With Law. . . . . . . . . . . . . . . . . .9
2.8 Labor Difficulties; No Discrimination. . . . . . . . .9
2.9 Trade Regulation. . . . . . . . . . . . . . . . . . . .9
2.10 Employees. . . . . . . . . . . . . . . . . . . . . . 10
2.11 Litigation. . . . . . . . . . . . . . . . . . . . . . 10
2.12 Compliance with Environmental Requirements. . . . . . 10
2.13 No Brokers. . . . . . . . . . . . . . . . . . . . . . 11
2.14 Disclosure. . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3. Representations and Warranties of NetManage. . . . . . . . . 11
3.1 Organization and Good Standing. . . . . . . . . . . 11
3.2 Power, Authorization and Validity. . . . . . . . . . 11
3.3 No Violation of Existing Agreements. . . . . . . . . 11
3.4 Compliance With Other Instruments and Laws. . . . . . 12
3.5 Litigation. . . . . . . . . . . . . . . . . . . . . . 12
3.6 No Brokers. . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 4. Conditions to NCD's Obligations . . . . . . . . . . . . . . . 12
4.1 Accuracy of Representations and Warranties. . . . . . 12
4.2 Covenants. . . . . . . . . . . . . . . . . . . . . . 12
4.3 Authorizations . . . . . . . . . . . . . . . . . . . 12
4.4 Government Consents . . . . . . . . . . . . . . . . . 12
4.5 No Litigation. . . . . . . . . . . . . . . . . . . . 13
4.6 Board of Directors Approval. . . . . . . . . . . . . 13
4.7 Delivery of Cash Consideration and Executed Assignment
and Assumption of Contracts. . . . . . . . . . . . . 13
ARTICLE 5. Conditions to NetManage's Obligations. . . . . . . . . . . . 13
5.1 Accuracy of Representations and Warranties. . . . . . 13
5.2 Covenants.. . . . . . . . . . . . . . . . . . . . . . 13
5.3 Authorizations. . . . . . . . . . . . . . . . . . . . 13
5.4 No Litigation.. . . . . . . . . . . . . . . . . . . . 13
5.5 Board of Directors Approval.. . . . . . . . . . . . . 13
5.6 Government Consents.. . . . . . . . . . . . . . . . . 14
5.7 Due Diligence.. . . . . . . . . . . . . . . . . . . . 14
5.8 Assignment and Assumption of Contracts. . . . . . . . 14
5.9 Xxxx of Sale and Other Transfer Documents.. . . . . . 14
ARTICLE 6. Termination of Agreement. . . . . . . . . . . . . . . . . . . 14
6.1 Termination.. . . . . . . . . . . . . . . . . . . . . 14
6.2 Effect of Termination.. . . . . . . . . . . . . . . . 14
6.3 Certain Effects of Termination. . . . . . . . . . . . 14
ARTICLE 7. Indemnification.. . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Survival of Representations.. . . . . . . . . . . . . 15
7.2 Indemnification by NCD. . . . . . . . . . . . . . . . 16
7.3 Indemnification by NetManage. . . . . . . . . . . . . 16
7.4 Threshold; Ceiling; Exclusivity.. . . . . . . . . . . 16
ARTICLE 8. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Governing Laws. . . . . . . . . . . . . . . . . . . . 17
8.2 Binding upon Successors and Assigns.. . . . . . . . . 17
8.3 Personnel.. . . . . . . . . . . . . . . . . . . . . . 17
8.4 Building Lease. . . . . . . . . . . . . . . . . . . . 17
8.5 Further Assurances; Benefits of Nonassignable Rights;
Notices.. . . . . . . . . . . . . . . . . . . . . . . 18
8.7 Severability. . . . . . . . . . . . . . . . . . . . . 18
8.8 Entire Agreement. . . . . . . . . . . . . . . . . . . 18
8.9 Facsimile; Counterparts.. . . . . . . . . . . . . . . 18
8.10 Expenses. . . . . . . . . . . . . . . . . . . . . . . 19
8.11 Amendment and Waivers.. . . . . . . . . . . . . . . . 19
8.12 Survival of Agreements. . . . . . . . . . . . . . . . 19
8.13 No Waiver.. . . . . . . . . . . . . . . . . . . . . . 19
8.14 Attorneys' Fees.. . . . . . . . . . . . . . . . . . . 19
8.15 Notices.. . . . . . . . . . . . . . . . . . . . . . . 19
8.16 Construction of Agreement.. . . . . . . . . . . . . . 20
8.17 No Joint Venture. . . . . . . . . . . . . . . . . . . 20
8.18 Pronouns. . . . . . . . . . . . . . . . . . . . . . . 20
8.19 Further Assurances. . . . . . . . . . . . . . . . . . 21
8.20 Absence of Third Party Beneficiary Rights.. . . . . . 21
EXHIBITS
EXHIBIT A Certain Definitions
EXHIBIT B-1 Assignment and Assumption of Contracts
EXHIBIT B-2 Assignment and Assumption of Contracts
EXHIBIT C NCD Disclosure Schedule
SCHEDULES
Schedule 1.1 Assets
Schedule 1.1(b) Assumed Customer and Other Contracts
Schedule 1.3(b) Assumed Liabilities
Schedule 1.5 Purchase Price Allocation
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of this
3rd day of June 1996, by and among NETMANAGE, INC., a Delaware corporation
("NetManage"), NETWORK COMPUTING DEVICES, INC., a California corporation ("NCD,
Inc.") and NCD Software Corporation, a California corporation ("NCD Sub").
"NCD" shall mean NCD, Inc. and its subsidiary NCD Sub. Certain other
capitalized terms used in this Agreement are defined in EXHIBIT A attached
hereto.
RECITALS
A. NCD is engaged in, among other things, the business of developing,
marketing and selling an electronic e-mail package for the UNIX, Macintosh, MS-
DOS and Windows marketplace (the "Z-Mail Business").
B. NetManage desires to purchase from NCD certain assets used or usable
in connection with the Z-Mail Business and to assume certain liabilities related
to the Z-Mail Business, and NCD desires to sell to NetManage such certain assets
and to transfer to NetManage such certain liabilities, all according to the
terms and subject to the conditions set forth in this Agreement (the
"Acquisition").
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, NetManage and NCD hereby agree as
follows:
ARTICLE I. THE TRANSACTION.
1.1 ASSETS. SUBJECT TO AND IN RELIANCE UPON THE REPRESENTATIONS,
WARRANTIES AND AGREEMENTS HEREIN SET FORTH, AND SUBJECT TO THE TERMS AND
CONDITIONS HEREIN CONTAINED, NCD, INC. AND NCD SUB AGREE TO GRANT, CONVEY, SELL,
ASSIGN, TRANSFER AND DELIVER TO NETMANAGE ON THE CLOSING DATE (AS HEREINAFTER
DEFINED), AND NETMANAGE AGREES ON THE CLOSING DATE TO PURCHASE, ACCEPT AND
ASSUME, THOSE ASSETS SET FORTH ON SCHEDULE 1.1 ATTACHED HERETO (COLLECTIVELY,
THE "ASSETS"). WITHOUT LIMITING THE FOREGOING, THE ASSETS SHALL INCLUDE THE
FOLLOWING, EXCEPT TO THE EXTENT THAT ANY OF THE FOLLOWING ARE EXCLUDED ASSETS:
(a) all proprietary software relating to the Assets, in every
case including all documentation, object code and source code with respect to
such software set forth on SCHEDULE 1.1;
(b) all customer contracts and service agreements relating to
the supply and servicing of the Z-Mail products and all other contracts relating
to the Z-Mail Business set
forth on SCHEDULE 1.1(b), which Schedule shall be prepared and attached hereto
within 15 days following the Closing to include, among other things, technical
support and maintenance agreements and the agreement between NCD and
Xxxxxxxx.xxx, Inc. dated December 14, 1995 (the "Xxxxxxxx.xxx Agreement")
(collectively, the "Contracts");
(c) all inventory of the Z-Mail Business (collectively, the
"Inventory");
(d) certain tangible personal property located at the facility
held under the Lease (as defined in Section 8.4) (the "Property") but only as
determined by mutual agreement of the parties;
(e) all intellectual property rights, whether held by NCD as
owner or as licensee, relating to the Assets including, without limitation,
patents, patent applications, trademarks (whether registered or unregistered),
trademark applications, copyrights (whether registered or unregistered),
copyright applications, trade secrets, know-how, customer lists, franchises,
systems, computer software, computer programs (including both source and object
code forms), inventions, designs, proprietary products, technologies,
proprietary rights or other intellectual property or intangible assets and any
rights to use or exploit any of the foregoing (collectively, the "Proprietary
Rights");
(f) all tangible records of the Proprietary Rights, customer
lists, customer records and similar information relating to the ongoing conduct
of the Z-Mail Business, including, without limitation, commented source code and
other technical papers, inventory, maintenance, and asset records (the
"Proprietary Rights Records");
(g) all sales and promotional materials, catalogues and
advertising literature relating to the Assets; and
(h) any and all claims, choses in action, rights of
indemnification and rights against third parties if and to the extent that they
relate to (i) the condition of the Assets, including, without limitation, all
rights under manufacturers' and vendors' warranties, or (ii) the operation of
the Z-Mail Business prior to the Closing (collectively, the "Claims"); PROVIDED,
HOWEVER, that Claims shall not include any claims, choses in action, rights of
indemnification or rights against third parties arising solely in connection
with accounts receivable or accounts payable or prepaid expenses (other than
prepaid expenses, if any, relating to the Contracts).
1.2 EXCLUDED ASSETS. THERE SHALL BE EXCLUDED FROM THE ASSETS AND
RETAINED BY NCD ALL ITEMS NOT IDENTIFIED IN SECTION 1.1, INCLUDING TO THE EXTENT
IN EXISTENCE ON THE CLOSING DATE, THE FOLLOWING ASSETS (COLLECTIVELY, THE
"EXCLUDED ASSETS"):
(a) all cash or securities owned or held by NCD relating to the
Z-Mail Business;
(b) all prepaid expenses (other than prepaid expenses relating
to the Contracts) and accounts receivable owned or held by NCD relating to the
Z-Mail Business;
(c) all contracts of insurance relating to Z-Mail Business;
(d) all pension, profit sharing and savings plans and trusts
relating to the Z-Mail Business and any assets thereof;
(e) any contracts relating to the Z-Mail Business not being
assumed by NetManage pursuant to Section 1.1(b) hereof; and
(f) any and all claims, choses in action, and rights against
third parties relating to the Z-Mail Business other than the Claims as defined
in Section 1.1(h).
1.3 LIABILITIES.
(a) NCD shall sell and convey the Assets to NetManage free and
clear of all mortgages, liens, deeds of trust, security interests, pledges,
restrictions, prior assignments, charges, claims, defects in title and
encumbrances of any kind or type whatsoever except: (i) for liens for taxes not
yet due and payable or that are being contested in good faith by appropriate
proceedings, and (ii) for the obligations of NCD under contracts which NetManage
hereby agrees to assume as described in Section 1.3(b) of this Agreement.
(b) NetManage agrees to assume at the Closing the certain
obligations arising, and expressly provided to be performed by NCD, after the
Closing Date under the technical support and maintenance agreements identified
in Schedule 1.1(b) and the obligations under the Xxxxxxxx.xxx Agreement pursuant
to the form of Assignment and Assumption of Contracts attached hereto as EXHIBIT
B-1. At the time the parties have finalized Schedule 1.1(b), NetManage shall
execute and deliver an additional assignment and assumption of contracts in the
form attached hereto as Exhibit B-2 to assume, effective as of the Closing, all
Contracts identified in such Schedule 1.1(b). Notwithstanding the foregoing,
and subject to Section 8.5, NetManage shall not be obligated to assume any
obligations under any Contract as to which NCD fails to deliver any required
written consent of all other parties thereto.
(c) Except as otherwise specifically provided herein, NetManage
shall not assume or be liable for, and does not, and does not undertake to
attempt to, assume or discharge any liability of NCD relating to the Z-Mail
Business or otherwise.
(d) NCD retains and shall hereafter pay, satisfy, discharge,
perform and fulfill all such obligations and liabilities not expressly assumed
by NetManage hereunder as they become due, without any charge or cost to
NetManage, and NCD agrees to indemnify and hold NetManage and its successors and
assigns harmless from and against any and all such liabilities in accordance
with the terms of Article 7 below.
1.4 PURCHASE PRICE AND METHOD OF PAYMENT. The purchase price for
the Assets shall be comprised of (i) One Million Three Hundred Twenty-Five
Thousand Dollars ($1,325,000) in cash (the "Cash Consideration"), and (ii) the
assumption of the liabilities identified on Schedule 1.3(b) (collectively with
the Cash Consideration, the "Purchase Price"). NetManage shall (i) pay, or
cause to be paid to NCD on thE Closing Date an amount equal to the Cash
Consideration by (A) check, or (B) bank wire transfer of immediately available
federal funds, as instructed by NCD, and (ii) execute and deliver to NCD the
Assignment and Assumption of Contracts in the form attached hereto as EXHIBIT B.
NetManage shall pay all sales and transfer taxes incurred in connection with thE
Acquisition.
1.5 TAX MATTERS; BULK SALES. NetManage and NCD agree on the
allocation of the Purchase Price for the Assets set forth on SCHEDULE 1.5
attached hereto based on the fair market value of the Assets as reasonably
determined by NetManage and NCD and as may be required by Section 1060 of the
Internal Revenue Code of 1986, as amended. NetManage and NCD each agree not to
take any tax position that is inconsistent with the allocation of the Purchase
Price set forth as SCHEDULE 1.5. NetManage waives compliance with any bulk
sales notice or other bulk sale provisions of applicable law.
1.6 LIMITED LICENSE TO NCD TO SATISFY POST-CLOSING SUPPORT
OBLIGATIONS. Subject to the terms and conditions herein contained, NetMAnage
grants to NCD a nontransferable, worldwide, royalty-free, nonexclusive and
nonassignable right and license to use the Proprietary Rights subsequent to the
Closing, solely for the purposes of (i) internal use by NCD, and (ii) providing
technical support under existing support and maintenance contracts and licenses
relating to thE Z-Mail Business which are not assumed by NetManage pursuant to
this Agreement.
1.7 CLOSING. The closing (the "ClosinG") of the sale and purchase
of the Assets shall take place at the offices of Xxxx Xxxx Xxxx & Freidenrich,
400 Xxxxxxxx, Palo Alto, California, on June 3, 1996 at 2:00 p.m., Pacific
Standard Time. The actual date of the Closing is sometimes herein referred to
as the "Closing Date."
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF NCD.
Except as otherwise set forth in the NCD Disclosure Schedule provided to
NetManage on the date hereof, a copy of which is attached hereto as EXHIBIT C,
NCD represents and warrants to NetManage as set forth below. No fact or
circumstance disclosed to NetManage shall constitute an exception to these
representations and warranties unless such fact or circumstance is set forth in
the NCD Disclosure Schedule.
2.1 ORGANIZATION.
(a) Each of NCD, Inc. and NCD Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has corporate power and authority to carry on the Z-Mail Business
as it is now being conducted by each of them.
(b) NCD, Inc. is duly qualified or licensed to do business and
in good standing in each jurisdiction in which the nature of the Z-Mail Business
or properties makes such qualification or licensing necessary, except where the
failure to so qualify or be licensed would not result in a material effect on
the Z-Mail Business, and NCD Sub is duly qualified or licensed to do business
in California.
(c) The NCD Disclosure Schedule contains a true and complete
listing of the locations of all sales offices, manufacturing facilities, and any
other offices or facilities of the Z-Mail Business and a true and complete list
of all states in which the Z-Mail Business maintains any employees.
2.2 POWER, AUTHORITY AND VALIDITY. Each of NCD, Inc. and NCD Sub
has the corporate power and authority to enter into this Agreement and the other
Transaction Documents to which it is a party and to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and the
Transaction Documents to which it is a party and the consummation of the
Acquisition have been duly authorized by the board of directors of NCD, Inc. AND
NCD Sub, and no other corporate proceedings are necessary to authorize this
Agreement and the other Transaction Documents. NCD is not subject to or
obligated under any charter, bylaw or contract provision or any license,
franchise or permit, or subject to any order or decree, which would be breached
or violated in a material manner by or in material conflict with its executing
and carrying out this Agreement and the Acquisition. To NCD'S knowledge, no
consent of any person who is a party to a contract which is material to NCD, nor
consent of any governmental body, is required to be obtained on the part of NCD
to permit the consummation of the Acquisition and continue the business
activities of the Z-Mail Business as previously conducted by NCD. This
Agreement is, and the other Transaction Documents to which NCD is a party when
executed and delivered by NCD shall be, the valid and binding obligations of NCD
enforceable in accordance with their respective terms, subject to (i) laws of
general application relating to bankruptcy, insolvency, and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
2.3 TITLE AND RELATED MATTERS. NCD has good title to the Assets,
free and clear of all mortgages, liens (including without limitation tax liens),
pledges, charges or encumbrances of any kind or character, except the lien of
current taxes not yet due and payable and except for liens which in the
aggregate do not secure more than Ten Thousand Dollars ($10,000) in liabilities.
2.4 PROPRIETARY RIGHTS AND WARRANTY CLAIMS.
(a) Part 2.4 of the Disclosure Schedule sets forth, with respect
to each Proprietary Right registered with any Governmental Body or for which an
application has been filed with any Governmental Body, (i) a list of such
Proprietary Right, and (ii) the names of the jurisdictions covered by the
applicable registration or application. Part 2.4 of the NCD Disclosure Schedule
identifies each Proprietary Right licensed to NCD by any Person (except for any
Proprietary Right that is licensed to NCD under any third party software license
generally available to the public at a cost of less than One Thousand Dollars
($1,000), and identifies the license agreement under which such Proprietary
Right is being licensed to NCD. Except as set forth in Part 2.4 of the NCD
Disclosure Schedule, NCD has, to the best of NCD's knowledge good title to all
of the Proprietary Rights identified in Part 2.4 of the NCD Disclosure Schedule,
free and clear of all liens and other Encumbrances, and has a valid right to use
all Proprietary Rights identified in Part 2.4 of the NCD Disclosure Schedule.
(b) Except as set forth in Part 2.4 of the NCD Disclosure
Schedule, NCD has taken all reasonable and customary measures and precautions
necessary to protect and maintain the confidentiality and secrecy of all
Proprietary Rights (except Proprietary Rights whose value would be unimpaired by
public disclosure) and otherwise to maintain and protect the value of all
Proprietary Rights. Except as set forth in Part 2.4 of the NCD Disclosure
Schedule, NCD has not (other than pursuant to license agreements identified in
Part 2.4 of the NCD Disclosure Schedule) disclosed or delivered to any Person,
or permitted the disclosure or delivery to any Person of, (i) the source code,
or any portion or aspect of the source code, of any Proprietary Right, or (ii)
the object code, or any portion or aspect of the object code, of any Proprietary
Right.
(c) To the best of NCD's knowledge in connection with the
conduct of the Z-Mail Business, NCD is not infringing, misappropriating or
making any unlawful use of, and NCD has not at any time infringed,
misappropriated or made any unlawful use of, or received any notice or other
communication (in writing or otherwise) of any actual, alleged, possible or
potential infringement, misappropriation or unlawful use of, any proprietary
right owned or used by any other Person. To the best of NCD's knowledge, no
other Person is infringing, misappropriating or making any unlawful use of, and
no proprietary right owned or used by any other Person infringes or conflicts
with, any Proprietary Right.
(d) Except as set forth in Part 2.4 of the NCD Disclosure
Schedule: (i) each Proprietary Right conforms substantially to any
specification, documentation, performance standard, representation or statement
made or provided with respect thereto by or on behalf of NCD; and (ii) there has
not been any claim made against NCD by any customer or other Person alleging
that any Proprietary Right (including each version thereof that has ever been
licensed or otherwise made available by NCD to any Person) does not
substantially conform to any specification, documentation, performance standard,
representation or statement made or provided by or on behalf of NCD, and, to the
best of NCD's knowledge, there is no basis for any such claim.
(e) The Proprietary Rights constitute all the Proprietary Rights
necessary, in NCD's reasonable judgment, to enable NCD to conduct the Z-Mail
Business in the manner in which such business has been and is being conducted.
Except as set forth in Part 2.4 of the NCD Disclosure Schedule, (i) NCD has not
licensed any of the Proprietary Rights to any Person on an exclusive basis, and
(ii) NCD has not entered into any covenant not to compete or contract limiting
its ability to exploit fully any of the Proprietary Rights or to transact
business in any market or geographical area or with any Person.
(f) Except as set forth in Part 2.4 of the NCD Disclosure
Schedule, (i) all current and former employees of the Z-Mail Business have
executed and delivered to NCD an agreement (containing no exceptions to or
exclusions from the scope of its coverage) that is substantially identical to
the forms of Confidential Information and Invention Assignment Agreements
previously delivered to NetManage, and (ii) all current and former consultants
and independent contractors to the Z-Mail Business have executed and delivered
to NCD an agreement (containing no exceptions to or exclusions from the scope of
its coverage) that is substantially identical to the form of Consultant
Confidential Information and Invention Assignment Agreement previously delivered
to NetManage.
2.5 CONTRACTS.
(a) Except as set forth in Part 2.5 of the NCD Disclosure
Schedule:
(i) NCD has not entered into any employment, independent
contractor or similar agreement, contract or commitment relating to the Z-
Mail Business that obligates NCD to pay more than $10,000 over the life of
the contract, or has a fixed term of more than one year, or that is not
terminable on not more than ninety (90) days' notice without penalty or
liability of any type, including without limitation severance or
termination pay.
(ii) NCD is not restricted by agreement from competing with
any person or from carrying on the Z-Mail Business anywhere in the world.
(b) The NCD Disclosure Schedule lists all agreements pursuant to
which NCD has agreed to manufacture for or supply to any third party any Z-Mail
Products or components thereto requiring, or expected to require, payments of
Fifty Thousand Dollars ($50,000) or more over the life of any such agreement.
The NCD Disclosure Schedule also lists each vendor who is the sole source for
any product or component included in the Products.
(c) Each Contract is valid and in full force and effect, and, to
the best of the knowledge of NCD, is enforceable by NCD in accordance with its
terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies. To NCD's
knowledge, no party to any such Contract, agreement or instrument intends to
cancel, withdraw, modify or amend such Contract.
(d) Except as set forth in Part 2.5 of the NCD Disclosure
Schedule:
(i) NCD has not violated or breached, or committed any
default under, any NCD contract relating to the Z-Mail Business, and, to
the best of NCD's knowledge, no other Person has violated or breached, or
committed any default under, any such contract; in each case which default
would have a Material Adverse Effect on the Z-Mail Business.
(ii) to the best of NCD's knowledge, no event has occurred,
and no circumstance or condition exists, that (with or without notice or
lapse of time) will, or could reasonably be expect to, (A) result in a
violation or breach of any of the provisions of any NCD contract relating
to the Z-Mail Business, (B) give any Person the right to declare default or
exercise any remedy under any such NCD contract, (C) give any Person the
right to accelerate the maturity or performance of any such contract; or
(D) give any Person the right to cancel, terminate or modify any such
contract, in each case, the result of which would have a Material Adverse
Effect on the Z-Mail Business.
(iii) The Lease, as defined in Section 8.4 herein, is valid,
binding, enforceable and effective in accordance with its terms. To the
best of NCD's knowledge, there is not any existing material default by NCD
or any other party of any provision of the Lease or event which, with
notice or lapse of time or both, would constitute a material default of any
such provision.
(e) The Lease contains no provision which would require the
consent of third parties to the Acquisition in the event of the subletting of
the Building, as defined in Section 8.4 or the assignment of the Lease by NCD to
NetManage. If the Lease contains any such provisions, then NCD has described in
the NCD Disclosure Schedule such actions as are necessary with respect to the
Lease to avoid any adverse consequence as a result of the subletting of the
Building or the assignment of the Lease.
2.6 ORDERS, COMMITMENTS AND RETURNS. All accepted and unfilled
orders entered into by NCD for the sale, license, or lease or other disposition
by ncd of the Z-Mail Products, and all agreements, contracts, or commitments for
the purchase of supplies by NCD relating to the Z-Mail Business, were made in
the ordinary course of business.
2.7 COMPLIANCE WITH LAW. With respect to its Z-Mail Business, NCD
is in compliance in all material respects with all applicable laws and
regulations. With respect to its Z-Mail Business, neither NCD nor, to the best
of NCD's knowledge, any of its employees has directly or indirectly paid or
delivered any fee, commission or other sum of money or item of property, However
characterized, to any finder, agent, government official or other party in the
United States or any other country, that was or is in violation of any federal,
state, or local statute or law or of any statute or law of any other country
having jurisdiction. With respect to its Z-Mail Business, NCD has not
participated directly or indirectly in any boycotts or other similar practices
affecting any of its customers. With respect to its Z-Mail Business, NCD has
complied in all material respects at all times with any and all applicable
federal, state and foreign
laws, rules, regulations, proclamations and orders relating to the importation
or exportation of its products. All licenses, franchises, permits and other
governmental authorizations held by NCD and which are material to the Z-Mail
Business are valid and sufficient in all material respects for the Z-Mail
Business presently carried on by NCD.
2.8 LABOR DIFFICULTIES; NO DISCRIMINATION.
(a) To the best of NCD's knowledge, NCD is not with respect to
its Z-Mail Business engaged in any unfair labor practice and is not in violation
of any applicable laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours.
(b) There is no strike, labor dispute, slowdown, or stoppage
actually pending or, to the best of NCD's knowledge, threatened against NCD that
would have a Material Adverse Effect on the Z-Mail Business.
(c) No union representation question exists respecting the
employees of NCD and to the best of NCD's knowledge no union organizing
activities are taking place.
(d) No collective bargaining agreement that is binding on NCD
restricts it from relocating or closing any of its operations relating to the Z-
Mail Business.
(e) NCD has not experienced any work stoppage or other labor
difficulty having a Material Adverse Effect on the Z-Mail Business.
2.9 TRADE REGULATION. NCD has not terminated its relationship
with or refused to ship Z-MAIL Products to any dealer, distributor, OEM, third
party marketing entity or customer which had theretofore paid or been obligated
to pay NCD in excess of Ten Thousand Dollars ($10,000) over any consecutive
twelve (12) month period. All of the prices charged by NCD in connection with
the marketing or sale of any Z-Mail Products or Z-Mail Business services have
been in compliance in all material respects with all applicable laws and
regulations. No claims against NCD have been communicated or threatened in
writing to NCD in connection with thE Z-Mail Business with respect to wrongful
termination of any dealer, distributor or any other marketing entity,
discriminatory pricing, price fixing, unfair competition, false advertising, or
any other violation of any laws or regulations relating to anti-competitive
practices or unfair trade practices of any kind, and to the best of NCD's
knowledge, no specific situation, set of facts, or occurrence provides any basis
for any such claim.
2.10 EMPLOYEES. The NCD Disclosure Schedule lists and describes all
currently effective written or, to NCD's knowledge, oral employment agreements
and other material agreements concluded with individual employees relating to
the Z-Mail Business and to which NCD is a party. True and correct copies of all
such written agreements have been provided to NetManage or NeTManage's
representatives. All salaries and wages paid by NCD in connection with the Z-
Mail Business are in compliance in all material respects with applicable
federal, state and local laws.
2.11 LITIGATION. To the best of NCD's knowledge, there is no suit,
action or proceeding (i) pending, (ii) which has been threatened against or
materially affects the Z-Mail Business in each case other than immaterial
matters, or (iii) which questions or challenges the validity of this Agreement
or the transaction documents. There is no judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or arbitrator outstanding against NCD which relates to the Z-Mail Business.
2.12 COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS. To the best of
NCD's knowledge, NCD has obtained all material permits, licenses and other
authorizations which are required under federal, state and local laws applicable
to NCD and relating to pollution or protection of the environment, including
laws or provisions relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, or hazardous or toxic materials,
substances, or wastes into air, surface water, groundwater, or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants or
hazardous or toxic materials, substances, or wastes. Except as set forth in the
NCD Disclosure SchedulE, To the best of NCD's knowledge, NCD is in material
compliance with all terms and conditions of the required permits, licenses and
authorizations in connection with the Z-Mail Business. Except as set forth in
the NCD Disclosure Schedule, NCD is not aware of, nor has NCD received written
notice of, any conditions, circumstances, activities, practices, incidents, or
actions which may form the basis of any claim, action, suit, proceeding,
hearing, or investigation of, by, against or relating to the Z-Mail Business,
based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, or hazardous or toxic substance, material or waste.
2.13 NO BROKERS. Neither NCD nor, to the best of NCD's knowledge,
any NCD shareholder is obligated for the payment of fees or expenses of any
broker or finder in connection with the origin, negotiation or execution of this
Agreement or in connection with the Acquisition.
2.14 DISCLOSURE. No statements by NCD contained in this Agreement,
its exhibits and schedules nor any of the certificates or documents required to
be delivered by NCD to NetManage under this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances under which they were made.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF NETMANAGE.
Except as set forth in the NetManage Disclosure Schedule provided to NCD on
the date hereof, NetManage represents and warrants to NCD that:
3.1 ORGANIZATION AND GOOD STANDING. NetManage is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has full power and authority to carry on its businesses as now
conducted.
3.2 POWER, AUTHORIZATION AND VALIDITY. NetManage has the right,
power, legal capacity and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents to which it is a party.
The execution and delivery of this Agreement and the other Transaction Documents
have been duly and validly approved and authorized by the Board of Directors of
NetManage. No authorization or approval, governmental or otherwise, is
necessary in order to enable NetManage to enter into and to perform the terms of
this Agreement or the other Transaction Documents on its part to be performed.
This Agreement is, and the other Transaction Documents when executed and
delivered by NetManage shall be, the valid and binding obligations of NetManage
enforceable in accordance with their terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies.
3.3 NO VIOLATION OF EXISTING AGREEMENTS. Neither the execution and
delivery of this Agreement nor the consummation of the Acquisition will conflict
with, or result in a material breach or violation of, any provision of
NetManage's certificate of incorporation or bylaws, as currently in effect; any
instrument or contract to which NetManage is a party or by which it is bound; or
any federal, state or local judgment, writ, decree, order, statute, rule or
regulation applicable to NetManage. Neither the execution and delivery of this
Agreement, nor any Agreement attached hereto as an Exhibit, nor the consummation
of the transactions contemplated hereby or thereby will have a Material Adverse
Effect on the operations, assets, or financial condition of NetManage.
3.4 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS. NetManage is not in
violation of any provisions of its certificate of incorporation or bylaws as
currently in effect or in effect at the Closing, or any federal, state or local
judgment, writ, decree, or order applicable to NetManage.
3.5 LITIGATION. There is no suit, action, proceeding, claim or
investigation pending or, to the best of netmanage's knowledge, threatened
against NetManage before any court or administrative agency or which questions
or challenges the validity of this Agreement which could have a Material Adverse
Effect on the operations, assets or financial condition of NetManage.
3.6 NO BROKERS. Neither NetManage nor, to the best of NetManage's
knowledge, any NetManage shareholder is obligated for the payment of fees or
expenses of any broker or finder in connection with the origin, negotiation or
execution of this Agreement or in connection with the Acquisition.
ARTICLE 4. CONDITIONS TO NCD'S OBLIGATIONS
The obligations of NCD to close the transactions contemplated under this
Agreement are subject to the fulfillment or satisfaction on and as of the
Closing Date of each of the following
conditions (any one or more of which may be waived by NCD but only in a writing
signed by NCD):
4.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of NetManage set forth in Article 3 shall be true and correct
when made and on and as of the Closing with the same force and effect as if they
had been made at the Closing.
4.2 COVENANTS. NetManage shall have performed and complied with all
of its covenants and obligations contained in this Agreement on or before the
Closing (to the extent such covenants are capable of being performed on or
before the Closing).
4.3 AUTHORIZATIONS. The execution, delivery and performance of
NetManage's obligations under this Agreement shall have been duly and validly
approved and authorized by the board of directors of NetManage.
4.4 GOVERNMENT CONSENTS. There shall have been obtained at or prior
to the Closing Date such permits or authorizations, if any, and there shall have
been taken such other action, if any, as may be required by any regulatory
authority having jurisdiction over the parties and the subject matter and the
actions herein proposed to be taken.
4.5 NO LITIGATION. On and as of the Closing Date, no litigation or
proceeding shall be threatened or pending against NetManage challenging the
validity of any of the transactions contemplated by this Agreement.
4.6 BOARD OF DIRECTORS APPROVAL. The boards of directors of NCD,
Inc. and NCD Sub shall have approved the Acquisition.
4.7 DELIVERY OF CASH CONSIDERATION AND EXECUTED ASSIGNMENT AND
ASSUMPTION OF CONTRACTS. NetManage shall have delivered the Cash Consideration
and the executed Assignment and Assumption of Contracts in accordance with
Section 1.4 hereof.
ARTICLE 5. CONDITIONS TO NETMANAGE'S OBLIGATIONS.
The obligations of NetManage are subject to the fulfillment or satisfaction
on and as of the Closing of each of the following conditions (any one or more of
which may be waived by NetManage, but only in a writing signed by NetManage):
5.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by NCD contained in Article 2 and in any certificate
delivered by NCD in connection with this Agreement shall be true and correct
when made and on and as of the Closing Date with the same force and effect as if
they had been made at the Closing (subject to changes to the NCD Disclosure
Schedule which, in the aggregate, would not constitute a Material Adverse
Change).
5.2 COVENANTS. NCD shall have performed and complied with all of
its covenants and obligations contained in this Agreement on or before the
Closing (to the extent such covenants are capable of being performed on or
before the Closing).
5.3 AUTHORIZATIONS. The execution, delivery and performance of this
Agreement have been duly and validly approved and authorized by the boards of
directors of NCD, Inc. and NCD Sub.
5.4 NO LITIGATION. On and as of the Closing, no litigation or
proceeding shall be threatened or pending against NCD for the purpose or with
the probable effect (in the reasonable opinion of NetManage's counsel) of
enjoining or preventing the consummation of the Acquisition or which would have
a Material Adverse Effect on the business, liabilities, income, property, or
operations of the Z-Mail Business Subsequent to the Closing, and no judgment,
decree, injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or arbitrator relating to the Z-Mail
Business shall be outstanding against NCD.
5.5 BOARD OF DIRECTORS APPROVAL. The board of directors of
NetManage shall have approved the Acquisition.
5.6 GOVERNMENT CONSENTS. There shall have been obtained at or prior
to the date of Closing such permits or authorizations, and there shall have been
taken such other action, as may be required by any regulatory authority having
jurisdiction over the parties and the subject matter and the actions herein
proposed to be taken.
5.7 DUE DILIGENCE. NetManage shall have satisfactorily completed
its due diligence investigation of the Z-Mail Business.
5.8 ASSIGNMENT AND ASSUMPTION OF CONTRACTS. NCD shall have executed
and delivered to NetManage the assignment and assumption of contracts in the
form attached as EXHIBIT B with respect to the Contracts.
5.9 XXXX OF SALE AND OTHER TRANSFER DOCUMENTS. NCD shall execute
and deliver to NetManage such bills of sale, certificates of title,
endorsements, assignments and other good and sufficient instruments of sale,
conveyance and transfer and assignment, in form and substance satisfactory to
NetManage sufficient to sell, convey, transfer, and assign to NetManage all
right, title and interest of NCD in the Assets.
ARTICLE 6. TERMINATION OF AGREEMENT.
6.1 TERMINATION. This Agreement may be terminated at any time prior
to the Closing by the mutual written consent of each of the parties hereto.
This Agreement may also be terminated and abandoned by either NetManage or NCD
for any reason if the Closing has not occurred by June 3, 1996, or such later
date as the parties may agree in writing, provided that a party cannot terminate
under this provision if the failure to occur of the Closing is the result of the
failure on the part of such party to perform any of its obligations hereunder
(except
the failure on the part of such party to satisfy a closing condition over which
such party has no control).
Any termination of this Agreement under this Section 6.1 shall be effective
by the delivery of written notice of the terminating party to the other parties
hereto.
6.2 EFFECT OF TERMINATION. Any termination of this Agreement
pursuant to this Article 6 shall be without further obligation or liability upon
any party in favor of any other party hereto; PROVIDED, HOWEVER that if such
termination by one party shall result from the willful failure of the other
party to carry out its obligations under this Agreement, then such party shall
be liable for Damages incurred by the other party, and such termination shall
not be deemed or construed as limiting or denying any legal or equitable right
or remedy of said party, and said party shall be entitled to recover its costs
and expenses which are incurred in pursuing its rights and remedies (including
reasonable attorneys' fees).
6.3 CERTAIN EFFECTS OF TERMINATION. In the event of the termination
of this Agreement by either NCD or NetManage as provided in Section 6.1 hereof:
(a) each party, if so requested by the other party, will (i)
return promptly every document (other than documents publicly available)
furnished to it by the other party (or any subsidiary, division, associate or
affiliate of such other party) in connection with the transactions contemplated
hereby, whether so obtained before or after the execution of this Agreement, and
any copies thereof which may have been made, and will cause its representatives
and any representatives of financial institutions and investors and others to
whom such documents were furnished promptly to return such documents and any
copies thereof any of them may have made, or (ii) destroy such documents and
cause its representatives and such other representatives to destroy such
documents, and such party shall deliver a certificate executed by its president
or vice president stating to such effect; and
(b) NCD and NetManage shall continue to abide by the provisions
of that certain Mutual Nondisclosure Agreement between NetManage and NCD dated
May ___, 1996. This Section 6.3 shall survive any termination of this
Agreement.
ARTICLE 7. INDEMNIFICATION.
7.1 SURVIVAL OF REPRESENTATIONS.
(a) The representations and warranties made by NCD (including
the representations and warranties set forth in Article 2 hereof and the
representations and warranties set forth in any certificate delivered by NCD in
connection with this Agreement) shall survive the Closing and shall remain in
full force and effect and shall survive until the end of the Indemnification
Period and shall survive thereafter only with respect to any claims made prior
to the end of the Indemnification Period; PROVIDED, HOWEVER, that the
termination hereunder of the representations and warranties made by NCD shall
not terminate or limit in any manner whatsoever any rights NetManage has or may
have for intentional misrepresentation or fraud.
The representations and warranties made by NetManage shall survive the Closing
and shall remain in full force and effect and shall survive until the end of the
Indemnification Period; PROVIDED, HOWEVER, that the termination hereunder of the
representations and warranties made by NetManage shall not terminate or limit in
any manner whatsoever any rights which NCD has or may have for intentional
misrepresentation or fraud.
(b) The representations, warranties, covenants and obligations
of NCD, and the rights and remedies that may be exercised by the Indemnitees,
shall not be limited or otherwise affected by or as a result of any information
furnished to, or any investigation made by or knowledge of, any of the
Indemnitees or any of their Representatives.
(c) For purposes of this Agreement, each statement or other item
of information set forth in the NCD Disclosure Schedule or in any update to the
NCD Disclosure Schedule shall be deemed to be a modification of the
representations and warranties made by NCD in this Agreement.
7.2 INDEMNIFICATION BY NCD. From and after the Closing Date (but
subject to Section 7.1(a), NCD shall hold harmless and indemnify each of the
Indemnitees from and against, and shall compensate and reimburse each of the
Indemnitees for, any Damages which are directly or indirectly suffered or
incurred by any of the Indemnitees or to which any of the Indemnitees may
otherwise become subject (regardless of whether or not such Damages relate to
any third-party claim) and which arise from or as a result of, or are directly
or indirectly connected with: (i) any inaccuracy in or breach of any
representation or warranty set forth in Article 2 hereunder or in any
certificate delivered by NCD in connection with this Agreement; (ii) any breach
of any covenant or obligation of NCD hereunder; (iii) any Legal Proceeding
relating to any inaccuracy, breach or expense of the type referred to in clause
"(i)" or "(ii)" above (including any Legal Proceeding commenced by any
Indemnitee for the purpose of enforcing any of its rights under this Section 7.2
if such Indemnitee is the prevailing party in any such Legal Proceeding); or
(iv) any amounts exceeding the Xxxxxxxx.xxx Obligation Cap as defined in
SCHEDULE 1.3(b) attached hereto.
7.3 INDEMNIFICATION BY NETMANAGE. From and after the Closing Date,
NetManage shall hold harmless and indemnify each of NCD, Inc., NCD Sub and their
respective officers, directors, shareholders, affiliates and their successors
and assigns (collectively, the "NCD Indemnitees") from and against, and shall
compensate and reimburse each of the NCD indemnitees for, any damages which are
directly or indirectly suffered or incurred by any of the NCD Indemnitees or to
which any of the NCD Indemnitees may otherwise become subject (regardless of
whether or not such Damages relate to any third-party claim) and which arise
from or as a result of, or are directly or indirectly connected with, (i) any
inaccuracy in or breach of any representation or warranty set forth in Article
3; (ii) any breach of any covenant or obligation of NetManage hereunder; or
(iii) any liability or obligation assumed by NetManage pursuant to Section
1.3(b) of this Agreement arising after the Closing Date.
7.4 THRESHOLD; CEILING; EXCLUSIVITY.
(a) NCD shall not be required to make any indemnification
payment pursuant to Section 7.2 for any inaccuracy in or breach of any of the
representations and warranties set forth in Article 2 hereof or in any
certificate delivered by NCD in connection with this Agreement until such time
as the total amount of all Damages (including the Damages arising from such
inaccuracy or breach and all other Damages arising from any other inaccuracies
in or breaches of any representations or warranties) that have been directly or
indirectly suffered or incurred by any one or more of the Indemnitees, or to
which any one or more of the Indemnitees has or have otherwise become subject,
exceeds Fifty Thousand Dollars ($50,000).
(b) The maximum liability of (i) NCD to all Indemnitees for any
indemnification payments pursuant to Section 7.2 and (ii) NetManage to all NCD
Indemnitees for any indemnification payments pursuant to Section 7.3, shall be
One Million Dollars ($1,000,000). All indemnification payments shall be net of
any amounts received by NetManage from insurance proceeds related to the matters
for which indemnification is requested.
ARTICLE 8. MISCELLANEOUS.
8.1 GOVERNING LAWS. It is the intention of the parties hereto that
the internal laws of the State of California (irrespective of its choice of law
principles) shall govern the validity of this Agreement, the construction of its
terms, and the interpretation and enforcement of the rights and duties of the
parties hereto.
8.2 BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and unless
otherwise provided in, this Agreement, each and all of the covenants, terms,
provisions, and agreements contained herein shall be binding upon, and inure to
the benefit of, the permitted successors, executors, heirs, representatives,
administrators and assigns of the parties hereto provided that no party hereto
shall assign this Agreement to any such entity without the prior written consent
of the other party.
8.3 PERSONNEL. NetManage shall extend offers of employment
entailing responsibilities comparable to those currently in effect at NCD, Inc.
to all employees and consultants of the Z-Mail Business listed as "Hires" on
Schedule 8.4, at levels of compensation similar to those paid to NetManage
employees or consultants with similar responsibilities, such employment or
consultancy to be effective as of the Closing Date. NCD will use its reasonable
best efforts to encourage such employees and consultants to accept NetManage's
offers of employment. NCD shall retain at its expense all employees and
consultants listed on such schedule as "M" or "T," until the earlier of (i) the
date such person receives an employment or consultancy relationship offer from
NetManage or (ii) June 15 if labelled "M" or June 30 if labeled "T." In the
event NetManage determines to make offers of employment or consultancy to any of
such persons within such period, NCD will use its reasonable best efforts to
encourage such employees to accept NetManage's offers of employment or
consultancy. All employment and consultancy arrangements between NetManage and
any employee and consultant hired by NetManage will be negotiated directly
between such employees and NetManage, and NCD shall have no responsibility for
or liability from such negotiations or any hiring, employment or termination
decisions or related actions taken or made by NetManage. NetManage shall be
responsible for all obligations to former employees of the Z-Mail business hired
by NetManage accruing after the Closing Date, and for its own conduct referred
to in the preceding sentence.
8.4 BUILDING LEASE. As of the Closing, NCD shall permit NetManage
to use specified portions of the building located at 000 Xxxxxxx Xxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxx (the "Building") for a period of thirty (30) days without
charge. NetManage may use specified portions of the Building for up to an
additional sixty (60) days after the expiration of the initial thirty (30) day
period, but NetManage shall pay monthly rent in the amount of Forty Thousand
dollars ($40,000) to NCD during such additional period. Upon the expiration of
this additional sixty (60) day period, NetManage may in its sole discretion
assume the lease of the building (the "Lease") in full or enter into a sublease
for the Building for the duration of the term of the lease by providing NCD with
written notice of its intention to do so within sixty (60) days after the
closing, subject to the consent of the landlord under the Lease. If NetManage
does not provide such written notice, NetManage shall have no further obligation
with respect to the building after such 90 day period. Notwithstanding the
above, all phone charges incurred in connection with the Building on or after
the Closing Date and until NetManage vacates the Building shall be the sole
responsibility of NetManage.
8.5 FURTHER ASSURANCES; BENEFITS OF NONASSIGNABLE RIGHTS; NOTICES.
Both before and after the Closing, the parties shall execute and/or cause to be
executed such further documents, and perform such further acts, as may be
necessary to transfer and convey any of the Contracts to NetManage, on the terms
herein contained, and to otherwise comply with the terms of this agreement and
consummate the transactions contemplated hereby. NCD and NetManage will use
their best efforts to acquire any third party consents necessary for assigning
the Contracts to NetManage and to provide such assistance as is necessary to
pass through to the other party, as appropriate, relief from the obligations of
or the benefits of any contract, claim, cause of action, or other assets which
cannot be assigned to NetManage as required hereunder. NCD shall use its best
efforts to provide notices of this transaction to its distributors and instruct
them to destroy or return any inventory relating to the Z-Mail Business.
8.6 CUSTOMER ACCOUNTS. For a period of ninety (90) days following
the Closing, the parties hereto shall notify each other in writing as to each
problem that arises to their knowledge in connection with a customer's failure
to pay on a timely basis outstanding amounts owed to NCD under a Z-Mail Business
account.
8.7 SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall be interpreted so as best to reasonably
effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision which will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provision.
8.8 ENTIRE AGREEMENT. This Agreement, the exhibits hereto, the
documents referenced herein, and the exhibits thereto, constitute the entire
understanding and agreement of
the parties hereto with respect to the subject matter hereof and thereof and
supersede all prior and contemporaneous agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect hereto and thereto.
8.9 FACSIMILE; COUNTERPARTS. This Agreement may be executed by
facsimile and in any number of counterparts, each of which shall be an original
as against any party whose signature appears thereon and all of which together
shall constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as signatories.
8.10 EXPENSES. Each party shall pay all of its own costs and
expenses incurred with respect to the negotiation, execution and delivery of
this Agreement and the exhibits hereto including all legal and accounting fees
and expenses, and broker's or finder's fees, whether or not the Acquisition is
consummated, PROVIDED, HOWEVER, that NetManage will pay all sales and transfer
taxes in connection with the Acquisition in accordance with Section 1.5.
8.11 AMENDMENT AND WAIVERS. Any term or provision of this Agreement
may be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof for default in payment of any amount due
hereunder or default in the performance hereof shall not be deemed to constitute
a waiver of any other default or any succeeding breach or default.
8.12 SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby notwithstanding any investigation of the parties hereto and shall
terminate on the date one year after the Closing Date.
8.13 NO WAIVER. The failure of any party to enforce any of the
provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
8.14 ATTORNEYS' FEES. Should suit be brought to enforce or
interpret any part of this Agreement, the prevailing party shall be entitled
to recover, as an element of the costs of suit and not as damages, reasonable
attorneys' fees to be fixed by the court (including, without limitation,
costs, expenses and fees on any appeal). The prevailing party shall be the
party entitled to recover its costs of suit, regardless of whether such suit
proceeds to final judgment. A party not entitled to recover its costs shall
not be entitled to recover attorneys' fees. No sum for attorneys' fees shall
be counted in calculating the amount of a judgment for purposes of
determining if a party is entitled to recover costs or attorneys' fees.
8.15 NOTICES. Any notice provided for or permitted under this
agreement will be treated as having been given when (i) delivered personally,
(ii) sent by confirmed telex or telecopy, (iii) sent by commercial overnight
courier with written verification of receipt, or (iv) mailed postage prepaid by
certified or registered mail, return receipt requested, to the party
to be notified, at the address set forth below, or at such other place of which
the other party has been notified in accordance with the provisions of this
section 8.14.
NCD: Network Computing Devices, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
NCD Software Corporation
c/o Network Computing Devices, Inc.
000 Xxxxx Xxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
With copy to: Xxxxxx & Xxxxx LLP
000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
NetManage or Sub: NetManage, Inc.
00000 Xxxxx Xx Xxxx Xxxx.
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
With copy to: Xxxx Xxxx Xxxx & Freidenrich
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: J. Xxxxxx Xxxxxx, Esq.
Such notice will be treated as having been received upon actual receipt.
8.16 CONSTRUCTION OF AGREEMENT. This Agreement has been negotiated
by the respective parties hereto and their attorneys and the language hereof
shall not be construed for or against any party. The titles and headings herein
are for reference purposes only and shall not in any manner limit the
construction of this Agreement which shall be considered as a whole.
8.17 NO JOINT VENTURE. Nothing contained in this agreement shall be
deemed or construed as creating a joint venture or partnership between any of
the parties hereto. No party is by virtue of this Agreement authorized as an
agent, employee or legal representative of any other party. No party shall have
the power to control the activities and operations of any other and their status
is, and at all times, will continue to be, that of independent contractors with
respect to each other. No party shall have any power or authority to bind or
commit any other. No party shall hold itself out as having any authority or
relationship in contravention of this Section 8.16.
8.18 PRONOUNS. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.
8.19 FURTHER ASSURANCES. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances, as may be reasonably
requested by any other party to better evidence and reflect the transactions
described herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement.
8.20 ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. No provisions of
this Agreement are intended, nor shall be interpreted, to provide or create any
third party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, partner of any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof shall be personal solely between the parties
to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
NETMANAGE, INC., NETWORK COMPUTING DEVICES, INC.,
a California corporation
a Delaware Corporation
By:
------------------------
Its:
By: -----------------------
-----------------------------------
XXXXXX X. XXXXXX, Senior Vice
President, Finance, Chief Financial
Officer and Secretary
NCD SOFTWARE CORPORATION,
a California corporation
By:
----------------------------
Its:
---------------------------
LIST OF EXHIBITS:
EXHIBIT A: CERTAIN DEFINITIONS
EXHIBIT B-1: ASSIGNMENT AND ASSUMPTION OF CONTRACTS
EXHIBIT B-2: ASSIGNMENT AND ASSUMPTION OF CONTRACTS
EXHIBIT C: NCD DISCLOSURE SCHEDULE
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this EXHIBIT A):
CLOSING AND CLOSING DATE. "Closing" and "Closing Date" shall have the
meanings set forth in Section 1.6.
CONTRACTS. "Contracts" shall have the meaning set forth in Section 1.1(b).
CONFIDENTIAL INFORMATION. "Confidential Information" shall mean
confidential information of a party ("Disclosing Party") which is disclosed to
another party ("Receiving Party"). Confidential Information shall include, but
not be limited to, trade secrets, know-how, inventions, techniques, processes,
algorithms, software programs, schematics, designs, contracts, customer lists,
financial information, sales and marketing plans and business information.
DAMAGES. "Damages" shall include any loss, damage, injury, decline in
value, liability, claim, demand, settlement, judgment, award, fine, penalty,
tax, fee (including reasonable attorneys' fees), charge, costs (including
reasonable costs of investigation) of any nature.
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body, or Entity and any court or
other tribunal).
INDEMNIFICATION PERIOD. "Indemnification Period" shall mean the period
commencing on the Closing Date and ending at the close of business on the first
anniversary of the Closing Date.
INDEMNITEES. "Indemnitees" shall mean the following Persons: (a)
NetManage; (b) NetManage's current and future affiliates; (c) the respective
Representatives of the Persons referred to in clauses "(a)" and "(b)" above; and
(d) the respective successors and assigns of the Persons referred to in clauses
"(a)" and "(b)" and "(c)" above.
LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by
or before, or otherwise involving any court or other Governmental Body or any
arbitrator or arbitration panel.
MATERIAL ADVERSE CHANGE. "Material Adverse Change" shall mean a change
which would have a Material Adverse Effect.
MATERIAL ADVERSE EFFECT. A violation or other matter will be deemed to
have a "Material Adverse Effect" on the Z-Mail Business or NetManage, as
applicable, if such violation or other matter would have a Material Adverse
Effect on (i), as to NetManage, NetManage's business, intellectual property
rights, condition, assets, liabilities, operations, or financial performance or
(ii) as to the Z-Mail Business, the business, intellectual property rights,
condition, assets, operations or financial performance of the Z-Mail Business.
MATERIAL CONTRACTS. "Material Contracts" shall mean the Contracts
designated as Material Contracts in Schedule 1.1(b).
PERSON. "Person" shall mean any individual, Entity or Governmental Body.
REPRESENTATIVES. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
TRANSACTION DOCUMENTS. "Transaction Documents" shall mean all documents or
agreements required to be delivered by any party hereunder including the
Agreement, and any related agreements.
EXHIBIT B-1
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
This Assignment and Assumption of Contracts Agreement (this
"Assignment") is entered into by and among Network Computing Devices, Inc., a
California corporation ("NCD"), NCD Software Corporation, a California
corporation ("Sub," and together with NCD, "Assignor"), and NetManage, Inc., a
Delaware corporation ("Assignee").
Assignor hereby assigns to Assignee, its successors and assigns, for
the consideration described in that certain Asset Purchase Agreement dated as of
June 3, 1996 by and among NCD, Sub and NetManage (the "Agreement"), the receipt
and sufficiency of which are hereby acknowledged, all of Assignor's right, title
and interest (as limited by the language set forth in SCHEDULE A attached
hereto) in and to the contracts listed in SCHEDULE A attached hereto (the
"Obligations").
Assignee hereby accepts assignment of the Obligations. Assignee
hereby assumes and agrees to pay, perform and discharge the obligations of
Assignor with respect to the Obligations arising after 11:59 p.m. on the day
preceding the Closing Date (as that term is defined in Section 1.7 of the
Agreement).
This Assignment may be executed in any number of counterparts, each of
which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument. This Assignment shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment of
Contracts and Assumption to be executed and delivered as of the 3rd day of June
1996.
ASSIGNOR: NETWORK COMPUTING DEVICES, INC., a California
corporation
By:
--------------------------------------------
Its:
-------------------------------------------
NCD SOFTWARE CORPORATION, a California corporation
By:
--------------------------------------------
Its:
------------------------------------------
ASSIGNEE: NETMANAGE, INC., a Delaware corporation
By:
--------------------------------------------
XXXXXX X. XXXXXX
Senior Vice President, Finance, and Chief
Financial Officer
SCHEDULE A
OBLIGATIONS
A. NetManage will (i) provide all technical support, with respect to and
(ii) assume NCD's technical support obligations under those agreements set forth
on Schedule 1.1(b) arising after the Closing Date. NetManage will also assume
technical support obligations arising before the Closing Date in connection with
such agreements up to Four Hundred Twenty-Eight Thousand Dollars ($428,000).
B. NetManage will assume all of NCD's obligations set forth in that
certain Xxxxxxxx.xxx Software License Development Agreement including but not
limited to the obligation to purchase a minimum quantity of four thousand
(4,000) units through December 18, 1996; PROVIDED, HOWEVER, that the obligations
assumed by NetManage pursuant to this paragraph shall not exceed Three Hundred
Thirty Thousand Dollars ($330,000) (the "Xxxxxxxx.xxx Obligation Cap"). In the
event that the obligations as set forth in this paragraph exceed the
Xxxxxxxx.xxx Obligation Cap, NCD shall be liable for all such amounts exceeding
the Xxxxxxxx.xxx Obligation Cap, not including costs incurred in the purchase of
those units which exceed the minimum quantity of 4,000.
EXHIBIT B-2
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
This Assignment and Assumption of Contracts Agreement (this
"Assignment") is entered into by and among Network Computing Devices, Inc., a
California corporation ("NCD"), NCD Software Corporation, a California
corporation ("Sub," and together with NCD, "Assignor"), and NetManage, Inc., a
Delaware corporation ("Assignee").
Assignor hereby assigns to Assignee, its successors and assigns, for
the consideration described in that certain Asset Purchase Agreement dated as of
June 3, 1996 by and among NCD, Sub and NetManage (the "Agreement"), the receipt
and sufficiency of which are hereby acknowledged, all of Assignor's right, title
and interest in and to the contracts listed in SCHEDULE A attached hereto (the
"Contracts").
Assignee hereby accepts assignment of the Contracts. Assignee hereby
assumes and agrees to pay, perform and discharge the obligations of Assignor
with respect to the Contracts arising after 11:59 p.m. on the day preceding the
Closing Date (as that term is defined in Section 1.7 of the Agreement).
This Assignment may be executed in any number of counterparts, each of
which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument. This Assignment shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment of
Contracts and Assumption to be executed and delivered as of the 3rd day of June
1996.
ASSIGNOR: NETWORK COMPUTING DEVICES, INC., a California
corporation
By:
---------------------------------------
Its:
---------------------------------------
NCD SOFTWARE CORPORATION, a California corporation
By:
----------------------------------------
Its:
---------------------------------------
ASSIGNEE: NETMANAGE, INC., a Delaware corporation
By:
----------------------------------------
XXXXXX X. XXXXXX
Senior Vice President, Finance, and Chief
Financial Officer
SCHEDULE 1.3(b)
Assumed Liabilities
A. NetManage will (i) provide all technical support, with respect to and
(ii) assume NCD's technical support obligations under those agreements set forth
in Schedule 1.1(b) arising after the Closing Date. NetManage will also assume
technical support obligations arising before the Closing Date in connection with
such agreements up to Four Hundred Twenty-eight Thousand Dollars ($428,000).
B. NetManage will assume all of NCD's obligations set forth in that
certain Xxxxxxxx.xxx Software License Development Agreement including but not
limited to the obligation to purchase a minimum quantity of four thousand
(4,000) units through December 18, 1996; PROVIDED, HOWEVER, that the obligations
assumed by NetManage pursuant to this paragraph shall not exceed Three Hundred
Thirty Thousand Dollars ($330,000) (the "Xxxxxxxx.xxx Obligation Cap"). In the
event that the obligation as set forth in this paragraph exceed the Xxxxxxxx.xxx
Obligation Cap, NCD shall be liable for all such amounts exceeding the
Xxxxxxxx.xxx Obligation Cap not including costs incurred in the purchase of
those units which exceed the minimum quantity of 4,000.
C. NetManage will assume all obligations under the Contracts as defined
in Section 1.1(b).
