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EXHIBIT 2.01
EXECUTION VERSION
ASSET PURCHASE AGREEMENT
BETWEEN
BROKAT TECHNOLOGIES, INC.
AS SELLER
AND
HNC SOFTWARE INC.
AS BUYER
August 15, 2001
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ARTICLE 1 DEFINITIONS...............................................................1
1.1 Definitions..................................................................1
ARTICLE 2 PURCHASE AND SALE.........................................................8
2.1 Purchase And Sale............................................................8
2.2 Excluded Assets..............................................................9
2.3 Assumed Liabilities.........................................................10
2.4 No Other Liabilities Assumed................................................10
2.5 Purchase Price; Allocation of Purchase Price................................12
2.6 Closing.....................................................................13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER.................................13
3.1 Corporate Existence and Power...............................................13
3.2 Corporate Authorization.....................................................14
3.3 Governmental and Other Authorization........................................14
3.4 Non-contravention...........................................................14
3.5 Required Consents...........................................................14
3.6 Financial Statements........................................................15
3.7 Absence of Certain Changes..................................................15
3.8 No Undisclosed Liabilities..................................................16
3.9 Material Contracts..........................................................16
3.10 No Litigation...............................................................18
3.11 Compliance with Laws and Court Orders.......................................18
3.12 Properties..................................................................18
3.13 Title to and Condition of Purchased Assets..................................19
3.14 Fairness of Consideration...................................................19
3.15 No Proceedings..............................................................19
3.16 Debt........................................................................19
3.17 Intellectual Property Rights................................................19
3.18 Insurance Coverage.........................................................23
3.19 Licenses and Permits........................................................23
3.20 Privacy.....................................................................23
3.21 Status of Assumed Contracts.................................................23
3.22 Receivables.................................................................23
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3.23 Finders' Fees...............................................................24
3.24 Environmental Compliance....................................................24
3.25 No Representations to Employees or Consultants of Seller....................24
3.26 Employee Matters............................................................24
3.27 No Right to Purchase the Blaze Business or the Purchased Assets.............27
3.28 No Existing Discussions.....................................................27
3.29 Taxes.......................................................................27
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER..................................28
4.1 Corporate Existence and Power...............................................28
4.2 Corporate Authorization.....................................................28
4.3 Governmental Authorization..................................................28
4.4 Non-contravention...........................................................28
4.5 Finders' Fees...............................................................28
4.6 No Litigation...............................................................28
ARTICLE 5 COVENANTS OF SELLER......................................................29
5.1 Confidentiality; Access.....................................................29
5.2 Payment of Debts............................................................29
5.3 Transfer of Affiliate-Owned Assets..........................................29
5.4 Assistance..................................................................30
5.5 Consents....................................................................30
ARTICLE 6 COVENANTS OF BUYER AND SELLER............................................30
6.1 Further Assurances..........................................................30
6.2 Almaden Boulevard Lease.....................................................30
6.3 Japanese Sublease...........................................................31
6.4 Books and Records; Personnel................................................32
6.5 Certain Filings.............................................................32
6.6 Public Announcements........................................................32
ARTICLE 7 TAX MATTERS..............................................................32
7.1 Taxes.......................................................................32
7.2 Straddle Periods............................................................33
7.3 Other Taxes.................................................................33
7.4 Treatment of Indemnity Payments.............................................33
ARTICLE 8 EMPLOYEE BENEFITS........................................................33
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8.1 Employees, Consultants and Offers by Buyer..................................33
8.2 Seller's Employee Benefit Plans.............................................33
8.3 Buyer Benefit Plans.........................................................34
8.4 Continuation of Certain Administrative Services and Insurance Coverage......34
8.5 No Third Party Beneficiaries................................................35
8.6 Employees; WARN Act.........................................................35
ARTICLE 9 CONDITIONS TO CLOSING....................................................35
9.1 Conditions to Obligations of Buyer and Seller...............................35
9.2 Conditions to Obligation of Buyer...........................................35
9.3 Conditions to Obligation of Seller..........................................37
ARTICLE 10 SURVIVAL; INDEMNIFICATION................................................37
10.1 Survival....................................................................37
10.2 Indemnification.............................................................37
10.3 Investment of Retained Amount; Accrued Interest.............................39
10.4 Claim; Notice of Claim......................................................39
10.5 Contents of Notice of Claim.................................................40
10.6 Defense of Third-Party Claims...............................................40
10.7 Resolution of Claims........................................................40
10.8 Release of Remaining Retained Amount........................................43
ARTICLE 11 MISCELLANEOUS............................................................43
11.1 Notices.....................................................................43
11.2 Amendments and Waivers......................................................45
11.3 Expenses....................................................................45
11.4 Successors and Assigns......................................................45
11.5 Governing Law...............................................................45
11.6 Counterparts; Third Party Beneficiaries.....................................45
11.7 Entire Agreement............................................................45
11.8 Captions....................................................................45
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of August 15, 2001 (this
"AGREEMENT"), is made and entered into by and between Brokat Technologies, Inc.,
a Delaware corporation ("SELLER"), and HNC Software Inc. a Delaware corporation
("BUYER"). Seller and Buyer are referred to collectively herein as the "PARTIES"
and individually as a "PARTY".
R E C I T A L S
WHEREAS, Seller conducts the Blaze Business (as defined below);
WHEREAS, Buyer desires to purchase substantially all of the assets used
to conduct the Blaze Business from Seller and to assume the Assumed Liabilities
(as defined below), and Seller desires to sell to Buyer substantially all of the
assets of, the Blaze Business, upon and subject to the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties and
covenants herein contained, the Parties hereby agree as follows.
ARTICLE 1
DEFINITIONS
1.1 Definitions. The following terms have the meanings ascribed to them
or referenced below:
"1933 ACT" has the meaning set forth in Section 5.4.
"1934 ACT" has the meaning set forth in Section 5.4.
"AAA" has the meaning set forth in Section 10.7(c).
"ADDITIONAL RETAINED AMOUNT" has the meaning set forth in Section 10.3.
"AFFILIATE" means, with respect to any specified Person, any other
Person that directly or indirectly controls, is controlled by, or is under
common control with such specified other Person (where, for purposes of this
definition, "CONTROL" (including the correlative terms "CONTROLLED BY" or "UNDER
COMMON CONTROL WITH") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management policies of a Person, whether
through the ownership of stock, by Contract or otherwise).
"AFFILIATE-OWNED ASSETS" has the meaning set forth in Section 3.13(a).
"AGREEMENT" has the meaning set forth in the preamble to this Agreement.
"ALMADEN BOULEVARD LEASE" means that certain Office Lease dated as of
November 12, 1999 between Seller and SJ Plaza LLC, as amended, pursuant to which
Seller leases office space located at 000 Xxxxxxx Xxxxxxxxx, Xxx Xxxx,
Xxxxxxxxxx (the "ALMADEN BOULEVARD FACILITY"). The office space leased by Seller
under the Almaden Boulevard Lease is hereinafter referred to as the "ALMADEN
BOULEVARD PREMISES".
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"ASSIGNMENT AND ASSUMPTION AGREEMENT" has the meaning set forth in
Section 2.6(a).
"ASSUMED CONTRACTS" has the meaning set forth in Section 2.1(f).
"ASSUMED LIABILITIES" has the meaning set forth in Section 2.3.
"ASSUMED SEVERANCE LIABILITIES" has the meaning set forth in Section
2.3(d).
"AWARDED DAMAGES" has the meaning set forth in Section 10.7(c).
"AUDITED STATEMENTS" has the meaning set forth in Section 3.6.
"BALANCE SHEET" has the meaning set forth in Section 3.6.
"BALANCE SHEET DATE" has the meaning set forth in Section 3.6.
"BLAZE BUSINESS" means the business conducted by Blaze Software, Inc.
immediately prior to its acquisition by Brokat and extensions of such business
since such acquisition, which are now referred to by Seller as its "Rules
Business Unit" and which includes, but is not limited to, the business conducted
by Seller in which Seller designs, develops, markets and supports computer
software products (including the Blaze Business Offerings and related services)
that enable companies: (i) to provide their respective customers, employees,
partners and suppliers with adaptable and personalized interactions that are
consistent across all communication channels, including the Internet, automated
telephone response systems, manned customer service centers, automated
self-service kiosks and others; (ii) to translate business rules into a format
that can be used by business applications; and (iii) to communicate their unique
way of doing business through these interactions.
"BLAZE BUSINESS OFFERINGS" has the meaning set forth in Section 2.1(a).
"BLAZE BUSINESS RECEIVABLES" has the meaning set forth in Section
2.1(g).
"BLAZE IP RIGHTS" has the meaning set forth in Section 3.17(e).
"BLAZE SOURCE CODE" has the meaning set forth in Section 3.17(i).
"BOOKS AND RECORDS" means, to the extent not already included in
Intellectual Property, all books, records, books of account, financial records,
financial statements, files, data and papers, whether in hard copy or computer
format, used or held for use by Seller or any of its Affiliates primarily in
connection with the conduct of the Blaze Business, including, without
limitation, engineering information, sales and promotional literature, manuals
and data, sales and purchase correspondence, lists of present and former
suppliers, lists of present and former customers, personnel and employment
records, and any Tax return relating exclusively to any Tax imposed on the
Purchased Assets; provided, however, that Seller is entitled to retain originals
of records, files or data that relate to businesses other than the Blaze
Business and Tax returns, financial records and financial statements of Seller,
so long as Buyer is given true and complete copies of such documents and records
at the Closing or no later than five (5) days thereafter.
"BROKAT" means Brokat Technologies Aktiengesellschaft, an
Aktiengesellschaft organized and existing under the laws of Germany and of which
Seller is an indirect Subsidiary.
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"BUSINESS DAY" means a day, other than a Saturday or Sunday, on which
banks are open for ordinary banking business in San Jose, California.
"BUYER" has the meaning set forth in the preamble to this Agreement.
"BUYER ANCILLARY AGREEMENTS" means, collectively, the Assignment and
Assumption Agreement, the Xxxx Assignment, the Patent Applications Assignment,
the Domain Name Assignment, the Transition Services Agreement and all other
agreements, assignments, certificates and documents that Buyer is to execute and
deliver pursuant to this Agreement.
"BUYER INDEMNITEES" has the meaning set forth in Section 10.2(a).
"BUYER LEASE" has the meaning set forth in Section 6.2(a).
"BUYER'S PRO RATA LEASE SHARE" has the meaning set forth in Section
2.1(h).
"CLAIM" has the meaning set forth in Section 10.4.
"CLOSING" has the meaning set forth in Section 2.6.
"CLOSING CASH PAYMENT" has the meaning set forth in Section 2.6(a).
"CLOSING DATE" means the date of the Closing.
"COBRA" has the meaning set forth in Section 3.26(h).
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTESTED CLAIM" has the meaning set forth in Section 10.7(b).
"CONTRACT" means any written or oral contract, agreement, arrangement,
undertaking, indenture, lease, deed, mortgage, license, option, instrument, note
or other commitment.
"COPYRIGHTS" has the meaning set forth in Section 3.17(a).
"DAMAGES" has the meaning set forth in Section 10.2(a).
"EMPLOYEE PLANS" has the meaning set forth in Section 3.26(b).
"ENVIRONMENTAL LAWS" means any federal, state, local or foreign law
(including, without limitation, common law), treaty, judicial decision,
regulation, ordinance, code, legally binding guideline or policy or rule of the
United States or of any other country or any judgment, order, decree,
injunction, permit or governmental restriction or any agreement with any
Governmental Authority, relating to the environment, human health and safety or
to exposure to Hazardous Substances.
"ENVIRONMENTAL LIABILITIES" means any and all Liabilities arising in
connection with or in any way relating to Seller (or any predecessor of Seller
or any prior owner of all or part of Seller's business and assets), any property
now or previously owned, leased or operated by Seller, the Blaze Business (as
currently or previously conducted by Seller or any of its Affiliates), the
Purchased Assets or any activities or operations occurring or conducted at the
Real Property (including, without limitation, offsite disposal), whether
accrued, contingent, absolute, determined, determinable or otherwise, which (i)
arise under any
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Environmental Law and (ii) relate to actions occurring or conditions existing on
or prior to the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations promulgated thereunder.
"EXCLUDED ASSETS" has the meaning set forth in Section 2.2.
"EXCLUDED LIABILITIES" has the meaning set forth in Section 2.4.
"FACILITY" has the meaning set forth in Section 3.24.
"FINAL AWARD" has the meaning set forth in Section 10.7(c).
"FIRST AMENDMENT TO LEASE" means that certain First Amendment to Lease
entered into as of March 31, 2000 between Blaze Software Inc. and SJ Plaza LLC
relating to the Almaden Boulevard Facility, and the term "ORIGINAL LEASED
PREMISES" means the approximately 27,586 square feet of space in Suites 800 and
900 of the Almaden Boulevard Facility and defined as the "Original Leased
Premises" in the First Amendment to Lease.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"GOVERNMENTAL AUTHORITY" means any national, federal, state, county,
municipal, district or local government or government body, whether of the
United States or another country, or any public administrative or regulatory
agency, political subdivision, commission, court, board or body, or
representative of any of the foregoing.
"HAZARDOUS SUBSTANCES" means any pollutant, contaminant, waste or
chemical or any toxic, radioactive, ignitable corrosive, reactive or otherwise
hazardous substance, having any constituent elements displaying any of the
foregoing characteristics.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"INDEMNIFIED PARTY" has the meaning set forth in Section 10.2(e).
"INDEMNIFYING PARTY" has the meaning set forth in Section 10.1.
"INDEMNITEES" has the meaning set forth in Section 10.4.
"INDENTURE" means the indenture, dated as of March 28, 2000, by and
among Brokat and The Bank of New York, as trustee, with respect to Brokat's
11-_% Senior Notes due 2010.
"INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in Section
3.17(a).
"IP LICENSES" has the meaning set forth in Section 3.17(b).
"ISV AGREEMENT" has the meaning set forth in Section 9.2(i).
"J.A.M.S." has the meaning set forth in Section 10.7(c).
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"JAPANESE LEASE" means the office lease between Brokat Technologies
Japan, Inc., a subsidiary of Brokat ("BROKAT JAPAN") and Sumitomo Fudosan
("JAPANESE LANDLORD") pursuant to which Brokat Japan leases office space located
Akasaka DS Building 0X, 0-0-00 Xxxxxxx Xxxxxx-Xx, Xxxxx, Xxxxx (the "JAPANESE
FACILITY") under a lease term ending on August 31, 2003. The office space leased
by Seller under the Japanese Lease is hereinafter referred to as the "JAPANESE
PREMISES").
"JAPANESE SUBLEASE" has the meaning set forth in Section 6.3.
"KNOWLEDGE" of a Party to this Agreement means, with respect to any
fact, circumstance, event or other matter in question, the actual knowledge of
such fact, circumstance, event or other matter by any executive officer or
director of such Party. For purposes of this definition, any such executive
officer or director will be deemed to have actual knowledge of a particular
fact, circumstance, event or other matter if: (i) such fact, circumstance, event
or other matter is reflected in one or more documents (whether written or
electronic, including e-mails sent to or by such individual) in, or that have
been in, such individual's possession, including personal files of such
individual; or (ii) such fact, circumstance, event or other matter is reflected
in one or more documents (whether written or electronic) contained in books and
records of such Party (in the case of knowledge of a Party that is not an
individual) that would reasonably be expected to be reviewed by an individual
who has the duties and responsibilities of such individual in the customary
performance of such duties and responsibilities.
"LANDLORD" has the meaning set forth in Section 6.2(a).
"LIABILITIES" means debts, liabilities and obligations, whether accrued
or fixed, absolute or contingent, matured or unmatured, determined or
determinable, known or unknown, including those arising under any law, action or
governmental order and those arising under any Contract.
"LIEN" means with respect to any property or asset, any mortgage, lien,
option, equitable interest, security interest, right of first refusal or other
restriction on transfer, easement, pledge, hypothecation, charge, debenture,
deed of trust, claim, title retention agreement or covenant of any nature or
other restriction, encumbrance or any other adverse claim of any kind in respect
of such property or asset or any restriction on the use of such property or
asset or any irregularity in title thereto.
"MATERIAL ADVERSE CHANGE" means, with respect to the Blaze Business, any
change, event, circumstance or effect on the Blaze Business that is, or would
reasonably be expected to be, materially adverse to the Purchased Assets
(including but not limited to intangible assets), or to the condition (financial
or otherwise), operations or resulting of operations of the Blaze Business,
excluding any such change, event, circumstance or effect resulting from (i) an
adverse change in the cash flows of the Blaze Business as operated by Seller
prior to the Closing Date, (ii) changes in general economic conditions, (iii)
changes affecting the industry generally in which the Blaze Business operates
which do not disproportionately affect the Blaze Business or (iv) changes
resulting directly from the public announcement of the transactions contemplated
by this Agreement.
"MATERIAL CONTRACT" has the meaning set forth in Section 3.9.
"NON-PREVAILING PARTY" has the meaning set forth in Section 10.7(c).
"NOTICE OF CLAIM" has the meaning set forth in Section 10.4.
"OWNING AFFILIATES" has the meaning set forth in Section 3.13(a).
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"PARTY" has the meaning set forth in the preamble to this Agreement.
"PATENTS" has the meaning set forth in Section 3.17(a).
"PERMITS" has the meaning set forth in Section 3.19.
"PERMITTED LIENS" means (i) liens for Taxes not yet due and payable
(other than liens for any Transfer Taxes arising from any transactions
contemplated by this Agreement or by any Buyer Ancillary Agreement or any Seller
Ancillary Agreement), or (ii) mechanics', carriers', workmen's, warehousemen's,
repairmen's or other like liens arising in the ordinary course of business which
are not yet due and payable, or (iii) the rights of the lessors of any real or
personal property leased to Seller under any leases or lease agreements
described in Section 3.9(f).
"PERSON" means an individual, a partnership, a corporation, an
Aktiengesellschaft, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, a limited liability company, or a
Governmental Authority.
"PREVAILING PARTY" has the meaning set forth in Section 10.7(c).
"PRIOR FACILITY" has the meaning set forth in Section 3.24.
"PROPOSED INTELLECTUAL PROPERTY AGREEMENTS" has the meaning set forth in
Section 3.17(b).
"PURCHASE PRICE" has the meaning set forth in Section 2.5(a).
"PURCHASED ASSETS" has the meaning set forth in Section 2.1.
"RELEASE DATE" has the meaning set forth in Section 10.2(f).
"REQUIRED CONSENTS" has the meaning set forth in Section 3.5.
"REQUIRED PREMISES" has the meaning set forth in Section 6.2.
"RETAINED AMOUNT" has the meaning set forth in Section 2.5(a).
"SEC" has the meaning set forth in Section 3.6.
"SELLER ANCILLARY AGREEMENTS" means, collectively, the Assignment and
Assumption Agreement, the Xxxx of Sale and General Assignment, the Xxxx
Assignment, the Patent Applications Assignment, the Domain Name Assignment and
the Transition Services Agreement and all other agreements, assignments,
certificates and documents that Seller is to execute and deliver pursuant to
this Agreement.
"SELLER-RETAINED RIGHTS" has the meaning set forth in Section 2.1(j).
"SELLER WEBSITES" has the meaning set forth in Section 3.20.
"SELLER" has the meaning set forth in the preamble to this Agreement.
"SELLER'S DISCLOSURE LETTER" has the meaning set forth in the preamble
to Article 3.
"SETTLED CLAIM" has the meaning set forth in Section 10.7(d).
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"SEVERANCE EMPLOYEES" has the meaning set forth in Section 2.3(d).
"SOFTWARE" has the meaning set forth in Section 3.17(a).
"SPECIAL BUYER CLAIMS" has the meaning set forth in Section 10.2(c).
"SPECIAL CLAIMS" has the meaning set forth in Section 10.2(d).
"SPECIAL SELLER CLAIMS" has the meaning set forth in Section 10.2(d).
"STRADDLE PERIODS" has the meaning set forth in Section 7.2.
"SUBLEASE" has the meaning set forth in Section 6.2(a).
"SUBLET TERM" has the meaning set forth in Section 6.2(a).
"SUBSIDIARY" or "SUBSIDIARIES" means, with respect to any Person: (i)
any corporation at least a majority of whose outstanding voting stock is owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries, or
by such Person and one or more of its Subsidiaries; (ii) any general
partnership, limited liability company, joint venture or similar entity, at
least a majority of whose outstanding partnership, membership or similar
interests shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries; and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner. For purposes of this definition, "voting stock" means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of the
directors (or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of
contingency.
"TAX" or "TAXES" means foreign, federal, state and local taxes of any
kind whatsoever (whether payable directly or by withholding), including all
income, capital, sales, use, transfer, customs duties, stamp, stock,
registration, franchise, social security, payroll, premium, employment, excise,
property, value added or other taxes of any kind whatsoever, together with any
interest and penalties, additions to tax or additional amounts with respect
thereto, whether disputed or not.
"TECHNOLOGY" has the meaning set forth in Section 3.17(a).
"THIRD-PARTY CLAIM" has the meaning set forth in Section 10.4.
"TRADEMARKS" has the meaning set forth in Section 3.17(a).
"TRANSACTION TAXES" has the meaning set forth in Section 7.1.
"TRANSFER TAXES" means all recordation, transfer and documentary taxes
and fees, stamps and any value added, excise, sales or use taxes, and similar
costs.
"TRANSFERRED EMPLOYEES" has the meaning set forth in Section 8.1.
"TRANSFERRED PERMITS" has the meaning set forth in Section 2.1(e).
"TRANSITION SERVICES AGREEMENT" has the meaning set forth in Section
9.2(h).
"TREASURY MONEY MARKET FUND" has the meaning set forth in Section 10.3.
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"TRUSTEE" means the Bank of New York, as trustee under the Indenture, or
its successor in such capacity.
"UNCONTESTED CLAIM" has the meaning set forth in Section 10.7(a).
"WARN ACT" has the meaning set forth in Section 3.26(a).
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase And Sale. Except as otherwise provided below, upon and
subject to the terms and conditions of this Agreement, at the Closing, Buyer
agrees to purchase from Seller, and Seller agrees to sell, assign, transfer,
convey and deliver or cause to be sold, assigned, transferred, conveyed and
delivered to Buyer, free and clear of all Liens (other than Permitted Liens) and
claims, all right, title and interest in, to and under the assets, properties
and business, of every kind and description, wherever located, personal or
mixed, tangible or intangible, owned, leased or used by Seller or any of its
Affiliates in the conduct of the Blaze Business as the same shall exist on the
Closing Date, including, without limitation, all assets and properties (other
than cash or cash equivalents) shown or reflected on the Balance Sheet and not
disposed of in the ordinary course of business after the Balance Sheet Date and
prior to the Closing as permitted by this Agreement, and all assets of the Blaze
Business acquired after the Balance Sheet Date prior to the Closing (the
"PURCHASED ASSETS"), and including, without limitation, all right, title and
interest in, to and under:
(a) all computer software products and technologies developed by
or for the Blaze Business or used or marketed in connection with the Blaze
Business (including, but not limited to, Blaze's Advisor Solutions Suite
including Advisor Builder, Advisor Rule Engine, Advisor Rule Server, Advisor
Innovator, Blaze Expert, Blaze Presenter, Expertframe, including Accessor,
Microline Widget Library, Microline Component Toolkit, Microline View, Toolkit,
Xxxx (a constraint-based optimization technology) and Local, and Nextra) and all
source code, object code, supplements, modifications, updates, corrections and
enhancements of past and present versions, shipping versions and versions under
development of such products and technologies (collectively, the "BLAZE BUSINESS
OFFERINGS" and each individually a "BLAZE BUSINESS OFFERING");
(b) any and all design and code documentation, methodologies,
processes, trade secrets, design information, product information, formulae,
routines, engineering specifications, technical manuals and data, drawings,
inventions, know-how, techniques, engineering work papers, works-in-process,
works of authorship and programmer's notes, which are related to, used in, or
derived from the Blaze Business, or products or services which are relevant to
the development, manufacture, operation, maintenance or use of the Blaze
Business Offerings;
(c) all Intellectual Property Rights (as defined in Section 3.17)
in, to or related to (i) the Blaze Business and/or (ii) any of the other
Purchased Assets;
(d) all Books and Records;
(e) to the extent lawfully transferable, all licenses, permits,
registrations and authorizations granted by Governmental Authorities that are
necessary for the conduct of the Blaze Business and the marketing of the Blaze
Business Offerings, including, without limitation, the items listed on Schedule
2.1(e) to the Seller's Disclosure Letter (collectively, the "TRANSFERRED
PERMITS");
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(f) all right, title and interest of Seller in and to the
outstanding Contracts in respect of the Blaze Business that are set forth on
Schedule 2.1(f) to the Seller's Disclosure Letter (the "ASSUMED CONTRACTS");
(g) all accounts receivable and notes receivable arising out of
the Blaze Business and outstanding at Closing (the "BLAZE BUSINESS
RECEIVABLES");
(h) all prepaid expenses relating to the Blaze Business,
including, but not limited to, ad valorem taxes leases and rentals (except that,
with respect to the security deposit with respect to the Almaden Boulevard
Lease, Buyer shall acquire only that percentage of each security deposit that is
equal to the percentage obtained by dividing (i) the total square footage of the
Almaden Premises that Buyer subleases from Seller in accordance with the
provisions of Section 6.2(a), divided by (ii) the total square footage of the
Almaden Boulevard Premises that is leased to Seller under the Almaden Boulevard
Lease as of the Closing Date) ("BUYER'S PRO RATA LEASE SHARE");
(i) all licenses of Software and third-party Intellectual
Property Rights used in the Blaze Business, including without limitation, the
software licenses identified in Schedule 2.1(i) to the Seller's Disclosure
Letter, together with all machine-readable media containing copies of all source
code (if available), object code, data files, records and other information
subject to or provided in connection with such third party software licenses and
copies of all documentation, including documents setting out applicable license
terms, operating procedures, maintenance and support rights and error recovery
procedures;
(j) all of Seller's rights, claims, credits, causes of action or
rights of setoff against third parties arising out of the Blaze Business or the
Purchased Assets, whether liquidated or unliquidated, fixed or contingent, and
all rights of Seller under or pursuant to all warranties, representations and
guarantees made by suppliers, manufacturers, contractors and other third parties
arising out of the Blaze Business; provided, however, that Seller shall retain
all rights, claims, credits, causes of action, counterclaims, setoffs and
defenses, and all warranties, representations and guarantees that may be
asserted against third parties arising out of any of the Excluded Assets or any
of the Retained Liabilities including without limitation any rights to
reimbursement for damages, fees or expenses related thereto (collectively, the
"SELLER-RETAINED RIGHTS").
(k) all tangible assets used in the Blaze Business including, but
not limited to, (i) all furniture, fixtures, furnishings, machinery, vehicles,
equipment, computers, servers, spare parts, documentation, technical materials,
advertising materials, promotional literature, sales or marketing-related
materials and other tangible assets owned by Seller and used in to the Blaze
Business, together with all plates, camera-ready art, blocks, negatives and
similar material relating to any of the foregoing; and (ii) all tangible assets
(including without limitation workstations and personal computers, the
third-party software programs stored therein and the licenses thereto, logbooks,
notebooks, furniture, file cabinets, white boards, personal office supplies and
equipment) owned by Seller that at any time on or after the Balance Sheet Date
are or were held for use primarily by employees of Seller in the conduct of the
Blaze Business; and
(l) all goodwill associated with the Blaze Business or the
Purchased Assets, together with the right to represent to third parties that
Buyer is the successor to the Blaze Business.
2.2 Excluded Assets. Buyer and Seller expressly understand and agree
that the Purchased Assets will not include any assets of Seller not described in
Section 2.1 above or not related to the Blaze Business (the "EXCLUDED ASSETS"),
including without limitation the following:
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(a) the Seller-Retained Rights;
(b) all capital stock of Seller or of any subsidiary of Seller;
(c) all rights, interests and claims of Seller under this
Agreement;
(d) subject to the definition of Books and Records, all Tax
returns, corporate minutes, stock books of account, financial and Tax records of
Seller; and
(e) all cash and cash equivalents of Seller (other than the Blaze
Business Receivables, which are Purchased Assets).
2.3 Assumed Liabilities. Upon and subject to the terms the conditions of
this Agreement, Buyer agrees, effective at the time of the Closing, to assume
the following liabilities (the "ASSUMED LIABILITIES"):
(a) the trade payables and other normal operating Liabilities of
the Blaze Business set forth on Schedule 2.3(a) of the Seller's Disclosure
Letter, which are all reflected on Balance Sheet to the extent such trade
payables and normal operating Liabilities are still owed and payable on the
Closing Date;
(b) the trade payables and other normal operating liabilities of
the Blaze Business incurred by Seller after the Balance Sheet Date and prior to
the Closing Date in the ordinary course of conducting the Blaze Business,
consistent (in type, amount and otherwise) with the past practices of the Blaze
Business and that are set forth on Schedule 3.8 to the Seller's Disclosure
Letter;
(c) the liabilities and obligations of Seller under the Assumed
Contracts, but only to the extent such liabilities and obligations first accrued
or arose after the Closing Date for reasons other than any breach, violation or
default by Seller of any of the terms of any of the Assumed Contracts; and
(d) the obligations of Seller or any of its Affiliates to make
cash severance payments to the employees and consultants of Seller whose names
are set forth on Schedule 2.3(d) to the Seller's Disclosure Letter (the
"SEVERANCE EMPLOYEES") in the respective amounts set forth opposite such
Severance Employee's name in Schedule 2.3(d) in an aggregate amount that
(inclusive of all payroll taxes and other amounts that are required to be
withheld and paid by Buyer to any Tax authority or other Governmental Authority
in connection with any payments made pursuant to this subparagraph (d)) shall
not exceed a total of One Million Five Hundred Thousand ($1,500,000) in cash
(the "ASSUMED SEVERANCE LIABILITIES"); provided that Buyer shall not be
obligated to pay any such Assumed Severance Liabilities until November 15, 2001
and Buyer shall only be obligated to assume and pay such payments to those
Severance Employees who, prior to receipt of such payment from Buyer and prior
to November 15, 2001, execute and deliver to Buyer (i) an IRS Form W-9 or other
appropriate tax withholding form and (ii) a written agreement releasing Buyer in
full from all claims of any kind (including but not limited to severance claims
arising from the termination of the Severance Employee's employment with
Seller). As provided above, the actual total aggregate amount payable by Buyer
under this subparagraph (d) (inclusive of all payroll taxes and other amounts
that are required to be withheld and paid by Buyer to any Tax authority or other
Governmental Authority in connection with any payments made pursuant to this
subparagraph (d)) shall not exceed the maximum aggregate sum of One Million Five
Hundred Thousand Dollars ($1,500,000).
2.4 No Other Liabilities Assumed. As a material consideration and
inducement to Buyer to enter into this Agreement, Seller will retain, and will
be solely responsible for paying, performing and
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discharging when due, and Buyer will not assume or otherwise have or acquire any
obligation, responsibility or liability for, any Excluded Liabilities (as
hereinafter defined). The term "EXCLUDED LIABILITIES" means any and all
Liabilities of Seller of any of its Affiliates, whether now existing or
hereafter arising, other than the Assumed Liabilities. By way of example and not
by way of limitation, the Excluded Liabilities that are not being assumed by
Buyer include:
(a) any and all Taxes now or hereafter due and payable by Seller
or any Affiliate of Seller, including without limitation, any Transaction Taxes
(as defined in Section 7.1 of this Agreement) and any other Taxes on, or arising
from, Seller's sale, assignment, transfer and delivery to Buyer of any of the
Purchased Assets pursuant to this Agreement;
(b) any and all Taxes attributable or related to any of the
Purchased Assets that relate in any manner to, or first arose during, any time
period or portion thereof ending on or prior to the Closing Date, and any
related Liabilities of Seller and its Affiliates;
(c) any and all Liabilities arising after the Closing Date from
or with respect to, any sale, license, provision, performance or delivery by
Seller or any of its Affiliates of a product or service that has been sold,
licensed, provided, performed or delivered by Seller or any of its Affiliates
prior to the Closing Date (including all past sales and licenses of the Blaze
Business Offerings by Seller or any of its Affiliates or predecessors that
occurred prior to the Closing Date);
(d) any and all Liabilities arising from any breach, violation or
default by Seller or any of its Affiliates of any Contract (including, without
limitation, any lease or license), to which Seller or any of its Affiliates is a
party or is bound (including, but not limited to, any breach, violation or
default by Seller or any of its Affiliates of any of the Assumed Contracts that
occurred or first arose prior to the Closing);
(e) any obligations, debts or duties of Seller under any Contract
that is not an Assumed Contract;
(f) other than the Assumed Severance Liabilities, any and all
Liabilities to current, former or future employees of Seller related to or
arising from or with respect to any past, present or failure act or omission of
Seller or any of its Affiliates, including any Liabilities to such employees for
the payment of any and all wages or accrued and unused vacation time or for the
reimbursement of any expenses incurred by such employees;
(g) other than the Assumed Severance Liabilities, any and all
Liabilities arising from the past, present or future termination by Seller or
any of its Affiliates of the employment of any current, former or future
officers, directors, employees, consultants or contractors of Seller, any other
claims brought against Seller arising from the past, present or future
employment by Seller or any of its Affiliates of any person, or arising from any
duties or obligations under any past, present or future employee benefit plans
or compensation arrangements of Seller or any of its Affiliates;
(h) any and all past, present or future Liabilities of Seller or
any of its Affiliates to employees of Seller under the Employee Plans, ERISA,
COBRA, the WARN Act, or any severance pay obligations of Seller;
(i) any and all Liabilities arising from the violation (or
alleged violation) by Seller or any of its Affiliates of any statute, law,
ordinance, regulation, order, judgment or decree of any Governmental Authority
or any jurisdiction (other than Assumed Liabilities);
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(j) any and all Liabilities relating to or arising out of any of
the Excluded Assets (including, but not limited to, any Liabilities now existing
or hereafter arising under any Contract of Seller that is not an Assumed
Contract);
(k) any and all Liabilities arising from any claim, action,
demand, lawsuit, investigation or proceeding instituted by or against Seller or
from the actual or alleged infringement or misappropriation by Seller of any
Intellectual Property Rights of a third party;
(l) any Environmental Liability;
(m) any Liabilities of Seller (other than Assumed Liabilities)
relating to the Blaze Business not incurred in the ordinary course of conducting
the Blaze Business consistent with past practice (including any such liabilities
included on the Balance Sheet), which such Liabilities are set forth on Schedule
2.4(m) to the Seller's Disclosure Letter; and
(n) any and all Liabilities arising as a result of any failure to
comply with any "bulk sales", "bulk transfer" or similar laws in connection with
the transactions contemplated by this Agreement.
2.5 Purchase Price; Allocation of Purchase Price.
(a) In consideration of Seller's transfer of good and marketable
title to, and delivery of, the Purchased Assets to Buyer, effective upon the
Closing, Buyer shall (i) pay to Seller in cash at the Closing an amount equal to
the sum of Sixteen Million Five Hundred Thousand United States Dollars
($16,500,000) (which sum represents $18,000,000 minus the $1,500,000 of Assumed
Severance Liabilities); (ii) assume the Assumed Liabilities (and no other
Liabilities) of Seller; and (iii) agree, as provided in Article 10 of this
Agreement, to pay Seller in cash, at the time provided in Article 10 of this
Agreement the Retained Amount (as defined below) minus the amount of Damages
that Buyer is entitled to recover from the Retained Amount pursuant to Claims
(as defined in Section 10.4) in accordance with Article 10 of this Agreement
(the "PURCHASE PRICE"). As used herein, the "RETAINED AMOUNT" means the sum of
Two Million United States Dollars ($2,000,000) in cash, plus any Additional
Retained Amount (as defined in Section 10.3). The Parties acknowledge and agree
that Buyer shall be the sole owner of the Retained Amount until all or any
portion of the Retained Amount is required to be paid and released to Seller
under the terms of Article 10 of this Agreement. To the extent that the Buyer
has not, by November 15, 2001, been required to pay out any portion of the
$1,500,000 of Assumed Severance Liabilities to any Severance Employee in
accordance with the provisions of Section 2.3(d) due to the failure by any such
Severance Employee to execute or deliver to Buyer any release agreement or Form
W-9 to Buyer by November 15, 2001, then Buyer shall refund any such unpaid
portion of such $1,500,000 to Seller on or before November 30, 2001.
(b) Seller and Buyer will use commercially reasonable efforts to
agree within sixty (60) days after the Closing Date, to allocate the Purchase
Price among the Purchased Assets in accordance with the allocation requirements
of Section 1060 of the Code. Any subsequent adjustments to the Purchase Price,
including the adjustments referred to in Section 7.4, will be reflected in the
allocation hereunder in a manner that is consistent with Section 1060 of the
Code and the regulations promulgated thereunder. For all Tax purposes, Buyer and
Seller agree to report the transactions contemplated in this Agreement in a
manner consistent with the allocation agreed to by the Parties under this
Section 2.5(b) and Section 7.4, and will not take any position inconsistent with
the allocation agreed to by the Parties under this Section 2.5(b) in an Tax
return, in any refund claim, in any litigation or otherwise.
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2.6 Closing. The closing and consummation (the "CLOSING") of the
purchase and sale of the Purchased Assets and the assumption of the Assumed
Liabilities hereunder shall take place at the offices of Fenwick & West LLP, Two
Palo Alto Square, Palo Alto, California, simultaneously with the execution of
this Agreement and after satisfaction of the conditions precedent to the Closing
set forth in Article 9. At the Closing, upon the satisfaction or waiver of all
conditions precedent to the Closing set forth in Article 9:
(a) Buyer shall:
(i) Pay to Seller the sum of Sixteen Million Five Hundred
Thousand United States Dollars (U.S. $16,500,000) (the "CLOSING CASH PAYMENT")
in immediately available funds by wire transfer to an account of Seller with a
bank designated by Seller, by notice to Buyer not later than the Closing Date
(or if not so designated, then by certified or official bank check payable in
immediately available funds to the order of Seller in such amount);
(ii) deliver to Seller the Assignment and Assumption
Agreement substantially in the form of EXHIBIT A (the "ASSIGNMENT AND ASSUMPTION
AGREEMENT") and the other items required to be delivered by Buyer under Section
9.3.
(b) At the Closing, Seller shall deliver, or cause to be
delivered, to Buyer, each of the following, duly executed by or on behalf of
Seller:
(i) the Assignment and Assumption Agreement substantially
in the form of EXHIBIT A;
(ii) the Xxxx of Sale and General Assignment substantially
in the form of EXHIBIT B; and
(iii) the Purchased Assets and the other items required to
be delivered by Seller under Section 9.2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that, except as expressly
set forth in the letter signed by Seller dated as of the Closing Date and
addressed to Buyer which is being delivered to Buyer concurrently with the
Parties' execution and delivery of this Agreement (the "SELLER'S DISCLOSURE
LETTER"), each of the representations, warranties and statements contained in
the following sections of this Article 3 is true and correct on and as of the
Closing Date. For all purposes of this Agreement (including, without limitation,
Articles 7 and 8), the statements contained in the Seller's Disclosure Letter
and its schedules shall also be deemed to be representations and warranties made
and given by Seller to Buyer pursuant to this Article 3.
3.1 Corporate Existence and Power. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all necessary corporate power and authority and all
necessary governmental licenses, authorizations, permits, consents and approvals
to own, lease and operate its properties and to carry on its business as now
conducted. Seller is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction in which its failure to so qualified and in
good standing would have a Material Adverse Effect on the Blaze Business or the
Purchased Assets. Seller has heretofore delivered to Buyer true and complete
copies of its
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certificate of incorporation and bylaws as currently in effect. Seller is not in
violation of its certificate of incorporation and bylaws as currently in effect.
3.2 Corporate Authorization. Seller has all necessary corporate power
and authority to enter into this Agreement and each of the Seller Ancillary
Agreements, to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Seller of this Agreement and each of the Seller
Ancillary Agreements, the sale of the Purchased Assets to Buyer under this
Agreement and the consummation of all the transactions contemplated hereby and
thereby on the terms and subject to the conditions set forth herein and therein
(i) have been duly and validly authorized by Seller by all necessary corporate
action and approvals of Seller's Board of Directors (which action and approvals
have been obtained and carried out in compliance with applicable law, Seller's
certificate of incorporation and bylaws, each as amended to date, and all
Contracts binding on Seller), and (ii) have been duly and validly authorized and
approved by the sole stockholder of Seller at a meeting duly called, noticed and
held (which authorization and approval of by such sole stockholder of Seller has
been obtained and carried out in compliance with, and with the requisite votes
required by, applicable law, Seller's certificate of incorporation and bylaws,
each as amended to date, and all Contracts binding on Seller), and (iii) have
been duly and validly authorized and approved by Brokat by all necessary
corporate actions and approvals of Brokat's Board of Directors (which action and
approvals have been obtained and carried out in compliance with applicable law,
Brokat's charter documents, each as amended to date), including the resolution
of the Board of Directors (or other comparable governing body) of Brokat
required to be delivered to the Trustee under the Indenture that the Purchase
Price is at least equal to the Fair Market Value (as such term is defined in the
Indenture) of the Purchased Assets. This Agreement and each Seller Ancillary
Agreement has been duly and validly executed and delivered by Seller, and
(assuming due authorization, execution and delivery by Buyer) this Agreement and
each of the Seller Ancillary Agreements constitutes, legal, valid and binding
obligations of Seller enforceable against Seller in accordance with their
respective terms.
3.3 Governmental and Other Authorization. Except as set forth in
Schedule 3.3 to the Seller's Disclosure Letter, the execution, delivery and
performance by Seller of this Agreement and each Seller Ancillary Agreement and
the consummation of the transactions contemplated hereby and thereby require no
consent, approval, authorization or other action by or in respect of, or filing
with, any third party, including, but not limited to, any Governmental
Authority, bankruptcy trustee, creditors' committee, receiver or any other
Person.
3.4 Non-contravention. Except as set forth on Schedule 3.4 to the
Seller's Disclosure Letter, the execution, delivery and performance by Seller of
this Agreement and each Seller Ancillary Agreement, and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) violate or
conflict with any provision of the organizational documents of Seller, (ii)
violate or conflict, in any material respect, with any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
Seller or the Purchased Assets, or (iii) result in a violation or breach by
Seller of, conflict with, or constitute a default (or an event which with the
giving of notice or the lapse of time or both, would become a breach or default)
by Seller (or give rise to any right of termination, rescission, amendment,
cancellation, payment or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
agreement, lease or other Contract, instrument or obligation to which Seller is
a party, or by which it or any such Purchased Assets may be bound or otherwise
related to or affecting the Purchased Assets, including, without limitation, the
Indenture and the Assumed Contracts, or (iv) result in the creation of any Liens
(other than Permitted Liens) on any of the Purchased Assets.
3.5 Required Consents. Schedule 3.5 to the Seller's Disclosure Letter
sets forth each Contract or other instrument binding upon Seller or any Permit
requiring a consent or other action by any
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Person as a result of the execution, delivery and performance of this Agreement
and the Seller Ancillary Agreements (the "REQUIRED CONSENTS"). Except as
expressly otherwise set forth in Schedule 3.5 to the Seller's Disclosure Letter,
all of the Required Consents, including, without limitation, all consents needed
to transfer or assign the Assumed Contracts, have been obtained. No approvals of
the stockholders of Brokat or the holders of Brokat's 11 1/2% Senior Notes Due
2010 are required for the consummation of any of the transactions contemplated
by this Agreement.
3.6 Financial Statements. Seller has delivered to Buyer, attached as
Schedule 3.6 to the Seller's Disclosure Letter: (a) the audited balance sheets
of Blaze Software Inc. as of March 31, 1999 and 2000 and the related audited
statements of income and cash flows of Blaze Software Inc. for each of the full
years ended March 31, 1999 and 2000 (such audited balance sheets, statements of
income and cash flows being hereinafter collectively referred to as the "AUDITED
STATEMENTS"); and (b) the unaudited pro forma balance sheet of the Blaze
Business as of July 31, 2001 (the "BALANCE SHEET") (such date of July 31, 2001
being hereinafter referred to as the "BALANCE SHEET DATE"). The Audited
Statements: (i) present fairly, in all material respects, in conformity with
GAAP applied on a consistent basis (except as may be indicated in the notes
thereto), the financial position, results of operation and cash flows of Blaze
Software Inc. for the periods then ended and the dates thereof and (ii) have
been prepared from the Books and Records. The Balance Sheet: (i) presents
fairly, in all material respects, in conformity with GAAP applied on a
consistent basis (except as may be otherwise expressly indicated in the notes
thereto), the financial position of the Blaze Business as at July 31, 2001
(subject to normal year-end adjustments) and (ii) has been prepared from the
Books and Records. Seller has no material debt, Liability or obligation of any
nature, whether accrued, absolute, contingent or otherwise, and whether due or
to become due, related to the Blaze Business except for (i) those shown on the
Balance Sheet, (ii) those that may have been incurred by Seller after the
Balance Sheet Date in the ordinary course of Seller's business consistent with
its past practices, and that are not in excess of $50,000, either individually
or collectively, and are not required to be set forth in the Balance Sheet under
GAAP, (iii) those incurred in connection with this Agreement and the agreements
to be entered into pursuant to this Agreement, and (iv) Retained Liabilities
that are not already reflected in the Balance Sheet and that are not required to
be reflected in the Balance Sheet under GAAP (if any). All reserves established
by Seller that are set forth in or reflected in the Balance Sheet are adequate
and were determined in accordance with GAAP. The Audited Statements complied as
to form in all material respects with the published rules and regulations of the
U.S. Securities and Exchange Commission ("SEC") with respect thereto. All books
of account and other accounting records of Seller with respect to the Blaze
Business are in Seller's possession and made up to date and contain the
information necessary to prepare financial statements in accordance with GAAP.
3.7 Absence of Certain Changes. Between the Balance Sheet Date and the
Closing Date, the Blaze Business has been conducted in the ordinary course
consistent with past practices and there has not been:
(a) any Material Adverse Change;
(b) any incurrence, assumption or guarantee by Seller of any
indebtedness for borrowed money with respect to the Blaze Business;
(c) any creation or other incurrence of any Lien on any Purchased
Asset (other than Permitted Liens);
(d) any physical damage, destruction or other casualty loss
(whether or not covered by insurance) having a significant affect on the Blaze
Business or on any Purchased Asset;
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(e) any transaction or commitment made, or any Contract entered
into, by Seller or any of its Affiliates relating to the Blaze Business or any
Purchased Asset (including the acquisition or disposition of any assets) or any
relinquishment by Seller or any of its Affiliates of any Contract or other right
relating to the Blaze Business or any Purchased Asset, other than transactions
and commitments in the ordinary course of business consistent with past
practices and those contemplated by this Agreement;
(f) any change in any method of accounting or accounting practice
by Seller with respect to the Blaze Business;
(g) except as set forth in Schedule 3.7(g) to the Seller's
Disclosure Letter, any (i) employment, deferred compensation, severance,
retirement or other similar agreement entered into with any officer or employee
of Seller or any of its Affiliates with respect to the Blaze Business (or any
amendment to any such existing agreement), (ii) grant of any severance or
termination pay to any officer or employee of Seller or any of its Affiliates
with respect to the Blaze Business or (iii) change in compensation or other
benefits payable to any officer or employee of Seller or any of its Affiliates
with respect to the Blaze Business pursuant to any severance or retirement plans
or policies thereof;
(h) any labor dispute or any activity or proceeding by a labor
union or representative thereof to organize any employees of Seller or of the
Blaze Business, any entry by Seller into a collective bargaining agreement, or
any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to employees of Seller with respect to the Blaze Business;
(i) to Seller's knowledge, any adverse change in Seller's
relationships with the material customers of the Blaze Business;
(j) any capital expenditure, or commitment for a capital
expenditure, for additions or improvements to property, plant and equipment used
in the Blaze Business; or
(k) the incurrence by Seller of any material Liability or the
making of any material expenditure other than (i) Liabilities arising under this
Agreement, (ii) the Retained Liabilities and (iii) Liabilities incurred in the
ordinary course of the Blaze Business consistent with its past practices.
3.8 No Undisclosed Liabilities. There are no Liabilities of the Blaze
Business of any kind whatsoever, and there is no existing condition, situation
or set of circumstances which could reasonably be expected to result in such a
Liability, other than:
(a) Liabilities provided for in the Balance Sheet;
(b) Liabilities incurred by Seller in good faith related to the
ordinary course of conducting the Blaze Business, consistent (in type, amount
and otherwise) with the past practices of the Blaze Business and occurring since
the Balance Sheet Date as set forth on Schedule 3.8 to the Seller's Disclosure
Letter;
(c) the Retained Liabilities; and
(d) the Assumed Severance Liabilities.
3.9 Material Contracts. Schedule 3.9 to the Seller's Disclosure Letter
sets forth a list of each of the following written or oral Contracts, including
leases, licenses, permits, assignments, mortgages,
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transactions, obligations, commitments or other instruments, to which Seller is
a party or to which Seller or any of its assets or properties is bound:
(a) any Contract providing for payments (whether fixed,
contingent or otherwise) by or to Seller relating to the Blaze Business in an
aggregate amount of $50,000 or more, which payments remain due and owing by
Seller;
(b) any dealer, distributor, OEM (Original Equipment
Manufacturer), VAR (Value Added Reseller), sales representative or similar
agreement under which any third party is authorized to sell, sublicense, lease,
distribute, market or take orders for, any product, service or technology of
Seller relating to the Blaze Business or to provide training or other services
to Seller's customers;
(c) any joint venture or partnership Contract which has involved,
or is reasonably expected to involve, a sharing of profits, expenses or losses
with any other party or the joint development of any product, service, software
or other technology with any third party, in each case, relating to the Blaze
Business;
(d) any Contract to which Seller is a party for or relating to
the employment of any officer, employee or consultant of Seller relating to the
Blaze Business or any other type of Contract with any officer, employee or
consultant of Seller relating to the Blaze Business that is not immediately
terminable by Seller without cost or other liability;
(e) any Contract relating to the Blaze Business, including any
indenture, mortgage, trust deed, promissory note, loan agreement, security
agreement or guarantee, for the borrowing of money, for a line of credit or for
a leasing transaction of a type required to be capitalized in accordance with
Statement of Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board;
(f) any Contract under which Seller is lessee of or holds or
operates any items of tangible personal property or real property owned by any
third party;
(g) any Contract that restricts Seller (with respect to the Blaze
Business) from: (i) engaging in any aspect of Seller's business; (ii)
participating or competing in any line of business or in any market; (iii)
freely setting prices for Seller's products, services or technologies (including
most favored customer pricing provisions); (iv) engaging in any business in any
market or geographic area; or (v) soliciting potential employees, consultants,
contractors or other suppliers or customers;
(h) any consulting or similar agreement under which Seller, with
respect to the Blaze Business, provides any advice or services to a third party
for an annual compensation to Seller of $50,000 per year or more;
(i) any Contract with any labor union or collective bargaining
unit;
(j) any other Contract that is material to the Blaze Business or
that involves a future commitment by Seller related to the Blaze Business that
is in excess of $50,000; and
(k) any other Contract not made or entered into in the ordinary
course of the Blaze Business that is material to the Blaze Business; and
Each Contract disclosed in any Schedule to the Seller's Disclosure
Letter or required to be disclosed pursuant to this Section 3.9 (each, a
"MATERIAL CONTRACT") is a valid and binding agreement of Seller or an Affiliate
of Seller and is in full force and effect, and neither of Seller or, to the
knowledge of
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Seller, any other party thereto is in default or breach in any material respect
under the terms of any such Material Contract, and, to the knowledge of Seller,
no event or circumstance has occurred that, with notice or lapse of time or
both, would constitute any event of default under. Except as indicated on
Schedule 3.9 to the Seller's Disclosure Letter, true and complete copies of each
such Material Contract have been delivered to Buyer.
3.10 No Litigation. There is no litigation, including, without
limitation, any claim, action, suit, investigation or proceeding of any nature
pending or, to the knowledge of Seller, threatened, at law or in equity, by way
of arbitration or before any court or other Governmental Authority that: (i) may
adversely affect, contest or challenge Seller's authority, right or ability to
sell or convey any of the Purchased Assets or the Blaze Business to Buyer under
this Agreement or to otherwise perform Seller's obligations under this Agreement
or any of the Seller Ancillary Agreements, as applicable; (ii) challenges or
contests Seller's right, title or ownership in any of the Purchased Assets or
asserts any Lien on any of the Purchased Assets (other than Permitted Liens);
(iii) asserts that any of the Purchased Assets, or any action taken by a current
or former employee of Seller with respect to any of the Purchased Assets,
infringes any Intellectual Property Rights of any third party or constitutes a
misappropriation or misuse of any Intellectual Property Rights of any third
party; (iv) seeks to enjoin, prevent or hinder the consummation of any of the
transactions contemplated by this Agreement or any of the Seller Ancillary
Agreements; (v) would impair or have an adverse effect on Buyer's right or
ability to use, commercialize or otherwise exploit any of the Purchased Assets
or impair or have an adverse effect on the value of any of the Purchased Assets;
or (vi) involves a wrongful termination, harassment or other employment-related
claim by any employee of the Blaze Business or that would adversely affect or
prevent Buyer from hiring or employing any employee of Seller. There are no
judgments, decrees, injunctions or orders of any Governmental Authority or
arbitrator binding on Seller which (i) affect any of the Purchased Assets or the
Blaze Business, (ii) would conflict with any of the transactions contemplated by
this Agreement or (iii) would impair or adversely affect Buyer's rights in any
of the Purchased Assets at any time on or after the Closing.
3.11 Compliance with Laws and Court Orders. Seller has complied in all
material respects with, and has not received any written notices of violation
with respect to, any domestic or foreign, national, state, regional, provincial
or local statute, law or regulation applicable to the Blaze Business, Seller's
conduct of the Blaze Business or any of the Purchased Assets, including, but not
limited to, securities laws and franchise and business opportunity or business
investment laws.
3.12 Properties.
(a) Schedule 3.12(a) to the Seller's Disclosure Letter correctly
describes the Almaden Boulevard Lease, specifying in the case of leases or
subleases, the name of the lessor or sublessor, the lease term and the actual
rent paid in respect of such lease in calendar 2000 and the first seven months
of calendar 2001.
(b) To Seller's knowledge, there are no developments affecting
any of the Purchased Assets that are pending or threatened, which might
materially detract from the value, materially interfere with any present or
intended use or materially adversely affect the marketability of any of the
Purchased Assets.
(c) The Almaden Boulevard Lease and all leases of personal
property related to the Blaze Business are in good standing, in full force and
effect and are valid, binding and enforceable in accordance with their
respective terms and there does not exist under any such lease any default or
any event which with notice or lapse of time or both would constitute a default
under such lease.
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3.13 Title to and Condition of Purchased Assets.
(a) Seller owns all of the Purchased Assets and Seller has good,
exclusive and marketable title in and to all the Purchased Assets, free and
clear of all Liens whatsoever (other than Permitted Liens), except that good and
marketable title to the Purchased Assets that are listed on Schedule 3.13(a) to
Seller's Disclosure Letter (the "AFFILIATE-OWNED ASSETS") are owned by the
respective Affiliates of Seller who are identified on Schedule 3.13(a) to
Seller's Disclosure Letter (the "OWNING AFFILIATES"), free and clear of all
Liens whatsoever (other than Permitted Liens). Upon consummation of the
transactions contemplated hereby, Buyer will have acquired good and marketable
title in and to, or a valid leasehold interest in, each of the Purchased Assets,
free and clear of all Liens (other than Permitted Liens. No other person has any
right, title or interest in any assets utilized by Seller in the Blaze Business
(except for the rights and interests in Assumed Contracts of the other Persons
who are parties to such Assumed Contracts and except for the rights and
interests in properties leased to Seller held by those Persons who lease such
properties to Seller or who hold Liens in such leased properties).
(b) The tangible personal property included in the Purchased
Assets is in reasonably good working condition and repair consistent with the
operating condition of such equipment in Buyer's industry, reasonable wear and
tear excepted. The Buyer's acquisition of the Purchased Assets will enable Buyer
to operate the Blaze Business as it is currently being operated by Seller.
Except as set forth in Schedule 3.13(b) to the Seller's Disclosure Letter, none
of the Purchased Assets is licensed by Seller to any third party. Title to all
of the Purchased Assets is freely transferable from Seller to Buyer free and
clear of all Liens (other than Permitted Liens) without obtaining the consent or
approval of any person or party other than those consents set forth in the
Seller's Disclosure Letter or the schedules thereto.
3.14 Fairness of Consideration. Seller has received a final independent
appraisal of the Purchased Assets prepared by PricewaterhouseCoopers LLP, and,
based upon such appraisal, each of Brokat's Board of Directors and Seller's
Board of Directors has determined that the Purchase Price (including the Buyer's
assumption of the Assumed Liabilities) is equal to at least the Fair Market
Value (as defined in the Indenture) of the Purchased Assets.
3.15 No Proceedings. No proceedings for the liquidation, dissolution,
merger or disposition of all or substantially all the assets of, or bankruptcy,
reorganization, moratorium, assignment for the benefit of creditors or other
similar transaction or arrangement with respect to Seller or any of its
Affiliates, is pending or, to the best knowledge of Seller, threatened, and no
corporate action in view of any such transaction or arrangement has been taken.
3.16 Debt. Schedule 3.16 to the Seller's Disclosure Letter lists all
accounts payable of the Blaze Business as of the Closing Date, including any
accounts representing short-term or long-term Liabilities for borrowed moneys.
3.17 Intellectual Property Rights.
(a) For purposes of this Agreement, "INTELLECTUAL PROPERTY
RIGHTS" means any rights exercisable or available in any jurisdiction of the
world constituting industrial or intellectual property rights or protections, in
each case, to the extent owned by, licensed to, or otherwise used or held for
use by Seller or any of Seller's Affiliates in the Blaze Business, including
without limitation all of the following:
(i) patents, patent applications and the inventions,
designs and improvements described and claimed therein, patentable inventions,
and other patent rights (including any divisions, continuations,
continuations-in-part, substitutions, or reissues thereof, whether or not
patents
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are issued on any such applications and whether or not any such applications are
amended, modified, withdrawn, or resubmitted) (collectively, "PATENTS");
(ii) trademarks, service marks, trade dress, trade names,
brand names, Internet domain names, designs, logos, or corporate names
(including, in each case, the goodwill associated therewith), whether registered
or unregistered, and all registrations and applications for registration thereof
(collectively, "TRADEMARKS");
(iii) copyrights, including all renewals and extensions,
copyright registrations and applications for registration, and non-registered
copyrights and moral rights (collectively, "COPYRIGHTS");
(iv) trade secrets, confidential business information,
concepts, ideas, designs, research or development information, processes,
procedures, techniques, technical information, specifications, operating and
maintenance manuals, engineering drawings, methods, know-how, data, mask works,
discoveries, inventions, modifications, extensions, improvements, and other
proprietary rights (whether or not patentable or subject to copyright,
trademark, or trade secret protection) (collectively, "TECHNOLOGY");
(v) computer software programs, including all source code,
object code, and documentation related thereto ("SOFTWARE"); and
(vi) all licenses, and sublicenses, and other agreements
or permissions granted by any third party or parties to Seller or any Affiliate
of Seller related to any of the Intellectual Property Rights described in the
foregoing provisions of this Section 3.17(a).
(b) Disclosure.
(i) Schedule 3.17(b)(i) to the Seller's Disclosure Letter
sets forth all United States and foreign patents and patent applications,
trademark and service xxxx registrations and applications, Internet domain name
registrations and applications, and copyright registrations and applications
owned or licensed by Seller or any of Seller's Affiliates for use in connection
with the Blaze Business (excluding off-the-shelf software licensed to the Blaze
Business and licenses or sublicenses that are not material to the Blaze
Business), specifying as to each item, as applicable: (A) the nature of the
item, including the title; (B) the owner of the item; (C) the jurisdictions in
which the item is issued or registered or in which an application for issuance
or registration has been filed; and (D) the issuance, registration or
application numbers and dates.
(ii) Schedule 3.17(b)(ii) to the Seller's Disclosure
Letter sets forth (A) all licenses, sublicenses and other agreements or
permissions ("IP LICENSES") used in connection with the Blaze Business under
which the Seller or an Affiliate of Seller is a licensee or otherwise is
authorized to use or practice any Intellectual Property owned by a third party
(other than licenses of computer software that is generally available to the
public under a non-negotiated "shrink-wrap" license at a per copy license fee of
less than $1,000 per copy); (B) all Contracts providing for the development of
any computer Software, content (including textual content and visual,
photographic or graphics content), technology or intellectual property for (or
for the benefit or use of) Seller relating to the Blaze Business or the purchase
or other acquisition by Seller of any computer Software, content (including
textual content and visual or graphics content), technology or other
Intellectual Property Rights to (or for the benefit or use of) Seller and
relating to the Blaze Business, any Purchased Asset or any Blaze Business
Offering; and (C) any Contract under which Intellectual Property Rights, any
Blaze Business Offering or any software used in or marketed in connection with
the Blaze Business has been licensed to any third party. The IP Licenses,
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include without limitation, all licenses of any computer software that is used
or incorporated in any Blaze Business Offering or in any potential product or
offering for the Blaze Business that is under development. Except as set forth
on Schedule 3.17(b)(ii) to the Seller's Disclosure Letter, none of the Purchased
Assets is licensed from any third party (other than licenses of computer
software that is generally available to the public under a non-negotiated
"shrink-wrap" license at a per copy license fee of less than $1,000 per copy).
(iii) Schedule 3.17(b)(iii) to the Seller's Disclosure
Letter sets forth and describes the status of any material agreements involving
Intellectual Property (including licenses and sublicenses, but excluding
licenses of computer software that is generally available to the public under a
non-negotiated "shrink-wrap" license at a per copy license fee of less than
$1,000 per copy) currently in negotiation or proposed ("PROPOSED INTELLECTUAL
PROPERTY AGREEMENTS") by Seller or any Affiliate of Seller.
(c) Ownership. Except as set forth on Schedule 3.17(c) to the
Seller's Disclosure Letter, Seller owns, free and clear of all Liens, has valid
and enforceable rights in, and has the unrestricted right to use, sell, license,
transfer or assign, all Intellectual Property Rights and all Software that is
material to the business of the Blaze Business.
(d) Licenses; Sufficiency. Seller has a valid and enforceable
license to use all Intellectual Property Rights and all Software not owned by
Seller that are used by Seller in connection with the Blaze Business. The IP
Licenses set forth in Schedule 3.17(b)(ii) to the Seller's Disclosure Letter
constitute all licenses, sublicenses and other agreements or permissions of
third parties that are necessary for Seller to conduct the Blaze Business
without infringing the Intellectual Property Rights of any third party.
(e) Infringement.
(i) Neither the conduct of the Blaze Business, nor any
Blaze Business Offering or any Intellectual Property Rights owned by Seller or
any Affiliate of Seller that are used in the Blaze Business or included in the
Purchased Assets, infringes or misappropriates any Intellectual Property Rights
of any third party. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby, will (a) constitute a
breach or default under any Contract granting or governing any Intellectual
Property Rights that are Purchased Assets or that are used in connection with
the Blaze Business ("BLAZE IP RIGHTS"); (b) cause or give rise to any rights of
forfeiture or termination with respect to any Blaze IP Rights; or (c) diminish,
impair or limit the exercise of any of the Blaze IP Rights by the Buyer on and
after the Closing. There are no royalties, honoraria, fees or other payments
payable by Seller to any third person with respect to any Blaze IP Rights, and
none will become payable as a result of the consummation of the transactions
contemplated by this Agreement.
(ii) No current or former employee or independent
contractor performing or having performed services in connection with the
conduct of the Blaze Business is (a) using any trade secrets or proprietary
information of any third party without permission; (b) otherwise in breach of
any invention-assignment, confidentiality, non-competition or other agreement
with any former employer or other third party by virtue of such services with
respect to the Blaze Business; or (c) subject to any agreement under which any
technology currently used in conducting the Blaze Business has been transferred
in whole or in part to a third party.
(iii) No claim or action is pending or threatened, and
Seller knows of no basis for any claim that challenges the validity,
enforceability, ownership, or right to use, sell or license, any Intellectual
Property Rights used in connection with the Blaze Business, and no Intellectual
Property
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Right used in connection with the Blaze Business is subject to any outstanding
order, ruling, decree, stipulation, charge or agreement restricting in any
manner the use or the licensing thereof.
(iv) Neither Seller nor any of its Affiliates has received
any notice that it has infringed upon or otherwise misappropriated or violated
the Intellectual Property Rights of any third party or received any claim,
charge, complaint, demand or notice alleging any such infringement,
misappropriation or violation, or knows of any basis for any such claim.
(v) To the knowledge of the Seller and its Affiliates, no
third party is infringing upon or otherwise misappropriating or violating any
material Intellectual Property Rights used in connection with the Blaze
Business.
(f) [Intentionally Omitted.]
(g) Protection of Intellectual Property. Seller and its
Affiliates have taken reasonable and customary precautions to protect the
secrecy, confidentiality, and value of the Blaze Business' trade secrets and the
proprietary nature and value of the Intellectual Property Rights related to the
Blaze Business or included in the Purchased Assets. Without limiting the
generality of the foregoing, all current and former employees and independent
contractors providing any services relating to the Blaze Business have executed
and delivered to Seller (i) agreements regarding the protection of confidential
information and (ii) valid written assignments of all Blaze IP Rights that would
otherwise be owned by such persons absent such assignments. None of Seller's or
its Affiliates' current or former employees or independent contractors owns or
has retained any right, title or interest in or to any Blaze IP Rights. The
Blaze Business' products (including all Blaze Business Offerings) have been
marked as necessary to take advantage of rights available under each applicable
Patent statute and Seller has given the public notice of its Copyrights and
notice of its Trademarks as required by the applicable Trademark and Copyright
statutes, in each case except to the extent for such omissions as do not
materially diminish such rights.
(h) Software. All Software that is material to the Blaze Business
or included in the Purchased Assets is described in Schedule 3.17(h) to the
Seller's Disclosure Letter. The Software performs in material conformance with
its documentation and any warranties made or given by Seller or any of its
Affiliates with respect to such Software.
(i) Source Code. Except as disclosed on Schedule 3.17(i) to the
Seller's Disclosure Letter, no Blaze Source Code (as defined below) has been (i)
delivered to any source code escrow agent or other third party or (ii) assigned
or licensed to any other party. "BLAZE SOURCE CODE" means any human-readable
computer code, portion thereof, or information or algorithm contained or
disclosed therein, that constitutes owned Blaze IP Rights. No event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time) may reasonably be expected to result in the release of any
Blaze Source Code to a third party. Schedule 3.17(i) to the Seller's Disclosure
Letter identifies each agreement and instrument (whether written or oral)
pursuant to which any Blaze Source Code has been or may be required to be
deposited with any third party, and describes whether the execution of this
Agreement or the consummation of the transactions contemplated herein may
reasonably be expected to result in the release of any Blaze Source Code.
(j) No Government Involvement. No government funding, facilities
of any educational institution or research center, or funding from third parties
(other than funds received in consideration for capital stock of Seller) was
used in the creation of any Blaze IP Rights. No current or former employee or
independent contractor that was involved in or contributed to the creation of
any Blaze IP Rights performed services for any government, educational
institution or research center at any time when performing services for Seller.
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(k) Conformity to Warranties. All Blaze Business Offerings and
all software and other products and services developed, marketed, licensed or
otherwise furnished by Seller to customers in connection with the Blaze
Business, conform to all their applicable contractual commitments, express and
implied warranties, product specifications and product documentation and to any
representations provided to customers by Seller and its Affiliates and their
respective employees, representatives and/or agents. None of the software or
other products or services licensed or otherwise marketed or furnished by Seller
to customers in connection with the Blaze Business contains any defect or error
that would impair the accuracy, performance or functionality of such software,
product or service.
(l) Related Parties. Seller does not use in the Blaze Business
any Intellectual Property Rights owned by any director, officer, employee,
consultant or Affiliate of Seller.
3.18 Insurance Coverage. Seller has furnished to Buyer a list of all
insurance policies and fidelity bonds relating to the Purchased Assets and/or
the conduct of Blaze Business. There is no claim by Seller pending under any of
such policies or bonds. Such policies of insurance and bonds (or other policies
and bonds providing substantially similar insurance coverage) are in full force
and effect. Seller does not know of any threatened termination of, premium
increase with respect to, or material alteration of coverage under, any of such
policies or bonds.
3.19 Licenses and Permits. Schedule 3.19 to the Seller's Disclosure
Letter correctly describes each license, franchise, permit, certificate,
approval or other similar authorization that is necessary to conduct the Blaze
Business (the "PERMITS") together with the name of the government agency or
entity issuing such Permit. Except as set forth on Schedule 3.19 to the Seller's
Disclosure Letter, (i) the Permits are valid and in full force and effect, (ii)
Seller is not in default, and no condition exists that with notice or lapse of
time or both would constitute a default, under the Permits and (iii) none of the
Permits will be terminated or impaired or become terminable, in whole or in
part, as a result of the transactions contemplated hereby. Upon consummation of
such transactions, Buyer will have all of the right, title and interest in all
the Permits.
3.20 Privacy. The Purchased Assets do not include any personally
identifiable information regarding individuals that is subject to any applicable
laws and regulations relating to (i) the privacy of users of Seller's products
and services and the websites of the Blaze Business and Seller (to the extent
such websites relate to the Blaze Business) (the "SELLER WEBSITES"), and (ii)
the collection, storage and transfer of any personally identifiable information
collected by Seller or by third parties having authorized access to Seller's
records.
3.21 Status of Assumed Contracts. Each Assumed Contract is in full force
and effect and Seller is not in breach or default thereunder and, to Seller's
knowledge, no other party thereto is in breach or default thereunder. No Assumed
Contract will result in any product or service of Buyer (excluding any product
or service included among the Purchased Assets) being priced or repriced in
manner that is adverse to Buyer.
3.22 Receivables. All accounts, notes receivable and other receivables
(other than receivables collected since the Balance Sheet Date) reflected on the
Balance Sheet are, valid, genuine and are not subject to any right of offset or
defense against payment of any amount thereof, and are not subject to any
discounts. All accounts, notes receivable and other receivables arising out of
or relating to the Blaze Business at the Balance Sheet Date have been included
in the Balance Sheet, and all accounts, notes receivable and other receivables
arising out of or relating to the Blaze Business after the Balance Sheet Date
and prior to the Closing Date arose in the ordinary course of the Blaze Business
consistent with past
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practice, and are valid, genuine and are, valid, genuine and are not subject to
any right of offset or defense against payment of any amount thereof, and are
not subject to any discounts.
3.23 Finders' Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Seller who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement for which Buyer could have
liability.
3.24 Environmental Compliance. Seller has at all times prior to the
Closing Date complied in all material respects with all applicable Environmental
Laws both in respect of the Blaze Business as carried on from time to time and
in respect of any of the facilities at which the Blaze Business is now conducted
or at which any Purchased Assets are located (each, a "FACILITY") and any prior
facility or site at which the Blaze Business has been conducted by Seller or its
predecessors in interest or at which any Purchased Assets have been located
(each, a "PRIOR FACILITY"). Seller is not aware of any circumstances that may
cause Seller to be in non-compliance or violation of any Environmental Laws in
any material respect and Seller is not aware of any circumstances affecting the
Blaze Business that might justify the imposing of any requirement by a competent
authority in accordance with such authority's powers and obligations under the
Environmental Laws which would, if the requirement were not complied with,
result in there being a non-compliance or violation of any Environmental Laws.
There are no past, pending or (to Seller's knowledge) threatened proceedings,
claims or actions against Seller brought under any Environmental Laws before any
court, arbitrator or other body which have had or which would, in the event of a
judgment, decision, ruling or order being unfavorable to Seller, have a Material
Adverse Effect on the Blaze Business or any of the Purchased Assets. To Seller's
knowledge, no part of any Facility or any Prior Facility has been contaminated
(whether by the deposit, spillage, disposal, discharge, release or leaching of
any Hazardous Substances) and as a result of any contamination no part of any
Facility or any Prior Facility represents a hazard to health or to the
environment. Seller is not aware of any circumstances which may give rise or
have in the past given rise to any Liability (whether under statute or at common
law) in nuisance in respect of any Facility or any Prior Facility or the
operation of the Blaze Business.
3.25 No Representations to Employees or Consultants of Seller. Seller
has made no representations to any employee or consultant of Seller concerning
the length of time (if any) that the employee's or consultant's work or
employment with Buyer may continue or the compensation or benefits or other
terms or conditions of employment (if any) with Buyer to be offered to employees
or consultants of Seller by Buyer.
3.26 Employee Matters.
(a) Generally. Seller: (i) has never been and is not now subject
to a union organizing effort; (ii) is not subject to any collective bargaining
agreement with respect to any of its employees; (iii) is not subject to any
other Contract with any trade or labor union, employees' association or similar
organization; and (iv) has no current labor disputes and has had no material
labor disputes or claims of unfair labor practices. Seller has good labor
relations, and Seller has no knowledge of any facts indicating that the
consummation of the transactions provided for herein will adversely affect its
labor relations, and Buyer has no knowledge that any key employee, or any
significant number of other employees, intends to leave Seller's employ or to
decline to accept employment with Buyer following the Closing. No key employee
or significant number of other employees of Seller, has given notice that such
employee intends to terminate his or her employment with Seller. There are no
strikes, material slowdowns, work stoppages or lockouts, or threats thereof by
or with respect to any employees of Seller. Seller is in compliance in all
material respects with all applicable laws regarding employment practices, terms
and conditions of employment, and wages and hours (including ERISA), the Worker
Adjustment
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Retraining and Notification Act, as amended (the "WARN ACT") or any similar
national, state or local law) and has correctly classified employees as exempt
employees and non-exempt employees under the Fair Labor Standards Act. Except as
set forth in Schedule 3.26(a) to the Seller's Disclosure Letter, Seller has no
contracts, agreements, arrangements or commitments with employees or consultants
currently in effect that are not terminable at will (other than agreements with
the sole purpose of providing for the confidentiality of proprietary information
or assignment of inventions). All independent contractors have been properly
classified as independent contractors for the purposes of federal and applicable
state tax laws, laws applicable to employee benefits and other applicable laws.
Each of Seller's employees is legally permitted to be employed by Seller in the
jurisdiction in which such employee is employed. Seller will have no liability
to any employee or to any organization or any other entity as a result of the
termination of any employee leasing arrangement.
(b) Employee Plans. Schedule 3.26(b) to the Seller's Disclosure
Letter contains a list of all employment and consulting agreements, pension,
retirement, disability, medical, dental or other health plans, life insurance or
other death benefit plans, profit sharing, deferred compensation agreements,
stock, option, bonus or other incentive plans, vacation, sick, holiday or other
paid leave plans, severance plans or other similar employee benefit plans
maintained by Seller or any of its Affiliates which cover any employee of the
Blaze Business, other than any such plan maintained or provided by an Affiliate
of Seller that provides solely for cash payments (the "EMPLOYEE PLANS"),
including all "employee benefit plans" as defined in Section 3(3) of ERISA.
Seller has delivered true and complete copies or descriptions of all the
Employee Plans to Buyer's legal counsel. Seller has also delivered annual
reports (Form 5500) for each Employee Plan for the last three years and an
accurate summary description of such plans. Seller has provided Buyer with, or
has caused to be provided to Buyer, complete actuarial data (including age,
salary, service and related data) as of the most recent practicable date for
employees of the Blaze Business. No Employee Plan is a "multiemployer plan"
within the meaning of Section 3(37) or ERISA and no Employee Plan is subject to
Title IV of ERISA. Neither Seller nor any of Seller's Affiliates has incurred
any liability under Title IV of ERISA arising in connection with the termination
of any plan covered or previously covered by Title IV of ERISA that could
become, after the Closing Date, an obligation of Buyer or any of its Affiliates.
Each Employee Plan which is intended to be qualified under Section 401(a) of the
Code is so qualified and has been so qualified during the period from its
adoption to date, and each trust forming a part thereof is exempt from tax
pursuant to Section 501(a) of the Code. Seller has furnished to Buyer copies of
the most recent Internal Revenue Service determination letters with respect to
each such Employee Plan. Each Employee Plan has been maintained in compliance
with its terms and with the requirements prescribed by any and all statutes,
orders, rules and regulations, including, but not limited to, ERISA and the
Code, which are applicable to such Employee Plan. With respect to the employees
of the Blaze Business, there are no employee post-retirement medical or health
plans in effect, except as required by Section 601 of ERISA. Except as disclosed
in Schedule 3.26(b) to the Seller's Disclosure Letter, to the date hereof, there
has been no amendment to, written interpretation of or announcement (whether
written or not written) by Seller or any of its Affiliates relating to, or
change in employee participation or coverage under, any Employee Plan which
would increase materially the expense of maintaining such Employee Plan above
the level of the expense incurred in respect thereof for the most recent fiscal
year. The Purchased Assets are not now nor will they after the passage of time
be subject to any Lien (other than a Permitted Lien) imposed under Code Section
412(n) by reason of the failure of Seller or its Affiliates to make timely
installments or other payments required by Code Section 412. No Transferred
Employee will become entitled to any retirement, severance or similar benefit or
enhanced benefit solely as a result of the transactions contemplated hereby. In
addition, within the past five (5) years, Seller has never been a participant in
any "prohibited transaction," within the meaning of Section 406 of ERISA with
respect to any employee pension benefit plan (as defined in Section 3(2) of
ERISA) which it sponsors as employer or in which it participates as an employer,
which was not otherwise exempt pursuant to Section 408 of ERISA (including any
individual exemption granted under Section 408(a) of ERISA), or which could
result in an excise tax under the Code.
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(c) No Employment Agreements. To Seller's knowledge, no employee
of Seller with respect to the Blaze Business is in material violation of any
term of any employment Contract or any other Contract, or any restrictive
covenant, relating to the right of any such employee to be employed by Seller or
to use trade secrets or proprietary information of others, and the employment of
any employee of Seller with respect to the Blaze Business does not subject
Seller to any liability to any third party.
(d) Immigration Law Compliance. Except as set forth on Schedule
3.26(d) to Seller's Disclosure Letter, to Seller's knowledge, No employee of
Seller holds any visa from the United States Government and Seller is not
sponsoring any of its employees with respect to any visa or other authorization,
in each case, with respect to the Blaze Business. All employees of Seller were
hired in compliance with all laws, statutes, regulations and requirements for
the lawful hiring of employees who are not citizens of the United States of
America.
(e) No Parachute Agreements. Except as disclosed on Schedule
3.26(e) to the Seller's Disclosure Letter, neither Seller nor any of its
Affiliates, with respect to employees of the Blaze Business, is a party to any
(i) agreement with any of its executive officers or other key employees of the
Blaze Business (A) the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction involving Seller in
the nature of any of the transactions contemplated by this Agreement, (B)
providing any term of employment or compensation guarantee, or (C) providing
severance benefits or other benefits after the termination of employment of such
employee regardless of the reason for such termination of employment, or (ii)
agreement or plan, including any stock option plan, stock appreciation rights
plan or stock purchase plan, any of the benefits of which will be materially
increased, or the vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement. Seller has no obligations to
pay any amounts, or provide any benefits, to any former employees or officers,
other than obligations for which Seller has established a reserve on the Balance
Sheet as of the Balance Sheet Date, which reserve is in an amount equal to the
amount of such obligations, and other than obligations pursuant to agreements
entered into after the Balance Sheet Date and disclosed on Schedule 3.26(e) to
the Seller's Disclosure Letter.
(f) Employee List. A list of all employees, officers and
consultants of the Blaze Business and Seller and their current compensation and
benefits as of the date of this Agreement is set forth on Schedule 3.26(f) to
the Seller's Disclosure Letter.
(g) Contributions. All contributions due from Seller or any of
its Affiliates with respect to any of the Employee Plans and all employee social
security contributions have been made or accrued on the Balance Sheet, and no
further contributions will be due or will have accrued thereunder as of the
Closing Date, other than contributions accrued after the Balance Sheet Date in
the ordinary course of business, consistent with past practice as a result of
operations of the Blaze Business after the Balance Sheet Date, all of which have
been paid.
(h) Continuation of Coverage; COBRA. The group health plans (as
defined in Section 4980B(g) of the Code) that benefit employees of the Blaze
Business are in compliance, in all material respects, with the continuation
coverage requirements of Section 4980B of the Code. As of the Closing Date,
there are no material outstanding, uncorrected violations under the
Consolidation Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
with respect to any of the Employee Plans that could materially adversely affect
the Blaze Business or the Purchased Assets after the Closing Date.
(i) No Liabilities for Terminating Employees. Neither Seller nor
any of its Affiliates has incurred any Liabilities in connection with the
termination of any employees of the Blaze
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Business. Buyer will not incur any liability with respect to Seller's past,
present or future termination of any employee of Seller other than the Assumed
Severance Liabilities.
3.27 No Right to Purchase the Blaze Business or the Purchased Assets.
There are no options, rights of first refusal, rights of first offer or other
rights or agreements outstanding to any third party to purchase or otherwise
acquire (whether directly or indirectly) all or any portion of the Blaze
Business or the Purchased Assets.
3.28 No Existing Discussions. Neither Seller or any of its Affiliates
nor any director, officer, stockholder, employee or agent of Seller or any such
Affiliate is engaged, directly or indirectly, in any discussions or negotiations
with any third party relating to any transaction that would be inconsistent with
the accomplishment of the sale of the Purchased Assets hereunder, such as,
without limitation, any merger, consolidation, sale of assets or similar
business combination transaction involving Seller.
3.29 Taxes.
(a) Definition of Seller. As used in this Section 3.29, the term
"SELLER" shall mean and include each and every Subsidiary of Seller, if any.
(b) Tax Returns. Seller has filed all Tax returns that it was
required to file. All such Tax returns were correct and complete in all
respects. All Taxes owed by Seller (whether or not shown on any Tax return) have
been paid. Seller is not currently the beneficiary of any extensions of time
within which to file any Tax return. No claim has ever been made by an authority
in a jurisdiction where Seller does not file Tax returns that it is or may be
subject to Taxation by that jurisdiction.
(c) Withholdings. Seller has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party.
(d) No Dispute. There is no dispute or claim concerning any Tax
liability of Seller either (i) claimed or raised by any authority in writing or
(ii) as to which the directors and officers of Seller has knowledge based on
personal contact with any agent of such authority.
(e) No Waiver. Seller has not waived any statute of limitations
in respects of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(f) Tax Reserves. The unpaid Taxes of Seller (i) did not, as of
the most recent fiscal month end, exceed the reserve for Tax liability (rather
than any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of the Balance Sheet (rather
than in any notes thereto) and (ii) do not exceed that reserve as adjusted for
the passage of time through the Closing Date in accordance with the past custom
and practice of the Seller in filing Seller's Tax returns.
(g) 280G. None of the Assumed Liabilities is an obligation to
make a payment that will not be fully deductible by Buyer under Section 280G of
the Code. Seller is not a party to any Tax allocation or sharing agreement.
Seller has not been a member of an affiliated group filing a consolidated
federal income Tax return (other than a group the common parent of which was
Seller. Seller has no liability for the Taxes of any person (other than Seller
and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the Agreement Date and as
of the Closing Date that:
4.1 Corporate Existence and Power. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all necessary corporate power and authority and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.
4.2 Corporate Authorization. Buyer has all necessary corporate power and
authority to enter into this Agreement and each Buyer Ancillary Agreement, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Buyer of this Agreement and each of the Buyer Ancillary
Agreements, the purchase of the Purchased Assets by Buyer and the assumption of
the Assumed Liabilities from Seller by Buyer, in each case pursuant to this
Agreement, and the consummation of all the transactions contemplated by this
Agreement and the Buyer Ancillary Agreements on the terms and subject to the
conditions set forth herein and therein, have been duly and validly authorized
by Buyer by all necessary corporate action and approved by Buyer's Board of
Directors, which action and approval have been obtained and carried out in
compliance with applicable law and Buyer's certificate of incorporation and
bylaws, each as amended to date. This Agreement, and each of the Buyer Ancillary
Agreements has been, duly and validly executed and delivered by Buyer, and
(assuming due authorization, execution and delivery by Seller and the
enforceability of this Agreement and the Buyer Ancillary Agreement against
Seller) this Agreement and each of the Buyer Ancillary Agreements constitutes,
legal, valid and binding obligations of Buyer enforceable against Buyer in
accordance with their respective terms.
4.3 Governmental Authorization. The execution, delivery and performance
by Buyer of this Agreement and each Buyer Ancillary Agreement and the
consummation of the transactions contemplated hereby and thereby require no
material consent, approval, authorization or other action by or in respect of,
or filing with, any Governmental Authority with respect to Buyer.
4.4 Non-contravention. The execution, delivery and performance by Buyer
of this Agreement and each Buyer Ancillary Agreement and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) violate the
certificate of incorporation or bylaws of Buyer or (ii) violate any applicable
law, rule, regulation, judgment, injunction, order or decree in any material
respect.
4.5 Finders' Fees. Except for Credit Suisse First Boston, whose fees
will be paid by Buyer, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Buyer who might be entitled to any fee or commission from Seller or any of its
Affiliates upon consummation of the transactions contemplated by this Agreement.
4.6 No Litigation. There is no litigation, including, without
limitation, any claim, action, suit, investigation or proceeding of any nature
pending or, to the knowledge of Buyer, threatened, at law or in equity, by way
of arbitration or before any court or other Governmental Authority that may be
reasonably expected to adversely affect, contest or challenge Buyer's authority,
right or ability to purchase any of the Purchased Assets or to assume any
Assumed Liability under this Agreement or to otherwise perform Buyer's
obligations under this Agreement or any of the Buyer Ancillary Agreements, as
applicable
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ARTICLE 5
COVENANTS OF SELLER
5.1 Confidentiality; Access.
(a) Seller hereby covenants and agrees with Buyer that, after the
Closing or after any termination of this Agreement, Seller and its Affiliates
will hold, and will use their best efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning the Blaze Business, except to the extent that such
information can be shown to have been (i) previously known on a non-confidential
basis by Seller, (ii) in the public domain through no fault of Seller or its
Affiliates or (iii) later lawfully acquired by Seller from sources other than
those related to its prior ownership of the Blaze Business. The obligation of
Seller and its Affiliates to hold any such information in confidence shall be
satisfied if they exercise the same care with respect to such information as
they would take to preserve the confidentiality of their own similar
information.
(b) Seller hereby covenants and agrees with Buyer that, on and
after the Closing Date, Seller will afford promptly to Buyer and its agents
reasonable access to its books of account, financial and other records
(including, without limitation, accountant's work papers), information,
employees and auditors to the extent necessary or useful for Buyer in connection
with any audit, investigation, dispute or litigation or any other reasonable
business purpose relating to the Blaze Business; provided that any such access
by Buyer shall not unreasonably interfere with the conduct of the business of
Seller.
5.2 Payment of Debts. Seller shall use good faith diligent efforts to
promptly pay its debts and liabilities (including outstanding receivables) as
such become due and payable.
5.3 Transfer of Affiliate-Owned Assets. Seller acknowledges and agrees
that the Purchase Price has been negotiated by the Parties based on their
understanding that Buyer will acquire good and marketable right, title and
interest in and to all of the Purchased Assets, free and clear of all Liens
(other than Permitted Liens). The Parties acknowledge that Seller may require a
slight amount of additional time to cause Buyer to receive and obtain title to
the Affiliate-Owned Assets. Accordingly, Seller hereby covenants and agrees with
Buyer that, for no additional consideration other than the Purchase Price to be
paid in accordance with this Agreement, Seller shall, by no later than August
21, 2001:
(a) sell, assign, convey to Buyer and/or cause the applicable
Owning Affiliate(s) of Seller to sell, assign, and convey to Buyer, all right,
title and interest in and to all the Affiliate-Owned Assets (as defined in
Section 3.13(a)), free and clear of all Liens (other than Permitted Liens), in
the same manner, and subject to all the same terms and conditions, as all other
Purchased Assets are to be sold, assigned and conveyed to Buyer under this
Agreement; and
(b) deliver (and/or cause the applicable Owning Affiliate(s) of
Seller to deliver) to Buyer all the Affiliate-Owned Assets as mutually agreed by
Seller and Buyer, together with written assignments executed by the Owning
Affiliate(s) that are reasonably satisfactory in form and substance to Buyer,
documenting Seller's ownership of such Affiliate-Owned Assets immediately prior
to the Seller's transfer of such Affiliate-Owned Assets to Buyer pursuant to
this Section 5.3.
Seller's failure to sell, assign, convey and deliver to (or to
cause any Owning Affiliate(s) of Seller to sell, assign and convey to Buyer) all
Affiliate-Owned Assets and right, title and interest
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thereto free and clear of all Liens (other than Permitted Liens) by August 21,
2001 shall constitute a breach of this Agreement by Seller.
5.4 Assistance. Seller shall use reasonable efforts to assist and
cooperate with the efforts of Buyer and its accountants and auditors to prepare,
review or audit the Audited Financial Statements, the Balance Sheet or any other
financial statements (including but not limited to pro forma financial
statements) that Buyer may from time to time be required to prepare, file or
furnish pursuant to the Securities Act of 1933, as amended (the "1933 ACT") or
the Securities Exchange Act of 1934, as amended (the "1934 ACT"), the rules and
regulations of the SEC promulgated thereunder or under any other applicable
laws, but Seller will not be obligated to incur any out-of-pocket costs in order
to fulfill its obligations under this Section 5.4.
5.5 Consents. Following the Closing, Seller shall, at its own expense,
use its good faith diligent efforts to assist Buyer in promptly obtaining any
and all Required Consents of third parties that have not been obtained at the
Closing.
ARTICLE 6
COVENANTS OF BUYER AND SELLER
Buyer and Seller agree that:
6.1 Further Assurances.
(a) On the terms and subject to the conditions of this Agreement,
Buyer and Seller will use their good faith diligent efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement. Seller and Buyer agree to execute and deliver
such other documents, certificates, agreements and other writings and to take
such other actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement and to
vest in Buyer good and marketable title to the Purchased Assets.
(b) Subject to Seller's right to retain Seller-Retained Rights,
Seller hereby constitutes and appoints, effective as of the date hereof, Buyer
and its successors and assigns as the true and lawful attorney of Seller with
full power of substitution in the name of Buyer, or in the name of Seller but
for the benefit of Buyer, (i) to collect for the account of Buyer any items of
Purchased Assets and (ii) to institute and prosecute all proceedings which Buyer
may in its sole discretion deem proper in order to assert or enforce any right,
title or interest in, to or under the Purchased Assets, and to defend or
compromise any and all actions, suits or proceedings in respect of the Purchased
Assets. Buyer shall be entitled to retain for its own account any amounts
collected pursuant to the foregoing powers, including any amounts payable as
interest in respect thereof.
6.2 Almaden Boulevard Lease. The parties acknowledge that it is their
mutual intention and objective that Buyer obtain a separate lease of that
portion of the Almaden Boulevard Premises consisting of the eighth (8th) and
ninth (9th) floors of the Almaden Boulevard Facility (the "REQUIRED PREMISES"),
at a rent and on other terms and conditions that are no less favorable than the
terms and conditions on which Seller leases the Almaden Boulevard Premises under
Seller's existing Almaden Boulevard Lease (except that the rent Buyer would pay
for the lease of such Required Premises would be reduced to the rent schedule
for the Original Leased Premises provided for in the First Amendment to Lease).
Accordingly, the parties hereby agree as follows:
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(a) Interim Sublease. Buyer and Seller hereby agree that Seller
shall (with or without the consent of the master landlord of the Almaden
Boulevard Facility ("LANDLORD")) sublet the Required Premises to Buyer during
the Sublet Term (as defined below) for the monthly sublet rent equal to exactly
the same monthly rent that Seller is required to pay to lease the Required
Premises for such month under the existing terms of the Almaden Boulevard Lease
(where for clarity's sake, the Parties acknowledge and agree that the rent
Seller pays to lease the Required Premises is the rent for the Original Premises
payable under the Rent Schedule for the First Amendment to Lease), on
substantially the same terms and condition on which Seller now rents the Almaden
Boulevard Premises under the Almaden Boulevard Lease (the "SUBLEASE"). The
Parties agree that Buyer shall be entitled to pay all payments of rent due from
Buyer under the Sublease directly to the Landlord (rather than to Seller). As
used herein, the "SUBLET TERM" means that time period beginning on the Closing
Date and ending on the earlier to occur of (i) August 31, 2003; or (ii) the
first date on which Buyer secures a lease of office space located in the San
Xxxx-Palo Alto Metropolitan Area (other than the Required Premises) that is, in
Buyer's opinion, adequate for use by the employees of the Blaze Business who are
hired as employees of Buyer after the Closing; or (iii) the date on which Buyer
both secures and enters into its own direct (non-sublet) lease agreement for the
lease of the Required Premises from the master landlord of the Almaden Boulevard
Facility (the "BUYER LEASE") and obtains the right to occupancy of the Required
Premises under such Buyer Lease. If the Sublet Term expires other than on the
last day of any month for which rent is due under the Almaden Boulevard Lease
for the last month of the sublet term shall be reduced and prorated based on the
number of days of such month during which the Sublet Term was in effect. If
requested to do so by Buyer, Seller agrees to use its commercially reasonable
efforts to cooperate with Buyer to initiate and conduct joint discussions with
the Landlord of the Almaden Boulevard Facility and otherwise in order to obtain
the necessary consents to the Sublease on the terms and conditions specified
above as soon as possible after the Closing Date.
(b) Cooperative Efforts to Secure Buyer Lease. Seller agrees, at
all time during the ninety (90) day period commencing on the Closing Date, to
use its diligent good faith efforts to cooperate with Buyer to initiate and
conduct discussions with the Landlord (as defined above) in order to enable
Buyer to secure, by no later than October 31, 2001, a Buyer Lease of the
Required Premises on terms and conditions no less favorable to Buyer than the
terms and conditions of Seller's existing Almaden Boulevard Lease (except that
the rent Buyer would pay for such Buyer Lease would be reduced to the rent
schedule for the Original Leased Premises provided for in the First Amendment to
Lease and for a lease term that is no longer than that currently provided for
under the Seller's Almaden Boulevard Lease (without considering any renewal or
extension of such lease term)). The Parties would, in connection with Buyer's
attempt to secure the Buyer Lease, also attempt in good faith to (i) negotiate
with the Landlord for a proportionate release of the Seller for rent and other
liabilities relating to the Required Premises leased to Buyer by the Landlord
under the Buyer Leases and (ii) for the agreement of the Landlord, made in
conjunction with the Landlord's entering into the Buyer Lease, that Buyer (and
not Seller) shall be entitled to receive from Landlord (when a tenant would be
entitled to receive back a security deposit under the terms of Seller's Almaden
Boulevard Lease) that portion of the security deposit currently held by landlord
under the Seller's Almaden Boulevard Lease that is equal to the amount obtained
by multiplying such security deposit by Buyer's Pro Rata Lease Share.
(c) No Obligation. Notwithstanding the foregoing, Buyer shall
have no obligation to enter into the Buyer Lease or to agree to any particular
terms, conditions or rent under any lease agreement for the lease of any part of
the Almaden Boulevard Premises or to lease any space in the Almaden Boulevard
Facility.
6.3 Japanese Sublease. Buyer and Seller hereby agree that Seller shall
cause Brokat Japan (with or without the consent of the Japan Landlord of the
Japanese Facility) to sublet the Japanese Premises to Buyer on a month-to-month
basis commencing on a date within five (5) business days after
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the Closing Date for a monthly sublet rent equal to exactly the same monthly
rent that Brokat Japan is required to pay to lease the Japanese Premises for
such month under the existing terms of the Japanese Lease, on substantially the
same terms and condition on which Brokat Japan now rents the Japanese Premises
under the Japanese Lease (the "JAPANESE SUBLEASE"). The Japanese Sublease shall
be a month-to-month lease and shall be terminable by Buyer at its discretion on
one (1) month's notice to Seller or Brokat Japan). The Parties agree that Buyer
shall be entitled to pay all payments of rent due from Buyer under the Japanese
Sublease directly to the Japanese Landlord (rather than to Brokat Japan). If
requested to do so by Buyer, Seller agrees to cause Brokat Japan to use its
commercially reasonable efforts to cooperate with Buyer to initiate and conduct
joint discussions with the Japanese Landlord of the Japanese Facility and
otherwise in order to obtain the necessary consents to the Japanese Sublease on
such terms and conditions as soon as possible after the Closing Date.
6.4 Books and Records; Personnel. At all times after the Closing Date,
Seller shall allow Buyer and any agents of Buyer, upon reasonable advance notice
to Seller, access to all Books and Records and personnel of Seller, to the
extent necessary in connection with (i) the preparation, audit or review of any
financial statements required to be prepared, filed or furnished pursuant to the
1933 Act, the 1934 Act or the rules and regulations of the SEC promulgated
thereunder or any other applicable laws, (ii) Tax returns (including those
necessary to establish Tax credits) or audits, or reports to or filings with
governmental agencies, or (iii) preparation for, existing or future arbitration
or litigation or employment matters, in each case during normal business hours
at Seller's principal place of business or at any location where such Books and
Records are stored, and Buyer shall have the right, at its cost, to make copies
of any such Books and Records.
6.5 Certain Filings. Seller and Buyer shall cooperate with each other
(i) in determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material Contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (ii) in taking such actions or making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such actions, consents, approvals or waivers.
6.6 Public Announcements. The Parties agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or the transactions contemplated hereby and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation.
ARTICLE 7
TAX MATTERS
7.1 Taxes. Seller shall be responsible for, and shall promptly pay in
full, any and all Taxes that may be incurred by Seller or any Affiliate of
Seller in connection with the sale of the Purchased Assets contemplated by this
Agreement, including, without limitation, any sales, use, excise and value added
taxes (collectively, "TRANSACTION TAXES"). Seller shall be responsible for
preparing and filing any Tax return relating to such Transaction Taxes and shall
promptly provide a copy of such Tax return to Buyer. Buyer, on the one hand and
Seller, on the other hand, agree to reasonably cooperate in lawful efforts to
minimize the amount of any such Transaction Taxes and in the filing of all
necessary documentation and all Tax returns, reports and forms with respect to
all such Transaction Taxes, including any available pre-Closing filing
procedures.
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7.2 Straddle Periods. All property taxes, personal property taxes and
similar ad valorem obligations in respect of the Purchased Assets that relate to
periods beginning prior to the Closing Date and ending after the Closing Date
("STRADDLE PERIODS") shall be prorated as of the Closing. Seller's estimated
accrued liability at the Closing for any of the above-described Taxes and
charges that are due and payable after the Closing shall be withheld by Buyer at
the Closing. Seller shall prepare and file, or shall cause to be prepared and
filed, on a timely basis, all Straddle Period tax returns. Seller shall provide
each Straddle Period tax return to Buyer for review not less than ten (10)
business days in advance of the due date thereof, and Buyer shall pay to Seller
its prorated portion of the tax shown to be due on each such return not less
than five (5) business days before the due date of such payment.
7.3 Other Taxes. Except as provided in Section 7.2 above, (i) Seller
shall be responsible for and shall pay any and all Taxes with respect to the
Purchased Assets relating to all periods (or portions thereof) ending on or
prior to the Closing Date, and (ii) Buyer shall be responsible for and shall pay
any and all Taxes with respect to the Purchased Assets relating to all periods
(or portions thereof) ending after the Closing Date.
7.4 Treatment of Indemnity Payments. All payments (i) made by Seller to
or for the benefit of Buyer pursuant to any indemnification obligations of
Seller under this Agreement and (ii) made by Buyer to or for the benefit of
Seller pursuant to any indemnification obligations of Buyer under this
Agreement, will be treated as adjustments to the Purchase Price for Tax purposes
and such agreed treatment will govern for purposes of this Agreement, unless
otherwise required by law.
ARTICLE 8
EMPLOYEE BENEFITS
8.1 Employees, Consultants and Offers by Buyer. On the Closing Date,
Buyer shall offer employment or consulting positions to certain employees and
consultants in the North American operations of the Blaze Business that are
selected by Buyer in its sole and absolute discretion; provided, that Buyer may
terminate at any time after the Closing Date the services of any individual who
accepts such offer of employment. Any such offers shall be at such pay and/or
benefit levels in accordance with Buyer's standard hiring employment and
consultant practices and shall (unless otherwise agreed by Buyer in its sole and
absolute discretion) be for "at will" employment; provided, however, that
certain key employees and consultants may be required by Buyer to execute such
non-solicitation or similar agreements as Buyer deems appropriate. The employees
and consultants of Seller who accept and commence service with Buyer are
hereinafter collectively referred to as the "TRANSFERRED EMPLOYEES" (such
definition is used for ease of reference and is not intended to suggest that any
consultant is an employee of Seller or Buyer). Seller will cooperate in an
orderly transfer of service, will transfer all service records for Transferred
Employees and will not take, and will cause each of its Affiliates or
Subsidiaries not to take, any action which would impede, hinder, interfere or
otherwise compete with Buyer's effort to hire any Transferred Employees. Except
for Buyer's assumption of the Assumed Severance Liabilities upon the Closing,
Buyer shall not assume responsibility for any Transferred Employee until such
person commences service with Buyer. Buyer shall not assume any employment
contract or arrangement between Seller and any of such Transferred Employees or
any obligation or liability of Seller thereunder, all of which contracts,
arrangements and related obligations shall be retained by Seller.
8.2 Seller's Employee Benefit Plans.
(a) Seller or its Affiliates shall retain all obligations and
liabilities under the Employee Plans in respect of each employee or former
employee (including any beneficiary thereof) who
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is not a Transferred Employee. Except as expressly set forth herein, Seller or
its Affiliates shall retain all Liabilities in respect of benefits accrued as of
and including the Closing Date by Transferred Employees under the Employee
Plans, and neither Buyer nor any of its Affiliates shall have any Liability with
respect thereto. No assets of any Employee Plan shall be transferred to Buyer or
any of its Affiliates or to any plan of Buyer or any of its Affiliates. Accrued
benefits or account balances of Transferred Employees under the Employee Plans
shall be fully vested as of the Closing Date.
(b) With respect to the Transferred Employees (including any
beneficiary or dependent thereof), Seller or its Affiliates shall retain (i) all
Liabilities arising under any group life, accident, medical, dental or
disability plan or similar arrangement (whether or not insured) to the extent
that such Liability relates to contributions or premiums accrued (whether or not
payable), or to claims incurred (whether or not reported), on or prior to the
Closing Date, (ii) all Liabilities arising under any worker's compensation
arrangement to the extent such Liability relates to the period prior to the
Closing Date, including Liability for any retroactive worker's compensation
premiums attributable to such period (iii) all other Liabilities arising under
the Employee Plans to the extent any such Liability relates to the period prior
to the Closing Date, and (iv) severance obligations, if any, due a Transferred
Employee under any severance plan of Seller or any of its Affiliates; provided,
that the foregoing shall not alter Buyer's obligations with respect to the
Assumed Severance Liabilities as provided in Section 2.3(d).
(c) With respect to any Transferred Employee (including any
beneficiary or dependent thereof) who enters a hospital or is on short-term
disability under any Employee Plan on or prior to the Closing Date and continues
in a hospital or on short-term disability after the Closing Date, Seller and its
Affiliates shall be responsible for claims and expenses incurred both before and
after the Closing Date in connection with such person, to the extent that such
claims and expenses are covered by an Employee Plan, until such time, (if any)
that, in the case of a Transferred Employee, such Person resumes full-time
employment with Buyer or one of its Affiliates and, in the case of any
beneficiary or dependent of a Transferred Employee, such Person's
hospitalization has terminated. With respect to any Employee Plans covering
medical expenses and other costs relating to pregnancies and maternity leave for
Transferred Employees, Seller and its Affiliates shall be responsible for all
claims (whether or not reported) and expenses incurred during the period prior
to and ending on the Closing Date, and Buyer or one of its Affiliates shall be
responsible for such pregnancies and maternity leave for the period subsequent
to the Closing Date.
8.3 Buyer Benefit Plans. Buyer or one of its Affiliates will recognize
all service of the Transferred Employees with Seller, as required by applicable
law (including Section 401 et seq. of the Code) and otherwise for purposes of
eligibility to participate in those employee benefit plans, within the meaning
of Section 3(3) of ERISA, in which the Transferred Employees are enrolled by
Buyer or one of its Affiliates immediately after the Closing Date.
8.4 Continuation of Certain Administrative Services and Insurance
Coverage. Seller agrees to continue to provide certain administrative services
in respect of the Transferred Employees as reasonably necessary for Buyer to
conduct the Blaze Business, including, but not limited to, payroll services,
record keeping services and claims processing services, in each case, for a
period not to exceed ninety (90) days after the Closing, and Seller and Buyer
will enter into the Transition Services Agreement (as defined in Section 9.2(h))
to such effect. Buyer agrees to reimburse Seller for Seller's costs reasonably
incurred in continuing to provide such insurance and administrative services.
Such continuation of administrative services shall not affect the allocation of
liabilities and obligations as set forth in this Article 8. Buyer shall use all
reasonable efforts to arrange for such administrative services as promptly as
possible in order to avoid using Seller's services under this Section 8.4.
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8.5 No Third Party Beneficiaries. No provision of this Article shall
create any third party beneficiary or other rights in any employee or former
employee (including any beneficiary or dependent thereof) of Seller or of any of
its Affiliates in respect of continued employment (or resumed employment) with
either Buyer or the Blaze Business or any of their Affiliates and no provision
of this Article 8 shall create any such rights in any such Persons in respect of
any benefits that may be provided, directly or indirectly, under any Employee
Plan or any plan or arrangement which may be established by Buyer or any of its
Affiliates. No provision of this Agreement shall constitute a limitation on
rights to amend, modify or terminate after the Closing Date any such plans or
arrangements of Buyer or any of its Affiliates.
8.6 Employees; WARN Act. Schedule 8.6 to the Seller's Disclosure Letter
contains a list of all employees of the Blaze Business who will be offered
employment with Buyer after the Closing Date. Buyer and Seller agree that
employees of the Seller who do not continue employment with Buyer after the
Closing Date shall not be offered employment through a period sufficient to
satisfy the notice requirements under the WARN Act and that in lieu thereof,
Seller shall give timely and sufficient notice to such employees and retain
their employment with Seller for a sufficient period to satisfy the requirements
of the WARN Act or timely pay such employees in full all such amounts and/or
benefits as are required to otherwise fully satisfy the requirements of the WARN
Act. In addition, Seller covenants and agrees with Buyer that all employees of
Seller whose employment has been terminated within ninety (90) days prior to the
Closing Date shall also be promptly paid by Seller in full all such amounts
and/or benefits as are required to otherwise fully satisfy the requirements of
the WARN Act with respect to such employees.
ARTICLE 9
CONDITIONS TO CLOSING
9.1 Conditions to Obligations of Buyer and Seller. The obligations of
Buyer and Seller to consummate the Closing are subject to the satisfaction of
the following condition:
(a) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
Closing.
9.2 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a) (i) Seller shall have performed in all material respects all
of its obligations hereunder required to be performed by them on or prior to the
Closing Date, (ii) the representations and warranties of Seller contained in
this Agreement and in any certificate or other writing delivered by Seller
pursuant hereto shall be true and correct in all material respects (or in all
respects, to the extent any such representation and warranty is already
qualified by materiality) on and as of the date hereof and (iii) Buyer shall
have received a certificate dated as of the date hereof, and signed by an
authorized executive officer of Seller to the foregoing effect.
(b) From the Balance Sheet Date until the date hereof, there will
have been no Material Adverse Change and Buyer will have received a certificate
to such effect, dated as of the date hereof, signed by an authorized executive
officer of Seller.
(c) This Agreement and the sale and transfer of the Purchased
Assets by Seller to Buyer hereunder on the terms and conditions set forth
herein, shall have been duly and validly approved
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and adopted by the written consent or vote of (i) Seller's sole stockholder,
(ii) Seller's Board of Directors and (iii) Brokat's Management Board.
(d) There shall not be threatened, instituted or pending any
action or proceeding by any Person before any Governmental Authority, (i)
seeking to restrain, prohibit or otherwise interfere with the ownership or
operation by Buyer or any of its Affiliates of all or any material portion of
the Purchased Assets or the business or assets of Buyer or any of its Affiliates
or to compel Buyer or any of its Affiliates to dispose of all or any material
portion of the Purchased Assets or of Buyer or any of its Affiliates or (ii)
seeking to require divestiture by Buyer or any of its Affiliates of any
Purchased Assets.
(e) There shall not be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the purchase of the Purchased
Assets, by any Governmental Authority that, in the reasonable judgment of Buyer
could, directly or indirectly, result in any of the consequences referred to in
clauses 9.2(d)(i) and 9.2(d)(ii) above.
(f) Buyer shall have received the opinion letter of Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, counsel to Seller, dated the date hereof,
substantially in the form of EXHIBIT C attached hereto.
(g) Buyer shall have received the opinion letter of the Director
of Legal Affairs of Brokat, dated the date hereof, substantially in the form of
EXHIBIT D attached hereto.
(h) Seller shall have executed and delivered to Buyer the
Transition Services Agreement between Seller and Buyer substantially in the form
of EXHIBIT E attached hereto (the "TRANSITION SERVICES AGREEMENT").
(i) The Independent Software Vendor Agreement dated July 9, 2001,
between Seller and Brokat shall have been amended and restated substantially in
the form of EXHIBIT F attached hereto (the "ISV AGREEMENT") and shall have been
executed by Brokat and Seller and assigned to Buyer.
(j) Seller shall have received all Required Consents and all
consents, authorizations or approvals from the Governmental Authorities referred
to in Section 3.3, in form and substance reasonably satisfactory to Buyer, and
no such consent, authorization or approval shall have been revoked.
(k) Buyer shall have received a copy of the final appraisal of
the Purchased Assets prepared for Seller in connection with this Agreement.
(l) Seller shall have executed and deliver to Buyer (with
notarizations) the (i) Patent Applications Assignment in the form of EXHIBIT G
attached hereto, assigning all Patents and Patent Applications included in the
Purchased Assets; (ii) the Xxxx Assignment in the form of EXHIBIT H attached
hereto, assigning all Trademarks and registrations thereof and applications for
registrations thereof included in the Purchased Assets; and (iii) the Domain
Name Assignment in the form of EXHIBIT I attached hereto, assigning all Internet
Domain Names and registrations thereof that are included in the Purchased
Assets.
(m) Brokat shall have executed and delivered to Buyer a
Continuing Guarantee substantially in the form of EXHIBIT J attached hereto.
(n) Seller shall have delivered to Buyer the other documents to
be delivered to Buyer by Seller as provided in Section 2.6(b).
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9.3 Conditions to Obligation of Seller. The obligation of Seller to
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a) (i) Buyer shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to the
Closing Date, (ii) the representations and warranties of Buyer contained in this
Agreement and in any certificate or other writing delivered by Buyer pursuant
hereto shall be true in all material respects at and as of the Closing Date (or
in all respects, to the extent such representation and warranty is already
qualified as to materiality), as if made at and as of such date and (iii) Seller
shall have received a certificate signed by the an authorized executive officer
of Buyer to the foregoing effect.
(b) Buyer shall have executed and delivered to Seller the
Transition Services Agreement between Seller and Buyer attached hereto.
(c) The ISV Vendor Agreement dated July 9, 2001, between Seller
and Brokat shall have been amended and restated substantially in the form of the
ISV Agreement and shall have been executed by Brokat and Seller and assigned to
Buyer.
(d) Seller shall have received the opinion letter of Fenwick &
West LLP, counsel to Buyer, dated the date hereof, substantially in the form of
EXHIBIT K.
(e) Buyer shall have made the Closing Cash Payment to Seller and
delivered the other documents to be delivered to Seller by Buyer as provided in
Section 2.6(a).
ARTICLE 10
SURVIVAL; INDEMNIFICATION
10.1 Survival. The representations and warranties of the Parties hereto
contained in this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith shall survive the Closing until the
first anniversary of the Closing Date and shall not survive thereafter; provided
that notwithstanding the foregoing, the representations and warranties of Seller
in Section 3.13(a) and the covenants of Seller set forth in Articles 7 and 8
shall survive until expiration of the statute of limitations applicable to the
matters covered thereby (giving effect to any waiver, mitigation or extension
thereof), if later. Notwithstanding the preceding sentence, any representation
or warranty in respect of which indemnity may be sought under this Agreement
shall survive the time at which it would otherwise terminate pursuant to the
preceding sentence, if a Notice of Claim (as defined below) of the inaccuracy
thereof giving rise to such right of indemnity shall have been given pursuant to
this Article 10 to the Party against whom such indemnity may be sought prior to
such time (the "INDEMNIFYING PARTY").
10.2 Indemnification.
(a) Subject to the limitations set forth in this Article 10,
Seller hereby indemnifies Buyer and any present or future officer, director,
employee, Affiliate, stockholder or agent of Buyer (collectively, the "BUYER
INDEMNITEES") against and agree to hold each of them harmless from any and all
damage, loss, liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) ("DAMAGES") incurred or suffered
by Buyer or any other Buyer Indemnitee arising out of:
(i) any misrepresentation or breach of warranty, covenant
or agreement made or to be performed by Seller pursuant to this Agreement;
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(ii) any Excluded Asset or any Excluded Liability;
(iii) any Liabilities arising from any agreement that
Seller has with any of its employees, agents and independent contractors (other
than the Assumed Severance Liabilities);
(iv) any Liability arising from any claims asserting that
any transactions contemplated by this Agreement constitute a fraudulent
conveyance or any claim of a similar nature; and
(v) any Liability arising from any and all Transaction
Taxes payable by Seller pursuant to Section 7.1;
provided that Seller shall not be liable under this Article 10, except with
respect to Claims arising in whole or in part from Seller's fraud or Claims
arising from any matter described in subparagraph 10.2(a) (ii) through (v)
above, unless the aggregate amount of Damages with respect to all matters
referred to in Section 10.2(a)(i) for which Buyer or one or more other Buyer
Indemnitees seeks or has sought indemnification hereunder exceeds a cumulative
aggregate amount of $100,000, in which event Seller will be liable to indemnify
all Buyer Indemnitees for all Damages, subject to the limitations set forth in
Section 10.2(c), 10.2(e) and 10.2(f) below.
(b) Subject to the limitations set forth in this Article 10,
Buyer hereby agrees to indemnify Seller and any present or future officer,
director, employee, Affiliate, stockholder or agent of Seller (collectively, the
"SELLER INDEMNITEES") against and agree to hold each of them harmless from any
and all Damages incurred or suffered by Seller or any other Seller Indemnitee
arising out of:
(i) any misrepresentation or breach of warranty, covenant
or agreement made or to be performed by Buyer pursuant to this Agreement; and
(ii) any Assumed Liability;
provided that Buyer shall not be liable for indemnification under this Article
10, except with respect to Claims arising in whole or in part from Buyer's fraud
or Claims arising from any matter described in subparagraph 10.2(b)(ii) above
(regarding Assumed Liabilities) unless the aggregate amount of Damages with
respect to all matters referred to in Section 10.2(b)(i) for which Seller or one
or more other Seller Indemnitees seek or have sought indemnification hereunder
exceeds a cumulative aggregate amount of $100,000, in which event the Buyer will
be liable to indemnify all Seller Indemnitees for all Damages, subject to the
limitations set forth in Sections 10.2(d), 10.2(e) and 10.2(f) below.
(c) Notwithstanding anything herein to the contrary, the maximum
cumulative aggregate total Liability of Seller for its indemnification
Liabilities under Section 10.2(a)(i) shall not exceed Five Million Dollars
($5,000,000); provided, however, that notwithstanding the foregoing, the
foregoing limitation on Seller's indemnification Liabilities shall not apply to
any Claim by Buyer or any other Buyer Indemnitee relating to any Excluded
Liability or that arises in whole or in part from Seller's fraud (collectively,
"SPECIAL BUYER CLAIMS").
(d) Notwithstanding anything herein to the contrary, the maximum
cumulative aggregate total liability of Buyer for its indemnification
liabilities under Section 10.2(b)(i) shall not exceed Five Million Dollars
($5,000,000); provided, however, that notwithstanding the foregoing, the
foregoing limitation on Buyer's indemnification Liabilities shall not apply to
any Claim by Seller or any other Seller Indemnitee relating to any Assumed
Liability or that arises in whole or in part from Buyer's fraud ("SPECIAL SELLER
CLAIMS", and together with the Special Buyer Claims, the "SPECIAL CLAIMS").
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(e) Notwithstanding anything herein to the contrary, the amount
of any Damages recoverable by a Party pursuant to this Article 10 shall be
reduced by the net amount that the Party seeking indemnification (the
"INDEMNIFIED PARTY') or any of its Affiliates recovers (after deducting all
reasonable attorneys' fees, expenses and other costs of recovery) from any
insurer or other party liable for such Damages, and the Indemnified Party shall
use its commercially reasonable efforts to effect such recovery.
(f) Notwithstanding anything herein to the contrary, no Claim
under this Article 10 may be brought after the first (1st) anniversary of the
Closing Date (the "RELEASE DATE"); provided, however, that (i) Special Buyer
Claims, (ii) Special Seller Claims and (iii) Claims arising under the
representations and warranties of Seller in Section 3.13(a) and under covenants
of Seller contained in Articles 7 or 8 may be brought at any time until
expiration of the statute of limitations applicable to the matters covered
thereby (giving effect to any waiver, mitigation, or extension thereof); and
provided, further, that any Claim properly asserted by an Indemnified Party
prior to the Release Date may thereafter be prosecuted and arbitrated as
provided in this Article 10 and recovery on such Claim may be had by the
Indemnified Party as provided herein.
(g) Subject to the provisions of this Article 10, Buyer shall be
entitled to retain the Retained Amount as a non-exclusive remedy in respect of
Seller's indemnification obligations under this Article 10.
10.3 Investment of Retained Amount; Accrued Interest. Buyer shall invest
all of the Retained Amount in the SSgA U.S. Treasury Money Market Fund, which is
a money market mutual fund established under the Investment Company Act of 1940,
as amended, the principal of which is invested in obligations of or guaranteed
by the United States Government (the "TREASURY MONEY MARKET FUND"). All interest
accrued on the Retained Amount and all interest accrued on any such accrued
interest, if any (the "ADDITIONAL RETAINED AMOUNT") shall be reinvested by Buyer
in the Treasury Money Market Fund, shall be held by Buyer in accordance with
this Agreement, and shall be distributed to Seller or retained by Buyer, in the
same manner and in the same proportions as the Retained Amount is required to be
so held, distributed or retained under this Agreement. For all purposes of this
Agreement, any Additional Retained Amount will be treated the same as (and will
be considered to be) part of the Retained Amount and all references to the
Retained Amount will be deemed to include the Additional Retained Amount.
10.4 Claim; Notice of Claim. As used herein, the term "CLAIM" means a
claim for indemnification for Damages made against the Indemnifying Party by the
Indemnified Party (on its own behalf and/or on behalf of its respective present
or future officers, directors, employees, Affiliates, shareholders or agents
(the "INDEMNITEES") pursuant to this Article 10. Buyer (and only Buyer) may give
notice of a Claim under this Agreement for indemnification for Damages incurred
by Buyer or any other Buyer Indemnitee and only Buyer may prosecute and
arbitrate a Claim on behalf of Buyer or any other Buyer Indemnitee under this
Article 10. Seller (and only Seller) may give notice of a Claim under this
Agreement for indemnification for Damages incurred by Seller or any other Seller
Indemnitee, and only Seller may prosecute and arbitrate a Claim on behalf of
Seller or any other Seller Indemnitee under this Article 10. The Indemnified
Party will give written notice of a Claim executed by an officer of the
Indemnified Party (a "NOTICE OF CLAIM") to the Indemnifying Party promptly after
the Indemnified Party becomes aware of the existence of any potential claim by
the Indemnified Party or any of its Indemnitees for indemnification from the
Indemnifying Party under this Article 10 arising from or relating to: (a) in the
case of Claims made by Buyer, any item listed in subparagraphs (i) through (v)
of Section 10.2(a), (b) in the case of Claims made by Seller, any item listed in
subparagraphs (i) or (ii) of Sections 10.2(b); or (c) the assertion, whether
orally or in writing, against the Indemnified Party or any of its Indemnitees of
a claim, demand, suit, action, arbitration, investigation, inquiry or proceeding
brought by a third party against such Indemnified Party or any of its
Indemnitees that is based upon, or includes assertions relating
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to (in each such case, a "THIRD-PARTY CLAIM") any item for which such
Indemnified Party or its Indemnitees is entitled to indemnification under
Section 10.2(a) or 10.2(b), as applicable. No delay on the part of an
Indemnified Party in giving the Indemnifying Party a Notice of Claim will
relieve the Indemnifying Party from any of its obligations under this Article 10
unless (and then only to the extent) the Indemnifying Party is materially
prejudiced thereby with respect to such Claim. The assertion of any single Claim
by a Party hereunder will not bar such Party from asserting any other Claim or
Claims hereunder.
10.5 Contents of Notice of Claim. Each Notice of Claim by an Indemnified
Party given pursuant to Section 10.4 will contain the following information:
(a) the Indemnified Party's good faith estimate of the reasonably
foreseeable maximum amount of the alleged Damages arising from such Claim (which
amount may be the amount of damages claimed by a third party in an action
brought against the Indemnified Party or any of its Indemnitees based on alleged
facts, which if true, would give rise to liability for Damages to such
Indemnitee under this Article 10); and
(b) a brief description, in reasonable detail (to the extent
reasonably available to the Indemnified Party), of the facts, circumstances or
events giving rise to the alleged Damages based on the Indemnified Party's good
faith belief thereof, including the identity and address of any third-party
claimant (to the extent reasonably available to the Indemnified Party) and
copies of any formal demand or complaint.
10.6 Defense of Third-Party Claims. In the case of any Third-Party Claim
that may give rise to a claim for indemnification pursuant to this Article 10,
the Indemnifying Party shall have the right to defend and to direct the defense
against any such claim, in its name or in the name of the Indemnified Party, as
the case may be, at the expense of the Indemnifying Party, and with competent
counsel experienced in the handling of such claims selected by the Indemnifying
Party, unless (i) such claim seeks remedies other than monetary damages, and
such remedies could be reasonably expected to have a material adverse effect on
such Indemnified Party or (ii) if there is a conflict of interest which would
prevent counsel for the Indemnifying Party from also representing the
Indemnified Party. Notwithstanding anything in this Agreement to the contrary,
the Indemnified Party shall cooperate with the Indemnifying Party, and keep the
Indemnifying Party fully informed, in the defense of such claim or demand. The
Indemnified Party shall have the right to participate in the defense of any
claim or demand with counsel employed at its own expense; provided, however, (y)
except in the case of any claim or demand described in clause (i) or (ii) above,
the Indemnifying Party shall control the defense and (z) in the case of any
claim or demand described in clause (i) or (ii) above or as to which the
Indemnifying Party shall not in fact have employed competent counsel experienced
in the handling of such claims to assume the defense against such claim or
demand, the reasonable fees and disbursements of such counsel shall be at the
expense of the Indemnifying Party. Whether or not the Indemnifying Party shall
have assumed the defense of such claim or demand, the Indemnified Party shall
not admit any liability with respect to, or settle, compromise or discharge such
claim or demand without the Indemnifying Party's prior written consent (not to
be unreasonably withheld or delayed). Notwithstanding the foregoing, an
Indemnifying Party shall cease to be entitled to have the right to defend and
direct the defense of any claim if it (or its counsel) shall cease to diligently
and vigorously defends such claim with competent counsel experienced in the
handling of such a claim.
10.7 Resolution of Claims. Any Notice of Claim received by the
Indemnifying Party pursuant to Sections 10.4 and 10.5 will be resolved as
follows:
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(a) Uncontested Claims. In the event that, within thirty (30)
calendar days after a Notice of Claim is received by the Indemnifying Party
pursuant to Sections 10.4 and 10.5, the Indemnifying Party does not contest such
Notice of Claim in writing to the Indemnified Party as provided in Section
10.7(b) (an "UNCONTESTED CLAIM"), the Indemnified Party will be conclusively
deemed to have consented to the recovery by the Indemnified Party or its
Indemnitees of the full amount of such Damages specified in the Notice of Claim
in accordance with this Article 10 (which recovery, in the case of a recovery by
Buyer on behalf of itself or another Buyer Indemnitee, may be made by Buyer's
retention (and Seller's forfeit of any right to receive) of the appropriate
portion of the Retained Amount), subject to the limitations on the Indemnified
Party's indemnification Liabilities set forth in this Article 10, and, without
further notice, to have stipulated to the entry of a final judgment for damages
against the Indemnifying Party for such amount in any court having jurisdiction
over the matter where venue is proper.
(b) Contested Claims. In the event that the Indemnifying Party
gives the Indemnified Party written notice contesting all or any portion of a
Notice of Claim (a "CONTESTED CLAIM") within the thirty (30) day period
specified in Section 10.7(a), then the Parties shall attempt in good faith for
thirty (30) days to agree upon the rights of the respective parties with respect
to such Contested Claim. If no such agreement can be reached after good faith
negotiation, either party may submit the matter to binding arbitration in
accordance with the provisions of Section 10.7(c).
(c) Arbitration of Contested Claims. Each of Buyer and Seller
agrees that any Contested Claim that is not resolved in accordance with Section
10.7(b) will be submitted to mandatory, final and binding arbitration before
J.A.M.S./ENDISPUTE or its successor ("J.A.M.S."), pursuant to the United States
Arbitration Act, 9 U.S.C., Section 1 et seq. and that any such arbitration will
be conducted in Santa Xxxxx County, California. In the event J.A.M.S. ceases to
provide arbitration services, then the term "J.A.M.S." shall thereafter mean and
refer to the American Arbitration Association ("AAA"). Either Buyer or Seller
may commence the arbitration process called for by this Agreement by filing a
written demand for arbitration with J.A.M.S. and giving a copy of such demand to
each of the other Parties to this Agreement. The arbitration will be conducted
by a single arbitrator in accordance with the provisions of J.A.M.S' Streamlined
Arbitration Rules and Procedures in effect at the time of filing of the demand
for arbitration (or, if J.A.M.S. then means the AAA, the commercial arbitration
rules of the AAA then in effect), subject to the provisions of this Section
10.7(c); provided, however, that if the amount sought to be recovered in the
Claim being arbitrated exceeds Five Hundred Thousand United State Dollars
($500,000) then the arbitration will be conducted by a panel of three (3)
arbitrators consisting of one (1) arbitrator chosen by the Indemnifying Party,
one (1) arbitrator chosen by the Indemnified Party and one (1) arbitrator
unanimously chosen by the two (2) arbitrators just mentioned that were selected
by the Indemnified Party and the Indemnifying Party, and the majority decision
of such three arbitrators shall constitute the decision of such arbitration
panel entitled to render the Final Award (as defined below) in such arbitration.
The Parties will cooperate with J.A.M.S. and with each other in promptly
selecting a single arbitrator from J.A.M.S.' panel of neutrals, and in
scheduling the arbitration proceedings in order to fulfill the provisions,
purposes and intent of this Agreement. The Parties covenant that they will
participate in the arbitration in good faith, and that they will share in its
costs in accordance with subparagraph (i) below. The provisions of this Section
10.7(c) may be enforced by any court of competent jurisdiction. Subject to the
provisions of subparagraph (vii) below, judgment upon the Final Award or any
other final finding rendered by the arbitrator in the arbitration may be entered
in any court having competent jurisdiction.
(i) Payment of Costs. The Indemnified Party, on the one
hand, and the Indemnifying Party, on the other hand, will bear the expense of
deposits and advances required by the arbitrator in equal proportions, but
either Party may advance such amounts, subject to recovery as an addition or
offset to any award. The arbitrator shall determine in the Final Award (as
defined below) the
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Party who is the prevailing Party (the "PREVAILING PARTY") and the Party who is
not the Prevailing Party (the "NON-PREVAILING PARTY"). The Non-Prevailing Party
shall pay all reasonable costs, fees and expenses related to the arbitration,
including reasonable fees and expenses of attorneys, accountants and other
professionals incurred by the Prevailing Party, the fees of the arbitrator and
the administrative fee of the arbitration proceedings. If such an award would
result in manifest injustice, however, the arbitrator may apportion such costs,
fees and expenses between the Parties in such a manner as the arbitrator deems
just and equitable.
(ii) Burden of Proof. Except as may be otherwise expressly
provided herein, for any Contested Claim submitted to arbitration, the burden of
proof will be as it would be if the claim were litigated in a judicial
proceeding governed exclusively by the internal laws of the State of California
applicable to Contracts executed and entered into within the State of
California, without regard to the principles of choice of law or conflicts of
law of any jurisdiction.
(iii) Award. Upon the conclusion of any arbitration
proceedings hereunder, the arbitrator will render findings of fact and
conclusions of law and a final written arbitration award setting forth the basis
and reasons for any decision reached (the "FINAL AWARD") and will deliver such
documents to the Indemnified Party and the Indemnifying Party, together with a
signed copy of the Final Award. Subject to the provisions of subparagraph (vii)
below, the Final Award will constitute a conclusive determination of all issues
in question (including any award of Damages), binding upon the Indemnified Party
and the Indemnifying Party, and will include an affirmative statement to such
effect. To the extent that the Final Award determines that an Indemnified Party
or any of its Indemnitees has suffered or incurred Damages in connection with
the Contested Claim through the date of the Final Award ("AWARDED DAMAGES"), the
Final Award will set forth and award to the Indemnified Party the amount of such
Awarded Damages.
(iv) Timing. The Indemnified Party, the Indemnifying Party
and the arbitrator will conclude each arbitration pursuant to this Section 10.7
as promptly as reasonably possible for the Contested Claim being arbitrated.
(v) Terms of Arbitration. The arbitrator chosen in
accordance with these provisions will not have the power to alter, amend or
otherwise affect the terms of these arbitration provisions or the provisions of
this Agreement.
(vi) Exclusive Process. Following the Closing Date, except
as specifically otherwise provided in this Agreement (including without
limitation the provisions of Section 10.9), and except as the Parties may
otherwise agree pursuant to a written settlement or other agreement between
themselves), arbitration conducted in accordance with this Agreement will be the
sole and exclusive method of resolving any Claim for indemnification made
pursuant to this Article 10, other than any Claim arising from fraud.
(vii) Treatment of Damages. Upon issuance and delivery of
the Final Award as provided in subparagraph 10.7(c)(iii) above, Buyer will
immediately be entitled to recover as provided in subparagraph 10.7(e) below the
amount of any Awarded Damages awarded to Buyer under such Final Award.
(d) Settled Claims. If a Claim (including a Contested Claim) is
settled by a written settlement agreement executed by Buyer and Seller (a
"SETTLED CLAIM"), then the Parties shall resolve such Settled Claim as provided
in such settlement agreement.
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(e) Payment of Damages. Any Damages that (i) the Parties have
agreed are to be awarded to Buyer and/or any other Buyer Indemnitee pursuant to
a Settled Claim or (ii) have been awarded to Buyer and/or any other Buyer
Indemnitee pursuant to a Final Award of an arbitration conducted pursuant to
this Section 10.7, and any other Damages payable by Seller to Buyer pursuant to
an Uncontested Claim or otherwise under this Article 10, shall be paid to Buyer:
(A) first, by Buyer's reduction of an amount of the Retained Amount, if any then
remains, equal to the amount of such Damages and Seller's forfeiture of any
future right to receive such amount of the Retained Amount, and (B) only to the
extent that the then-current Retained Amount, if any, is not equal to or greater
than the amount of such Damages, by Seller to Buyer directly in cash, subject to
the limits on the indemnification Liabilities of Seller set forth in Section
10.2(b). Buyer will notify Seller in writing of any such reduction of the
Retained Amount as promptly as practicable thereafter.
10.8 Release of Remaining Retained Amount. Within one (1) week following
the Release Date, Buyer shall pay to Seller that portion of the remaining
Retained Amount (if any) that is in excess of any amount of the Retained Amount
that is necessary to satisfy all unsatisfied or disputed claims for Damages
specified in any Notice of Claim delivered to Seller before the Release Date. If
any Claims are pending but not resolved on the Release Date, then Buyer may
retain possession and custody of that amount of the Retained Amount that equals
the total maximum amount of Damages then being claimed by Buyer in all such
pending Claims, and as soon as all such Claims have been resolved, Buyer shall
deliver to Seller all of the remaining Retained Amount not required to satisfy
such Claims.
10.9 Exclusive Remedy; Equitable Relief. The Parties agree that the
rights of the Parties to indemnification under this Article 10 shall be the
exclusive rights and remedies of the Parties for the recovery of any Damages for
which a Party may be entitled to recovery under this Agreement and all
certificates delivered hereunder; except for any Damages caused or arising from
the fraud of a Party; provided, however, that nothing in this Agreement will
preclude or prevent any Party from seeking and obtaining equitable remedies or
relief not involving the recovery of money damages from any court of competent
jurisdiction (such as the remedies of injunctive relief or specific performance)
for any breach or violation of this Agreement,
ARTICLE 11
MISCELLANEOUS
11.1 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and shall
be given,
if to Buyer, to:
HNC Software Inc.
0000 Xxxxxxxxxxx Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
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Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
if to Seller, to:
Brokat Technologies, Inc.
000 Xxxxxxx Xxxxxxxxx
Xxx Xxxx, XX 00000
Telephone:
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
11.2 Amendments and Waivers.
(a) Any provision of this Agreement may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed, in the case
of an amendment, by each Party to this Agreement, or in the case of a waiver, by
the Party against whom the waiver is to be effective.
(b) No failure or delay by any Party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
11.3 Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
11.4 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and assigns; provided that no Party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other Party hereto, except that Buyer may transfer or assign, in
whole or from time to time in part, to one or more of its Affiliates, the right
to purchase all or a portion of the Purchased Assets, but no such transfer or
assignment will relieve Buyer of its obligations hereunder.
11.5 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of California applicable to
contracts executed and performed entirely
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within the State of California, without regard to the principles of choice of
law or conflicts of law rules of such state.
11.6 Counterparts; Third Party Beneficiaries. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each Party hereto shall
have received a counterpart hereof signed by the other Party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
Parties hereto any rights or remedies hereunder.
11.7 Entire Agreement. This Agreement, the Seller Ancillary Agreements,
the Buyer Ancillary Agreements constitute the entire agreement between the
Parties with respect to the subject matter of this Agreement and supersede all
prior agreements and understandings, both oral and written, between the Parties
with respect to the subject matter of this Agreement (including but not limited
to the Letter Agreement among Buyer, Seller and Brokat dated as of July 31,
2001).
11.8 Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
HNC SOFTWARE INC.
By: __________________________________
Name:
Title:
BROKAT TECHNOLOGIES, INC.
By: __________________________________
Name:
Title:
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
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LIST OF EXHIBITS
Exhibit A: Assignment and Assumption Agreement
Exhibit B: Xxxx of Sale and General Assignment
Exhibit C: Opinion of Xxxx Xxxxx, Rifkind, Xxxxxxx & Xxxxxxxx
Exhibit D: Opinion of Director of Legal Affairs of Brokat
Technologies Aktiengesellschaft
Exhibit E: Transition Services Agreement
Exhibit F: Amended and Restated Independent Software Vendor
Agreement
Exhibit G: Patent Applications Assignment
Exhibit H: Xxxx Assignment
Exhibit I: Domain Name Assignment
Exhibit J: Continuing Guarantee Agreement
Exhibit K: Opinion of Fenwick & West LLP
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EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AGREEMENT, dated as of August 15, 2001 between Brokat Technologies,
Inc., a Delaware corporation ("SELLER"), and HNC Software Inc., a Delaware
corporation ("BUYER").
WITNESSETH:
WHEREAS, Buyer and Seller have concurrently herewith consummated the
purchase by Buyer of the Purchased Assets pursuant to the terms and subject to
the conditions of the Asset Purchase Agreement, dated the date hereof, between
Buyer and Seller (the "PURCHASE AGREEMENT"; terms defined in the Purchase
Agreement and not otherwise defined herein being used herein as therein
defined);
WHEREAS, pursuant to the Purchase Agreement, Buyer has agreed to assume
certain liabilities and obligations with respect to the Purchased Assets and the
Blaze Business;
NOW, THEREFORE, in consideration of the sale of the Purchased Assets and
in accordance with and subject to the terms of the Purchase Agreement, Buyer and
Seller agree as follows:
1. (a) Seller does hereby sell, transfer, assign and deliver to
Buyer all of the right, title and interest of Seller in, to and under the
Purchased Assets.
(b) Buyer does hereby accept all the right, title and interest of
Seller in, to and under all of the Purchased Assets and hereby assumes the
Assumed Liabilities in order to release and relieve Seller from any further
liability under such Assumed Liabilities.
2. Seller hereby covenants and agrees to cooperate with Buyer from time
to time on or after the date hereof, upon request of Buyer and without further
consideration, to take all actions and to execute and deliver all other
documents and instruments reasonably necessary or appropriate to fully evidence,
vest, perfect and confirm, document, record and carry out the contribution,
sale, assignment, transfer and delivery of the Purchased Assets to Buyer and the
assignment and assumption of the Assumed Contracts by Buyer as provided in and
contemplated by the Purchase Agreement and this Agreement.
3. Nothing herein shall be deemed to deprive Buyer of any defenses,
setoff or counterclaims which Seller may have had, or which Buyer shall have,
with respect to any of the obligations, liabilities and commitments hereby
assumed ("DEFENSES AND CLAIMS"). Seller hereby transfers, conveys and assigns to
Buyer all of its rights, title and interests in such Defenses and Claims and
agree to cooperate with Buyer to maintain, secure and perfect such Defenses and
Claims, including the signing of any documents, the giving of any testimony or
the taking of any action as is reasonably requested by Buyer in connection with
such Defenses and Claims.
4. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of California, without regard to the conflicts of
law rules of such state.
5. This Agreement shall bind and inure to the benefit of Buyer and
Seller and their respective successors and assigns.
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6. The invalidity or unenforceability of any provision of this Agreement
will not affect the validity or enforceability of any other provision.
7. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BROKAT TECHNOLOGIES, INC.
By: __________________________________
Name:
Title:
HNC SOFTWARE INC.
By: __________________________________
Name:
Title:
[SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT]
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EXHIBIT B
XXXX OF SALE AND GENERAL ASSIGNMENT
Brokat Technologies, Inc., a Delaware corporation ("SELLER"), for good
and valuable consideration to it paid, receipt and sufficiency of which is
hereby acknowledged, and pursuant to the Purchase Agreement (the "PURCHASE
AGREEMENT") dated August 15, 2001 (the "CLOSING DATE") between Seller and HNC
Software Inc., a Delaware corporation (the "BUYER"), and notwithstanding that
the following property may be conveyed by separate and specific transfer
documents, by these presents does sell assign, transfer and deliver unto Buyer,
and its successors and assigns, as of the Closing Date, all of their right,
title and interest in the Purchased Assets:
TO HAVE AND TO HOLD the Purchased Assets unto Buyer and its
successors and assigns, to and for its or their use forever.
This Xxxx of Sale and General Assignment is being delivered pursuant to
the Purchase Agreement and shall be construed consistently therewith.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale and General
Assignment to be signed by its duly authorized officers on the Closing Date.
BROKAT TECHNOLOGIES, INC.
By: __________________________________
Name:
Title:
HNC SOFTWARE INC.
By: __________________________________
Name:
Title:
[SIGNATURE PAGE TO XXXX OF SALE AND GENERAL ASSIGNMENT]
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STATE OF ____________________)
) SS.:
COUNTY OF ___________________)
On this ___ day of ____________, 2001, before me personally came
___________________, to me personally known, who, being duly sworn, did depose
and say that he resides at ________________________________; that he is
______________ of __________________, one of the corporations described in and
which executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so fixed by authority of the Board of Directors of said corporation;
and that he signed his name thereto by like authority.
_____________________________________
Notary Public
STATE OF ____________________)
) SS.:
COUNTY OF ___________________)
On this ___ day of ____________, 2001, before me personally came
___________________, to me personally known, who, being duly sworn, did depose
and say that he resides at ________________________________; that he is
______________ of __________________, one of the corporations described in and
which executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so fixed by authority of the Board of Directors of said corporation;
and that he signed his name thereto by like authority.
_____________________________________
Notary Public
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EXHIBIT E
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (this "AGREEMENT") is effective as of
August 15, 2001 (the "EFFECTIVE DATE") by and among Brokat Technologies, Inc., a
Delaware corporation ("BTI") and HNC Software Inc., a Delaware corporation
("HNC").
R E C I T A L S
WHEREAS, concurrently herewith, BTI and HNC are entering into that
certain Asset Purchase Agreement dated as of the Effective Date (the "PURCHASE
AGREEMENT"), pursuant to which HNC is to purchase substantially all of the
assets used in conducting the Blaze Business (as defined in the Purchase
Agreement). Capitalized terms used and not defined herein shall have the meaning
given to them in the Purchase Agreement; and
WHEREAS, as a material inducement to HNC to enter into and perform its
obligations under the Purchase Agreement, it is a condition precedent to the
Closing under the Purchase Agreement that BTI and HNC enter into this Agreement
under which the parties have agreed that BTI will provide certain transition
support services to HNC as further described in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
1. PROVISION OF SERVICES.
(a) During the term of this Agreement, BTI shall make available and
provide to HNC all of the services described in Schedule A hereto, which
services shall, for the avoidance of doubt, include BTI's cooperation with and
assistance of PricewaterhouseCoopers LLP or another independent accounting firm
of nationally recognized significance agreed upon by the parties to audit the
financial statements of the Blaze Business for the nine (9) months ended
December 31, 2000, to review the financial statements of the Blaze Business for
the six (6) months ended June 30, 2001 and to perform such other audit services
with respect to the Blaze Business as shall be reasonably requested by HNC, in
order to promptly complete the above-described audit, review and other audit
services by no later than October 14, 2001 (collectively, the "SERVICES"). The
parties agree that the Services shall be provided by the employees of BTI named
on Schedule B hereto (each a "BTI EMPLOYEE" and together the "BTI EMPLOYEES").
(b) In addition to the Services identified in Schedule A hereto, BTI and
HNC agree to negotiate in good faith regarding the provision of any other
services (and the terms and conditions thereof) as are reasonably requested by
HNC and are not otherwise covered by this Agreement. If any agreement is reached
regarding such other services, it
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shall be evidenced by the parties signing and attaching an amended or additional
Schedule to this Agreement, at which time such other services shall be subject
to the provisions of this Agreement.
2. REPRESENTATIVES. Each of BTI and HNC shall nominate representatives
to act as its primary contact persons to coordinate the provision of Services
(collectively, the "PRIMARY COORDINATORS"). Each Primary Coordinator may
designate one or more service coordinators for each specific Service (the
"SERVICE COORDINATORS"). Each party may treat an act of a Primary Coordinator or
Service Coordinator of another party as being authorized by such other party
without inquiring behind such act or ascertaining whether such Primary
Coordinator or Service Coordinator had authority to so act; provided, however,
that no such Primary Coordinator or Service Coordinator has any authority to
amend this Agreement. BTI and HNC shall advise each other promptly in writing of
any change in the Primary Coordinators or any Service Coordinator for a
particular Service, setting forth the name of the Primary Coordinator or Service
Coordinator to be replaced and the name of the replacement, and certifying that
the replacement Primary Coordinator or Service Coordinator is authorized to act
for such party in all matters relating to this Agreement, in the case of a
Primary Coordinator or, in the case of a Service Coordinator, with respect to
the Service for which such Service Coordinator has been designated. BTI and HNC
each agree that all communications relating to the provision of the Services
shall be directed to the Service Coordinators, if any, for such Service or
alternatively directly to the Primary Coordinators. BTI's initial Primary
Coordinators shall be Xxxx Xxxxxxx and Xxxx Xxxxxxx. HNC's initial Primary
Coordinator shall be Jan-Xxxx Xxxxxx. For each Service, BTI's and HNC's initial
Service Coordinators are set forth in Schedule A.
3. THE BTI EMPLOYEES.
(a) BTI hereby agrees, during each month of the term of this
Agreement, to make each BTI Employee available to HNC to perform the Services
for at least the percentage of such BTI Employee's time (assuming full-time
employment of such BTI employee with BTI) required for the performance of such
BTI Employee's normal duties pursuant to such BTI Employee's employment
arrangement with BTI that is set forth in Schedule B under the column headings
"Month 1," "Month 2" and "Month 3" for each month of the term of this Agreement
for such BTI Employee. The parties agree that HNC shall have the right to the
exclusive and uninterrupted use of the time and services of the BTI Employees
during such periods. BTI acknowledges that, with respect to each BTI Employee,
BTI is the employer of such BTI Employee and that during the term of this
Agreement, BTI shall not terminate or take any action that could be deemed to
constructively terminate any BTI Employee without the express prior written
consent of HNC. None of the agreements contained in the preceding sentence are
intended for the benefit of any BTI Employee.
(b) BTI shall be solely responsible for (i) the payment of, and
shall indemnify, defend and hold HNC harmless from and against, all federal,
state, local and foreign taxes and withholdings payable with respect to the
wages of all BTI Employees and all other employer liabilities relating to such
personnel, (ii) the maintenance of
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workers' compensation insurance required by applicable statutes with respect to
all BTI Employees, and (iii) the maintenance, payment and provision of all
applicable employee benefits for the BTI Employees, including for each BTI
Employee, his or her then current annual salary or hourly wage, overtime pay (if
applicable), employee benefits, bonus and other incentive compensation such as
stock options. BTI and its agents, as applicable, shall be independent
contractors in connection with the performance of the Services hereunder and any
personnel performing services in connection herewith shall not be, nor shall any
of them be deemed to be, employees of HNC.
(c) In performing any Services hereunder for HNC, each BTI
Employee shall be under the direction, control and supervision of HNC and HNC
shall have the sole right to assign projects within such Services to the BTI
Employees. HNC may at any time decide to no longer utilize any BTI Employee for
the provision of Services for the remaining term of the Agreement.
(d) HNC shall have the right and option, but no obligation, to
offer employment to any of the BTI Employees. BTI shall cooperate with HNC to
facilitate any of HNC's efforts to directly employ any of the BTI Employees. In
the event that HNC elects to make offers of employment to certain or all of the
BTI Employees, BTI shall take all reasonable actions to encourage those BTI
Employees who have received an offer of employment from HNC to accept such offer
of employment. BTI will not make any claims against HNC or its affiliates as a
result of HNC's soliciting or hiring such BTI Employees. Except as otherwise set
forth in the Purchase Agreement, BTI shall be solely responsible for the payment
of any and all vacation, sick time, stock options or any other benefits that may
be payable in connection with the transactions contemplated in this paragraph
with respect to such BTI Employees hired by HNC and shall indemnify, defend and
hold HNC harmless from and against any and all such benefits.
(e) BTI agrees that all Inventions and moral rights that (i)
result from the Services performed by the BTI Employees specifically for HNC, or
(ii) relate to HNC's business or current or anticipated research and
development, will be the sole and exclusive property of HNC and are hereby
irrevocably assigned by BTI to HNC. "MORAL RIGHTS" mean any rights to claim
authorship of an Invention, to object to or prevent the modification of any
Invention, or to withdraw from circulation or control the publication or
distribution of any Invention, and any similar right existing under judicial or
statutory law of any country in the world, or under any treaty, regardless of
whether of not such right is denominated or generally referred to as a "moral
right". "INVENTIONS" means all inventions, improvements, designs, original works
of authorship, formulas, processes, compositions of matter, computer software
programs, databases, mask works and trade secrets conceived, made, received,
first reduced to practice or created by any BTI Employee alone or jointly or
with others which result from or relate to the Services, whether or not such
Inventions are patentable, copyrightable or protectable as trade secrets. BTI
agrees, as a condition precedent to HNC's entering into this Agreement, to cause
each BTI Employee to enter into an Invention Assignment and Confidentiality
Agreement in the form attached hereto as Schedule C. To the extent necessary to
effect the foregoing, BTI hereby irrevocably waives any rights otherwise
exercisable, whether
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under its agreements with BTI Employees, "work for hire" doctrine or other
applicable law, in the copyrightable works, Inventions and other intellectual
property arising from Services performed by BTI Employees.
4. EFFECT OF PROVIDING SERVICES. HNC shall at all times be responsible
for, and shall have the final authority to make, all decisions regarding the
business and other operations of HNC and its Subsidiaries.
5. COST OF SERVICES.
(a) HNC shall pay to BTI a fixed fee of Five Hundred Thousand
Dollars ($500,000) for the provision of the Services which shall be payable in
three (3) equal monthly installments during the term of this Agreement (which
amount shall include any travel expenses allocable to the provision of the
Services), which installments shall be allocable in equal amounts to each BTI
Employee providing Services at the beginning of each month. In the event that
HNC decides to no longer utilize any BTI Employee for the provision of Services
(including in connection with the termination of any or all of the Services
pursuant to Section 10), the payment for that month shall be reduced by the
amount allocable to such BTI Employee, with credit given on a pro rata basis for
the number of days such BTI Employee provided Services during such month. HNC
shall be entitled to audit the books and records of BTI related to amounts
payable for Services provided to HNC.
(b) BTI shall provide to HNC a statement of the amounts due for
Services rendered in each month of the term of this Agreement within ten (10)
days of the end of such month, and the amounts due under such statement shall be
payable by HNC within thirty (30) days after the date of the statement. Such
statements shall set forth the names of the personnel providing Services and the
number of hours worked by such personnel in providing the Services during such
month. Amounts not paid within such thirty (30) day period shall accumulate
interest at the annual rate of ten percent (10%) per annum or the maximum lawful
rate, whichever is less. HNC shall have a right to dispute in good faith any
amounts contained in BTI's statement of amounts due for Services. Should such a
dispute arise, the parties shall attempt to settle such dispute in good faith
within ten (10) days of HNC's providing BTI with notice of such dispute. If no
resolution can be reached within this time period, then the dispute shall be
submitted to a mutually agreed upon independent accounting firm of nationally
recognized significance (which shall not be the accounting firm performing the
audit and review described in Section 1(a)), who shall apply the provisions of
this Agreement to the computation of the amount of the specific costs that HNC
has disputed. The decision of such accounting firm shall be binding on both
parties and shall be non-appealable, and the costs of such accounting firm
incurred in deciding such dispute shall be borne by HNC, unless the accounting
firm makes an award that exceeds the amount requested by HNC by a difference of
greater than 5%, in which case, all such costs shall be borne solely by BTI.
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6. RECIPROCAL REPRESENTATIONS AND WARRANTIES. Each party represents and
warrants that:
(a) it has full corporate power and authority to enter into this
Agreement and to perform its obligations under this Agreement; and
(b) the execution and delivery of this Agreement shall not
conflict with or result in the breach of any agreement or other legal obligation
to which that party is subject.
7. BTI REPRESENTATIONS AND WARRANTIES.
(a) BTI represents and warrants to HNC that BTI shall provide the
Services to HNC as described herein in an uninterrupted manner and in a manner
substantially consistent with the provision of such or related services during
the six (6) months prior to the Effective Date.
(b) BTI represents and warrants to HNC that BTI shall use its
commercially reasonable efforts to assist in and fully cooperate with the
preparation of any audited or reviewed financial statements of the Blaze
Business or any other audit services to be performed as described in Section
1(a).
8. LIMITATION ON LIABILITY.
(a) Except for the representations and warranties contained in
Section 7, all Services will be provided without representation or warranty of
any kind and BTI shall not have any liability to HNC arising out of or relating
to the provision of the Services except for any liability arising from the
provisions of Section 5(b) or from a breach of Section 7 or from the gross
negligence or willful misconduct of BTI. THE LIMITED WARRANTIES SET FORTH ABOVE
ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES AND CONDITIONS, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE WITH RESPECT TO THE SERVICES OR PRODUCTS
PROVIDED UNDER THIS AGREEMENT, THE PERFORMANCE OF MATERIALS OR PROCESSES
DEVELOPED OR PROVIDED UNDER THIS AGREEMENT, OR AS TO THE RESULTS WHICH MAY BE
OBTAINED THEREFROM, AND ALL IMPLIED WARRANTIES AND CONDITIONS OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NONINFRINGEMENT.
(b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO
EVENT SHALL ANY PARTY OR ITS SUBSIDIARIES OR AFFILIATES BE LIABLE FOR ANY
INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES (INCLUDING,
BUT NOT LIMITED TO, LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS
INFORMATION OR OTHER PECUNIARY LOSS) ARISING FROM THIS AGREEMENT, REGARDLESS OF
WHETHER SUCH LIABILITY IS BASED ON BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY, BREACH OF WARRANTIES, FAILURE OF ESSENTIAL
PURPOSE OR
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OTHERWISE AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9. CONFIDENTIALITY. During and after the term of this Agreement, each
party shall keep the other party's confidential documents and information in
confidence in accordance with the terms set forth in Section 5.1 of the Purchase
Agreement.
10. TERMINATION. The Services to be provided under this Agreement shall
terminate on the date that is three (3) months after the Effective Date (the
"EXPIRATION DATE"). HNC shall be permitted to terminate any or all of the
Services being provided by BTI under this Agreement upon five (5) days' prior
written notice to BTI.
11. RELATIONSHIP OF THE PARTIES. Nothing contained in this Agreement
shall be deemed or construed to create a partnership or a joint venture between
BTI and HNC or any of their respective affiliates, or to cause either party to
be responsible in any way for the debts or other obligations of any party hereto
or any other party or be deemed affiliated with any other party. Each party
shall be responsible for the acts of its own employees, agents, independent
contractors and vendors in connection with providing or receiving, as
applicable, the transition support described in this Agreement.
12. RECORDS. BTI agrees to maintain accurate records arising from or
related to any Services provided hereunder, including but not limited to
accounting records and documentation produced in connection with the rendering
of any Services. BTI's accounting records shall be reasonably sufficient to
permit the computation and verification of all payments due hereunder.
13. FURTHER COOPERATION. Each party hereto agrees to cooperate with the
other, at any other party's request, to execute any and all documents or
instruments, or to obtain any consents, in order to assign, transfer, perfect,
record, maintain, enforce or otherwise carry out the intent of the terms of this
Agreement.
14. AMENDMENT AND WAIVER. A waiver by any party hereto of a breach of
any provisions of this Agreement shall not be valid unless such waiver is in
writing and signed by such party. Failure of any party to require, in one or
more instances, performance by another party in accordance with the terms and
conditions of this Agreement shall not be deemed a waiver of relinquishment of
the future performance of any such terms or conditions or of any other terms and
conditions of this Agreement. All rights, remedies, undertakings, obligations
and agreements contained in this Agreement shall be cumulative and none of them
shall be a limitation of any other remedy, right, undertaking, obligation or
agreement of a party. This Agreement may not be amended except as provided in a
writing signed by each of the parties.
15. ASSIGNMENT. No party may assign its rights and obligations under
this Agreement without the prior written consent of the other party, which
consent may not be unreasonably withheld; provided, however, that HNC may assign
all or a portion of its rights and obligations hereunder to one or more of its
Subsidiaries or Affiliates.
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16. GOVERNING LAW; JURISDICTION AND VENUE; WAIVER OF JURY TRIAL. This
Agreement shall be governed and construed in accordance with the internal laws
of the State of California applicable to contracts executed and performed
entirely within the State of California, without regard to the principles of
choice of laws or conflicts of law rules of such state. Each of the parties
hereto irrevocably and unconditionally consents to the jurisdiction and venue of
either the state courts located in Santa Xxxxx County, California or the United
States District Court for the Northern District of California. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.
17. NOTICES. Any notice in connection with this Agreement shall be given
in accordance with the Purchase Agreement.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original as regards to 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 of it, individually or taken together, bear the signature of each
of the parties
19. ENTIRE AGREEMENT; REMEDIES. This Agreement, the Purchase Agreement,
the Buyer Ancillary Agreements and the Seller Ancillary Agreements constitute
the entire agreement and understanding between and among the parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements, understandings and negotiations, both written and oral, between and
among the parties with respect to the subject matter of this Agreement. The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided under
applicable law.
20. SEVERABILITY. If any term or other provision of this Agreement is
determined by a court or other Governmental Authority to be invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse to a party
hereto. Upon such determination that any term or other provisions are invalid,
illegal or incapable of being enforced, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions be consummated as originally contemplated to the fullest extent
possible.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Transition
Services Agreement effective as of the date first above written.
"BTI" "HNC"
BROKAT TECHNOLOGIES, INC. HNC SOFTWARE INC.
By:________________________________ By:_________________________________
Name:______________________________ Name:_______________________________
Title:_____________________________ Title:______________________________
[SIGNATURE PAGE TO TRANSITION SERVICES AGREEMENT]
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SCHEDULE A
SERVICES TO BE PROVIDED BY BTI WITH RESPECT TO THE BLAZE BUSINESS
1. FINANCIAL, GENERAL AND ADMINISTRATIVE SERVICES
a. Assistance in preparation of audited and reviewed financial
statements and other audit services as described in Section 1(a) of the
Agreement
b. All order processing, invoicing, posting and tracking (as
applicable), including with respect to:
i. Technical Support renewal revenue
ii. Customer Service contracts
iii. Deferred Revenue items
iv. Customer Training engagements
v. New Sales Agreements
c. Transition of all revenue accounting and order processing functions
to HNC; compilation of contact list for order processing
d. Accounting support for international operations of the Blaze Business
i. assistance with payroll, local regulatory filings, tax
filings, etc.
e. Management of accounts receivable, including preparation of accounts
receivable reports in the following areas:
i. Customer Services
ii. Sales
f. Management of financial controls and budgets
g. Processing of accounts payable and payroll
h. Transition of customer files to HNC
BTI Service Coordinators: Xxxxx Xxxxxxxxx and Xxxx Xxxxxxx
HNC Service Coordinator: Taylor van Buren (finance and administration)
Xxxx Xxxxxxxx (accounting)
2. LEGAL/CONTRACTS SERVICES
a. Assistance to HNC in obtaining valid assignments and third-party
consents to assignments of relevant BTI contracts to HNC:
i. Assignment of Blaze Master GSA agreement with U.S. Government
ii. Assignment of international contracts of foreign entities
iii. Obtain consents to assignment of other assumed BTI
contracts
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b. Compile list of legal contacts
c. Revision of copyright notices to intellectual property
d. Revision of software license agreements
BTI Service Coordinator: Xxxxxxx Xxxxx
HNC Service Coordinator: Xxxxx Xxxxxxxx
3. SALES/MARKETING
a. Assist in transition of sales and marketing relationships to HNC,
including sales-related items in "Finance, General and Administrative"
above
b. Transition of Blaze Business sales management tool to HNC
BTI Service Coordinators: Xxxxx Xxxxxxx and Xxxx Xxxxxxxxxx
HNC Service Coordinator: Xxxxxxx Xxxxxxxxxx
4. HUMAN RESOURCES
a. Assistance in transition of BTI staff to HNC
BTI Service Coordinator: Xxxx Xxxxx and Xxxxxx Xxxxxxxx
HNC Service Coordinator: ______________________
5. INFORMATION TECHNOLOGY (IT) SUPPORT
a. Continue provision of customer IT support and IT support for areas
described above
b. Assistance as required in:
i. re-branding of BOSS; integration of web links between HNC
tech support pages and BOSS
ii. integration of BOSS with HNC accounting system
iii. transfer of Virtual Private Network to HNC
iii. switchover of BTI staff to HNC email accounts
iv. placement of web server in HNC network to redirect BTI links
v. migration of Japanese Blaze Advisor pages
BTI Service Coordinator: Xxxx Xxxxxxxxxx
HNC Service Coordinator: ______________________________
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SCHEDULE B
LIST OF BTI EMPLOYEES AND
TOTAL COST OF SERVICES
------------------------------------------------------------------------
NAME DEPARTMENT MONTH 1 MONTH 2 MONTH 3
------------------------------------------------------------------------
Xxxx Xxxxxxx Executive 100% 100% 100%
------------------------------------------------------------------------
Xxxx Xxxxxxx Executive 100% 100% 100%
------------------------------------------------------------------------
Xxxx Xxxxxxxx Executive 25% 25% 0%
------------------------------------------------------------------------
Xxxxx Xxxxxxxxx Accounting/Finance 75% 50% 25%
------------------------------------------------------------------------
Xxxx Xxxxxx Accounting/Finance 75% 50% 25%
------------------------------------------------------------------------
Xxxx Xxxxx Accounting/Finance 75% 50% 25%
------------------------------------------------------------------------
Xxxx Xxxxxxx Accounting/Finance 100% 75% 25%
------------------------------------------------------------------------
Xxxx Xxxxx Accounting/Finance 100% 100% 0%
------------------------------------------------------------------------
Xxxxxx Xxxxx Accounting/Finance 100% 100% 50%
------------------------------------------------------------------------
Xxxxxxxx Xxxxx Accounting/Finance 25% 25% 0%
------------------------------------------------------------------------
Xxxx Xxxxxxx Accounting/Finance 50% 50% 50%
------------------------------------------------------------------------
Xxxxx Xxxxxxx Rev. Acct/Order Proc. 100% 100% 100%
------------------------------------------------------------------------
Xxxxx Xxxxx Rev. Acct/Order Proc. 100% 75% 50%
------------------------------------------------------------------------
Xxxxxxx Xxxxxx Rev. Acct/Order Proc. 50% 25% 0%
------------------------------------------------------------------------
Xxxxx Xxxxxxx Rev. Acct/Order Proc. 50% 25% 0%
------------------------------------------------------------------------
Xxxxx Xxxxx Rev. Acct/Order Proc. 50% 25% 0%
------------------------------------------------------------------------
Xxxx Xxxxxxx FP&A 75% 50% 0%
------------------------------------------------------------------------
Xxxxxx Xxx FP&A 50% 25% 0%
------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx FP&A 100% 100% 100%
------------------------------------------------------------------------
Xxxxxxxx Xxxxx Legal/Contracts 25% 0% 0%
------------------------------------------------------------------------
Xxxxx Xxxxxxxxx Legal/Contracts 25% 0% 0%
------------------------------------------------------------------------
Xxxxxxx Xxxxxx Legal/Contracts 75% 0% 0%
------------------------------------------------------------------------
Xxxxxxx Xxxxx Legal/Contracts 100% 75% 75%
------------------------------------------------------------------------
Xxxxxx Xxxxxxxx Human Resources 75% 75% 75%
------------------------------------------------------------------------
Xxxx Xxxxx Human Resources 100% 100% 100%
------------------------------------------------------------------------
Xxxx Xxxxxxxxx Information Technology 75% 75% 75%
------------------------------------------------------------------------
Xxx Xxxx Information Technology 50% 50% 50%
------------------------------------------------------------------------
Xxxx Xxxxxxxx Information Technology 25% 25% 25%
------------------------------------------------------------------------
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SCHEDULE C
FORM OF INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT
HNC SOFTWARE INC.
INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT
In consideration of, and as a condition of my provision of certain
services (the "SERVICES") to HNC SOFTWARE INC., a Delaware corporation (the
"COMPANY") pursuant to the Transition Services Agreement dated as of August 14,
2001 (the "TRANSITION SERVICES AGREEMENT"), between the Company and Brokat
Technologies, Inc., a Delaware corporation ("BTI") in my capacity as an employee
of BTI, I hereby represent to, and agree with the Company as follows:
1. PURPOSE OF AGREEMENT.I understand that the Company is engaged in a
continuous program of research, development, production and marketing in
connection with its business and that it is critical for the Company to preserve
and protect its Proprietary Information (as defined below), its rights in
Inventions and in all related intellectual property rights. Accordingly, I am
entering into this Agreement as a condition of my provision of Services to the
Company, whether or not I am expected to create inventions of value for the
Company. I acknowledge and agree that I am not an employee of the Company but
that rather, in my capacity as an employee of BTI I will provide Services to HNC
on behalf of BTI.
2. DISCLOSURE OF INVENTIONS. I will promptly disclose in confidence to
the Company all inventions, improvements, designs, original works of authorship,
formulas, processes, compositions of matter, computer software programs,
databases, mask works and trade secrets ("INVENTIONS") that I make or conceive
or first reduce to practice or create, either along or jointly with others,
during the period I provide Services to the Company, whether or not in the
course of my provision of such Services, and whether or not such Inventions are
patentable, copyrightable or protectable as trade secrets.
3. WORK FOR HIRE: ASSIGNMENT OF INVENTIONS. I acknowledge and agree that
any copyrightable works prepared by me within the scope of my provision of
Services are "works for hire" under the Copyright Act and that the Company will
be considered the author and owner of such copyrightable works. To the extent
any such works may not be considered "works for hire" authored by the Company
under the Copyright Act, I hereby irrevocably assign and agree to assign to the
Company all of my right, title and interest in and to such works, including
without limitation all intellectual property rights. I agree that all Inventions
that (a) are developed using equipment, supplies, facilities or trade secrets of
the Company, (b) result from work performed by me for the Company, or (c) relate
to the Company's business or current or anticipated research and development,
will be the sole and exclusive property of the Company and are hereby
irrevocably assigned by me to the Company.
4. ASSIGNMENT OF OTHER RIGHTS. In addition to the foregoing assignment
of Inventions to the Company, I hereby irrevocably transfer and assign to the
Company: (a) all worldwide patents, patent applications, copyrights, mask works,
trade secrets and other intellectual property rights in any Invention that is
assigned or assignable to the Company under this Agreement; and (b) any and all
"MORAL RIGHTS"(as defined below) that I may have in or with
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70
respect to any Invention that is assigned or assignable to the Company under
this Agreement. I also hereby forever waive and agree never to assert any and
all Moral Rights I may have in or with respect to any Invention that is assigned
or assignable to the Company under this Agreement, even after termination of my
provision of Services to the Company. "MORAL RIGHTS" mean any rights to claim
authorship of an Invention, to object to or prevent the modification of any
Invention, or to withdraw from circulation or control the publication or
distribution of any Invention, and any similar right, existing under judicial or
statutory law of any country in the world, or under any treaty, regardless of
whether of not such right is denominated or generally referred to as a "moral
right".
5. ASSISTANCE. I agree to assist the Company in every proper way to
obtain for the Company and enforce patents, copyrights, mask work rights, trade
secret rights and other legal protections for the Company's Inventions in any
and all countries. I will execute any documents that the Company may reasonably
request for use in obtaining or enforcing such patents, copyrights, mask work
rights, trade secrets and other legal protections. My obligations under this
paragraph will continue beyond the termination of my provision of Services to
the Company, provided that the Company will compensate me at a reasonable rate
after such termination for time and expenses actually spent by me at the
Company's request on such assistance. I appoint the Secretary of the Company as
my attorney-in-fact to execute documents on my behalf for this purpose.
6. PROPRIETARY INFORMATION. I understand that my provision of Services
to the Company creates a relationship of confidence and trust with respect to
any information of a confidential or secret nature that may be disclosed to me
by the Company that relates to the business of the Company or to the business of
any parent, subsidiary, affiliate, customer or supplier of the Company or any
other party with whom the Company agrees to hold information of such party in
confidence ("PROPRIETARY INFORMATION"). Such Proprietary Information includes
but is not limited to Inventions, marketing plans, product plans, business
strategies, financial information, forecasts, personnel information and customer
lists.
7. CONFIDENTIALITY. At all times, both during my provision of Services
to the Company and after the termination of my provision of such Services, I
will keep and hold all such Proprietary Information in strict confidence and
trust, and I will not use or disclose any of such Proprietary Information
without the prior written consent of the Company, except as may be necessary to
perform my duties as a provider of Services to the Company, I will promptly
deliver to the Company all documents and materials of any nature pertaining to
my provision of Services to the Company and I will not take with me any
documents or materials or copies thereof containing any Proprietary Information.
8. NO BREACH OF PRIOR AGREEMENT. I represent that my performance of all
the terms of this Agreement and my duties as a provider of Services to the
Company will not breach any invention assignment, proprietary information or
similar agreement with my employer or any other party. I represent that I will
not use in the performance of my duties for the Company any documents or
materials of my employer that are not generally available to the public or have
not been legally transferred to the Company or are not necessary to enable BTI
to perform its
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obligations under the Transition Services Agreement or the Asset Purchase
Agreement, dated August 14, 2001, between the Company and BTI.
9. DUTY NOT TO COMPETE. During the period I perform Services for the
Company, I agree that I will not, directly or indirectly, whether as an
employee, consultant, officer, director, stockholder, partner, proprietor,
associate, representative, or in any other capacity whatsoever (other than in
the performance of my normal duties in any such capacity for BTI acting for BTI
pursuant to the Transition Services Agreement), engage in, become financially
interested in, be employed by, render services to or have any business
connection with any other person, corporation, firm, partnership or other entity
which competes directly, or indirectly with the Company or any of its affiliates
anywhere, in any line of business (including but not limited to the rules
business formerly carried on by the Rules Business Unit of BTI (which was
originally the business carried on by Blaze Software, Inc.) (the "Blaze
Business") that is engaged in (or in which the Company or any of its affiliates
plans to engage) by the Company or any of its affiliates.
The foregoing shall not prohibit me from owning, as a passive investor,
securities of any publicly-traded competitor corporation, so long as my holdings
in any one such competitor corporation do not, in the aggregate, constitute more
than one percent (1%) of the voting stock of such competitor corporation. I
acknowledge that if I have any question whether a person, corporation, firm,
partnership or other entity competes directly with the Company or with any of
the Company's affiliates in any line of business engaged in by the Company (or
any of its affiliates) or in a line of business in which the Company or any of
its affiliates plans to compete, I must seek clarification of the issue with the
Company before becoming involved with such person, corporation, firm,
partnership or other entity.
I acknowledge and agree that the foregoing non-competition provisions
are reasonable and necessary for the protection of the Company and its
affiliates, and that my breach of such non-competition provisions may not be
adequately enforced through an action for damages. Therefore, in the event of a
breach or threatened breach of this non-competition clause, the Company and its
affiliates shall be entitled, in addition to all other remedies, to an
injunction and/or restraining order enjoining the breach or threatened breach of
the provisions of this section or otherwise to enforce these provisions against
violation, without the necessity of posting any bond, undertaking or other
security by the Company or its affiliates. I further agree that the prevailing
party shall be entitled to its reasonable attorneys' fees and costs incurred in
any action in which it is successful in establishing or defending against an
alleged violation of this section.
10. NOTIFICATION. I hereby authorize the Company to notify my actual or
future employers of the terms of this agreement and my responsibilities
hereunder.
12. NON-SOLICITATION. During, and for a period of one (1) year after
termination of, my provision of Services to the Company, I will not directly or
indirectly solicit or take away customers or suppliers (if the identity of such
customer or supplier or information about the customer or supplier relationship
between such customer or supplier and the Company is a trade
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72
secret or otherwise considered confidential information under California law),
or any employees or consultants of the Blaze Business for my own benefit or for
the benefit of any other party.
13. NAMES & LIKENESS RIGHTS, ETC. I hereby authorize the Company to use,
reuse, and to grant others the right to use and reuse, my name, photograph,
likeness (including caricature), voice, and biographical information, and any
reproduction or simulation thereof, in any media now known or hereafter
developed (including but not limited to film, video and digital or other
electronic media), both during and after my provision of Services to the
Company, for whatever purposes the Company deems necessary.
14. INJUNCTIVE RELIEF. I understand that in the event of a breach or
threatened breach of this Agreement by me the Company may suffer irreparable
harm and will therefore be entitled to injunctive relief to enforce this
Agreement.
15. GOVERNING LAW; SEVERABILITY. This Agreement will be governed and
interpreted in accordance with the internal laws of the State of California,
without regard to or application of choice of law rules or principles. In the
event that any provision of this Agreement is found by a court, arbitrator or
other tribunal to be illegal, invalid or unenforceable, then such provision
shall not be voided, but shall be enforced to the maximum extent permissible
under applicable law, and the remainder of this Agreement shall remain in full
force and effect.
16. NO DUTY TO EMPLOY. I understand that this Agreement does not
constitute a contract of employment or obligate the Company to employ me or to
use my services for any stated period of time. This Agreement shall be effective
as of the first day of my provision of Services to the Company under the
Transition Services Agreement, namely: August 14, 2001.
SERVICE PROVIDER: HNC SOFTWARE INC.:
______________________________________ ___________________________________
Signature of Service Provider Signature of Company Representative
______________________________________ ___________________________________
Print Name of Service Provider Title of Representative
______________________________________ ___________________________________
Date Date
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[BROKAT TECHNOLOGIES LOGO]
INDEPENDENT SOFTWARE VENDOR AGREEMENT
This Independent Software Vendor Agreement ("Agreement") is entered into between
Brokat Technologies Inc. ("Brokat") and Brokat AG ("ISV"), effective on the
Effective Date listed at the end of this Agreement.
1. DEFINITIONS.
(a) SOFTWARE means the current release (as of the Effective Date) of the
Brokat product(s) listed in Exhibit 1 in object code form, the printed and/or
online user documentation which Brokat makes generally available to end users,
and any full or partial copies of the Software made by or for ISV. As long as
ISV is receiving software maintenance and support services for the Software,
"SOFTWARE" will include any new releases (enhancements, patches) of the Software
which are provided by Brokat to its supported customers.
(b) LICENSED PRODUCT means the product that results from ISV's authorized
use of the Software to create run-time software, which is then embedded into and
distributed as part of the "ISV APPLICATION" described in Exhibit 1. The
"LICENSED PRODUCT" includes only the Brokat Advisor Engine, Brokat Advisor Rule
Server and Brokat Advisor Innovator Runtime and in all cases, no documentation
on Brokat Advisor Engine or Brokat Advisor Rule Server API's.
(c) ISV CUSTOMER means an end-user customer of ISV who licenses the ISV
Application.
2. LICENSE RIGHTS, DISTRIBUTION AND OWNERSHIP.
2.1 ISV'S INTERNAL USE. The Software is provided under two license types: a
development license and a run-time license, as further described in Exhibit 1.
When ISV orders a license for ISV's internal use, Brokat will invoice ISV for
the license and maintenance fees listed in Exhibit 1, and will grant ISV a
non-exclusive, non-transferable license to install and use the Software for
ISV's internal use for testing, development and for support of ISV Customers,
for the scope of license listed in ISV's order. ISV may copy the Software as
reasonably necessary to install and use the Software at ISV's facilities within
the TERRITORY/MARKET listed in Exhibit 1 and for backup. Except as expressly
provided in this Agreement, ISV has no right to:
(a) reverse engineer, reverse compile, disassemble, modify, adapt,
translate, or create derivative works from the Software without Brokat's prior
written consent, except to the extent required to obtain interoperability with
other independently created computer programs within the operating environment
identified in the order;
(b) transfer or assign the Software to other affiliated entities or to ISV
facilities outside the Territory without Brokat's prior written consent, which
will not unreasonably be withheld;
(c) copy the Software for distribution; or
ISV does have the right to deploy Licensed Product in an Application Service
Provider (ASP) context through data processing, time-sharing, outsourcing,
software leasing or rental services to others.
Brokat shall not provide Software to any competitor of ISV for any application
which competes with ISV Applications (see exhibit 1) for a period of one year
from the Effective Date:
Competitors are (as of the date of this Agreement, subject to change due to ISV
divestiture): Nokia, Ericsson, 724 Solutions, Trintech, Siemens, SBS, Nortel,
iPin, Portal, Amdocs, LHS/Sema, Geneva, Lucent.
2.2 DISTRIBUTION BY ISV. Brokat grants to ISV the nonexclusive right to:
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[BROKAT TECHNOLOGIES LOGO]
(a) use the Software to create the Licensed Product at ISV's facilities in
Territory; all such copies must contain the same proprietary rights notices as
appear on or in the master provided by Brokat, or such other notices as the
parties may agree in writing;
(b) distribute and sublicense the Licensed Product to ISV Customers in the
Territory/Market, only embedded in and distributed as part of the ISV
Application, subject to ISV's payment of the royalties in Exhibit 1;
(c) make and use a reasonable number of copies of the Licensed Product as
part of the ISV Application for non-revenue demonstration and evaluation
purposes in the Territory/Market on a royalty-free basis. If the demonstration
is conducted away from ISV's facility, the copies must be removed immediately on
completion of the demonstration. If the demonstration period exceeds a single
period of 30 days, ISV must pay the royalty fee listed in Exhibit 1 for such
extended demonstration. Copies of the Licensed Work used for evaluation purposes
must be time-limited for a period of not more than 90 days before the Licensed
Work becomes inoperable.
2.3 END-USER LICENSES. All sublicenses of the ISV Application which includes
or incorporates the Licensed Product must be in writing (including on-screen
licenses) and executed by the ISV Customer. Such sublicenses must contain terms
substantially similar to the following:
(a) All rights and title to the ISV Application remain with ISV and its
suppliers;
(b) The ISV Customer has the right to use the ISV Application for its
internal business use in the Territory, and has no right to reverse engineer,
reverse compile, disassemble, modify, adapt, or create derivative works from the
ISV Application, or transfer, distribute, rent or lease the ISV Application;
(c) The ISV Customer may copy the ISV Application only as needed for
installation and operation of the ISV Application within the scope of the
license granted by ISV; and
(d) The ISV Customer will not export or re-export the ISV Application in
violation of U.S. export laws.
In addition, ISV must prohibit the ISV Customer from using the Software to
create a rule project not directly related to the ISV Application, and ISV must
take reasonable steps to verify ISV Customers' compliance with this term.
2.4 PRODUCT LABELING. ISV will distribute and market the ISV Application
under ISV's trademarks and service marks. ISV will identify the Licensed Product
as a component of the ISV Application in the ISV Application "About" screens and
in the user documentation for the ISV Application, using the same proprietary
rights notices (copyright and trademark) as are used on and in the Licensed
Product as provided by Brokat to ISV. ISV shall not combine Brokat's trademarks
with any other trademarks. ISV shall not file trademark applications for any of
Brokat's trademarks or otherwise seek to register such trademarks. ISV will
provide to Brokat, upon request, such materials and information as Brokat may
reasonably require to verify ISV's compliance with this section.
Brokat grants to the ISV the right to use its "Beyond Personalization" trademark
solely for purposes associated with Licensed Product.
2.5 TITLE. Notwithstanding any provision to the contrary contained in this
Agreement, it is understood and agreed by the Parties that any software,
application service, equipment, and documentation provided by Brokat and all
intellectual property rights associated therewith (the "BROKAT TECHNOLOGY") is,
and will remain, the sole and exclusive property of Brokat and its suppliers and
successors and assigns and, except as otherwise specifically provided in this
agreement, no license, right, title, interest in and/or to such Brokat
Technology is granted to ISV by virtue of this Agreement and/or Brokat's
performance hereunder. As such, Brokat will continue to have the unfettered
right to utilize the Brokat Technology (and any portion or portions thereof) in
any manner as determined by Brokat in its sole and absolute discretion; and
unless otherwise specifically provided by this Agreement, Brokat will retain all
right, title and interest
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[BROKAT TECHNOLOGIES LOGO]
to any modifications made to the Brokat Technology, derivative works derived
from the Brokat Technology, and/or incorporating the Brokat Technology pursuant
to this Agreement, if any, (including, without limitation, any source code for
said modifications and the right to own all patents and copyrights relating
thereto) including, but not limited to, modifications to enable the Brokat
Technology to function on a different operating system. ISV hereby makes all
assignments necessary to accomplish the foregoing.
2.6 U. S. GOVERNMENT USERS. The Software and Licensed Product are commercial
computer software and documentation developed exclusively at private expense. If
acquired by or on behalf of a civilian agency, they will be subject to the terms
of this computer software license as specified in 48 C.F.R. 12.212 of the
Federal Acquisition Regulations and its successors. If acquired by or on behalf
of the Department of Defense, they will be subject to the terms of this
commercial computer software license as specified in 48 C.F.R. 227.7202-2, DFAR
Supplement and its successors. If ISV receives a request from any agency of the
U.S. Government to provide ISV Application with rights beyond those stated
above, ISV will notify Brokat of the scope of the rights requested and the
agency making the request, and Brokat will promptly, in its sole discretion,
accept or reject such request.
2.7 EXPORT. Brokat shall not directly or indirectly export, re-export, or
knowingly cause such export or re-export (including by download) the Software in
violation of U.S. laws, including without limitation the Export Administration
Act of 1979, as amended, any successor legislation and Export Administration
Regulations, to anyone on the United States Treasury Department's list of
Specially Designated Nationals or Blocked Persons or the United States Commerce
Department's Table of Denial Orders. If ISV performs such prohibited act(s),
directly or indirectly, Brokat will be entitled to terminate the provision of
services and products, as well as this Agreement, at Brokat's sole option, after
having allowed a cure period of 30 days and this cure period has elapsed
unsuccessfully. ISV agrees to the foregoing and represents and warrants that ISV
and its end users is not located in, under the control of, or a national or
resident of any such country or on any such list.
3. SOURCE CODE ESCROW
3.1 Brokat maintains and will continue to maintain during the term of this
Agreement a source code escrow deposit agreement ("Escrow Deposit Agreement")
for its Software with one or more commercial software escrow companies. As of
the Effective Date, the Escrow Deposit Agreement is with Data Securities
International, Inc. Brokat will provide a copy of the then-current Escrow
Deposit Agreement to ISV, with confidential information removed, upon ISV's
written request.
3.2 Brokat will add ISV as a beneficiary of the Escrow Deposit Agreement
within 30 days after ISV's request and ISV's payment of the escrow agent's fees
to be added and maintained as a beneficiary. If ISV discontinues paying for
product support for a Software product, or fails to pay the annual fee to the
escrow agent to be maintained as an escrow beneficiary, ISV will immediately be
removed as a beneficiary of the Escrow Deposit Agreement for such Software. The
source code will be released to ISV from escrow according to the procedure
described in the Escrow Deposit Agreement if Brokat: (a) ceases doing business
(except where the business is continued by a successor-in-interest), or (b)
discontinues offering technical support for the Software and does not offer
comparable support through a third party reasonably acceptable to ISV under
substantially similar terms.
3.3 If the source code is released from escrow, ISV will be licensed to use
the source code to support its development, sublicensing and support of ISV
Customers and end-users under the terms of Section 2. The source code may not be
released or disclosed to any third party. If the Software includes any
commercially available software licensed from a third party, then no source code
escrow deposit will be required for such third-party portion.
4. FEES AND PAYMENTS
4.1 ISV will pay the license fees, royalties and support fees listed in
Exhibit 1. ISV will maintain accurate records, for each version of the Licensed
Product, of the number of licenses issued during each
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[BROKAT TECHNOLOGIES LOGO]
reporting period. Within 45 days after the close of each calendar quarter, ISV
will provide a written statement to Brokat in the form attached as Exhibit 2.
ISV will submit payment of the license fees, royalties and support fees with the
report.
4.2 ISV will pay, in addition to the other amounts payable under this
Agreement, all local, state and federal excise, sales, use, personal property,
gross receipts and similar taxes (excluding taxes imposed on or measured by
Brokat's net income) levied or imposed by reason of the transactions under this
Agreement. ISV will, upon demand, pay to Brokat an amount equal to any such
taxes actually paid or required to be collected or paid by Brokat. Prices listed
in this Agreement are net of any withholding. If ISV is required to withhold a
portion of payments hereunder, then ISV will "gross-up" the amount payable under
this Agreement so that Brokat receives the full amount specified in this
Agreement, regardless of any withholding.
4.3 At Brokat's request (not more often than annually), ISV will provide a
written certification, signed by an authorized representative of ISV, verifying
that ISV's use of the Software and distribution of the Licensed Product are in
compliance with this Agreement. Brokat will have the right to conduct a
compliance review of ISV's distribution, tracking and reporting systems and
records, during business hours at ISV's facilities, with reasonable notice, not
more frequently than annually.
4.4 Brokat shall be entitled, upon four weeks prior written notice and using
an independent auditor reasonably approved by ISV, to examine copies of ISV's
records pertaining to the information necessary for enforcement of the rights
and obligations under this Agreement, but only to the extent Brokat identifies
the right it seeks to enforce. Any information received as a result of an audit
shall be considered Confidential Information. If ISV is discovered to have
understated any amounts in excess of ten percent (10%) or in the event Brokat
learns that ISV has materially breached this Agreement as determined by such
audit, then ISV shall bear the expense of such audit.
5. SUPPORT means the problem resolution support and software maintenance
services generally offered by Brokat to its end user customers for the Software.
At a minimum, Support will include
- telephone support to ISV during business hours (7:00am-5:00pm Pacific time,
Monday through Friday, excluding Brokat holidays)
- For software support circumstances where the Software prevents the Licensed
Work from functioning, Brokat agrees to provide 24 x7 support access and a
response within 24 hours.
- ISV's ability to report bugs by e-mail, fax and/or the Blaze Online Support
System (BOSS) web site at any time
- bug fixes and maintenance releases that are provided as part of Software
maintenance. Brokat reserves the right to charge an upgrade fee for major new
versions with significantly enhanced functionality. As long as ISV is paying the
Support Fees, ISV may provide such bug fixes and maintenance releases to
supported ISV Customers.
ISV is solely responsible for providing first-line support for the Licensed
Product to ISV Customers. Such support must be provided at the same level of
service and availability as ISV provides for the ISV Product. ISV will name one
primary and one backup support coordinator for the Software. All Support
requests from ISV to Brokat must be made through these support coordinators.
When Brokat makes a new release available, ISV may distribute only the new
release and must stop distributing the old version of the Licensed Product
within a reasonable period of time, not to exceed six months. As long as ISV
continues to pay the Support Fee, Brokat will continue to provide Support for a
non-current release of the Software for up to 24 months after the superseding
release.
6. CONFIDENTIAL INFORMATION.
6.1 "Confidential Information" means the Software, the Licensed Product and
all other non-public information which is marked as confidential or which should
reasonably be expected to be treated as
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[BROKAT TECHNOLOGIES LOGO]
confidential, including without limitation, development plans, and non-public
financial, customer and market information. Confidential Information does not
include information (a) already lawfully known to the recipient prior to
disclosure by the other party or developed by or for the recipient independently
of and without access to the Confidential Information, (b) generally known to
the public or (c) lawfully obtained by the recipient from any third party
without breach of any confidentiality obligations.
6.2 Each party will safeguard Confidential Information with reasonable
security means at least equivalent to measures that it uses to safeguard its own
proprietary information. Each party will use the Confidential Information only
as needed to fulfill its obligations hereunder. If either party is required to
disclose the other's Confidential Information by law, regulation or court order,
the party will notify the owner promptly of the requirement, and will work with
the owner to attempt to minimize the scope of required disclosure.
6.3 Within 14 days after the first production deployment of Licensed Work at
a customer of ISV, the parties agree to issue a joint press release announcing
the customer success story and the existence and general nature of the
relationship between Brokat and ISV. Brokat may also include ISV's name on a
list of Brokat's resellers, without implication of endorsement. Any other public
statement by either party about the other party requires the other party's prior
consent.
7. LIMITED WARRANTIES
7.1 WARRANTY TO ISV CUSTOMERS. ISV will not make any representations or
warranties regarding the Licensed Product that are inconsistent with or greater
than the warranties that Brokat makes to ISV regarding the Software. ISV is
solely responsible to ISV Customers for any warranty claim regarding the
Licensed Product. Brokat will provide support to ISV under Section 5 above for
support issues that ISV is unable to resolve with ISV Customers.
7.2 DISCLAIMER. ISV ACKNOWLEDGES AND AGREE THAT THE SOFTWARE IS PROVIDED ON
AN "AS IS" AND "AS AVAILABLE" BASIS AND ISV'S USE AND SALE OF THE SOFTWARE IS AT
ITS OWN RISK. BROKAT MAKES NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, UNDER
THIS AGREEMENT AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ANY
WARRANTIES REGARDING FITNESS FOR PURPOSE, MERCHANTABILITY, ACCURACY OF DATA, OR
CORRESPONDENCE WITH DESCRIPTION, NONINFRINGEMENT, OR TITLE. FURTHER, EXCEPT AS
MAY BE EXPRESSLY SET FORTH, BROKAT DOES NOT WARRANT, GUARANTEE, OR MAKE ANY
REPRESENTATIONS THAT THE SOFTWARE WILL BE FREE FROM BUGS OR THAT THEIR USE WILL
BE UNINTERRUPTED OR WITHOUT DELAY OR WITHOUT INFILTRATION OR COMPROMISE OF
SECURITY SYSTEMS RELATED TO THE SOFTWARE.
8. PROPRIETARY RIGHTS INDEMNIFICATION
8.1 Brokat will defend, indemnify and hold harmless ISV from and against
direct pecuniary damages (exclusive of consequential damages) actually suffered
and incurred by ISV as a direct and proximate result of a third party suit,
claims, or proceeding alleging that the Software (excluding any third party
software or hardware, whether or not delivered by Brokat) infringemes of any
registered patent, trademark, copyright or trade secret of the United States or
Canada existing as of the Effective Date, provided that ISV gives Brokat (a)
prompt written notice of any such claim, and (b) full authority and control of
the settlement and defense of the claim, and (c) reasonable assistance, at
Brokat's request and expense, to defend or settle such claim.
8.2 Brokat has no obligation to ISV for any infringement claim which arises
from (a) Brokat's compliance with specifications or requirements provided by
ISV, or (b) any modification to the Software by anyone other than Brokat, or (c)
use of the Software in conjunction with third party software, hardware or data,
or (d) use not in compliance with Software documentation or other unauthorized
or undeintended use if the infringement would not have occurred without such
third party software, hardware or data or misuse.
8.3 If all or any material part of the Software (including any equipment or
software provided by Brokat) is, or in the opinion of Brokat may become the
subject of a claim covered by this Section, Brokat
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[BROKAT TECHNOLOGIES LOGO]
may at its own expense promptly (i) replace with a compatible, functionally
equivalent, non-infringing product or service, (ii) modify or take other action
so that the product or service becomes non-infringing, or (iii) procure the
right of ISV to continue using the Software, all without any additional cost to
ISV and at Brokat's sole and absolute discretion.
8.4 This Section 8 states the entire obligation of Brokat and the exclusive
remedies of ISV with respect to any alleged or actual patent, trademark,
copyright, trade secret or other intellectual property right infringement.
9. LIMITED LIABILITY AND REMEDIES
9.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT,
SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, EXCEPT TO THE EXTENT SUCH DAMAGES ARE:
THE RESULT OF A BREACH OF BROKAT'S INTELLECTUAL PROPERTY RIGHTS BY ISV.
9.2 BROKAT'S LIABILITY TO ISV SHALL NOT EXCEED THE AMOUNT PAID BY ISV DURING
THE PRECEDING TWELVE (12) MONTH PERIOD FROM THE DATE THE EVENT GIVING RISE TO
THE CLAIM OCCURRED. EXCEPT FOR THE FOLLOWING CLAIMS FOR WHICH NO LIMIT SHALL
APPLY:
a. DAMAGES AWARDED IN A THIRD PARTY CLAIM FOR WHICH THE ISV IS
INDEMNIFIED BY BROKAT UNDER SECTION 8; or
b. BROKAT'S COSTS TO DEFEND OR SETTLE A THIRD PARTY CLAIM FOR WHICH
ISV IS INDEMNIFIED BY BROKAT UNDER SECTION 8.
10. TERM AND TERMINATION
10.1 Term. Unless terminated earlier pursuant to Section 10.2 below, the
initial term of this Agreement is for 3 years after the Effective Date.
Thereafter, the Agreement will continue for automatic annual renewal terms of
one (1) year unless either party gives 30 days' written notice of termination at
any time.
10.2 This Agreement may be terminated by either party if the other party is
in material breach of its obligations under this Agreement (a material breach is
a breach of a material term in this Agreement), and the breach is not cured
within 30 days after the non-breaching party gives the breaching party written
notice of the breach, except that the cure period for any failure to pay any
fees shall only be 15 days.
10.3 On expiration or termination of this Agreement, all Confidential
Information will be destroyed or returned to the owner within 30 days of the
date of termination. ISV must destroy all full or partial copies of the Software
under ISV's control within ten days after termination. End-user sublicenses
validly issued to ISV Customers will survive any expiration or termination of
this Agreement.
10.4 This Section 10 and the following Sections will survive expiration or
termination of this Agreement: 2.5 (Title), 6 (Confidential Information), 7
(Limited Warranties), 8 (Proprietary Rights Indemnification), 9 (Limited
Liability and Remedies), and 11.3 (Governing Law).
11. GENERAL TERMS
11.1 Assignment. Neither party may, without the prior written consent of the
other party which may not be unreasonably withheld or delayed, assign or
transfer all or any part of this Agreement to any third party, whether by reason
of acquisition or merger or otherwise. Each party will give the other party
prompt written notice of any other acquisition or merger.
11.2 Force Majeure. Neither party will be deemed in default of this Agreement
to the extent that their performance (other than payment) or attempts to cure
any breach are delayed or prevented by reason of any cause beyond the control of
such party, provided that such party gives the other party prompt written notice
thereof, and uses its best efforts to cure the delay.
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[BROKAT TECHNOLOGIES LOGO]
11.3 Governing Law. This Agreement will be construed pursuant to the
substantive law of the State of California, without reference to principles of
conflicts of law, to international law, including without limitation the 1980
United Nations Convention on Contracts for the International Sale of Goods, as
revised, or to the Uniform Computer Information Transactions Act as adopted in
any jurisdiction.
11.4 Notices. All notices, consents or other communications provided for
under this Agreement will be in writing and will be deemed given if delivered by
overnight courier (effective on the date of delivery) or by mail (effective on
the date of receipt). Until notice of change of address has been given in the
manner provided in this paragraph, notices will be sent to the notice address at
the end of this Agreement.
11.5 Modification and Waiver. This Agreement may not be modified or amended
except by a writing which is signed by authorized representatives of each of the
parties. Either party's failure to exercise any right or the waiver by either
party of any breach, will not prevent a subsequent exercise of such right or be
deemed a waiver of any subsequent breach of the same or any other term of the
Agreement.
11.6 Severability. Each provision of this Agreement is intended to be
severable and if any provision is determined by a court of competent
jurisdiction to be illegal or invalid or unenforceable for any reason
whatsoever, such provision will be severed from this Agreement and will not
affect the legality or validity or enforceability of the remainder of this
Agreement or any other provision hereof.
11.7 Entire Agreement. This Agreement constitutes the sole and entire
agreement of the parties with respect to the subject matter hereof and
supersedes any prior oral or written promises or agreements. There are no
promises, covenants or undertakings other than those expressed in this
Agreement. This Agreement supersedes any conflicting terms in any purchase order
or acknowledgment, or in any license agreement included with or incorporated in
the Software.
11.8 Effective Date. The Effective Date of this Agreement is July 9,
2001______________________.
AGREED:
BROKAT TECHNOLOGIES INC. (Brokat) Brokat A (ISV)
By: By:
------------------------------- -------------------------------
Printed Printed
Name: Xxxx Xxxxxxx Name: Xxxxxxx Xxxxxx
----------------------------- -----------------------------
Title: Chief M3 Officer Title: Chief Technology Officer
------------------------------- -------------------------------
Notice Notice
Address: 000 Xxxxxxx Xxxx, Xxx 000 Address:
Xxx Xxxx, XX 00000
Attn: General Counsel
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[BROKAT TECHNOLOGIES LOGO]
EXHIBIT 1
SOFTWARE:
Brokat Advisor Builder
Brokat Advisor Innovator Workbench
Brokat Advisor Rule Server and Engine - Deployment
Brokat Advisor Innovator Runtime
In addition, ISV shall have the option to license at terms no less favorable
than this Agreement future Brokat Advisor-based software products developed by
Brokat for rules-based personalization of end user-directed content
In addition, the ISV shall receive a softcopy of the training materials for the
Software as of the Effective Date for internal use only.
ISV APPLICATION:
The Software may be distributed by ISV only as part of the following ISV
Application: {describe}
Brokat M Business Platform 5.0 and later versions; specifically and only
embedded within the following components:
Brokat PaymentWorks
Brokat TrustWorks also known as Brokat SignatureWorks Brokat LocationWorks
Brokat Profile Exchange Brokat Alerting Service Brokat Orchestration Service
Brokat Interaction Service Brokat Profile Manager Brokat Virtual Personal
Assistant Works
These products (which may be subsequently renamed) are described in the attached
document: "Brokat M-Business Platform 5.0"
LICENSE FEES AND ROYALTIES FOR SOFTWARE:
- Price to ISV for licenses for ISV's internal use:
- ISV shall pay US$25,000 per annum starting on the Effective Date as a
non-refundable technology licensing fee to develop Licensed Software
- Amount of royalties to be paid by ISV for sublicenses of the Software to end
users:
- ISV shall pay a non-refundable deployment royalty fee of $2,975,000 by the
Effective Date.
Note: ISV may set the price for licenses distributed to customers.
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[BROKAT TECHNOLOGIES LOGO]
SUPPORT FEE TO ISV:
ISV shall pay Brokat 9.0% of the non-refundable deployment royalty fee and
non-refundable technology license fee as royalty maintenance and support fee
during the term as determined by the Payment Schedule below. Such maintenance
will be calculated and paid on a quarterly basis, and based upon customer
deployment amounts as noted below.
Non-refundable royalty fee: $2,975,000
Term (quarters) of Agreement: 12
Non-refundable Royalty Support & Maintenance Fee Rate: 9.0%
Minimum quarterly deployment rate - year 2 900000 1200000 1500000 1700000
Minimum quarterly deployment rate - year 3 2100000 2300000 2650000 2975000
Support payments based upon Deployment Rate Q1 Q2 Q3 Q4 Total
Year 1 Quarterly Support Payments 0 0 6750 13500 20250
Year 2 Quarterly Support Payments 20250 27000 33750 38250 119250
Year 3 Quarterly Support Payments 47250 51750 59625 66937.5 225562.5
Royalty Rate 0.09
TERRITORY/MARKET:
No restrictions (except for compliance with Section 2.7)
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[BROKAT TECHNOLOGIES LOGO]
EXHIBIT 2
ROYALTY REPORTING FORM
BROKAT TECHNOLOGIES INC.
QUARTERLY SALES & ROYALTY REPORT FOR XXXXXX.
FOR THE PERIOD ENDING:
NOTE: THE FOLLOWING INFORMATION IS TO BE PROVIDED WITHIN 15 CALENDAR
DAYS AFTER THE CLOSE OF EACH QUARTER
CUSTOMER NAME PRODUCT LICENSE LICENSE QTY PRICING TIER ROYALTY AMT NET SALES PRICE AMOUNT DUE
Customer A Blaze Advisor
Customer B Blaze Advisor
----------- ------------ ----------- --------------- ----------
TOTALS: 0 0 0 0
=========== ============ =========== =============== ==========
CUSTOMER NAME SUPPORT AND MAINTENANCE LICENSE QTY SUPPORT ID # NET SALES PRICE AMOUNT DUE
Customer A Blaze Advisor Support
Customer B Blaze Advisor Support
----------- ------------ --------------- ----------
TOTALS: 0 0 0
=========== ============ =============== ==========
NOTES AND COMMENTS:
Submit to: Brokat Technologies Inc.
Attention: Revenue Accounting
000 Xxxxxxx Xxxx, Xxx 000
Xxx Xxxx, XX 00000
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EXHIBIT G
PATENT APPLICATIONS ASSIGNMENT
This Patent Applications Assignment (this "ASSIGNMENT") is made and
entered into as of August 15, 2001 by and between Brokat Technologies, Inc. a
Delaware corporation, having a place of business at 000 Xxxxxxx Xxxxxxxxx, Xxx
Xxxx, Xxxxxxxxxx 00000 ("ASSIGNOR"), and HNC Software Inc., a Delaware
corporation, having a place of business at 0000 Xxxxxxxxxxx Xxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000 ("ASSIGNEE").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and pursuant to the Asset Purchase Agreement
dated August 15, 2001 between Assignor and Assignee, Assignor has agreed to, and
does hereby, sell, assign, and transfer to Assignee, for itself and its
successors, transferees, and assignees, the following:
1. The entire worldwide right, title, and interest in all inventions and
improvements ("SUBJECT MATTER") that are disclosed in the following applications
("PATENT RIGHTS"):
COUNTRY/ PATENT APPLICATION
ORIGIN SERIAL NO. TITLE FILING DATE
------- ------------------- ----- -----------
USA 4,752,889 Dynamic, interactive display system August 18, 1986
for a knowledge base
USA 60/203,073 Flexible and adaptable rule May 9, 2000
architecture and development
environment
USA 60/231,161 Question framework with 24/7 operation September 7, 2000
USA 09/751,535 Method and system for implementing December 29, 2000
rules and ruleflow
USA 09/852,609 Approach for re-using business rules May 9, 2001
PCT PCT/US01/15024 Approach for re-using business rules May 9, 2001
USA 09/852,610 Approach for generating rules May 9, 2001
PCT PCT/US01/15025 Approach for generating rules May 9, 2001
2. The entire worldwide right, title, and interest in and to (a) the
Patent Rights, including any right of priority; (b) any divisional,
continuation, substitute, renewal, reissue, and other related applications
thereto which have been or may be filed in the United States or elsewhere in the
world; (c) any patents which may be granted on the applications set forth in (a)
and (b) above; and (d) the right to xxx in its own name and to recover for past,
present and/or future infringement of any or all of any applications or patents
issuing therefrom.
Assignor agrees to do the following, when requested, and without further
consideration, in order to carry out the intent of this Assignment: (a) execute
all oaths, assignments, powers of attorney, applications, and other papers
necessary or desirable to fully secure to Assignee the rights, titles and
interests herein conveyed; (b) communicate to Assignee all known facts relating
to the Subject Matter of the above-identified patent applications; and (c)
generally do all lawful acts that Assignee shall consider desirable for
securing, maintaining, and enforcing worldwide
1
84
patent protection relating to the Subject Matter of the above-identified patent
applications and for vesting in Assignee the rights, titles, and interests
herein conveyed. Assignor hereby appoints Assignee as Assignor's
attorney-in-fact (this appointment being irrevocable and coupled with an
interest) to execute such documents on its behalf. Assignor further agrees to
provide any successor, transferee, assignee, or legal representative of Assignee
with the benefits and assistance provided to Assignee hereunder.
Assignor represents that Assignor has sufficient right, title, and
interest to make the conveyances set forth herein, and covenants with Assignee
that the Assignor has made or will make hereafter no assignment, grant,
mortgage, license, or other agreement affecting the rights, titles, and
interests herein conveyed.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
2
85
IN WITNESS WHEREOF, the parties have caused this Patent Applications Assignment
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
BROKAT TECHNOLOGIES, INC.
By: __________________________
Name:
Title:
State of California
County of __________
On this ______ day of August, 2001, before me, ____________________, a Notary
Public in and for the State of California, personally appeared
____________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal. _____________________________________
Notary Public
HNC SOFTWARE INC.
By: ___________________________
Name: _________________________
Title: __________________________
State of California
County of Santa Xxxxx
On this ______ day of August, 2001, before me, ____________________, a Notary
Public in and for the State of California, personally appeared
_______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal. _____________________________________
Notary Public
3
86
EXHIBIT H
XXXX ASSIGNMENT
This Xxxx Assignment (this "ASSIGNMENT") is made and entered into as of
August 15, 2001 by and between Brokat Technologies, Inc. a Delaware corporation,
having a place of business at 000 Xxxxxxx Xxxxxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000
("ASSIGNOR"), and HNC Software Inc., a Delaware corporation, having a place of
business at 0000 Xxxxxxxxxxx Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000
("ASSIGNEE").
RECITALS
A. Assignor owns certain trademarks and service marks identified in
Attachment A (collectively, the "MARKS") and the applications and registrations
listed in Attachment A hereto (the "APPLICATIONS AND REGISTRATIONS").
B. In connection with that Asset Purchase Agreement dated August 15,
2001 between Assignor, Assignee and the other parties thereto (the "PURCHASE
AGREEMENT"), Assignor and Assignee desire to transfer all right, title and
interest in and to the Marks and the Applications and Registrations from
Assignor to Assignee.
NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. REPRESENTATIONS AND WARRANTIES BY ASSIGNOR. Without limiting or
amending Assignor's representations and warranties made in the Purchase
Agreement, Assignor represents and warrants that it owns all right, title and
interest in and to the Marks and the Applications and Registrations, and that it
has the full power and authorization to execute and perform this Assignment and
to make the assignments and transfers contained herein of the Marks,
Applications and Registrations.
2. TRANSFER OF RIGHTS BY ASSIGNOR. Assignor hereby confirms that it has
under the Purchase Agreement agreed to, and Assignor does hereby, assign,
transfer and convey to Assignee, its successors, assigns and other legal
representatives, all right, title and interest, including common law rights, in
the United States of America and all other countries and jurisdictions of the
world, in and to each of the Marks and each of the Applications and
Registrations, together with the goodwill of the business symbolized by said
Marks and that portion of the business which is ongoing and existing to which
the Marks pertain, and further including all claims for damages by reason of
past, present and/or future infringement of the Marks, with the right to xxx
for, and collect, the same for Assignee's own use and benefit. Assignor hereby
appoints Assignee as Assignor's attorney-in-fact (this appointment being
irrevocable and coupled with an interest) to execute such documents on its
behalf.
1
87
IN WITNESS WHEREOF, the parties have caused this Xxxx Assignment to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
BROKAT TECHNOLOGIES, INC.
By: __________________________
Name:
Title:
State of California
County of __________
On this ______ day of August, 2001, before me, ____________________, a Notary
Public in and for the State of California, personally appeared
____________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal. _____________________________________
Notary Public
HNC SOFTWARE INC.
By: ___________________________
Name: _________________________
Title: __________________________
State of California
County of Santa Xxxxx
On this ______ day of August, 2001, before me, ____________________, a Notary
Public in and for the State of California, personally appeared
_______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal. _____________________________________
Notary Public
2
88
ATTACHMENT A TO XXXX ASSIGNMENT
REGISTERED MARKS
------------------------ ------------ ------------- ---------------
XXXX COUNTRY SERIAL NO. REG. NO
------------------------ ------------ ------------- ---------------
BLAZE ADVISOR European 1463603 n/a
Union
------------------------ ------------ ------------- ---------------
BLAZE ADVISOR Brazil 822036126 n/a
------------------------ ------------ ------------- ---------------
BLAZE ADVISOR Switzerland 00499/2000 474.313
------------------------ ------------ ------------- ---------------
BLAZE ADVISOR China 0000000000 1562231
------------------------ ------------ ------------- ---------------
XXXXX XXXXXXX Xxxxxx 000000 n/a
------------------------ ------------ ------------- ---------------
Blaze Software logo China 2000007438 1562230
and "speedy bee" logo
------------------------ ------------ ------------- ---------------
Blaze Software logo Switzerland 00498/2000 474.278
and "speedy bee" logo
------------------------ ------------ ------------- ---------------
Blaze Software logo Australia 820220 n/a
and "speedy bee" logo
------------------------ ------------ ------------- ---------------
C/S ELEMENTS France 94514202 n/a
------------------------ ------------ ------------- ---------------
C/S ELEMENTS China 950106019 n/a
------------------------ ------------ ------------- ---------------
C/S ELEMENTS Germany N265129WZ n/a
------------------------ ------------ ------------- ---------------
C/S ELEMENTS USA 74576327 2074589
------------------------ ------------ ------------- ---------------
DATA ACCESS ELEMENT USA 75076620 2074683
------------------------ ------------ ------------- ---------------
DISTRIBUTED MESSAGING USA 75076601 2078196
ELEMENT
------------------------ ------------ ------------- ---------------
ELEMENTS ENVIRONMENT USA 74732437 2090205
------------------------ ------------ ------------- ---------------
EXPERTFRAME USA 75640066 2,458,049
------------------------ ------------ ------------- ---------------
INTELLIGENT RULES USA 75076618 2076582
ELEMENT
------------------------ ------------ ------------- ---------------
INTEROPERABLE OBJECTS USA 75076619 2076582
ELEMENT
------------------------ ------------ ------------- ---------------
ND logo USA 74576333 1921737
74732436 2002918
------------------------ ------------ ------------- ---------------
ND logo France 94514205 n/a
95589513
------------------------ ------------ ------------- ---------------
ND logo Germany N265139WZ n/a
------------------------ ------------ ------------- ---------------
ND logo Japan HEI632719 n/a
------------------------ ------------ ------------- ---------------
NEURON DATA China 950106021 n/a
------------------------ ------------ ------------- ---------------
NEURON DATA France 94514201 n/a
95589512
------------------------ ------------ ------------- ---------------
NEURON DATA European 208389 n/a
Union
------------------------ ------------ ------------- ---------------
NEURON DATA USA 74732440 2068537
74576334 1980504
------------------------ ------------ ------------- ---------------
89
------------------------ ------------ ------------- ---------------
NEURON DATA USA 74732437 2224508
ELEMENTS
ENVIRONMENT
------------------------ ------------ ------------- ---------------
NEXPERT USA 73632865 1445140
73592557 1453986
------------------------ ------------ ------------- ---------------
NEXPERT France 94514203 n/a
------------------------ ------------ ------------- ---------------
NEXPERT Germany N265179WZ n/a
------------------------ ------------ ------------- ---------------
NEXPERT Great 1567708 n/a
Britain
------------------------ ------------ ------------- ---------------
NEXPERT OBJECT France 94514204 n/a
------------------------ ------------ ------------- ---------------
NEXPERT OBJECT Germany N265189WZ n/a
------------------------ ------------ ------------- ---------------
NEXPERT OBJECT Great 1567706 n/a
Britain
------------------------ ------------ ------------- ---------------
NEXPERT OBJECT USA 74576332 1963840
------------------------ ------------ ------------- ---------------
OOSCRIPT USA 75076617 2168065
------------------------ ------------ ------------- ---------------
OPEN INTERFACE ELEMENT China 950106020 n/a
------------------------ ------------ ------------- ---------------
OPEN INTERFACE ELEMENT France 94527615 n/a
------------------------ ------------ ------------- ---------------
OPEN INTERFACE ELEMENT Japan XXX000000 n/a
------------------------ ------------ ------------- ---------------
OPEN INTERFACE ELEMENT USA 75076611 2096802
74576335 1956920
------------------------ ------------ ------------- ---------------
SMART ELEMENTS USA 74576329 1956919
------------------------ ------------ ------------- ---------------
SMART ELEMENTS China 950106018 n/a
------------------------ ------------ ------------- ---------------
SMART ELEMENTS France 94527616 n/a
------------------------ ------------ ------------- ---------------
SMART ELEMENTS Japan HEI637217 n/a
------------------------ ------------ ------------- ---------------
WEBCONTROL USA 75076615 n/a
------------------------ ------------ ------------- ---------------
WEB ELEMENT USA 75076612 2076580
------------------------ ------------ ------------- ---------------
PENDING MARKS
-------------------- ----------- ---------------
XXXX COUNTRY SERIAL NO.
-------------------- ----------- ---------------
SMARTLETS USA 75783632
-------------------- ----------- ---------------
"speedy bee" logo USA 75893670
-------------------- ----------- ---------------
90
EXHIBIT I
DOMAIN NAME ASSIGNMENT
This Domain Name Assignment (this "ASSIGNMENT") is made and entered into
as of August 15, 2001 by and between Brokat Technologies, Inc. a Delaware
corporation, having a place of business at 000 Xxxxxxx Xxxxxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000 ("ASSIGNOR"), and HNC Software Inc., a Delaware corporation,
having a place of business at 0000 Xxxxxxxxxxx Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx
00000 ("ASSIGNEE").
RECITALS
A. Assignor has registered with various registrars (the "REGISTRARS"),
and is the current owner of, the domain names listed in Attachment A attached
hereto (the "DOMAIN NAMES") and the applications and registrations listed in
Attachment A.
B. In connection with that Asset Purchase Agreement dated August __,
2001 between the parties hereto (the "ASSET PURCHASE AGREEMENT"), Assignee is
desirous of acquiring the Domain Names from Assignor and Assignor is desirous of
assigning the Domain Names from Assignee.
C. Assignor and Assignee are agreeable to a transfer from Assignor to
Assignee of the Domain Names and the applications and registrations listed in
Attachment A.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES BY ASSIGNOR. Without limiting or
amending Assignor's representations and warranties made in the Purchase
Agreement, Assignor represents and warrants to Assignee, its successors, assigns
and other legal representatives that Assignor owns all right, title and interest
in and to the Domain Names and the applications and registrations listed in
Attachment A, and that it has the full power to enter into and perform this
Assignment and to make the assignments and transfers of the Domain Names and
such applications and registrations contained herein.
2. TRANSFER OF RIGHTS BY ASSIGNOR. Assignor hereby assigns and
transfers to Assignee all of its right, title and interest worldwide in and to
all of the Domain Names and all of the applications and registrations listed in
Attachment A, together with any goodwill associated therewith.
3. TRANSFER OF DOMAIN NAMES BY ASSIGNOR. Without limiting or amending
Assignor's representations and warranties made in the Asset Purchase Agreement,
Assignor represents and warrants to Assignee, its successors, assigns and other
legal representatives that Assignor has taken the steps required by the
procedures promulgated by the Registrars with which the Domain Names have been
registered to transfer the Domain Names to Assignee. Assignor agrees, without
further consideration, to provide or execute such other information or documents
and to take such other steps as may be reasonably necessary or appropriate to
accomplish the assignment and transfer to Assignee of the Domain Names and the
applications and registrations listed in Attachment A upon Assignee's reasonable
request. Assignor hereby appoints Assignee as Assignor's attorney-in-fact (this
appointment being irrevocable and coupled with an interest) to execute such
information or documents on its behalf.
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IN WITNESS WHEREOF, the parties have caused this Domain Name Assignment
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
BROKAT TECHNOLOGIES, INC.
By: __________________________
Name:__________________________
Title:__________________________
State of California
County of __________
On this ______ day of __________, 2001, before me, ____________________, a
Notary Public in and for the State of California, personally
appeared ____________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal. _____________________________________
Notary Public
HNC SOFTWARE INC.
By: ___________________________
Name: _________________________
Title: __________________________
State of California
County of Santa Xxxxx
On this ______ day of __________, 2001, before me, ____________________, a
Notary Public in and for the State of California, personally appeared
_______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal. _____________________________________
Notary Public
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ATTACHMENT A TO DOMAIN NAME ASSIGNMENT
DOMAIN NAMES
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xxxxxxxxx.xx.xx
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xxxxxxxxxxxxx.xx.xx
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xxxxxxxx.xxx
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xxxxxxxxxxxxxxxxxx.xxx
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xxxx.xxx
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xxxxxx.xxx
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xxxxxxxxxx.xx.xx
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xxxxxxxxxx.xxx
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xxxxxxxxxxxxx.xxx
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EXHIBIT J
CONTINUING GUARANTEE
This Continuing Guarantee (this "GUARANTEE") is made and given as of
August 15, 2001 (the "EFFECTIVE DATE"), by Brokat Technologies
Aktiengesellschaft, an Aktiengesellschaft organized and existing under the laws
of the Federal Republic of Germany ("BROKAT"), in favor of HNC Software Inc., a
Delaware corporation ("HNC"). Capitalized terms used and not defined herein
shall have the meanings given to them in the Purchase Agreement (as defined
below).
R E C I T A L S
A. Brokat Technologies, Inc., a Delaware corporation ("BTI") is an
indirect subsidiary of Brokat.
B. Pursuant to an Asset Purchase Agreement dated as of the Effective
Date between BTI and HNC (the "PURCHASE AGREEMENT"), BTI desires to sell to HNC
assets of BTI related to BTI's "Blaze Business" (as defined in the Purchase
Agreement) (the "PURCHASED ASSETS"). All capitalized terms not defined in this
Agreement will have the same meaning given to such terms in the Purchase
Agreement.
C. HNC is willing to purchase the Purchased Assets and to assume the
Assumed Liabilities of the Blaze Business only on the condition that Brokat will
enter into, execute and deliver this Guarantee whereby Brokat will guarantee to
HNC the performance of BTI's obligations under the Purchase Agreement,
including, without limitation, BTI's indemnification obligations under Article
10 of the Purchase Agreement, BTI's covenants and other agreements and
obligations under the Purchase Agreement. Brokat is familiar with BTI's
obligations under the Purchase Agreement and is willing to provide such a
guarantee to HNC.
NOW, THEREFORE, as a material inducement, condition and consideration to
HNC to enter into the Purchase Agreement, to purchase the Purchased Assets and
to assume the Assumed Liabilities of the BTI as provided under the Purchase
Agreement, Brokat hereby agrees with HNC as follows:
1. GUARANTEE.
(a) Subject to the terms and conditions of this Agreement, as a
material inducement, condition and consideration for HNC to enter into the
Purchase Agreement, to agree to pay BTI the consideration provided for the
Purchased Assets under the Purchase Agreement and to assume the Assumed
Liabilities, which HNC is unwilling to do without Brokat's agreements and
guarantee hereunder, Brokat hereby guarantees and promises, subject to the
limitations set forth in Article 10 of the Purchase Agreement, to (a) pay
in United States Dollars, when due, any and all amounts owed by BTI to HNC
pursuant to or arising from (i) BTI's indemnification and other
obligations under Article
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10 of the Purchase Agreement or (ii) otherwise arising from any breach or
default of BTI's representations and warranties, or failure by BTI to
perform when due, any of its covenants or other obligations under the
Purchase Agreement and (b) perform any and all obligations of BTI under
the Purchase Agreement which are not performed by BTI when due in
compliance with the Purchase Agreement (collectively, the "OBLIGATIONS"),
if and when such Obligations become owed by BTI or are unperformed when
due, or if BTI is in default regarding any of such Obligations. Brokat
further agrees to pay all reasonable costs and expenses (including, but
not limited to, court costs and reasonable attorneys' fees) paid or
incurred by HNC in successfully enforcing this Guarantee. This Guarantee
is absolute, unconditional and continuing and shall remain in effect until
all of the Obligations shall have been fully discharged through payment or
otherwise, at which time this Guarantee shall terminate and be of no
further force or effect, and, prior to such termination, Brokat may not
revoke or terminate this Guarantee without the express written consent of
HNC. Each Obligation shall cease to be an Obligation only when it is fully
discharged through payment or otherwise.
(b) Notwithstanding the provisions of Section 1(a) above, HNC agrees
that, in exercising HNC's indemnification rights under Article 10 of the
Purchase Agreement, HNC shall first seek recovery of Damages against the
Retained Amount before seeking any recovery of such Damages from Brokat
pursuant to this Agreement; provided that if HNC seeks recovery of Damages
on a Claim in an amount in excess of the then-remaining Retained Amount,
then HNC may seek such recovery from both the Retained Amount and from
Brokat pursuant to this Agreement.
2. REPRESENTATIONS AND WARRANTIES BY BROKAT.
2.1 Brokat hereby represents and warrants to HNC that:
(a) Brokat is an Aktiengesellschaft duly incorporated,
validly existing and in good standing under the laws of the Federal Republic of
Germany. Brokat has all necessary corporate power and authority and all
necessary governmental licenses, authorizations, permits, consents and approvals
to own, lease and operate its properties and to carry on its business as now
conducted. Brokat has all necessary corporate power and authority to enter into
this Guarantee and to carry out its obligations hereunder.
(b) The execution, delivery and performance by Brokat
of this Guarantee have been duly and validly authorized by all necessary
corporate action and approvals on the part of Brokat (which action and approvals
have been obtained and carried out in compliance with applicable law and
Brokat's organizational documents, as amended to date).
(c) The execution, delivery and performance by Brokat
of this Guarantee require no consent, approval, authorization or other action by
or in respect of, or filing with, any third party or any Governmental Authority.
(d) The execution, delivery and performance by Brokat
of this Guarantee do not and will not: (i) violate or conflict with any
provision of the organizational
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documents of Brokat; (ii) violate or conflict with any existing law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to Brokat; or (iii) result in a violation or breach by Brokat of,
conflict with, or constitute a default (or an event which with the giving of
notice or the lapse of time or both, would become a breach or default) by Brokat
(or give rise to any right of termination, rescission, amendment, cancellation,
payment or acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture (including the Indenture, dated as of March 28,
2000, by and among Brokat and the Bank of New York, as trustee, with respect to
Brokat's 11 1/2% Senior Notes due 2010), license, franchise, permit, agreement,
lease or other contract, instrument or obligation to which Brokat is a party;
(e) there is no litigation, including, without
limitation, any claim, action, suit, investigation or proceeding of any nature
pending or threatened, at law or in equity, by way of arbitration or before any
court or other Governmental Authority that may adversely affect, contest or
challenge Brokat's authority, right or ability to perform its obligations under
the Guarantee. To Brokat's knowledge, there are no judgments, decrees,
injunctions or orders of any Governmental Authority or arbitrator pending or
binding against Brokat which would impair or adversely affect Brokat's
performance of its obligations under the Guarantee.
(g) this Guarantee has been duly and validly executed
by Brokat and constitutes the legal, valid and binding obligation of Brokat and
is enforceable against Brokat in accordance with its terms.
2.2 Brokat acknowledges that HNC has accepted this Guarantee in
full reliance on the representations and warranties set out in this Section 2.
3. NO IMPAIRMENT OF BROKAT'S LIABILITY. The liability of Brokat
hereunder shall in no event be affected or impaired by any of the following, any
of which may be done or omitted by HNC from time to time, without notice to or
the consent of Brokat: (a) any extension by HNC of the time for payment or
performance of any of the Obligations; (b) any acceptance by HNC of any
collateral or security for any of the Obligations; or (c) any invalidity or
unenforceability of all or any part of the Obligations against BTI, or of any
collateral security for the Obligations.
4. SUBROGATION, REIMBURSEMENT AND SIMILAR RIGHTS. So long as there are
any Obligations, Brokat shall not have any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution, indemnification, or
participation in any claim, right, or remedy of HNC against BTI or any security
which HNC now has or hereafter acquires, whether or not such claim, right or
remedy arises in equity, under contract, by statute, under common law, or
otherwise.
5. PAYMENTS AND TAXES. All sums payable by Brokat under this Guarantee
shall be paid to HNC free and clear of, and without any deduction for, all
deductions, Liens or withholdings whatsoever save only those as may be required
by law or regulation. If any deduction or withholding is required by any law or
regulation in respect of any payment due from Brokat under this Guarantee, such
deduction or withholding shall be the responsibility of
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Brokat and Brokat shall pay all such deduction or withholding amounts and
indemnify HNC for any loss with respect to such amounts. The sum payable by
Brokat shall be increased so that, after making such deduction or withholding so
required, Brokat shall pay HNC and HNC shall receive and be entitled to retain
on the due date for payment a net amount equal to the amount which it would have
received had no such deduction or withholding been required to be made. Promptly
after Hop's written request, Brokat shall deliver or procure the delivery to HNC
of all receipts issued to Brokat and evidencing each such deduction and
withholding.
6. GOVERNING LAW; JURISDICTION AND VENUE
6.1 This Guarantee shall be governed and construed in accordance
with the laws of the State of California applicable to contracts executed and
performed entirely within the State of California, without regard to the
principles of choice of laws or conflicts of law rules of such state. Brokat
irrevocably and unconditionally consents to the jurisdiction and venue of either
the state courts located in Santa Xxxxx County, California or the United States
District Court for the Northern District of California for the purpose of any
suit, action or proceeding which may arise out of or in connection with this
Guarantee.
6.2 Nothing contained in this Section shall limit the right of
HNC to take proceedings against Brokat in any other court of competent
jurisdiction, nor shall the taking of any such proceedings in one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not (unless precluded by applicable law).
7. AMENDMENT AND WAIVER. No amendment or modification of this Guarantee
may be made unless it is set forth in writing and signed by both Brokat and HNC.
No waiver of any right of HNC under this Guarantee will be effective unless
expressly set forth in a writing signed by HNC. No course of dealing between the
parties will operate as a waiver of HNC's rights under this Guarantee. A waiver
by HNC on one occasion will not be construed as a bar to or waiver by HNC of any
right or remedy on a future occasion.
8. SUCCESSORS AND ASSIGNS. The provisions of this Guarantee will inure
to the benefit of, and be binding upon, each party's respective heirs,
successors and assigns; provided that Brokat may not assign or delegate any of
its rights or obligations under this Guarantee without Hop's prior written
consent.
9. SEVERABILITY. The invalidity or unenforceability of any term or
provision of this Guarantee will not affect the validity or unenforceability of
any other term or provision hereof. The headings in this Guarantee are for
convenience of reference only and will not alter or otherwise affect the meaning
of this Guarantee.
10. COUNTERPARTS. This Guarantee may be executed in any number of
counterparts, each of which counterparts, once they are executed and delivered,
shall be deemed to be an original and all of which counterparts, taken together,
shall constitute but one and the same Guarantee.
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11. ENTIRE AGREEMENT. This Guarantee will constitute the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior understandings or agreements regarding
such subject matter.
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IN WITNESS WHEREOF, Brokat has executed and delivered this Guarantee
effective as of the day and year first above written.
BROKAT AKTIENGESELLSCHAFT
By:_________________________
Name:_______________________
Title:______________________
[SIGNATURE PAGE TO BROKAT AKTIENGESELLSCHAFT CONTINUING GUARANTEE]
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