Exhibit 10.9
ASSET TRANSFER AGREEMENT
This Asset Transfer Agreement (the "Agreement") is entered into effective
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as of June 1, 1996 (the "Effective Date"), by and between Trilogy Development
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Group, Inc., a Delaware corporation ("Transferor"), and Conquer, Inc., a
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Delaware corporation, to be known as ▇▇▇▇▇▇▇.▇▇▇, Inc. ("Transferee").
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WHEREAS, the parties desire that Transferor transfer to Transferee in a
tax-free transfer pursuant to Section 351 of the Internal Revenue Code of 1986,
as amended, those assets and liabilities of Transferor comprising Transferor's
▇▇▇▇▇▇▇.▇▇▇ Division (the "▇▇▇▇▇▇▇.▇▇▇ Division"), upon the terms and subject to
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the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the parties hereto hereby
agree as follows:
1. Definitions. The following terms have the meanings set forth below
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when used herein and identified with capital letters:
"Affected Employees" shall have the meaning ascribed to such term in
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paragraph 5.6.1 hereof.
"Assets" shall have the meaning ascribed to such term in paragraph
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2.1.1 hereof.
"Claim" shall have the meaning ascribed to such term in paragraph 5.3
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hereof.
"Commission" shall mean the Securities and Exchange Commission, or any
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other federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning ascribed to such term in
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paragraph 2.2 hereof.
"▇▇▇▇▇▇▇.▇▇▇ Division" shall have the meaning ascribed to such term in
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the recital to this Agreement.
"Effective Date" shall have the meaning ascribed to such term in the
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preamble of this Agreement.
"Holder" shall mean any person who is the owner of record of any of
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the Transferee Shares.
"Indemnified Party" shall have the meaning ascribed to such term in
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paragraph 5.3 hereof.
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"Indemnifying Party" shall have the meaning ascribed to such term in
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paragraph 5.3 hereof.
"Liabilities" shall have the meaning ascribed to such term in
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paragraph 2.3 hereof.
"Registration Statement" shall mean a registration statement filed or
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to be filed by Transferee to register under the Securities Act a sale
of any of the Transferee Shares by or for the account of any Holder.
Such term includes any prospectus included in the Registration
Statement.
"Securities Act" shall mean the Securities Act of 1933 or any similar
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federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Third Party Claim" shall have the meaning ascribed to such term in
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paragraph 5.3.1 hereof.
"Transfer" shall mean any sale or other disposition of any Transferee
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Shares which would constitute a sale thereof under the Securities Act.
"Transferee" shall have the meaning ascribed to such term in the
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preamble of this Agreement.
"Transferee Shares" shall mean the shares of Common Stock issued by
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Transferee pursuant to Section 2.2 of this Agreement and any other
securities that may be issued by Transferee, or any successor of
Transferee, as a distribution upon or in exchange for such shares or
any such other securities.
"Transferor" shall have the meaning ascribed to such term in the
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preamble of this Agreement.
2. Transfer of Assets; Assumption of Liabilities.
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2.1 Transfer of Assets.
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2.1.1 Upon the terms and subject to the conditions set forth in
this Agreement and upon the representations and warranties made herein
by each of the parties to the other, except to the extent the same are
excluded in Section 2.1.2 hereinbelow, Transferor hereby grants,
conveys, assigns, transfers and delivers to Transferee, and Transferee
hereby acquires from Transferor, all of the assets and properties used
exclusively by the ▇▇▇▇▇▇▇.▇▇▇ Division of every kind, nature and
description (wherever located), as the same shall exist on the
Effective Date (said
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assets and properties being hereinafter collectively referred to as
the "Assets"), including without limitation:
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(a) all tangible property, accounts receivable, notes
receivable, inventories, spare parts, prepayments, deferred
items, work in process, supplies, leaseholds, leasehold
improvements, tools, fixtures, machinery, equipment, furniture,
office furnishings and fixtures used exclusively by the
▇▇▇▇▇▇▇.▇▇▇ Division;
(b) all trademarks and trade names, trademark and trade
name registrations, service marks and service ▇▇▇▇
registrations, copyrights, copyright registrations, the
applications therefor and the licenses thereto used exclusively
by the ▇▇▇▇▇▇▇.▇▇▇ Division, together with the goodwill and the
business appurtenant thereto;
(c) all drawings, blueprints, specifications, designs
and data used exclusively by the ▇▇▇▇▇▇▇.▇▇▇ Division;
(d) all catalogues, brochures, sales literature,
promotional material and other selling material used
exclusively by the ▇▇▇▇▇▇▇.▇▇▇ Division;
(e) all books and records and all files, documents,
papers, agreements, books of account and other records
pertaining to the Assets or to the business of the ▇▇▇▇▇▇▇.▇▇▇
Division which are located at the offices, plants, warehouses
or other locations which relate exclusively to the ▇▇▇▇▇▇▇.▇▇▇
Division and are used in connection with the Assets;
(f) all rights of Transferor under all contracts,
agreements, licenses, leases, sales orders, purchase orders and
other commitments Transferee will assume pursuant to Section 2.3
hereof;
(g) all computer software owned by Transferor and used
exclusively by the ▇▇▇▇▇▇▇.▇▇▇ Division, the exclusive worldwide
rights to market and service such computer software, all trade
secrets and processes relating to such computer software, all
current, previous, enhanced and developmental versions of the
source and object codes and any variations thereof, and all
documentation related thereto, all design specifications
therefor, all maintenance and installation job control language,
all copyrights pertaining to such computer software, the
operators' manuals, the user documentation, the systems'
documentation and manuals (including all flowcharts, systems'
procedures and program component descriptions), all procedures
for the modification and preparation for the release of enhanced
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versions of such computer software, and all available testing
data relative to the installation and checkout of such programs;
and
(h) all other assets and rights of every kind and nature,
real or personal, tangible or intangible, which are owned by
Transferor and used exclusively in conducting the business of the
▇▇▇▇▇▇▇.▇▇▇ Division.
Without limiting the generality of the foregoing, the Assets
shall include all assets set forth in Exhibit "A" hereto.
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2.1.2 Anything herein contained to the contrary notwithstanding,
the following assets and properties of Transferor are specifically
excluded from the Assets and shall be retained by Transferor:
(a) all cash on hand, including bank accounts and
temporary cash investments;
(b) claims for refunds of taxes and other governmental
charges for periods ending on or prior to the Effective Date;
(c) claims or rights against third parties relating to
liabilities or obligations which are not assumed by Transferee
hereunder;
(d) rights under insurance policies, including rights to
any cancellation value on the Effective Date, except that
Transferor shall assign to Transferee rights under product
liability policies (or make the proceeds available) with
respect to claims arising out of transactions prior to the
Effective Date for which Transferee shall have agreed to be
responsible hereunder;
(e) all accounts receivable representing obligations of
any of Transferor's subsidiaries, divisions, stockholders,
directors, officers, employees or affiliates: and
(f) all computer software and other intellectual property
rights of Transferor which are not used exclusively in
conducting the business of the ▇▇▇▇▇▇▇.▇▇▇ Division.
2.1.3 Nothing in this Agreement shall be construed as an
attempt or agreement to assign (i) any contract, agreement, license,
lease, sales order, purchase order or other commitment which is
nonassignable without the consent of the other party or parties
thereto unless such consent shall have been given or (ii) any contract
or claim as to which all the remedies for the enforcement thereof
enjoyed by
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Transferor would not pass to Transferee as an incident of the
assignments provided for by this Agreement. In order, however, that
the full value of every contract and claim of the character
described in clauses (i) and (ii) above and all claims and demands
on such contracts may be realized, Transferor shall, by itself or by
its agents, at the request and under the direction of Transferee, in
the name of Transferor or otherwise as Transferee shall specify and
as shall be permitted by law, take all such action and do or cause
to be done all such things as shall in the opinion of Transferee be
necessary or proper (x) in order that the rights and obligations of
Transferor under such contracts shall be preserved and (y) for, and
to facilitate, the collection of the monies due and payable, and to
become due and payable, to Transferor in and under every such
contract and claim and in respect of every such claim and demand,
and Transferor shall hold the same for the benefit of and shall pay
the same over promptly to Transferee.
2.2 Issuance of Shares. Upon the terms and subject to the conditions
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set forth in this Agreement, in reliance upon the representations,
warranties, covenants and agreements of Transferor contained herein, and in
exchange for the Assets, Transferee has issued to Transferor 900 shares of
Transferee's common stock, $0.01 par value per share (the "Common Stock").
2.3 Assumption of Liabilities. As additional consideration for the
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grant, conveyance, assignment, transfer and delivery of the Assets,
subject, however, to Section 2.4 below, Transferee hereby assumes and
agrees to pay, perform and discharge when due all liabilities and
obligations of Transferor relating exclusively to the ▇▇▇▇▇▇▇.▇▇▇ Division,
of every kind or nature, whether absolute, contingent, accrued or otherwise
(the "Liabilities").
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Without limiting the generality of the foregoing, the Liabilities
shall include all liabilities set forth in Exhibit "B" hereto.
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2.4 Non-Assumption of Certain Liabilities. Transferee is not
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assuming, and shall not be deemed to have assumed, any liabilities or
obligations of Transferor of any kind or nature whatsoever, except as
expressly provided in Section 2.3 hereof. Anything in Section 2.3 hereof
or elsewhere in this Agreement to the contrary notwithstanding and without
limiting the generality of the foregoing, it is hereby agreed that
Transferee is not assuming, and shall not be deemed to have assumed, any
liability and shall not have any obligation for or with respect to any
liability or obligation of Transferor (i) under any employee benefit plan
of Transferor, (ii) in respect of (x) any sales, use or excise taxes,
income taxes, taxes based on or measured by income or franchise taxes
attributable to periods or events prior to or ending on the Effective Date
(other than federal, state or local payroll taxes on current payroll) or
(y) any of the foregoing or any other taxes, legal, accounting, brokerage,
finder's fees, or other expenses of whatsoever kind or nature incurred by
Transferor or any affiliate, stockholder, director, employee or officer of
Transferor as a
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result of the consummation of the transactions contemplated by this
Agreement, or (iii) arising out of any action, suit or proceeding based
upon an event occurring or a claim arising (x) prior to the Effective
Date or (y) after the Effective Date in the case of claims in respect of
products sold by Transferor prior to the Effective Date and attributable
to acts performed or omitted by Transferor prior to the Effective Date.
3. Representations and Warranties of Transferor. Transferor represents
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and warrants to Transferee as follows:
3.1 Existence; Good Standing; Corporate Authority; Compliance With
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Law. Transferor is a corporation duly incorporated, validly existing and
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in good standing under the laws of its jurisdiction of incorporation.
Transferor is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of any other
jurisdictions in which the character of the properties owned or leased by
it therein or in which the transaction of its business makes such
qualification necessary. Transferor has all requisite corporate power and
authority to own its properties and carry on its business as now conducted.
Transferor is not in default with respect to any order of any court,
governmental authority or arbitration board or tribunal to which Transferor
is a party or is subject, and Transferor is not in material violation of
any laws, ordinances, governmental rules or regulations to which it is
subject. Transferor has obtained all licenses, permits and other
authorizations and has taken all actions required by applicable laws or
governmental regulations in connection with its business as now conducted.
3.2 Authorization; Validity and Effect of Agreements. The execution
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and delivery of this Agreement and all agreements and documents
contemplated hereby by Transferor, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all
requisite corporate action. This Agreement constitutes, and all agreements
and documents contemplated hereby when executed and delivered pursuant
hereto for value received will constitute, the valid and legally binding
obligations of Transferor enforceable in accordance with their terms,
except that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium, bulk sales,
preference, equitable subordination, marshalling or other similar laws of
general application now or hereafter in effect relating to the enforcement
of creditors' rights generally and except that the remedies of specific
performance, injunction and other forms of equitable relief are subject to
certain tests of equity jurisdiction, equitable defenses and the discretion
of the court before which any proceeding therefor may be brought. The
execution and delivery of this Agreement by Transferor does not, and the
consummation of the transactions contemplated hereby by Transferor will
not, (i) require the consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority or
any third party; (ii) result in the breach of any term or provision of, or
constitute a default under, or result in the acceleration of or entitle any
party to accelerate (whether after the giving of notice or the lapse of
time or both) any obligation under, or result in the creation or imposition
of any lien, charge, pledge, security interest or other encumbrance
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upon any part of the property of Transferor pursuant to any provision of,
any order, judgment, arbitration award, injunction, decree, indenture,
mortgage, lease, license, lien, or other agreement or instrument to which
Transferor is a party or by which it is bound; or (iii) violate or
conflict with any provision of the by-laws or certificate of
incorporation of Transferor as amended to the date of this Agreement.
3.3 Taxes. Transferor (i) has duly and timely filed or caused to be
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filed all federal, state, local and foreign tax returns (including, without
limitation, consolidated and combined tax returns) required to be filed by
it prior to the Effective Date which relate to Transferor or with respect
to which Transferor or the Assets are liable or otherwise in any way
subject, (ii) has paid or fully accrued for all taxes shown to be due and
payable on such returns (which taxes are all the taxes due and payable
under the laws and regulations pursuant to which such returns were filed),
and (iii) has properly accrued for all such taxes accrued in respect of
Transferor or the Assets for periods subsequent to the periods covered by
such returns. No deficiency in payment of taxes for any period has been
asserted by any taxing body and remains unsettled at the Effective Date.
3.4 Title to the Assets. Transferor has good and marketable title to
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the Assets, free and clear of all security interests, mortgages,
encumbrances, liens, charges or adverse claims of any kind or character.
3.5 List of Contracts and Other Data. Schedule 3.5 sets forth the
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following:
3.5.1 (i) all patents and registrations for trademarks, trade
names, service marks and copyrights which are unexpired as of the
Effective Date and which are used exclusively in connection with the
operation of the ▇▇▇▇▇▇▇.▇▇▇ Division's business, as well as all
applications pending on said date for patents or for trademark, trade
name, service ▇▇▇▇ or copyright registrations, and all other
proprietary rights, owned or held by Transferor, or owned or held by
any of Transferor's stockholders, directors, officers, employees or
affiliates exclusively for use in connection with the business of the
▇▇▇▇▇▇▇.▇▇▇ Division of Transferor, and (ii) all licenses granted by
or to Transferor or any of Transferor's stockholders, directors,
officers, employees or affiliates and all other agreements to which
Transferor or any of Transferor's stockholders, directors, officers,
employees or affiliates is a party which relate to any items of the
categories mentioned in (i) above or to other proprietary rights of
any of Transferor's stockholders, directors, officers, employees or
affiliates or of Transferor which are used exclusively in conducting
the business of the ▇▇▇▇▇▇▇.▇▇▇ Division of Transferor whether owned
by Transferor or any of Transferor's stockholders, directors,
officers, employees or affiliates or otherwise;
3.5.2 all collective bargaining agreements, employment and
consulting agreements, executive compensation plans, bonus plans,
profit-sharing plans, deferred compensation agreements, employee
pension or retirement plans, employee
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stock purchase and stock option plans, group life insurance,
hospitalization insurance or other plans or arrangements providing
for benefits to employees of the ▇▇▇▇▇▇▇.▇▇▇ Division of Transferor;
3.5.3 all contracts, understandings and commitments to which
Transferor is a party exclusively relating to the business and
operations of the ▇▇▇▇▇▇▇.▇▇▇ Division, or to which it or any of the
Assets are subject and which are not specifically referred to in
Sections 3.5.1 or 3.5.2 above.
True and complete copies of all documents referred to in Schedule 3.5
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have been provided or made available to Transferee and its counsel.
3.6 Litigation. Except as set forth in Schedule 3.6, there are no
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actions, suits or proceedings with respect to Transferor involving claims
by or against the ▇▇▇▇▇▇▇.▇▇▇ Division of Transferor or the Assets which
are pending or threatened against Transferor or the Assets, at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality. No basis
for any such action, suit or proceeding exists, and there are no orders,
judgments, injunctions or decrees of any court or governmental agency with
respect to which Transferor or the Assets have been named or to which
Transferor is a party, which apply, in whole or in part, to the business of
the ▇▇▇▇▇▇▇.▇▇▇ Division, or to the Assets or which would result in any
material adverse change in the business or prospects of Transferor.
3.7 Investment Representation. Transferor understands that (i) the
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Common Stock being issued to Transferor pursuant to this Agreement has not
been registered under the Securities Act and is being issued in reliance
upon the exemption afforded by Section 4(2) thereof for transactions by an
issuer not involving any public offering, (ii) such Common Stock must be
held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration, (iii) such
Common Stock will bear a legend to such effect, and (iv) Transferee will
make a notation on its transfer books to such effect. Transferor further
represents that (i) such Common Stock is being acquired for investment and
without any present view toward distribution thereof to any other person,
(ii) it will not sell or otherwise dispose of such Common Stock except in
compliance with the registration requirements or exemption provision under
the Securities Act the rules and regulations thereunder, and as otherwise
set forth by the Commission, (iii) it has such knowledge and experience in
financial and business matters and that it is capable of evaluating the
risks and merits of an investment in such Common Stock, (iv) it has
consulted with counsel, to the extent deemed necessary, as to all matters
covered by this Agreement and has not relied upon Transferee for any
explanation of the application of the various federal or state securities
laws with regard to the acquisition of such Common Stock, (v) it has
investigated and is familiar with the affairs, financial condition and
prospects of Transferee, and has been given sufficient access to and has
acquired sufficient information
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about Transferee to reach an informed and knowledgeable decision to
acquire such Common Stock, and (vi) it is able to bear the economic risks
of such an investment.
4. Representations and Warranties of Transferee. Transferee represents
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and warrants to Transferor as follows:
4.1 Existence; Good Standing; Corporate Authority; Compliance With
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Law. Transferee is a corporation duly incorporated, validly existing and
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in good standing under the laws of its jurisdiction of incorporation.
Transferee is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of all other
jurisdictions in which the character of the properties owned or leased by
it therein or in which the transaction of its business makes such
qualification necessary. Transferee has all requisite corporate power and
authority to own its properties and carry on its business as now conducted.
Transferee is not in default with respect to any order of any court,
governmental authority or arbitration board or tribunal to which Transferee
is a party or is subject, and Transferee is not in material violation of
any laws, ordinances, governmental rules or regulations to which it is
subject. Transferee has obtained all licenses, permits and other
authorizations and has taken all actions required by applicable laws or
governmental regulations in connection with its business as now conducted.
4.2 Authorization; Validity and Effect of Agreements. The execution
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and delivery of this Agreement and all agreements and documents
contemplated hereby by Transferee, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all
requisite corporate action. This Agreement constitutes, and all agreements
and documents contemplated hereby when executed and delivered pursuant
hereto for value received will constitute, the valid and legally binding
obligations of Transferee enforceable in accordance with their terms,
except that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium, bulk sales,
preference, equitable subordination, marshalling or other similar laws of
general application now or hereafter in effect relating to the enforcement
of creditors' rights generally and except that the remedies of specific
performance, injunction and other forms of equitable relief are subject to
certain tests of equity jurisdiction, equitable defenses and the discretion
of the court before which any proceeding therefor may be brought. The
execution and delivery of this Agreement by Transferee does not, and the
consummation of the transactions contemplated hereby will not, (i) require
the consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority or any third
party, (ii) result in the breach of any term or provision of, or constitute
a default under, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or the lapse of time or
both) any obligation under, or result in the creation or imposition of any
lien, charge, pledge, security interest or other encumbrance upon any part
of the property of Transferee pursuant to any provision of any order,
judgment, arbitration award, injunction, decree, indenture, mortgage,
lease, license, lien, or other agreement or instrument to which Transferee
is a party or by which it is bound, and (iii)
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violate or conflict with any provision of the by-laws or certificate of
incorporation of Transferee as amended to the date of this Agreement.
4.3 No Prior Activities. Except for obligations or liabilities
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incurred in connection with its incorporation or organization or the
negotiation, preparation, execution and performance of this Agreement and
the transactions contemplated hereby or except as otherwise previously
disclosed in writing to Transferor, Transferee has not incurred any
obligations or liabilities nor engaged in any business or activities of any
type or kind whatsoever or entered into any agreements or arrangements with
any person or entity.
4.4 Capitalization. Transferee has authorized capital stock
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consisting solely of 10,000 shares of common stock, $0.01 par value per
share, 900 of which are presently issued and outstanding. There are no
outstanding rights, warrants, options, subscriptions, agreements or
commitments giving anyone any right to require the Transferee to sell or
issue any capital stock or other securities.
4.5 Authorization and Validity of Shares. The Common Stock is duly
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authorized, validly issued, fully paid and nonassessable. The Common Stock
is subject to no restrictions with respect to transferability and
Transferor has received good and marketable title to all of the Common
Stock, free and clear of all security interests, liens, encumbrances,
charges, assessments, restrictions and adverse claims.
5. Other Covenants and Agreements.
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5.1 Indemnification by Transferor. Upon the terms and subject to
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the conditions set forth in Section 5.3 hereof and this Section 5.1,
Transferor agrees to indemnify and hold Transferee harmless against, and
will reimburse Transferee on demand for, any payment, loss, cost or expense
(including reasonable attorney's fees and reasonable costs of investigation
incurred in defending against such payment, loss, cost or expense or claim
therefor) made or incurred by or asserted against Transferee at any time
after the Effective Date in respect of any omission, misrepresentation,
breach of warranty, or nonfulfillment of any term, provision, covenant or
agreement on the part of Transferor contained in this Agreement, or from
any misrepresentation in, or omission from, any certificate or other
instrument furnished or to be furnished to Transferee pursuant to this
Agreement.
5.2 Indemnification by Transferee. Upon the terms and subject to the
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conditions set forth in Section 5.3 hereof and this Section 5.2, Transferee
agrees to indemnify and hold Transferor harmless against, and will
reimburse Transferor on demand for, any payment, loss, cost or expense
(including reasonable attorney's fees and reasonable costs of investigation
incurred in defending against such payment, loss, cost or expense or claim
therefor) made or incurred by or asserted against Transferor at any time
after the Effective Date in respect of any omission, misrepresentation,
breach of warranty, or nonfulfillment of any term, provision, covenant or
agreement on the part of Transferee contained in this
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Agreement, or from any misrepresentation in, or omission from, any
certificate or other instrument furnished or to be furnished to
Transferor pursuant to this Agreement.
5.3 Conditions of Indemnification. With respect to any actual or
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potential claim, any written demand, the commencement of any action, or the
occurrence of any other event which involves any matter or related series
of matters (a "Claim") against which a party hereto is indemnified (the
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"Indemnified Party") by the other party (the "Indemnifying Party") under
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Section 5.1 or 5.2 hereof:
5.3.1 Promptly after the Indemnified Party first receives
written documents pertaining to the Claim, or if such Claim does not
involve a third party Claim (a "Third Party Claim"), promptly after
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the Indemnified Party first has actual knowledge of such Claim, the
Indemnified Party shall give notice to the Indemnifying Party of such
Claim in reasonable detail and stating the amount involved, if known
together with copies of any such written documents.
5.3.2 The Indemnifying Party shall have no obligation to
indemnify the Indemnified Party with respect to any Claim if (i) the
Indemnified Party fails to give the notice with respect thereto in
accordance with Section 5.3.1 hereof, or (ii) the notice with respect
thereto is not given on or before the third anniversary of the
Effective Date.
5.3.3 If the Claim involves a Third Party Claim, then the
Indemnifying Party shall have the right, at its sole cost, expense
and ultimate liability regardless of the outcome, and through counsel
of its choice (which counsel shall be reasonably satisfactory to the
Indemnified Party), to litigate, defend, settle or otherwise attempt
to resolve such Third Party Claim; provided, however, that if in the
Indemnified Party's reasonable judgment a conflict of interest may
exist between the Indemnified Party and the Indemnifying Party with
respect to such Third Party Claim, then the Indemnified Party shall be
entitled to select counsel of its own choosing, reasonably
satisfactory to the Indemnifying Party, in which event the
Indemnifying Party shall be obligated to pay the fees and expenses of
such counsel. Notwithstanding the preceding sentence, the Indemnified
Party may elect, at any time and at the Indemnified Party's sole cost,
expense and ultimate liability, regardless of the outcome, and through
counsel of its choice, to litigate, defend, settle or otherwise
attempt to resolve such Third Party Claim. If the Indemnified Party
so elects (for reasons other than the Indemnifying Party's failure or
refusal to provide a defense to such Third Party Claim), then the
Indemnifying Party shall have no obligation to indemnify the
Indemnified Party with respect to such Third Party Claim, but such
disposition will be without prejudice to any other right the
Indemnified Party may have to indemnification under Section 5.1 or 5.2
hereof, regardless of the outcome of such Third Party Claim. If the
Indemnifying Party fails or refuses to provide a defense to any Third
Party Claim, then the Indemnified Party shall have the right to
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undertake the defense, compromise or settlement of such Third Party
Claim, through counsel of its choice, on behalf of and for the account
and at the risk of the Indemnifying Party, and the Indemnifying Party
shall be obligated to pay the costs, expenses and attorney's fees
incurred by the Indemnified Party in connection with such Third Party
Claim. In any event, Transferee and Transferor shall fully cooperate
with each other and their respective counsel in connection with any
such litigation, defense, settlement or other attempted resolution.
5.4 Noncompetition.
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5.4.1 Upon the terms and subject to the conditions set forth in
this Section 5.4, Transferor covenants and agrees that, as a material
consideration running to Transferee for the issuance of the Common
Stock, for a period of three years from and after the Effective Date,
Transferor will neither permit Transferor's name to be used by nor
engage in or carry on, directly or indirectly, either for itself or as
a member of a partnership or as a stockholder, investor, agent,
associate or consultant of any person, partnership or corporation
(other than Transferee or a subsidiary or affiliate of Transferee),
any business directly in competition with Transferee (except as
expressly contemplated under the Reseller Agreement between the
parties or as otherwise agreed to by Transferee) but only for as long
as such business is carried on by Transferee or any subsidiary or
affiliate of Transferee, in any county in which Transferee or any
subsidiary or affiliate of Transferee conducts business, or in any
other county in any state of the United States, or in any country or
political subdivision of the world. The parties intend that the
covenants contained in this Section 5.4.1 shall be deemed to be a
series of separate covenants, one for each county in each state of the
United States and for each country and political subdivision of the
world and, except for geographic coverage, each such separate covenant
shall be identical in terms to the covenant contained in this Section
5.4.1. Transferor further covenants and agrees that for a period of
three years from and after the Effective Date Transferor will not
recruit, hire, assist others in recruiting or hiring, discuss
employment with, or refer to others concerning employment, any person
who is, or within the twelve-month period immediately prior to the
Effective Date was, an employee of the ▇▇▇▇▇▇▇.▇▇▇ Division.
5.4.2 The term of the covenants contained in Section 5.4.1
hereof shall be tolled for the period commencing on the date any
successful action is filed for injunctive relief or damages arising
out of a breach by Transferor of Section 5.4.1 hereof and ending upon
final adjudication (including appeals) of such action.
5.4.3 If, in any judicial proceeding, the court shall refuse to
enforce all of the separate covenants contained in Section 5.4.1
hereof because the time limit is too long, it is expressly understood
and agreed between the parties hereto that for purposes of such
proceeding such time limitation shall be deemed reduced to the
-12-
extent necessary to permit enforcement of such covenants. If, in any
judicial proceeding, the court shall refuse to enforce all of the
separate covenants contained in Section 5.4.1 hereof because it is
more extensive (whether as to geographic area, scope of business or
otherwise) than necessary to protect the business and goodwill of
Transferee, it is expressly understood and agreed between the
parties hereto that for purposes of such proceeding the geographic
area, scope of business or other aspect shall be deemed reduced to
the extent necessary to permit enforcement of such covenants.
5.4.4 Transferor acknowledges that a breach of Section 5.4.1
hereof would cause irreparable damage to Transferee, and in the event
of Transferor's actual or threatened breach of the provisions of
Section 5.4.1 hereof, Transferee shall be entitled to a temporary
restraining order and an injunction restraining Transferor from
breaching such covenants without the necessity of posting bond or
proving irreparable harm, such being conclusively admitted by
Transferor. Nothing shall be construed as prohibiting Transferee from
pursuing any other available remedies for such breach or threatened
breach, including the recovery of damages from Transferor. Transferor
acknowledges that the restrictions set forth in this Agreement are
reasonable in scope and duration, given the nature of the business of
Transferee.
5.5 Registration Rights.
-------------------
5.5.1 Restrictive Legend. Each certificate representing any
------------------
Transferee Shares and, except as otherwise provided in Section 5.5.2
hereof, each certificate issued upon exchange or transfer of any
Transferee Shares (whether or not such exchange or transfer shall
constitute a Transfer) shall be stamped or otherwise imprinted with a
legend substantially in the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER ANY SECURITIES
LAWS AND MAY ONLY BE SOLD IN COMPLIANCE WITH
ANY APPLICABLE SECURITIES LAWS. IN PARTICULAR,
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF (1) UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, WITH RESPECT TO SUCH SHARES SHALL THEN
BE IN EFFECT OR UNLESS THE COMPANY SHALL HAVE
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT ANY
-13-
PROPOSED TRANSFER OR DISPOSITION OF SUCH SHARES
IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND (2) EXCEPT IN
ACCORDANCE WITH THE ASSET TRANSFER AGREEMENT DATED
EFFECTIVE JUNE 1, 1996 BETWEEN THE COMPANY AND
TRILOGY DEVELOPMENT GROUP, INC, A COPY OF WHICH IS
ON FILE WITH THE COMPANY AT ITS PRINCIPAL OFFICE."
5.5.2 Notice of Proposed Transfer. Prior to any proposed
---------------------------
Transfer of any Transferee Shares (other than under the
circumstances described in Sections 5.5.3 or 5.5.4 hereof), the
Holder thereof shall give written notice to Transferee of the
intention to effect such Transfer. Each such notice shall describe
the manner of the proposed Transfer and shall be accompanied by an
opinion of counsel satisfactory to Transferee to the effect that the
proposed transfer of the Transferee Shares may be effected without
registration under the Securities Act and under applicable state
securities or blue sky laws. Upon confirmation that such opinion is
satisfactory to Transferee, the Holder of such Transferee Shares
shall be entitled to transfer such Transferee Shares in accordance
with the terms of its notice. Each certificate for Transferee Shares
transferred as above provided shall bear the legend set forth in
Section 5.5.1 hereof except that such certificate shall not bear
such legend if (i) such Transfer is in accordance with provisions of
Rule 144 (or any other rule permitting public sale without
registration under the Securities Act) or (ii) the opinion of
counsel referred to above is to the further effect that the
transferee and any subsequent transferee (other than an affiliate of
Transferee) would be entitled to Transfer such securities in a
public sale without registration under the Securities Act.
5.5.3 Required Registration.
---------------------
(a) If Transferee, on no more than two occasions at any
time after the completion of an initial public offering of the
common stock of Transferee and before the third anniversary of
the Effective Date, receives a written request for registration
from one or more Holders, then as soon as practical but not
later than 180 days after receipt of such request the
Transferee, subject to the limitations set forth in this
Section 5.5, shall file a Registration Statement with the
Commission to register the Transferee Shares contemplated to be
sold. Upon receiving any such request, Transferee shall give
written notice to all other Holders that such sales are
contemplated. If Transferee, within 20 days after giving such
notice, receives a written request for registration from any
such other Holder, then Transferee, subject to the limitations
set forth in this Section 5.5, shall include in the same
Registration
-14-
Statement the number of additional Transferee Shares to be sold
by or for the account of such other Holder as shall have been
specified in its request.
(b) After filing the Registration Statement, the
Transferee shall use its best efforts and shall take all
appropriate actions to cause the Registration Statement to
become effective as soon as practical. After the Registration
Statement becomes effective Transferee shall use its best
efforts and shall take all appropriate actions to maintain the
effectiveness of the Registration Statement for such reasonable
period, not exceeding six months, as the Holders participating
in such registration may require to complete their contemplated
sales in compliance with the Securities Act. So long as the
Registration Statement remains in effect, Transferee shall
furnish to the Holders participating in such registration and
their underwriters such quantities of each prospectus included
in the Registration Statement as they may reasonably request.
(c) If the Transferee Shares to be registered are to be
sold by the Holders in an underwritten public offering, the
Holders in their request for registration shall name the
managing underwriter or underwriters that the majority in
interest of such Holders propose to engage. Unless otherwise
agreed by Transferee, any managing underwriter proposed by the
Holders shall be an investment banking firm of recognized
national standing that has experience in managing national
distributions of equity securities of issuers having operations
similar to those of Transferee and that is capable, in the
judgment of the Transferee, of managing a distribution of
equity securities on a nationwide basis. If Transferee
reasonably objects to any managing underwriter proposed by the
Holders, a majority in interest of the Holders shall propose a
substitute acceptable to Transferee. If a majority in interest
of the Holders selling Transferee Shares included in a
Registration Statement filed pursuant to this Section 5.5.3
sell their Transferee Shares in an underwritten public
offering, the right of any other Holder to have Transferee
Shares included in the same Registration Statement shall be
conditioned upon the inclusion of such Holder's Transferee
Shares in the same underwriting. All Holders proposing to sell
their Transferee Shares in such underwriting shall enter into
an underwriting agreement in customary form with Transferee and
with the underwriter or underwriters selected in the manner set
forth above. Notwithstanding any other provision of this
Section 5.5.3, if the managing underwriter determines that
marketing factors require a limitation of the number of
Transferee Shares to be included in the underwriting, the
allowable number shall be allocated among all Holders desiring
to participate in proportion, as nearly as practical, to the
number of Transferee Shares for which each Holder requested
registration. No Transferee Shares excluded from an
underwriting by reason of such marketing limitation shall be
-15-
included in the Registration Statement. If any Holder
disapproves of the terms of the underwriting, he may elect to
withdraw his Transferee Shares by giving written notice to
Transferee and the managing underwriter. After receiving any
such notice, Transferee shall withdraw those Transferee Shares
from the Registration Statement. If a withdrawal of Transferee
Shares makes it possible, within the marketing limitation set
by the managing underwriter, to include in the underwriting a
greater number of Transferee Shares held by other participating
Holders, then to the extent practical, without delaying the
underwriting, Transferee shall offer to all Holders who then
have Transferee Shares included in the underwriting an
opportunity to include additional Transferee Shares in the
proportion previously described in this Section 5.5.3(c).
(d) Notwithstanding the other provisions of this Section
5.5.3, the Transferee may postpone the filing of a Registration
Statement pursuant to Section 5.5.3(a) hereof for an additional
period of up to 180 days if (i) the postponement will avoid the
necessity of preparing audited financial statements as of a date
other than the end of a fiscal year or (ii) the Chairman of the
Board or Chief Executive Officer of Transferee determines in good
faith that the postponement is necessary to avoid serious
jeopardy to Transferee, any significant business prospect of
Transferee or the security holders of Transferee considered as a
group. Notwithstanding the other provisions of this Section
5.5.3, Transferee shall not be obligated to file any Registration
Statement pursuant to this Section 5.5.3 hereof:
(1) If Transferee delivers, to each of the Holders who
shall have requested registration pursuant to Section
5.5.3(a), an opinion of qualified counsel, selected by
Transferee, that under the circumstances in which such
Holders contemplate selling their Transferee Shares an
exemption from registration under the Securities Act,
including but not limited to the exemption provided by
assuming compliance with the conditions stated in Rule 144
(except paragraph (c) of Rule 144), is available. Each
Holder shall cooperate with Transferee and its counsel in
investigating and assessing the availability of any such
exemption.
(2) If for any reason Form S-3 (or if Form S-3 is no
longer in effect, the most closely analogous form then in
effect) cannot be used by Transferee to file the
Registration Statement.
(3) If Transferee has previously filed two Registration
Statements pursuant to this Section 5.5.3 during the 3
year period from the Effective Date provided that each
such Registration
-16-
Statement either became effective or was withdrawn
before becoming effective at the request of a majority
in interest of the Holders who had included Transferee
Shares in such withdrawn Registration Statement.
(4) During the period commencing with the date of
filing of a registration statement under the Securities
Act pertaining to an underwritten public offering of
securities to be sold by or for the account of
Transferee and ending 180 days after the effective date
of such registration statement, provided that during
such period Transferee in good faith uses reasonable
efforts to cause such registration statement to become
effective and to complete the public offering covered by
such registration statement.
(5) During the period commencing with the date on
which Transferee, pursuant to Section 5.5.4 hereof,
shall notify the Holders of its intention to file a
registration statement pertaining to an underwritten
public offering of securities by or for the account of
Transferee or others (provided such date is not more
than 30 days following the date of the initial receipt
by Transferee of the request of Holders pursuant to
Section 5.5.3 (a) hereof) and ending with the earliest
of (i) the date of filing of such registration
statement, (ii) the date of abandonment by Transferee of
such intention to file (notice of which shall be given
promptly to the Holders) or (iii) the 180th day after
such notification of intention to file.
Nothing in this Section 5.5 shall prohibit Transferee from
including in any Registration Statement filed pursuant to Section
5.5.3 (a) hereof other outstanding securities of Transferee to be
sold by or for the account of any other security holder if
Transferee determines that it is obligated to do so.
5.5.4 Incidental Registration.
-----------------------
(a) If Transferee determines that it will file a
registration statement, at any time after the Effective Date but
before the third anniversary of the Effective Date, for any
public offering of securities of the same class as Transferee
Shares, either for its own account or the account of any security
holder, Transferee shall give written notice to each Holder, at
least 30 days in advance of filing such registration statement,
that such filing is expected to be made. Upon the written
request of any Holder received by Transferee at least 15 days in
advance of the filing, and subject to the limitations set forth
in this Section 5.5.4, Transferee shall include in such
registration statement (which as a result of the inclusion of
such Transferee Shares shall
-17-
become a Registration Statement) Transferee Shares specified in
the Holder's request for the purpose of registering those
Transferee Shares for sale by or for the account of such
Holder. Transferee shall have exclusive control over the
filing, amending, withdrawal and other actions regarding such
Registration Statement. Transferee shall have no obligation to
give notice to any Holder with respect to the filing of, or to
include any Transferee Shares for any Holder in, any
registration statement on Form S-4 or Form S-8 or on any other
form that does not include substantially the same information
or is not in substantially the same format as would be required
for a Registration Statement for a sale of Transferee Shares by
a Holder.
(b) If the securities to be sold by Transferee pursuant
to a registration statement described in Section 5.5.4 (a)
hereof, or if none are to be sold by Transferee then if the
majority of the securities to be sold by others pursuant to any
such registration statement, are to be sold in any underwritten
public offering, the right of any Holder to have Transferee
Shares included in the same registration statement shall be
conditioned upon the inclusion of such Holder's Transferee
Shares in the same underwriting. Transferee, all Holders and
all other security holders proposing to sell securities in such
underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected by
Transferee. Notwithstanding any other provisions of this
Section 5.5.4, if the managing underwriter determines that
marketing factors require a limitation of the number of
securities to be included in the underwriting, the managing
underwriter and Transferee may limit the number of Transferee
Shares to be included in the underwriting for all Holders.
Transferee shall advise all Holders who shall have requested
inclusion of their Transferee Shares in the same underwriting
of the aggregate number of Transferee Shares that may be
included for all Holders. Such aggregate number shall be
allocated among all such Holders in proportion, as nearly as
practical, to the number of Transferee Shares for which each
Holder requested registration. No Transferee Shares excluded
from an underwriting by reason of such marketing limitation
shall be included in the Registration Statement. If any Holder
disapproves of the terms of the underwriting, he may elect to
withdraw his Transferee Shares by giving written notice to
Transferee and the managing underwriter. After receiving any
such notice, Transferee shall withdraw those Transferee Shares
from the Registration Statement. If a withdrawal of Transferee
Shares or any withdrawal of other securities (except a complete
withdrawal of all securities that were to be sold by
Transferee, in which case Transferee may withdraw the
registration statement in its entirety) makes it possible, with
the marketing limitation set by the managing underwriter and
Transferee, to include in the underwriting a greater number of
Transferee Shares held by other Holders participating in such
-18-
underwriting, then to the extent practical, without delaying
the underwriting, Transferee shall offer to all Holders who
then have Transferee Shares included in the underwriting an
opportunity to include additional Transferee Shares in the
proportion previously described in this Section 5.5.4(b).
5.5.5 State Securities or Blue Sky Laws. In connection with the
---------------------------------
registration under the Securities Act of any sale of Transferee Shares
by or for the account of any Holder pursuant to Sections 5.5.3 or
5.5.4 hereof, Transferee shall file on a timely basis appropriate
applications or other instruments to register, qualify or obtain
exemptions for the sale under such state securities or blue sky laws
as the managing underwriter shall reasonably specify or, if the sale
is not to be an underwritten public offering, such state securities or
blue sky laws as the Holder may reasonably request. Transferee,
however, shall have no obligation to file any applications or other
instruments in any jurisdiction in which either (i) no such filing is
required with respect to the proposed sale of Transferee Shares by or
for the account of the Holder, in the opinion of qualified counsel
selected by Transferee, or (ii) Transferee would be required to
execute a general consent to service of process, to register as a
broker or dealer or to cause any officer or employee of Transferee to
register as a dealer, broker, or salesman or in any similar capacity.
Transferee shall use its best efforts in good faith to obtain and
maintain for a reasonable period, up to six months, an effective
registration, qualification or exemption under the applications or
other instruments filed by Transferee pursuant to this Section 5.5.5.
5.5.6 Registration Expenses. All expenses incurred in
---------------------
connection with the first such Registration Statement filed or
prepared for filing pursuant to Section 5.5.3 hereof and in connection
with all related state securities or blue sky applications or other
instruments, including without limitation all registration, filing and
qualification fees, printing expenses, fees and disbursements of
counsel for Transferee and fees and expenses of accountants incidental
to such Registration Statement, shall be borne by Transferee. All
expenses incurred in connection with the second such Registration
Statement filed or prepared for filing pursuant to Section 5.5.3
hereof and in connection with all related state securities or blue sky
applications or other instruments, including without limitation all
registration, filing and qualification fees, printing expenses, fees
and disbursements of counsel for Transferee and fees and expenses of
accountants incidental to such Registration Statement, shall be borne
by the Holders whose Transferee Shares are included in such
Registration Statement when it becomes effective, or if such
Registration Statement does not become effective then by all Holders
who originally requested the filing of such Registration Statement, in
the proportion that the number of Transferee Shares included for each
such Holder bears to the total number of Transferee Shares and other
securities of the same class, if any, that are included in such
Registration Statement. All expenses incurred in connection with any
Registration Statement filed or prepared for filing pursuant to
Section 5.5.4 hereof and in connection with
-19-
all related state securities or blue sky applications or other
instruments that would not have been incurred if Transferee Shares
of one or more Holders had not been included in the Registration
Statement, as reasonably determined by Transferee, shall be borne by
each Holder whose Transferee Shares are included in the Registration
Statement when it becomes effective in the proportion that the
number of Transferee Shares included for such Holder bears to the
total number of Transferee Shares included for all Holders.
Notwithstanding any other provision of this Section 5.5, each Holder
shall bear the entire amount of any discount or commission allowed
or paid to any underwriter in connection with any sale of Transferee
Shares by or for the account of such Holder.
5.5.7 Indemnifications. In connection with any Registration
----------------
Statement filed pursuant to this Section 5.5, Transferee shall
indemnify and hold harmless each Holder whose Transferee Shares are
included in the Registration Statement, each underwriter who may
purchase from or sell any Transferee Shares for any such Holder and
each person who controls any such Holder or any such underwriter,
within the meaning of the Securities Act, from and against any and all
losses, claims, damages and liabilities caused by any untrue
statements or alleged untrue statement of a material fact contained in
the Registration Statement or any related state securities or blue sky
applications or other instruments or caused by any omission or alleged
omission to state in the Registration Statement or any related state
securities or blue sky applications or other instruments any material
fact required to be stated or necessary to make the statements which
are made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or alleged
untrue statement or omission or alleged omission based upon
information furnished to Transferee by such Holder, underwriter or
controlling person expressly for use in the Registration Statement or
any related state securities or blue sky applications or other
instruments. Each Holder whose Transferee Shares are included in any
Registration Statement filed pursuant to this Section 5.5 shall
indemnify Transferee, its directors, each officer signing the
Registration Statement, each other person (including each other
Holder) whose securities are included in the Registration Statement,
each underwriter who may purchase from or sell any securities for
Transferee or any other person pursuant to the Registration Statement
and each person, if any, who controls Transferee, any such other
person or any such underwriter, within the meaning of the Securities
Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any
related state securities or blue sky applications or other instruments
or caused by any omission or alleged omission to state in the
Registration Statement or any related state securities or blue sky
applications or other instruments any material fact required to be
stated or necessary to make the statements which are made not
misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement or omission
or alleged omission based
-20-
upon information furnished by the Holder from whom indemnification is
sought expressly for use in the Registration Statement or any related
state securities or blue sky applications or other instruments. To the
extent the provisions contained in this Section 5.5.7 are in conflict
with any indemnification provisions that are included in any
underwriting agreement entered into by Transferee and one or more
Holders with one or more underwriters in connection with any
underwritten public offering registered under any Registration
Statement filed pursuant to this Section 5.5, the provisions of the
underwriting agreement shall govern. The indemnities provided for in
this Section 5.5.7 shall be independent of and in addition to any
other indemnity provision of this Agreement.
5.5.8 Miscellaneous.
-------------
(a) Each Holder whose Transferee Shares are included in
any Registration Statement filed pursuant to this Section 5.5
shall furnish to Transferee such information regarding such
Holder and the sale proposed by such Holder as may be required
for inclusion in the Registration Statement or any related
state securities or blue sky applications or other instruments,
as may be necessary to provide supplemental information to the
Commission, the National Association of Securities Dealers,
Inc. or any administrator of any state securities or blue sky
law, or as Transferee or any underwriter may reasonably
request.
(b) The registration rights granted in this Section 5.5
are not assignable, in whole or in part, without the prior
written consent of Transferee, except such rights shall
transfer with the ownership of Transferee Shares.
(c) As a condition to having Transferee Shares included in
any Registration Statement filed pursuant to this Section 5.5,
each Holder may be required to agree, in a manner acceptable to
Transferee, that in selling Transferee Shares the Holder will
comply with all applicable laws and regulations including, but
not limited to, Rules 10b-2, 10b-6 and 10b-7 promulgated under
the Securities Exchange Act of 1934.
5.6 Employees.
---------
5.6.1 Employment. The Transferee will offer employment to all
----------
active on the job employees who are on the payroll of the ▇▇▇▇▇▇▇.▇▇▇
Division on the Effective Date ("Affected Employees") at salary levels
------------------
and fringe benefits equal in measure and extent with their current
salary levels and fringe benefits and, to the extent it is reasonably
able to do so, in comparable positions of job responsibilities and
authority.
-21-
5.6.2 Vacation Pay. On the Effective Date, Transferee shall
------------
assume in accordance with the terms of the vacation pay policies
maintained by Transferor for employees of the ▇▇▇▇▇▇▇.▇▇▇ Division,
the vacation pay accrued for the calendar year 1996 by the Affected
Employees.
5.6.3 Employee Benefit Plans. Transferor shall continue to
----------------------
provide employee benefits to the Affected Employees under
Transferor's employee benefit plans as provided in the Services
Agreement referenced in paragraph 6.2 herein below.
5.7 Execution of Additional Documents. Each party hereto will at any
---------------------------------
time, and from time to time after the Effective Date, upon request of the
other party hereto, execute, acknowledge and deliver all such further
deeds, assignments, transfers, conveyances, powers of attorney and
assurances, and take all such further action, as may be required to carry
out the intent of this Agreement, and to transfer and vest title to any
Asset being transferred hereunder, and to protect the right, title and
interest in and enjoyment of all of the Assets sold, granted, assigned,
transferred, delivered and conveyed pursuant to this Agreement; provided,
however, that this Agreement shall be effective regardless of whether any
such additional documents are executed.
6. Contemporaneous Documents. Contemporaneously with this Agreement,
-------------------------
Transferor and Transferee shall execute and deliver to each other the following
documents:
6.1 Master Software License Agreement. Under the terms of which
---------------------------------
Transferor has given Transferee a license to use certain intellectual
property owned by Transferor in connection with the business operations of
Transferee.
6.2 Services Agreement. Under the terms of which Transferor will
------------------
provide certain administrative services to Transferee.
6.3 Facility Agreement. Under the terms of which Transferor and
------------------
Transferee will share certain office facilities and furniture and
equipment.
6.4 Reseller Agreement. Pursuant to which Transferor is given the
------------------
right to market Transferee's software.
7. Miscellaneous.
-------------
7.1 Notices. Any notice, consent, approval, request, demand or other
-------
communication required or permitted hereunder must be in writing to be
effective and shall be deemed delivered and received (i) if personally
delivered or if delivered by telex or
-22-
telecopy with electronic confirmation when actually received by the party
to whom sent, or (ii) if delivered by mail (whether actually received or
not), at the close of business on the third business day next following
the day when placed in the federal mail, postage prepaid, certified or
registered mail, return receipt requested, addressed as follows:
If to Transferee:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
If to Transferor:
Trilogy Development Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
(or to such other address as any party shall specify by written notice so
given).
7.2 Binding Effect; Benefits. This Agreement shall be binding upon
------------------------
and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in
this Agreement to the contrary, nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto
or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
7.3 Entire Agreement. This Agreement, together with the Exhibits,
----------------
Schedules and other documents contemplated hereby, constitute the final
written expression of all of the agreements between the parties, and is a
complete and exclusive statement of those terms. It supersedes all
understandings and negotiations concerning the matters specified herein.
Any representations, promises, warranties or statements made by any party
that differ in any way from the terms of this written Agreement, and the
Exhibits, Schedules and other documents contemplated hereby, shall be given
no force or effect. The parties specifically represent, each to the other,
that there are no additional or supplemental agreements between them
related in any way to the matters herein contained unless specifically
included or referred to herein. No addition to or modification of any
provision of this Agreement shall be binding upon any party unless made
in writing and signed by all parties.
7.4 Governing Law. THIS AGREEMENT, AND ALL QUESTIONS RELATING TO ITS
-------------
VALIDITY, INTERPRETATION, PERFORMANCE AND ENFORCEMENT, SHALL BE GOVERNED BY
AND CONSTRUED IN
-23-
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (EXCLUSIVE OF THE CONFLICT
OF LAW PROVISIONS THEREOF) APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.
7.5 Survival. All of the terms, conditions, covenants, agreements,
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warranties and representations contained in this Agreement shall survive,
in accordance with their terms, delivery by Transferee of the consideration
to be given by it hereunder and delivery by Transferor of the consideration
to be given by them hereunder, and shall survive the execution hereof.
7.6 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument; but in making proof of this
Agreement, it shall not be necessary to produce or account for more than
one such counterpart. It is not necessary that each party hereto execute
the same counterpart, so long as identical counterparts are executed by all
parties.
7.7 Headings. Headings of the Sections of this Agreement are for the
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convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
7.8 Waivers. Any party hereto may, by written notice to the other
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party hereto, (i) extend the time for the performance of any of the
obligations or other actions of the other party under this Agreement; (ii)
waive any inaccuracies in the representations or warranties of the other
party contained in this Agreement or in any document delivered pursuant to
this Agreement; (iii) waive compliance with any of the conditions or
covenants of the other party contained in this Agreement; or (iv) waive
performance of any of the obligations of the other party under this
Agreement. Except as provided in the preceding sentence, no action taken
pursuant to this Agreement, including without limitation any investigation
by or on behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The
waiver by any party hereto of a breach of any provision hereunder shall not
operate or be construed as a waiver of any prior or subsequent breach of
the same or any other provision hereunder.
7.9 Merger of Documents. This Agreement and all agreements and
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documents contemplated hereby constitute one agreement and are
interdependent upon each other in all respects.
7.10 Incorporation of Exhibits and Schedules. All Exhibits and
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Schedules attached hereto are by this reference incorporated herein and
made a part hereof for all purposes as if fully set forth herein.
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7.11 Severability. If for any reason whatsoever, any one or more of
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the provisions of this Agreement shall be held or deemed to be illegal,
inoperative, unenforceable or invalid as applied to any particular case or
in all cases, such circumstances shall not have the effect of rendering
such provision illegal, inoperative, unenforceable or invalid in any other
case or of rendering any of the other provisions of this Agreement illegal,
inoperative, unenforceable or invalid. Furthermore, in lieu of each
illegal, invalid, unenforceable or inoperative provision, there shall be
added automatically, as part of this Agreement, a provision similar in
terms of such illegal, invalid, unenforceable or inoperative provision as
may be possible and as shall be legal, valid, enforceable and operative.
7.12 Assignability. Neither this Agreement nor any of the parties'
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rights hereunder shall be assignable by either party hereto without the
prior written consent of the other party hereto, which consent will not be
unreasonably withheld.
7.13 References. The use of the words "hereof," "herein,"
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"hereunder," and words of similar import shall refer to this entire
Agreement, and not to any particular article, section, subsection, clause,
or paragraph of this Agreement, unless the context clearly indicates
otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the Effective Date.
Transferor:
Trilogy Development Group, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: President & CEO
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Transferee:
▇▇▇▇▇▇▇.▇▇▇, Inc.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: President
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