EXHIBIT 10.39
EXECUTION COPY
LICENSE AGREEMENT
THIS AGREEMENT made as of the 1st day of May 2001 by and between
▇▇▇▇▇▇, INC., a Delaware corporation having a place of business at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Licensor"); and RETAIL DECISIONS
INC., a New Jersey corporation having a principal place of business at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Licensee" and together
with the Licensor, the "Parties" and each individually, a "Party"):
WHEREAS, the Licensor has developed and/or acquired certain
technology, as more fully described in this Agreement, some of which is the
subject of U.S. and foreign patents; and
WHEREAS, the Licensee wishes to acquire from the Licensor certain
rights for use solely in connection with certain fields of use (as defined
herein) and to acquire from the Licensor certain trademarks and other assets
pertaining thereto; and
WHEREAS, the Licensee wishes to obtain from Licensor and Licensor
wishes to grant Licensee a license in certain fields of use to the ▇▇▇▇▇▇
Technology; (as defined herein).
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements herein contained and other valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the Parties covenant
and agree as follows:
I. Definitions.
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"Affiliate" means: (i) any Person (as defined herein) controlling,
controlled by or under common control with Licensee; and (ii) any Person who is
a member, other than as a limited partner or non-voting shareholder, with any
Person described in (i) above in a joint venture, limited liability company,
general partnership or similar form of unincorporated business association. For
purposes of this definition, the term "control" shall mean the control or
ownership of 50% or more of the beneficial interest in the Person to whom
referred.
"Agreement" or "this Agreement" means, and the words "herein,"
"hereof" and "hereunder" and words of similar import shall refer to, this
agreement, including all Exhibits and Schedules hereto, as it from time to time
may be amended.
"Certificate of Incorporation" means, in the case of any corporation,
the certificate of incorporation, articles of incorporation, memorandum and
articles of association or charter of a corporation, howsoever denominated under
the laws of the jurisdiction of its incorporation.
"Closing" means the closing of the Contemplated Transactions.
"Closing Date" means the date of the Closing on which the deliveries
set forth in Article X shall have been made, which date is May 18, 2001.
"Code" means the Internal Revenue Code of 1986, as amended.
"Customer Relationship Management" means synthesizing and updating
information from multiple data sources within an organization for marketing
purposes including, but not limited to, customer revenue, customer profits,
customer behavior, customer needs, customer loyalty, customer attrition,
customer cross-selling, and customer acquisition.
"Deliverables" means one (1) copy of (i) the source and object code as
it exists as of the Closing of all the ▇▇▇▇▇▇ Technology and (ii) all internal
or external documentation or technical materials related to the ▇▇▇▇▇▇
Technology (excluding any such documentation or materials relating to contracts
or other customer relationships of Licensor not included within the Transferred
Contracts which Licensor is prohibited by law or contract from delivering to
Licensee and/or which relate to the ACI License).
"Effective Date" means May 1, 2001.
"Exclusive Field of Use" means a use in connection with Fraud
Detection or Risk Management, but in each case only in connection with
electronic payments, financial transaction systems, card systems, retail,
banking, financial services, telecommunications, wireless communications,
insurance, e-commerce, mobile commerce, Television Commerce and the
card-not-present applications or businesses, and any successor to any of the
foregoing.
"Fraud Detection " means the detection or control of fraudulent
activity.
"GAAP" means generally accepted accounting principles as set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States in effect as of the date of this
Agreement.
"Improvement" means any development, modification or improvement of
the ▇▇▇▇▇▇ Technology or ▇▇▇▇▇▇ IP by the Licensee or any of the Licensee's
employees, agents or consultants.
"knowledge" shall specifically be limited to: (a) with respect to any
individual, actual knowledge; and (b) with respect to any corporation, the
actual knowledge after reasonable investigation of the directors and the
executive officers of such corporation. The term "knows" shall have a
correlative meaning.
"Liability" means any direct or indirect indebtedness, liability,
assessment, claim, loss, damage, deficiency, obligation or responsibility, fixed
or unfixed, ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, actual or potential, contingent or otherwise
(including any liability under any guaranties, letters of credit, performance
credits or with respect to insurance loss accruals).
"License" means, collectively, the FDRM License and the CRM License.
"Licensor Offices" means the Licensor's offices at One Richmond
Square, Providence, Rhode Island.
"Lien" means any mortgage, lien (including mechanics, warehousemen,
laborers and landlords' liens), claim, pledge, charge, security interest,
preemptive right, right of first refusal, option, judgment, title defect,
covenant, restriction, easement or encumbrance of any kind.
"▇▇▇▇▇▇ Copyrights" means all copyrightable works (registered or
unregistered) owned or controlled by the Licensor, on the date hereof, relating
to the ▇▇▇▇▇▇ Technology.
"▇▇▇▇▇▇ IP" means the ▇▇▇▇▇▇ Copyrights, ▇▇▇▇▇▇ know-how, and ▇▇▇▇▇▇
Patent Rights.
"▇▇▇▇▇▇ Know-how" means, but only to the extent they are directly
related to the Exclusive Field of Use and Non-Exclusive Field of Use, all
proprietary information relating to the ▇▇▇▇▇▇ Technology (except for ▇▇▇▇▇▇
Patent Rights, ▇▇▇▇▇▇ Copyrights and any information that relates to the ACI
License) owned or controlled by the Licensor before or after the date hereof and
relating to: (i) the practice of the ▇▇▇▇▇▇ Patent Rights; and (ii) the ▇▇▇▇▇▇
Technology. ▇▇▇▇▇▇ Know-how shall include, without thereby limiting: (x) all
such know-how received by the Licensee directly or indirectly from the Licensor
or the Licensor's present or former employees, officers, or agents (including
any former employee, officer or agent of the Licensor engaged by the Licensee)
relating to the use of items (i) and (ii), above; (y) all such proprietary
information contained in the Deliverables; and (z) all such know-how assigned by
Licensee to Licensor pursuant to Section II.D. below.
"▇▇▇▇▇▇ Patent Rights" means, but only to the extent they are directly
related to the Exclusive Field of Use and Non-Exclusive Field of Use, the
subject-matter of the claims of (i) those U.S. patents and patent applications
owned by the Licensor as of the date first written above and listed on Schedule
I.A.; and (ii) any patents issuing from, or any divisional, continuation,
continuation-in-part, continued prosecution application, request for continued
examination, reissue, reexamination, renewal, extension, or foreign counterpart
to any patent or patent application in (i) or (ii).
"▇▇▇▇▇▇ Technology" means: (i) the current version of those products
marketed by Licensor known as eCLIPSE CRM, PRISM eFRAUD, PRISM Credit, PRISM
Debit, PRISM Merchant, PRISM Money Laundering, PRISM Analysis Review Systems,
PRISM Modelers Workbench, and PRISM Private Label; (ii) all modifications,
improvements, bug fixes, customizations, extensions, or works in progress
related to any of the products existing on the Closing Date in (i); and (iii)
all customizations existing on the Closing Date of any item in (i) or (ii)
related to any of the Transferred Contracts (in all cases of (i), (ii) and
(iii), those modules listed on Schedule I.B. and any other modules the Parties
in good faith agree to add or subtract from that Schedule following notification
by one Party to the other as to any error or omission in the Schedule).
"New Field of Use" means any use except a use in connection with Fraud
Detection in connection with financial transaction systems, card systems and
money laundering.
"Non-Exclusive Field of Use" means a use in connection with Customer
Relationship Management, but only in connection with electronic payments,
financial transaction systems, card systems, retail, banking, financial
services, telecommunications, wireless communications, insurance, e-commerce,
mobile commerce, TV Commerce and the card-not-present applications or
businesses, and any successor to any of the foregoing.
"Permitted Liens" means those liens and other rights and licenses in
the Trademark Rights and ▇▇▇▇▇▇ Technology granted to others as specifically
listed on Schedule I.D attached hereto.
"person" or "Person" means an individual, company, corporation,
partnership, joint venture, limited liability company, association, trust,
unincorporated organization or other entity, domestic or foreign, including a
government or political subdivision or an agency or instrumentality thereof.
"Risk Management" means the provision of products or services to
manage an organization's risk associated with financial transactions.
"Television Commerce" means television-based e-commerce services.
"Third Party Software" means any third party software which is
incorporated into the ▇▇▇▇▇▇ Technology as specifically listed on Schedule I.E
attached hereto.
"Tax" (including, with correlative meaning, the terms "Taxes" and
"Taxable") shall mean: (i) (A) any net income, gross income, gross receipts,
sales, use, ad valorem, transfer, transfer gains, franchise, profits, license,
withholding, payroll, employment, excise, value added tax, severance, stamp,
rent, recording, occupation, premium, real or personal property, intangibles,
environmental or windfall profits tax, alternative or add-on minimum tax,
customs, duty or other tax, fee, duty, levy, impost, assessment or charge of any
kind whatsoever (including but not limited to taxes assessed to real property
and water and sewer rents relating thereto), together with (B) any interest and
any penalty, addition to tax or additional amount imposed by any domestic or
foreign Governmental Body, as defined herein (a "Tax Authority"), responsible
for the imposition of any such tax and interest on such penalties, additions to
tax, fines or additional amounts, in each case, with respect to the Licensor or
the Assets (or the transfer thereof); (ii) any liability for the payment of any
amount of the type described in the immediately preceding clause (i) as a result
of the Licensor being a member of an affiliated or combined group with any other
person at any time on or prior to the date hereof; and (iii) any liability of
the Licensor for the payment of any amounts of the type described in the
immediately preceding clause (i) as a result of a contractual obligation to
indemnify any other person.
"Transaction Documents" means, collectively, this Agreement and each
of the other agreements and instruments to be executed and delivered by all or
some of the Parties hereto in connection with the consummation of the
transactions contemplated hereby.
"Transferred Contracts" means any contract, agreement, indenture,
note, bond, lease, conditional sale contract, mortgage, license, franchise,
instrument, commitment or other binding arrangement specifically listed on
Schedule I.F attached hereto.
Unless the context otherwise requires, the terms defined in Article I
shall be applicable to both the singular and plural forms of any of the terms
defined herein. All accounting terms defined in Article I, and those accounting
terms used in this Agreement not defined in Article I except as otherwise
expressly provided herein, shall have the meanings customarily given thereto in
accordance with GAAP. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. The use of the neuter gender herein shall be deemed to include the
masculine and feminine genders wherever necessary or appropriate, the use of the
masculine gender shall be deemed to include the neuter and feminine genders and
the use of the feminine gender shall be deemed to include the neuter and
masculine genders wherever necessary or appropriate. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." Certain other
capitalized terms used herein have the respective meanings as defined in the
section of this Agreement in which such terms appear.
II. Grant of License.
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A. Subject to the terms and conditions of this Agreement, and further
subject to agreements of ▇▇▇▇▇▇ Technology specifically listed on Schedule II.A
attached hereto, the Licensor hereby grants to the Licensee, and the Licensee
accepts:
(i) a perpetual (except in the event of termination of the
License pursuant to Section XI), fully paid, non-transferable (except as
expressly permitted by this Agreement), world-wide license under the ▇▇▇▇▇▇ IP
(the "FDRM License") to exploit in any manner (except as expressly restricted in
this Agreement) the ▇▇▇▇▇▇ Technology in and for the Exclusive Field of Use,
which License shall be exclusive to Licensee except for those rights granted to
ACI under the ACI License; and
(ii) a perpetual (except in the event of termination of the
License pursuant to Section XI), fully-paid, non-transferable (except as
expressly permitted by this Agreement), world-wide, non-exclusive license under
the ▇▇▇▇▇▇ IP (the "CRM License") to exploit in any manner (except as expressly
restricted in this Agreement) the ▇▇▇▇▇▇ Technology in and for the Non-Exclusive
Field of Use.
The License is also subject to the rights of HNC pursuant to that
certain Settlement Agreement and Mutual Release between Licensor and HNC
Software Inc. ("HNC") dated January 18, 2001 (the "Settlement Agreement").
All fields of use not expressly included in the License are
specifically excluded from the scope of the License. Licensee's exploitation of
the ▇▇▇▇▇▇ Technology and/or the ▇▇▇▇▇▇ IP other than solely in and for the
Exclusive Field of Use or Non-Exclusive Field of Use, is not within the scope of
the License, and any such unlicensed use of the ▇▇▇▇▇▇ Technology and/or the
▇▇▇▇▇▇ IP, if not cured as permitted herein, shall be a material breach of this
Agreement. Any license or sublicense of the ▇▇▇▇▇▇ Technology or any product
containing any part of the ▇▇▇▇▇▇ Technology and/or the ▇▇▇▇▇▇ IP granted by the
Licensee, or agreement for the provision of any service based on any part of the
▇▇▇▇▇▇ Technology and/or the ▇▇▇▇▇▇ IP by the Licensee, outside the Exclusive
Field of Use or Non-Exclusive Field of Use is void.
Except with respect to the ACI License (as it currently exists or may
hereafter be amended), Licensor retains no rights to exploit the ▇▇▇▇▇▇
Technology and/or ▇▇▇▇▇▇ IP in or for the Exclusive Field of Use. Any
unpermitted use of the ▇▇▇▇▇▇ Technology and/or ▇▇▇▇▇▇ IP by Licensor in the
Exclusive Field of Use, if not cured as permitted herein, shall be a material
breach of this Agreement. Any license or sublicense of the ▇▇▇▇▇▇ Technology
and/or ▇▇▇▇▇▇ IP granted by Licensor after the Effective Date, or agreement for
the provision after the Effective Date of any service based on any part of the
▇▇▇▇▇▇ Technology and/or the ▇▇▇▇▇▇ IP by the Licensor, in the Exclusive Field
of Use, except as permitted by this Agreement with respect to the ACI License,
shall be void. The restrictions on Licensor contained in the immediately
preceding three sentences shall terminate on the termination of the License.
Except as otherwise provided in this Agreement, Licensor shall not
have any obligation to provide Licensee with any hardware or third party
software in connection with this Agreement. It is expressly understood and
agreed that the License does not include any sublicense to the Licensee of the
Third Party Software. All rights to the ▇▇▇▇▇▇ Technology and ▇▇▇▇▇▇ IP not
expressly granted in this Agreement to the Licensee are reserved by the
Licensor.
B. Except as provided in this Agreement, following the Closing Date,
neither Party shall have any obligation to provide the other Party with any
Improvements, updates, enhancements, modifications revisions, additions,
replacements or conversions to the ▇▇▇▇▇▇ Technology or ▇▇▇▇▇▇ IP.
C. In addition to any other limitations herein provided, Licensee's
rights under the License are also limited as follows:
(i) The Licensee may provide or provide access to the object code
form of the ▇▇▇▇▇▇ Technology to Licensee's sub-licensees but only so long as
the object code is subject to an end-user license (which may be a shrink-wrap
license) or reseller license that (a) prohibits, to the maximum extent permitted
by law, disassembling, decompiling or otherwise reverse-engineering of the
▇▇▇▇▇▇ Technology and (b) contains provisions no less favorable to Licensor than
the restrictions of use provided in this Section II and the warranty limitations
and limitations of liability for damages provided in the Agreement with respect
to the License.
(ii) Upon reasonable demand by Licensor to Licensee, which may be
made from time to time and at any time, the Licensee will furnish the Licensor
with the restrictive provisions from any and all of its standard form(s) of
license agreement, then or previously, between the Licensee and its sublicensees
and/or resellers, solely for the purpose of ascertaining Licensee's compliance
with the terms of the License. In no event shall Licensee be under any
obligation to divulge the identity of any of its sublicensees or the commercial
terms, such as pricing and support, provided its sublicensees.
(iii) The Licensee may provide or provide access to the source
code form of the ▇▇▇▇▇▇ Technology only to Licensee's sublicensees and then only
if such sublicensee(s) are not Competitors as defined by Section XII.C and if
either (a) pursuant to an escrow agreement with such sublicensee(s) which (1)
contains provisions restricting the use of the ▇▇▇▇▇▇ Technology to maintaining
the product licensed by Licensee to the sublicensee in question and requiring
the sublicensee to maintain the ▇▇▇▇▇▇ Technology in strict confidence and only
use it internally, (2) permits a breaking of escrow only upon the occurrence of
an event described in Section XI.A. hereof, and (3) is otherwise commercially
reasonable in all respects (including the identity of the escrow agent); or (b)
if Licensee has received Licensor's express written consent, which consent shall
not be unreasonably withheld.
(iv) For the purposes of this Agreement, the term "object code"
shall mean an executable computer program restricted in its entirety to
machine-readable instructions or data and the term "source code" shall mean a
computer program or any part thereof in human-readable form.
D. All Improvements are the property of the Licensor and all title and
interest therein shall vest in the Licensor and shall be deemed to be a work
made for hire to the maximum extent permitted by law. To the extent that title
to any such Improvements may not, by operation of law, vest in the Licensor or
such Improvements may not be considered works made for hire, all rights, title
and interest therein are hereby irrevocably assigned to the Licensor. The
Licensee will, upon the Licensor's request and at the Licensor's sole expense,
execute all instruments and documents necessary to secure for the Licensor any
form of protection or property right with respect to such Improvement. The
Licensee agrees to fully cooperate with the Licensor, at no cost to the Licensor
(except for reasonable out-of-pocket expenses), in all stages of procuring such
protection and in connection with the protection of such intellectual property
right of the Licensor. Such Improvement shall become part of the ▇▇▇▇▇▇
Technology and is hereby licensed to the Licensee pursuant to the terms and
conditions of this Agreement, including those terms relating to exclusivity.
Unless the License shall have been terminated, Licensee shall have no obligation
to provide to Licensor, and Licensor shall have no right to demand, any
Improvements.
E. Unless and until Licensee shall have delivered to Licensor the
original copy of any such record, Licensee shall keep and maintain commercially
reasonable records of any and all Improvements, at its principal place of
business.
F. If the Licensor shall acquire ownership or control of any patent
right and/or other improvement, modification or enhancement after the date of
this Agreement, the Licensor agrees not to assert such right against the
Licensee, but only to the extent that such assertion by the Licensor would
prevent the Licensee's use of a then existing right granted in the License to
use: (i) the ▇▇▇▇▇▇ Technology as it existed on the Closing Date; or (ii) any
Improvement assigned to the Licensor.
III. Assets to be Sold and Purchased.
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A. On the date hereof, but with effect as of the Effective Date, the
Licensor shall sell, assign, transfer, convey and deliver to the Licensee, free
and clear of all Liens (other than the Permitted Liens), and the Licensee shall
purchase from the Licensor, the following property, assets and right owned by
the Licensor as of the Effective Date (collectively, the "Assets"):
(i) all of the Licensor's rights, title and interest in and to
the machinery, hardware, software, equipment, tools, supplies, spare parts and
other tangible personal property specifically listed on Schedule III.A(i)
attached hereto (the "Equipment"):
(ii) all of the Licensor's right, title and interest in, to and
under all Transferred Contracts; -
(iii) subject to rights granted to Licensor and its sublicensees
pursuant to the Trademark License, all of the Seller's right, title and interest
throughout the world in, to and under the trademarks, trade names, trade dress,
logos and service marks specifically listed on Schedule III.A(iii) attached
hereto (the "Trademarks"), all goodwill associated therewith or symbolized
thereby, all common law rights thereto, all registrations that have been or may
be granted thereon, all applications for registration thereof, all records and
files relating thereto and all foreign counterparts thereof, together with the
right to ▇▇▇ and recover damages for future or past infringements thereof and to
fully and entirely stand in the place of Seller (collectively, the "Trademark
Rights");
(iv) all customer lists, credit policies and credit information
with respect to all customers of, and all cost and pricing data (including all
historical information, if any) for, or with respect to Assets (excluding in
whole or in part any of the above, directly or indirectly, related to that
certain license agreement by and between Licensor and ACI Worldwide, Inc.
("ACI") dated February 1, 2001, and any amendments or predecessor agreements
thereto (the "ACI License"));
(v) all transferable warranties and guarantees granted to the
Licensor by third-parties and pertaining to the Assets as specifically listed on
Schedule III.A(v) attached hereto; and
(vi) except for any of the following items (a) that are subject
to confidentiality obligations of the Licensor and for which Licensor has not
received written consent to transfer any related contract or written
instructions releasing the Licensor from such obligations with respect thereto
or (b) that relate to the ACI License, true and correct copies of all books and
records relating to the Assets (whether kept or maintained by the Licensor or
any third party) including, without limitation, records with respect to costs,
inventory and Equipment, materials, catalogues, correspondence, mailing lists,
art work, films, sales materials and records; purchasing materials and records;
service materials and records, media materials; sales order files; ledgers and
other books of account of the Licensor; and all computer printouts, databases
and related items in a form which is readable by the Licensee and used in
connection with the Assets.
IV. Liabilities Retained by Licensor; Liabilities Assumed by Licensee.
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A. Except as specified in clause (B) below, neither the Licensee nor
any of its Affiliates shall assume or be bound by or otherwise be responsible
for any duties, responsibilities, obligations or Liabilities of the Licensor of
any kind or nature, known, unknown, contingent or otherwise, including, but not
limited to, any Liabilities of the Licensor arising out of the Licensor's
ownership and operation of the Assets. All such duties, responsibilities,
obligations or Liabilities shall be retained by the Licensor (the "Retained
Liabilities"). Retained Liabilities shall include, but not be limited to those
arising from: (i) Claims by ACI arising under the ACI License; (ii) Claims by
HNC arising out of or relating to the Settlement Agreement and any other Claims
by HNC relating to or arising out of Licensor's ownership and operation of the
Assets or ▇▇▇▇▇▇ Technology prior to the Closing Date; (iii) any Liability of
Licensor for unpaid Taxes of Licensor, including, Taxes imposed on Licensor as a
transferee or successor by contract, or otherwise; (iv) any Liability of
Licensor arising as a result of any legal or equitable action or judicial or
administrative proceeding initiated at any time in respect of anything done,
suffered to be done or omitted to be done by Licensor or any of its respective
directors, officers, employees or agents; (v) any Liability of Licensor arising
out of any Licensor Plan as hereinafter defined; (vi) any Liability arising from
or relating to the termination by Licensor of any employee of Licensor,
including but not limited to severance Liabilities and obligations under
applicable employment and employee benefit Laws; (vii) any Liability of Licensor
under or relating to any lease, contract or agreement that is not a Transferred
Contract; (viii) any Liability of Licensor to indemnify any Person by reason of
the fact that such Person was a client or officer, employee, or agent of
Licensor or was serving at the request of Licensor as a partner, trustee,
director, officer, employee or agent of another entity; (ix) any Liabilities of
Licensor arising from failure by Licensor or any of its officers, directors,
employees, agents or affiliates to comply with applicable Laws and Orders; (x)
any debt or other Liability of Licensor for or in respect of any loan, account
payable, guarantee or indebtedness; and (xi) any other Liabilities of Licensor
that are not Assumed Liabilities.
B. Notwithstanding the preceding clause (A), the Licensee hereby
agrees that on the Closing Date (but with effect as of the Effective Date) it
shall assume and shall be bound by and otherwise responsible only for those
Liabilities of Licensor which are: (i) duties, responsibilities, obligations and
Liabilities of the Licensor arising (a) after the Effective Date and before the
Closing Date under any or all Transferred Contracts in the ordinary course of
business (other than Liabilities arising from any breach or default by Licensor
occurring prior to the Closing Date or from any event or obligation arising or
occurring prior to the Closing Date) and (b) after the Effective Date under any
or all Transferred Contracts; and (ii) product liability Claims, for products
sold by Licensee after the Closing Date or for Claims arising as a result of
faults in the ▇▇▇▇▇▇ Technology as operated after the Closing Date pursuant to
any contract (including any Transferred Contract) between Licensee and its
sublicensees (the "Assumed Liabilities"). The immediately preceding sentence is
not intended to, and shall not, relieve Licensee of responsibility or liability
for Liabilities arising out of the conduct by Licensee of its own business
(whether or not related to the ▇▇▇▇▇▇ Technology or the ▇▇▇▇▇▇ IP; but, if so
related, only unless expressly subject to indemnification by Licensor under this
Agreement), including, but not limited to (i) any Liability of Licensee for
unpaid Taxes of Licensee, (ii) any Liability arising from or relating to the
termination by Licensee of any employee of Licensee (including, but not limited
to, after the Closing Date, any Transferred Employee), including but not limited
to severance Liabilities and obligations under applicable employment and
employee benefit Laws and/or (iii) any Liability of Licensee arising from or
related to a breach by Licensee of any of its covenants, warranties or
obligations under this Agreement.
V. Consideration.
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A. The consideration for the Assets and the License shall be payable
on the Closing Date by Licensee by wire transfer of immediately available funds,
in an amount equal to the sum of :
(1) One Million Eight Hundred Thousand Dollars (US$1,800,000)
(the "Consideration"); minus ------------- -----
(2) the amount of the Net Cash Position, as set forth on the
Closing Balance Sheet.
B. Post-Closing Adjustment for Business Expenses. The Licensee shall
pay to the Licensor by wire transfer of immediately available funds the amount
of any expenses incurred by Licensor in the ordinary course of business in
respect of the Assets and Assumed Liabilities due from and after the Effective
Date through the Closing Date, as agreed to in good faith by the Parties, which
payment shall be made within five (5) business days following receipt from
Licensor of an invoice reflecting such expenses.
C. Allocation of the Consideration. The Consideration shall be
allocated among the Assets and the License in the manner specifically listed on
Schedule V.C attached hereto for all purposes, and each of the Parties shall
make all appropriate Tax and other filings on a basis consistent with such
allocation. The Parties shall exchange drafts of any information returns
required by Section 1060 of the Code, and all similar state statutes, ten (10)
days prior to filing any such return.
VI. Confidentiality.
---------------
A. As used herein, "Confidential Information" shall include all
business information and data furnished by either Party to this Agreement (the
"Discloser") to the other Party (the "Recipient"), whether in oral, written,
graphic or machine-readable form, including without limitation, specifications,
user, operations or systems manuals, diagrams, graphs, models, sketches,
technical data, research, business or financial information, plans, strategies,
forecasts, forecast assumptions, business practices, marketing information and
material, client names, proprietary ideas, concepts, know-how, methodologies and
all other information related to the business of a Party but excluding any user
documentation. Without limiting the foregoing, as between the Parties, the
Assets shall be deemed Confidential Information of Licensee only.
B. Notwithstanding anything to the contrary contained in this
Agreement, Confidential Information shall not include any information that is:
(i) in the public domain (other than as a result of a direct or indirect
disclosure by the Recipient); (ii) generally known by and disclosed to the
Recipient by persons or entities engaged in a comparable business (other than as
a result of a breach of this Agreement or any other agreement with Discloser to
which such persons or entities are parties); (iii) except with respect to the
Improvements (which shall be deemed Confidential Information belonging to
Licensor only) or Assets, in the Recipient's possession prior to its receipt
from the Discloser pursuant to this Agreement, all as established by the
Recipient by clear and convincing evidence; (iv) approved for release by the
Discloser in writing; or (v) required to be disclosed by applicable law
(including any requirements of the securities laws of any Governmental Body) or
proper legal, governmental or other competent authority, provided that the
Recipient (a) shall give prompt notice so that the Discloser may seek a
protective order or other appropriate relief and (b) shall not intentionally
interfere with any efforts the Discloser may take to seek such order or relief.
In the event that such protective order is not obtained, the Recipient shall
disclose only that portion of the Confidential Information which its counsel
advises that it is legally required to disclose.
C. The Recipient hereby agree to take all steps necessary to protect
and preserve the confidentiality of the Confidential Information of the
Discloser and shall not, directly or indirectly: (i) transfer or disclose any
Confidential Information to any third party (other than to its employees,
contractors or consultants (but only as set forth in Section VI.D hereof)); (ii)
use any Confidential Information other than as contemplated by this Agreement or
(iii) take any other action with respect to the Confidential Information
inconsistent with the confidential and proprietary nature of such information.
D. Recipient shall be permitted to disclose the Confidential
Information to: (i) any of its employees who have a need for access thereto in
connection with their employment; and (ii) any of the Recipient's contractors or
consultants who have a need for access thereto solely in connection with
developing the ▇▇▇▇▇▇ Technology; provided however, that all such employees,
contractors or consultants, as applicable, have executed confidentiality
agreements containing provisions similar to those contained in this Agreement.
Recipient shall take all steps necessary, at its own cost, to prevent its
employees, contractors or consultants from acting in a manner inconsistent with
the terms of this Agreement.
E. All prior confidentiality agreements, or provisions of other
agreements that provide for confidentiality, between the Parties shall be
superceded by this Section VI.
VII. Indemnity.
---------
A. Obligation of the Licensor to Indemnify. Subject to the provisions
of this Section VII and Section VIII, the Licensor agrees to indemnify, defend
and hold harmless the Licensee (and its respective directors, officers,
employees, Affiliates, successors and assigns), from and against all Claims,
Liabilities, judgments, settlements, costs of investigation and other expenses
(including Taxes, interest, penalties and reasonable attorneys' fees and
reasonable fees of other experts and disbursements and expenses incurred in
enforcing this indemnification) actually suffered or actually incurred
(collectively, the "Losses") by the Licensee or any of the foregoing persons in
any action or proceeding between the Licensee (or any other indemnified person)
or the Licensor, or between the Licensee (or any other indemnified person) and
any third party or otherwise, arising out of:
(i) any breach of the representations and warranties of the
Licensor contained in this Agreement, including the Exhibits and Schedules, or
any other Transaction Document;
(ii) any breach of the covenants and agreements of Licensor
contained in this Agreement or in the Schedules, Exhibits or any other
Transaction Documents;
(iii) Claims by any third party alleging that any part of the
▇▇▇▇▇▇ Technology or the ▇▇▇▇▇▇ IP which Licensor uses in products it markets or
licenses for use outside the Exclusive Field of Use as of the Closing Date (the
"Neural Network") infringes, contributes to the infringement of, induces the
infringement of or misappropriates any United States copyright, trademark
(excluding those trademarks contained in the Assets), trade secret, patent or
other proprietary right of a third party or corresponding right in a foreign
country except for Claims described in B(iii) below;
(iv) Claims by any third party alleging that any part of the
▇▇▇▇▇▇ Technology or ▇▇▇▇▇▇ IP other than the Neural Network infringes,
contributes to the infringement of, induces the infringement of or
misappropriates any United States copyright, trademark (excluding those
trademarks contained in the Assets), trade secret, patent or other proprietary
right of a third party or corresponding right in a foreign country except as
solely used within the New Field of Use and/or except for Claims described in A
(v) or B(iii) below:
(v) Claims by any third party alleging that any part of the
▇▇▇▇▇▇ Technology or ▇▇▇▇▇▇ IP, other than the Neural Network, infringes,
contributes to the infringement of, induces the infringement of or
misappropriates a United States patent of a third party, (but only if such a
patent exists on or issues as a result of any patent application existing on and
publicly disclosed or before the Closing Date) except for Claims described in
B(iii) below;
(vi) Retained Liabilities;
(vii) product or service liability Claims arising before the
Closing Date hereof with respect to products or services sold, licensed or
provided by Licensor or its distributors or agents;
(viii) the extended health and benefits coverage under Licensor
Plans not being available to the Transferred Employees during the Employee
Transition Period as contemplated by Section IX(H); and
(ix) any Liability of Licensor that becomes a Liability of the
Licensee under any bulk transfer law of any jurisdiction or any other Liability
of Licensor that is not an Assumed Liability that becomes a Liability of
Licensee under any common law doctrine of de facto merger or successor
liability, or otherwise by operation of law.
B. Obligation of the Licensee to Indemnify. The Licensee agrees to
indemnify, defend and hold harmless the Licensor (and any director, officer,
employee, Affiliate or successors and permitted assigns of the Licensor) from
and against any Losses suffered or incurred by the Licensor or any of the
foregoing persons arising out of:
(i) any breach of the representations and warranties of the
Licensee contained in this Agreement, including the Exhibits and the Schedules,
or any other Transaction Document;
(ii) any breach of the covenants and agreements of Licensee
contained in this Agreement or in the Schedules, Exhibits or any other
Transaction Document;
(iii) Claims by any third party alleging that (a) (1) the ▇▇▇▇▇▇
Technology or the ▇▇▇▇▇▇ IP, as used within the New Field of Use, (2) the ▇▇▇▇▇▇
Technology or the ▇▇▇▇▇▇ IP in combination with any other product, service or
technology provided by or for Licensee with which the ▇▇▇▇▇▇ Technology or
▇▇▇▇▇▇ IP were not used or intended for use in combination as of the Closing
Date, (3) any Improvement to the ▇▇▇▇▇▇ Technology or the ▇▇▇▇▇▇ IP made by or
for Licensee and/or (4) any marking or branding used or applied by Licensee and
not required by or directed by Licensor infringes, contributes to the
infringement of, induces the infringement of or misappropriates any United
States copyright, trademark (excluding those trademarks contained in the
Assets), trade secret, patent or other proprietary right of a third party or
corresponding right in a foreign country;
(iv) the Assumed Liabilities;
(v) the operation of the Assets or the exercise of any right
under the License by the Licensee from and after the Closing Date, except to the
extent Licensor has agreed to indemnify, defend and hold harmless Licensee (and
its respective directors, officers, employees, Affiliates, successors and
assigns) under Sections VII(A); and
(vi) product or service liability Claims arising with respect to
products or services incorporating any of the ▇▇▇▇▇▇ Technology or ▇▇▇▇▇▇ IP
licensed or provided, as the case may be, by Licensee following the Closing
Date.
C. Notice and Opportunity to Defend Third Party Claims.
(i) Promptly after receipt by any Party hereto (the "Indemnitee")
of notice of any demand, claim or circumstance which would or might give rise to
a claim by, or the commencement (or threatened commencement) of any action,
proceeding or investigation that may result in a Loss (an "Asserted Liability"),
the Indemnitee shall give prompt written notice thereof (the "Claims Notice") to
the Party obligated to provide indemnification pursuant to Sections VII(A) or
VII(B) (collectively, the "Indemnifying Party"). The Claims Notice shall
describe the Asserted Liability in reasonable detail and shall indicate the
amount (estimated, if necessary, and to the extent feasible) of the Loss that
has been or may be suffered by the Indemnitee. The failure of the Indemnitee to
provide a Claims Notice to the Indemnifying Party as herein provided shall not
relieve the Indemnifying Party of it obligations under this Section VII, unless
and then only to the extent that the Indemnifying Party is materially prejudiced
by such failure.
(ii) The Indemnifying Party may elect to defend, at its own
expense and with its own counsel, any Asserted Liability unless: (1) the
Asserted Liability seeks an Order, injunction or other equitable or declaratory
relief against the Indemnitee; or (2) the Indemnitee shall have reasonably
concluded that: (y) there is a conflict of interest between the Indemnitee and
the Indemnifying Party in the conduct of such defense; or (z) the Indemnitee
shall have one or more defenses not available to the Indemnifying Party
(provided, however, that none of these exceptions shall apply to Claims
described in Sections VII.A.(iii), (iv) and/or (v) or Section VII.B(iii)). If
the Indemnifying Party elects to defend such Asserted Liability, then it shall
within ten (10) days (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the defense of such
Asserted Liability. If the Indemnifying Party elects not to defend the Asserted
Liability, is not permitted to defend the Asserted Liability by reason of the
first sentence of this VII(C)(ii), fails to notify the Indemnitee of its
election as herein provided or contests its obligation to indemnify under this
Agreement with respect to such Asserted Liability, then the Indemnitee may pay,
compromise or defend such Asserted Liability at the sole cost and expense of the
Indemnifying Party, provided that the Indemnitee has notified the Indemnifying
Party of the claim and has consulted with the Indemnifying Party concerning the
defense thereof. Notwithstanding the foregoing, neither the Indemnifying Party
nor the Indemnitee may settle or compromise any claim over the reasonable
written objection of the other; provided that the Indemnitee may settle or
compromise any claim as to which the Indemnifying Party has failed to notify the
Indemnitee of its election under this Section VII(C)(ii) or as to which the
Indemnifying Party is contesting its indemnification obligations hereunder. In
any event, the Indemnitee and the Indemnifying Party may participate, at their
own expense, in the defense of any Asserted Liability. If the Indemnifying Party
chooses to defend any Asserted Liability, then the Indemnitee shall make
available to the Indemnifying Party any books, records or other documents within
its control that are necessary or appropriate for such defense. Any Losses of
any Indemnitee for which an Indemnifying Party is liable for indemnification
hereunder shall be paid upon written demand therefor. The foregoing
notwithstanding, neither Party shall settle, compromise or take any other action
with respect to any Claim unless it, with respect to Licensee, has no adverse
impact on the Neural Network, or unless it, with respect to Licensor, has no
adverse impact on any Improvement; and unless it otherwise contains an
unconditional release of the other Party or is otherwise consented to by such
other Party (such consent not to be unreasonably withheld).
D. Other Claims. If any action, proceeding or investigation for which
indemnification is sought involves Claims brought by a third party which are the
subject of both Section VII.A. and Section VII.B. or Claims against the
Indemnitee not subject to indemnification under this Agreement, then in such
case or cases the Parties' respective damages under this Section VII shall be
apportioned between the Parties in proportion to their respective faults to the
extent indemnifiable therefor provided, however, if neither Party is 100% liable
with respect to such a third party claim, each Party will bear its own defense
costs, including its attorneys' fees.
E. Exclusive Remedy. The Parties agree that the indemnification
provisions of this Section VII shall constitute the sole and exclusive remedy of
any Party (or sublicensee of a Party or any other entity claiming by or through
a Party) in respect of any of the matters which are the subject of this
Agreement, except for any Claims for fraud or intentional torts (for which the
indemnification provisions of this Section VII shall not constitute the sole and
exclusive remedy of any Party in respect of this Agreement, each Party being
entitled to seek any other remedy to which such Party is entitled, whether at
law or in equity) and that there are no rights to indemnification other than as
provided in this Section VII, provided, however, that nothing contained herein
shall prevent either party from seeking any injunction, damages or other relief
to enforce the provisions of Sections II, VI or IX.C, hereof and any other
provisions under any Transaction Document for which injunction or other
equitable relief is otherwise permitted or contemplated. Any dispute between the
Parties as to any Claim for indemnification under this Agreement or any other
proceeding brought hereunder shall be subject to arbitration as provided in
Section H of this Agreement.
F. Certain Limits on Indemnification. Notwithstanding any other
provision of this Agreement or otherwise applicable Law, the right of either
Party to indemnification under this Section VII or to claim damages as a result
of a breach of this Agreement (in either case a "Right"), except for claims of
fraud or intentional torts, shall be subject to the following additional
limitation terms and conditions:
(i) Except for Reserved Claims and suits instituted thereon and
Claims for breaches of any representations and warranties contained herein as to
which a Party has given the other Party notice including a reasonably specific
description of the nature of such Claim on or before such date, no Claim may be
made or suit instituted seeking enforcement of or damages in respect of any
breaches of any representations and warranties contained in this Agreement after
the date which is eighteen (18) months after the Closing Date and any such
Claims shall be subject to the Threshold and Cap as provided in (iv) below.
"Reserved Claims" shall mean all claims for indemnification under Section VII
for breaches of representations and warranties contained in Section XIII(A)
(authority), Section XIII(I) (title) or Section XIV(A) (authority) or in any
schedule thereto. Reserved Claims shall not be subject to any limitation as to
time or monetary amount except as provided in this Section VII.F(i). If an Order
is entered or issued in favor of Licensee's claim for indemnification in respect
of, or otherwise confirming the existence of, a Reserved Claim, then Licensor
shall grant, and hereby grants, to Licensee a license of the same force and
effect and subject to the same terms and conditions as the License (except that
it shall be nonexclusive), and Licensor shall further use its best efforts to
obtain for Licensee all rights to and in the ▇▇▇▇▇▇ Technology, ▇▇▇▇▇▇ IP and
the Assets which the parties intended for Licensee to receive and have
transferred to it as of the Closing Date (as evidenced by the express terms of
this Agreement), with any formal proceedings necessary to secure such rights
commenced by Licensor within 30 days of the date of any such Order; provided
that Licensee shall not be deemed to waive its rights to any award granted for
losses as otherwise herein provided to the extent Licensor is unable to secure
all such rights for Licensee and provided, further, that Licensor shall not
grant any other party any rights that would otherwise diminish Licensee's
intended rights. If Licensor fails to obtain all such intended rights for
Licensee or fails to use its best efforts to obtain such rights, Licensor shall
be liable to Licensee with respect to any such Reserved Claim up to a maximum of
the Consideration for any direct damages and up to an additional maximum of
$1,000,000 for any other provable damages suffered by Licensee as a result. No
claim may be made or suit instituted seeking enforcement of or damages for a
Right in respect of any Reserved Claim more than six (6) years after the date
hereof.
(ii) No Claim may be made or suit instituted seeking
indemnification pursuant to Section VII.A(iv) hereof or enforcement of any Right
arising from any Claim described in such Section VII.A.(iv) after the fourth
anniversary of the Closing Date and any such claim shall be further limited to
the Threshold Amount and Cap as provided in (iv) below.
(iii) Claims made and suits instituted seeking (a)
indemnification pursuant to Sections VII.A(ii), (iii), (v), (vi), (vii), (viii),
(ix) and Sections VII(B)(ii), (iii), (iv), (v), (vi) or enforcement of any Right
arising from any Claim described in such Sections or (b) the enforcement of the
provisions of Section II, VI or IX.C shall not be subject to any limitation as
to time or monetary amount.
(iv) Licensor shall not be liable to Licensee for any Loss
indemnifiable under Sections VII.A(i) (except for Reserved Claims) and A.(iv)
above (collectively, the "Limited Losses") until the aggregate amount of all
such Limited Losses exceeds Fifty Thousand Dollars (US$50,000) in the aggregate
(the "Threshold"), at which time only those Losses in excess of the Threshold
shall be subject to Licensor's indemnification obligations. The maximum
liability of Licensor for Licensee for Limited Losses shall equal One Million
Dollars (US$1,000,000) (the "Cap").
(v) Except as provided with respect to Reserved Claims in Section
VII.F.(i) and except for Claims described or included in Sections VII.F.(i),
(ii) or (iii), neither Party shall be liable to the other Party in connection
with any breach of this Agreement for any consequential, special, incidental,
indirect or punitive damages; provided, however, that without in any way
limiting the foregoing, the Parties further agree that, if there exists a third
party claim for which a Party is obligated to provide indemnity under Sections
VII.A.(iii), (iv), (v) or VII.B.(iii), and such Party is obligated to indemnify
the other Party, such other Party's Losses shall include defense costs, amounts
agreed to in settlement and/or amounts awarded in any such proceeding, but shall
not include any indirect, consequential or punitive damages as between the
Parties.
(vi) If one Party initiates a proceeding against the other Party
to enforce any Right under this Agreement, the prevailing Party in any such
proceeding shall be entitled to, in addition to any other Losses to which it may
be entitled, its reasonable costs and attorneys' fees incurred in connection
with any such proceeding.
(vii) Notwithstanding the foregoing or any other provision of
this Agreement, if the use by Licensee of ▇▇▇▇▇▇ Technology, the ▇▇▇▇▇▇ IP, or
any component of either thereof becomes, or in Licensor's reasonable opinion is
likely to become, enjoined or restrained as a result of any third-party Claim
described in Section VII.A.(iii), (iv) or (v), the Licensor shall in addition to
its obligation in this Section VII.A, at its option either (i) replace such part
or parts that have been or may be enjoined or restrained or (ii) modify such
part or parts to provide substantially similar functionality or obtain a license
for them so that they are no longer subject to the injunction or (iii), if
neither (i) or (ii) is reasonably commercially available, to refund Licensee an
amount of the Consideration that is fair and equitable.
VIII. Representations and Warranties.
------------------------------
A. Each of the Parties does hereby represent and warrant to the other
party as specifically listed on Exhibit A attached hereto.
B. EXCEPT AS OTHERWISE PROVIDED WITHIN THIS AGREEMENT AND ITS
EXHIBITS, SCHEDULES, AND OTHER ATTACHMENTS, LICENSOR PROVIDES THE ASSETS AND
LICENSE TO LICENSEE AS IS AND WITHOUT ANY REPRESENTATIONS AND WARRANTIES
(EXPRESS OR IMPLIED). WITHOUT LIMITING THE FOREGOING, THE PARTIES EXPRESSLY
DISCLAIM AND WAIVE THE APPLICATION OF THE UNIFORM COMPUTER INFORMATION
TRANSACTIONS ACT, INCLUDING ANY WARRANTY IMPLIED BY IT, TO THIS AGREEMENT AND
ANY CLAIMS ARISING UNDER OR RELATED TO THIS AGREEMENT.
IX. Covenants and Agreements.
------------------------
A. Filings and Authorizations. The Parties shall cooperate and use
their respective best efforts to make, or cause to be made, all registrations,
filings, applications and submissions, to give all notices and to obtain all
governmental or other third party consents, transfers, approvals, Orders and
waivers necessary or desirable for the consummation of the Contemplated
Transactions in accordance with the terms of this Agreement and shall furnish
copies thereof to each other Party prior to such filing and shall not make any
such registration, filing, application or submission to which the other Party,
reasonably objects in writing. All such filings shall comply in form and content
in all material respects with applicable Law. The Parties hereto also agree to
furnish each other with copies of such filings and any correspondence received
from any Governmental Body in connection therewith. The Parties shall each bear
their own respective costs with respect to the matters set forth in this Section
IX.A.
B. Public Announcements. The Parties will consult with each other
before issuing any press release or otherwise making any public statement with
respect to the Contemplated Transactions, and no Party hereto will issue any
such press release or make any such public statement without the prior approval
of the other Party, except as may be required by applicable Law in which event
the other Party shall have the right to review and reasonably comment upon (but
not approve) any such press release or public statement prior to its issuance. -
C. Non-Competition; Non-Solicitation.
(i) The Licensor acknowledges that in order to ensure that the
Licensee will retain the value of the Assets, the Licensor agrees that for a
period commencing on the Closing Date and expiring on the first to occur of: (A)
a termination of the License; or (B) the date which is five (5) years from the
Closing Date (such period shall be referred to as the "Licensor Covenant
Period"), except for transactions in connection with or required or contemplated
by the ACI License and any amendments thereto, Licensor will not compete with
the Licensee at the time in question, in connection with the development, sale,
marketing, servicing or license of software applications for use in or for the
Exclusive Field of Use. Notwithstanding anything contained herein to the
contrary, the Licensor may amend the terms of the ACI License without any
restrictions (including but not limited to expanding the ACI License to include
areas within the Exclusive Field of Use). In the event that the Licensor grants
ACI the right to sublicense the source code of the ▇▇▇▇▇▇ Technology, the
Licensor shall and hereby does, grant the Licensee the right to sublicense the
source code of the ▇▇▇▇▇▇ Technology to the same extent as and on terms no less
favorable than the terms of the grant of such rights to ACI; provided, however,
that such source code license to Licensee shall only be within the Exclusive
Field of Use and/or Non-Exclusive Field of Use.
For purposes of this Section IX, the term "compete" shall
include acting or participating, directly or indirectly, as a partner,
consultant, agent, licensor or otherwise, own or operate any business or Person,
or otherwise become or be interested in, any Person engaged in the business of
developing, marketing or selling any applications within the Exclusive Field of
Use; provided, however, that the term compete shall not include (a) activities
and communications related to the ACI License or (b) the ownership of less than
five (5%) per cent of the equity interest in any publicly traded Person.
(ii) For a period of eighteen (18) months from the date of the
ACI License, Licensee agrees not to hire or retain either as an employee, or as
or through a consultant any employee of ACI specifically listed on Schedule
IX.C(ii) attached hereto except with prior mutual consultation and consent of
ACI and Licensor.
(iii) For a period of twelve (12) months from the date hereof,
each Party agrees not to directly or indirectly recruit, offer employment, lure
or entice away, hire or retain either as an employee, or as or through a
consultant or in any other manner persuade or attempt to persuade any current
employee of the other Party or Affiliate thereof (except as otherwise provided
herein).
D. Expenses. Except as otherwise specifically provided in this
Agreement, the Licensee and the Licensor shall bear their respective expenses,
in each case, incurred in connection with the preparation, execution and
performance of the Transaction Documents and the Contemplated Transactions,
including, without limitation, all fees and expenses of their respective
Representatives. Notwithstanding anything contained herein to the contrary, the
Licensee shall be obligated, and shall pay, any and all sales and property taxes
on Assets imposed as a result of the sale of the Assets or granting of the
License herein.
E. Further Assurances. The Parties shall at any time following the
execution of this Agreement take or cause to be taken such actions, or execute,
acknowledge and deliver, or cause to be executed, acknowledged or delivered, all
such further documents, instruments or assurances, as may be necessary,
desirable or proper to carry out the intent and accomplish the purposes of this
Agreement. Except as otherwise provided herein, the Parties will each,
respectively, bear their own costs and expenses incurred in compliance with the
first sentence of this Section IX.E.
F. Obtaining Consents to Assignments. The Licensor shall use
commercially reasonable efforts to obtain all the Licensor Required Consents as
shall be necessary to convey and assign to and vest in the Licensee all of its
right, title and interest in and to the Assets, including, without limitation,
any Claim, right or benefit arising thereunder or resulting therefrom, as soon
as practicable. To the extent that rights under any Transferred Contract or
other Assets to be assigned to the Licensee hereunder may not be assigned
without the consent of another person, and such consent has not been obtained as
of the date hereof, neither this Agreement nor any document executed by the
parties hereto in connection with the Contemplated Transactions shall constitute
an agreement to assign the same if any attempted assignment would constitute a
breach thereof or would be unlawful, and the Licensor shall use commercially
reasonable efforts to obtain any such Licensor Required Consents as promptly as
possible. In the event that the Licensor fails to obtain any Licensor Required
Consents, the Licensor agrees to appoint the Licensee as its agent to provide
all services obligations in connection with each such Transferred Contract, on
behalf of the Licensor, until the earlier of: (i) the obtaining of a Licensor
Required Consent; or (ii) the termination of the Transferred Contract. Any fees
received by the Licensor with respect to such Transferred Contracts that are
with respect to events or periods that occur on and after the Effective Date,
shall be paid by Licensor to Licensee.
G. Licensee Not to Use Name. From and after the Closing Date, the
Licensee will not use, directly or indirectly, the name "NestorCommerce,"
"▇▇▇▇▇▇," or any other trademark of the Licensor not otherwise specifically
assigned pursuant to this Agreement or any combination or derivation thereof.
From and after the Closing Date and except with respect to corporate and
financial reporting, the Licensor will not use, directly or indirectly, the name
"NestorCommerce," or any trademark of the Licensee not otherwise specifically
assigned or licensed pursuant to this Agreement or the Transaction Documents.
Notwithstanding the foregoing, after the Closing Date, the Licensor shall not be
required to remove or discontinue using the name "NestorCommerce," that is
affixed to already existing products, documents or materials of Licensor.
H. Transferred Employees.
(i) On or prior to the Closing Date, each of the employees
specifically listed on Schedule IX.H(i)A who actually commence employment with
Licensee at Closing (the "Transferred Employees") has delivered to Licensor a
letter of resignation (in a form acceptable to Licensor), which resignation
shall be accepted by Licensor and be effective as of the Closing Date.
Substantially simultaneously therewith, Licensee shall or shall have tendered to
each of the Transferred Employees an offer of employment, effective as of the
Closing Date, on terms (including, but not limited to wages and benefits)
substantially similar to those described on Schedule IX.H(i)B attached hereto.
(ii) Subject to clause (iv) below, Licensor shall be solely
responsible for the costs associated with termination of the Transferred
Employees' employment with Licensor that may be due to such employees for
services performed prior to the Closing Date including but not limited to: (1)
accrued vacation; (2) bonuses; (3) commissions or incentives; and (4) separation
payments, severance, drawdown and any other similar payments. Licensee shall be
liable for any fees, expenses, salaries, wages, benefits or other payments in
respect of the Transferred Employees which arise in the ordinary course of
business following the Effective Date. Licensee shall also be liable for any
fees, expenses, salaries, wages, benefits or other payments which arise as a
result of the Licensee's termination of any of the Transferred Employees after
the Closing Date.
(iii) Licensor agrees to maintain current health and benefits
coverage in place for the Transferred Employees after the Closing Date until the
earlier of two (2) months after the Closing Date or such time as Licensee
implements or amends its own benefits coverage to include the Transferred
Employees and notifies ▇▇▇▇▇▇ in writing at least ten (10) days before the end
of the last month for which Licensee desires Licensor to maintain such coverage
(the "Employee Transition Period").
(iv) Licensee shall reimburse Licensor for the costs incurred by
Licensor in respect of all employee benefits provided by Licensor to the
Transferred Employees during the period beginning the Effective Date through the
end of the Employee Transition Period. Licensee agrees to reimburse Licensor for
all salaries, bonuses, commissions, and incentives payable and the employer
portion of withholding Taxes (including social security, FICA and FUTA) and any
other costs incurred by Licensor from and after the Effective Date through the
Closing Date in connection with the Transferred Employees.
(v) Intentionally omitted.
(vi) Licensor shall invoice Licensee at the beginning of each
month for all amounts to be reimbursed by Licensee pursuant to this Section IX.H
for such month. Licensee shall pay Licensor for such amounts not later than five
(5) business days after receipt of such invoice.
(vii) Licensor agrees not to enforce any nondisclosure agreement
between the Licensor and any Transferred Employee against any Transferred
Employee, but only to the extent that: (i) the information disclosed by such
Transferred Employee is disclosed to Licensee in connection with his/her
employment; (ii) such information relates to the Assets or the ▇▇▇▇▇▇ Technology
or ▇▇▇▇▇▇ IP within the Exclusive Field of Use or Non-Exclusive Field of Use and
(iii) such information does not in any event relate to ACI or the ACI License.
I. Use of ▇▇▇▇▇▇ Facilities.
(i) For a period of up to nine (9) months following the date
hereof or such shorter period as Licensee shall so notify Licensor not later
than sixty (60) days prior to the date on which such notice is intended to be
effective (the "Transition Period"), Licensor shall permit the Transferred
Employees and any other additional employees hired by Licensee after the date
hereof to continue to use Licensor Offices and related facilities. In
consideration of Licensor permitting such use of Licensor Offices, Licensee
shall pay Licensor an amount equal to $1,000 per calendar month or part thereof
for each Transferred Employee or other employee of Licensee located at Licensor
Offices during each month of the Transition Period. Licensee shall pay Licensor
for such amounts not later than five (5) business days after receipt of
Licensor's invoice therefor, which invoice shall not be rendered by Licensor
prior to the first day of the month to which such payment relates .
(ii) During the Transition Period, at no additional charge to
Licensee: (1) Licensor shall provide such employees with access to reasonable
equipment (including local PCs, database servers, photocopiers and fax machines)
and related maintenance, telephone services (including local and long distance,
but not international, charges), fixtures, furniture, parking spaces and other
uses of Licensor Offices in substantially the same manner as currently used by
the Transferred Employees at Licensor Offices, (2) Licensor shall provide such
employees with email services as presently used by Licensor's employees, and (3)
Licensor shall permit Licensee to store any and all Assets at Licensor Offices
and shall provide Licensee and its representatives with full access during
normal business hours to Licensor Offices for maintenance of, removal or other
activity concerning the Assets.
(iii) During the Transition Period, Licensor shall use its
commercially reasonable efforts to prevent loss or damage to the Assets by
taking reasonable measures. Nevertheless, Licensor shall not be responsible for
any Loss of the Assets stored at Licensor Offices, except and then only to the
extent that such Loss is attributable to the negligence or willful misconduct of
Licensor or any of its employees or agents.
(iv) Licensee's employees shall conduct themselves in accordance
with Licensor's employee policies in effect as of the date hereof and in a
manner so as not to interfere with normal business operations of Licensor and
not to cause damage or destruction to Licensor Offices, equipment, software or
data. Without limiting the foregoing, Licensee agrees that it and its employees
will not engage in any inappropriate conduct while on Licensor premises,
including but not limited to: (i) being under the influence of, or affected by,
or manufacturing, using or distributing alcohol, illegal drugs or controlled
substances, except for approved, legal, valid, medical purposes; (ii) the
possession of any kind of weapon, (iii) harassment (whether or not sexual),
threats or violent behavior, (iv) any inappropriate use of any computer
software, equipment or service (including but not limited to the use or
dissemination of any virus, trap door, back door, Trojan horse, worm or other
malicious code of any kind), (v) attempting to obtain or use any of the assets
or proprietary or confidential information of Licensor (unless otherwise
expressly permitted by this Agreement) and/or (vi) any illegal activity of any
kind.
(v) Licensor agrees to comply with the terms and conditions of
and to perform all of its material obligations (including making timely rental
payments) under the Providence Lease during the Transition Period. In the event
that the landlord of Licensor Offices terminates, threatens to terminate or
notifies Licensor of any material default concerning the Providence Lease during
the Transition Period, Licensor shall immediately notify Licensee. Licensor
agrees that it shall take no action to terminate the Providence Lease during the
Transition Period.
(vi) As of the date hereof, the Licensee shall, at its sole cost
and expense, have and maintain in effect a comprehensive general liability and
property damage insurance policy providing coverage of $1,000,000 per
occurrence, $2,000,000 in the aggregate and a $2,000,000 umbrella, subject to
customary self-insured retentions, and insuring against any claims that occur
during the Transition Period with respect to the Assets and /or Licensee's
activities in the Licensor Offices and the contents therein and thereof, which
policy shall show the Licensor as an additional named insured; and certify that
no alteration, modification or termination of such coverage shall be effective
during the Transition Period.
J. The Licensee further understands and agrees that:
(i) it will not accept or enter into any agreement with the U.S.
government) that by its terms or by the operation of law would grant the
government rights in the ▇▇▇▇▇▇ Technology greater than those Licensee may grant
any other end-user;
(ii) it does not intend to and will not use, market, disseminate
or transfer in any way the ▇▇▇▇▇▇ Technology in violation of any applicable law,
rule or regulation of the United States or any State of the United States or any
foreign country of applicable jurisdiction (including without limitation any
U.S. law, rule or regulation relating to technology export or transfer), and
(iii) it will obtain at its own cost any required export licenses
for Licensee's use as provided herein.
K. Each Party hereto agrees that it will not infringe the patent,
copyright or other proprietary rights in the ▇▇▇▇▇▇ Technology or the ▇▇▇▇▇▇ IP
nor assist others in doing so;
L. Accounts Receivable. In the event that any customer of Licensee has
incorrectly paid to Licensor any invoice issued by Licensee, Licensor shall
notify Licensee promptly following knowledge of such incorrect payment and shall
forward the invoice payment within five (5) business days thereof.
M. Bulk Transfer. Each Party hereby waives compliance by the other
Party with the provisions of any so-called "bulk transfer law", common law
doctrine of de facto merger or successor liability and other similar laws of any
jurisdiction in connection with the Contemplated Transactions.
X. Delivery.
--------
A. Deliveries of the Licensee. At Closing, the Licensee shall deliver
the following to the Licensor:
(i) The Consideration and prepaid assets by wire transfer of
immediately available funds, as set forth in Section V.A(ii).
(ii) Evidence of the good standing and corporate existence of the
Licensee issued by the Secretary of State of the State of New Jersey;
(iii) a copy of Licensee's Certificate of Incorporation certified
by the Secretary of State of the State of New Jersey;
(iv) An executed copy of an Assignment of Trademarks,
substantially in the form annexed hereto as Exhibit B(i).
(v) An executed copy of a Marketing and Transition Services
Agreement, substantially in the form annexed hereto as Exhibit B(ii).
(vi) An executed copy of a Trademark License Agreement,
substantially in the form annexed hereto as Exhibit B(iii) (the "Trademark
License").
(vii) An executed copy of an Assignment and Assumption Agreement,
substantially in the form annexed hereto as Exhibit B(iv) (the "Assignment and
Assumption Agreement").
B. Deliveries of the Licensor. At Closing, the Licensor shall deliver
the following to the Licensee:
(i) the Deliverables.
(ii) written consents by third parties under the Licensor
Required Consents (including, without limitation with respect to the Transferred
Contracts), which are indicated by an asterisk on Schedule I.E. in form and
substance reasonably satisfactory to the Licensee.
(iii) Evidence of the good standing and corporate existence of
the Licensor issued by the Secretary of State of the State of Delaware.
(iv) a copy of Licensor's Certificate of Incorporation certified
by the Secretary of State of the State of Delaware;
(v) Possession and control of the Assets.
(vi) An executed copy of a ▇▇▇▇ of Sale and Assignment
substantially in a form annexed hereto as Exhibit B(v).
(vii) An executed copy of an Assignment of Trademarks,
substantially in the form annexed hereto as Exhibit B(i).
(viii) An executed copy of a Marketing and Transition Services
Agreement, substantially in the form annexed hereto as Exhibit B(ii).
(ix) An executed copy of a Trademark License, substantially in
the form annexed hereto as Exhibit B(iii).
(x) An executed copy of an Assignment and Assumption Agreement,
substantially in the form annexed hereto as Exhibit B(iv).
(xi) An executed copy of a payoff letter from ACI which sets
forth the amount of the debt owed by Licensor to ACI, in the form and substance
reasonably acceptable to Licensee.
(xii) Evidence satisfactory to Licensee that all of Licensor's
debt to Citizens Bank of Rhode Island has been repaid in full and terminated and
that all related Liens have been removed (including copies of related UCC-3s).
(xiii) the legal opinion of ▇▇▇▇ Marks & ▇▇▇▇▇ LLP, counsel to
Licensor, substantially in the form and substance attached hereto as Exhibit
B(vi).
XI. Term and Termination.
--------------------
A. The License shall terminate if the Licensee: (i) files a voluntary
petition in bankruptcy or under any similar insolvency law; or has filed against
it any involuntary petition in bankruptcy or under any similar insolvency law if
any such petition is not dismissed within one hundred eighty (180) days after
filing; or (ii) a receiver is appointed for, or a levy or attachment is made
against, substantially all of its assets, if any such petition is not dismissed
or such receiver or levy or attachment is not discharged within one hundred
eighty (180) days after the filing or appointment liquidates, dissolves, shall
be adjudicated insolvent, files or has filed against it a petition in bankruptcy
or for reorganization (unless such petition is removed within one hundred eighty
(180) days of its filing), takes advantage of any insolvency act or proceeding,
including an assignment for the benefit of creditors, or commits any other act
of bankruptcy.
Either Party may terminate the License by written notice to the other
Party, if such other Party shall materially breach any provision of the License
and such breach, if curable, is not cured by such Party within at least sixty
(60) days after receipt of written notice thereof; provided, however, that such
cure period shall be suspended in the event of a good faith dispute among the
Parties as to whether any such breach has occurred, pending resolution of any
such dispute and for sixty (60) days following the conclusion of any such
proceeding as provided in Section XII.H.
B. Notwithstanding any termination of the License, any valid
unbreached sublicense shall continue in effect with respect to any ▇▇▇▇▇▇
Technology sublicensed by the Licensee prior to termination. Termination of the
License shall not release either Party from any of its obligations or
liabilities accrued or incurred under this Agreement, or rescind or give rise to
any right to rescind any payment made or other consideration given hereunder,
except that a termination by the Licensor for a breach of the License by the
Licensee shall release the Licensor from any obligation or liability accrued or
incurred after the date of such breach.
C. Upon termination of the License, in whole or in part:
(i) The Licensee shall cease sublicensing of all products, and
the providing of all services other than to support then existing customers of
the Licensee as permitted by this Section XI.C. under such part or parts of the
License as shall have been terminated; provided, however, except in the case of
a termination for a breach committed by Licensee, that the Licensee (and any of
its sublicensees who are not end users) shall have thirty (30) days from the
effective date of termination to complete delivery of then
contracted-for-services, all subject to the provisions of this Agreement;
(ii) If the License shall be terminated in whole or in part, and
provided that such termination has not been caused by the Licensee's material
breach of this Agreement, the Licensee shall be permitted to retain, for the
Licensee's use only, no more than three (3) copies of the ▇▇▇▇▇▇ Technology if
such shall be necessary to enable the Licensee to provide maintenance support to
its then existing customers, and such copies shall be maintained in strict
confidence as provided in Section VI of this Agreement and shall be otherwise
subject to this Agreement.
(iii) Termination of the License shall have no effect on any
end-user sublicense complying with the terms of this Agreement and existing as
of the date of termination; provided, however, the right, title and interest in
and to any payments due to Licensee pursuant to such end-user sublicenses have
been assigned to Licensor upon termination of the License.
(iv) Termination of the License shall have no effect on either
Party's rights to the Improvements.
(v) Licensee shall promptly (a) deliver to Licensor any and all
records and documents in Licensee's possession, custody or control which relate
to or document any Improvement, (b) take any and all actions which the Licensor
may reasonably request and execute all instruments and documents necessary to
secure for the Licensor any form of protection or property right with respect to
such Improvement and (c) fully cooperate with the Licensor, at no cost to the
Licensor (except for reasonable out-of-pocket expenses), in all stages of
procuring such protection and in connection with the protection of such
intellectual property right of the Licensor.
(vi) Except with respect to Section XI.B(ii), the Licensee shall:
(1) immediately deliver to the Licensor or irretrievably destroy, or cause to be
so delivered or destroyed, any and all copies of the ▇▇▇▇▇▇ Technology in
whatever form and any written or other materials relating to the ▇▇▇▇▇▇
Technology in the Licensee's possession, custody or control; and (2) within
thirty (30) days deliver to the Licensor a certification thereof.
D. Notwithstanding the termination of the License as provided in this
Article XI, the other provisions of this Agreement which by their terms are to
be performed by the Parties following the Closing Date shall survive (except
Sections IIA, IIC and IIF, which shall terminate), and including any claims made
for indemnification under Article VII as a result of any breach or other event
occurring on or prior to such termination.
XII. Miscellaneous.
-------------
A. The Licensee will cause the "boot" screens and the "about" screens
of any Licensee products which contain the ▇▇▇▇▇▇ Technology or the ▇▇▇▇▇▇ IP to
be marked and labeled with and/or to reference the Licensor's copyrights in the
form and style furnished from time to time by the Licensor and reasonably
acceptable to the Licensee. The Licensee will cause any and all Licensee
products containing any ▇▇▇▇▇▇ Technology or using any ▇▇▇▇▇▇ IP and packaging
therefor to be marked and labeled with and/or to reference the Licensor's patent
rights as required by applicable law. The Licensee shall not otherwise use such
marks or notices of the Licensor without the advance written permission of the
Licensor.
B. The Licensee shall permit the Licensor, upon reasonable prior
notice, to make reasonable inspections of the packaging or an object code of any
Licensee product containing the ▇▇▇▇▇▇ Technology or using the ▇▇▇▇▇▇ IP solely
for the purpose of checking quality, marking and labels, but the Licensor shall
not be liable to the Licensee, the Licensee's customers, or others for its
failure to do so or for any defects which it discovers or would or could have
discovered by so doing.
C. Any assignment of this Agreement by either Party requires the prior
written consent of the other Party, which consent will not be unreasonably
withheld, provided however, that either Party may, subject to the remainder of
this section XII.C., assign this Agreement to any of its Affiliates without the
other Party's prior written consent. If the Licensee or an Affiliate of Licensee
to which this Agreement (the "Assigning Entity") is assigned: (i) transfers all
or substantially all of its assets; (ii) assigns, sells, conveys, hypothecates,
pledges, encumbers, or otherwise transfers fifty percent (50%) or more of its
stocks, shares, limited partnership interests, general partnership interests or
other equity ownership interests (as appropriate); or (iii) transfers all or
substantially all of its products or a line of products that utilizes the
licenses as a going concern, whether through a sale, merger or otherwise, to a
successor entity (collectively (i), (ii) and (iii) a "Transfer"); and the value
of the License and all assets and employee rights related to the License at the
time of such Transfer equals more than fifty percent (50%) of the value of the
total assets of the Licensee or such Affiliate being Transferred, then the
Assigning Entity must first obtain the Licensor's prior written consent, which
consent will not be unreasonably withheld. If the Licensee or an Assigning
Entity undergoes a Transfer such that (i) a competitor of Licensor (as
specifically listed on the Licensor's then most recent Form 10-K filed with the
Securities and Exchange Commission as of the date of the Transfer) or (ii) HNC
(each a "Competitor" and collectively, "Competitors") becomes the successor
entity of the Assigning Entity, or such Competitor is within the "Consolidated
Group" (as such term is defined in the Code) of the Assigning Entity, then the
Assigning Entity must first obtain the Licensor's prior written consent, which
may be withheld in Licensor's discretion. If the Assigning Entity effects any
Transfer involving a Competitor without first obtaining the Licensor's prior
written consent to such Transfer, the License shall immediately terminate
without any opportunity to cure. The terms and conditions of this Agreement
shall inure to the benefit of the Parties' successors and assigns.
D. This Agreement may be amended, superseded, cancelled, renewed or
extended only by a written instrument signed by the Parties hereto. The
provisions hereof may be waived in writing by the Parties hereto. Any such
waiver shall be effective only to the extent specifically set forth in such
writing. No failure or delay on the part of any Party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof. Nor shall any
waiver on the part of any Party of any such right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other such right, power
or privilege. Except as otherwise provided herein, the rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any Party may otherwise have at law or in equity.
E. The Parties are independent contractors and engage in the operation
of their own respective businesses. Neither Party is the agent or employee of
the other Party for any purpose whatsoever. Nothing in this Agreement shall be
construed to establish a relationship of co-partners or joint venturers between
the two Parties. Neither Party has the authority to enter into any contract or
to assume any obligation for the other Party or to make any warranties or
representations on behalf of the other Party.
F. If any provision of this Agreement is, or is determined to be,
invalid, illegal or unenforceable, all remaining provisions of this Agreement
shall nevertheless remain in full force and effect, and no provision of this
Agreement shall be deemed to be dependent upon any provision so determined to be
invalid, illegal or unenforceable unless otherwise expressly provided for
herein. Should any provision of this Agreement be found or held to be invalid,
illegal or unenforceable, in whole or in part, such provision shall be deemed
amended to render it enforceable in accordance with the spirit and intent of
this Agreement.
G. This Agreement has been entered into, delivered and is to be
governed by, construed, interpreted and enforced in accordance with the laws of
the State of Delaware (without giving reference to choice-of-law provisions) and
the laws of the United States relating to intellectual property from time to
time in effect. The Parties agree that the United Nations Convention on
Contracts for the International Sale of Goods shall not apply to any of the
transactions which are contemplated by this Agreement.
H. Any dispute, controversy or claim arising out of or relating to
this Agreement or any agreement between the Parties contemplated by this
Agreement, or a breach of any thereof, or the use of the ▇▇▇▇▇▇ Technology or
the ▇▇▇▇▇▇ IP, shall be settled by arbitration before three neutral arbitrators
(selected by mutual agreement of the Parties, or, in the absence of such
agreement by the American Arbitration Association ("AAA"), from a panel of
persons having experience with and knowledge of the computer business, provided
that at least two of such arbitrators shall be attorneys), and administered by
the AAA in accordance with its Commercial Arbitration Rules in New York City.
Any provisional or equitable remedy which would be available from a court of law
shall be available from the arbitrators to the Parties. Judgment upon the award
of the arbitrators may be enforced in any court having jurisdiction thereof. The
Parties hereby consent to: (i) the exclusive jurisdiction of the courts of the
State of New York or to any Federal Court located within that State for any
action: (a) to compel arbitration, (b) to enforce the award of the arbitrators
or (c) prior to the appointment and confirmation of the arbitrators, for
temporary, interim or provisional equitable remedies; and (ii) service of
process in any such action by registered mail, return receipt requested, or by
any other means provided by law.
I. This Agreement together with the other Transaction Documents
contains the entire and exclusive agreement of the Parties with respect to its
subject matter. This Agreement together with the other Transaction Documents
supersedes any agreements and understandings, whether written or oral, entered
into by the Parties prior to its effective date and relating to its subject
matter. No modification or amendment of this Agreement shall be effective unless
it is stated in writing, specifically refers hereto and is executed on behalf of
each Party.
J. All of the provisions of Section , Section and Section shall
survive any termination of this Agreement, other than by expiration at its term,
or of the License.
K. Notices.
(i) Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally by hand or by
recognized overnight courier, telecopied or mailed (by registered or certified
mail, postage prepaid return receipt requested) as follows:
If to the Licensee, one copy to:
▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
---------
With a copy to:
▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
And
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Licensor, one copy to:
Retail Decisions Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
with a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(ii) Each such notice or other communication shall be effective:
(1) if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in Section XII.K(i) (with confirmation of transmission); or (2)
if given by any other means, when delivered at the address specified in Section
XII.K(i). Any party by notice given in accordance with this Section XII.K(i) to
the other party may designate another address (or telecopier number) or person
for receipt of notices hereunder. Notices by a party may be given by counsel to
such party.
L. Exhibits. All Exhibits and Schedules attached hereto are hereby
incorporated by reference into, and made a part of, this Agreement.
M. Counterparts. The Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
N. Third Parties. Except as specifically set forth or referred to
herein, nothing herein express or implied is intended or shall be construed to
confer upon or give to any person other than the parties hereto and their
permitted successors or assigns, any rights or remedies under or by reason of
this Agreement or the Contemplated Transactions.
O. Title and Risk of Loss. Legal title, equitable title and risk of
loss with respect to the Assets and rights to be transferred hereunder shall
pass to the Licensee on and as of the Closing Date.
P. Except for failures to make any payment when due, neither Party
hereto shall be liable to the other for failure or delay in meeting any
obligations hereunder as the result of strikes, lockouts, war, Acts of God,
fire, flood or acts of government, if beyond the control of such Party.
IN WITNESS WHEREOF, the Parties hereto have set their hands by
their duly authorized representatives as of the day and year first above
written.
Retail Decisions Inc. ▇▇▇▇▇▇, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. Gein By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. Gein Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President Title: Executive Vice President
and CFO
Exhibit A
XIII. Representations and Warranties of the Licensor.
----------------------------------------------
The Licensor hereby represents and warrants to Licensee that:
A. the Licensor has full power, capacity and authority to execute and
deliver this Agreement and each other Transaction Document to which it is a
party and to consummate the transactions contemplated hereby and thereby (the
"Contemplated Transactions"). The execution, delivery and performance of the
Transaction Documents and the consummation of the Contemplated Transactions to
which the Licensor is a party have been duly and validly authorized by the board
of directors of the Licensor and all other corporate and other actions or
proceedings necessary to authorize the execution, delivery and performance by
Licensor of each of the Transaction Documents and the consummation of the
Contemplated Transactions have been duly and properly taken. This Agreement and
the other Transaction Documents to which the Licensor is a party have been duly
and validly executed and delivered by the Licensor, and (assuming the valid
execution and delivery thereof by the Licensee) constitute the legal, valid and
binding agreements of the Licensor, enforceable against the Licensor in
accordance with their respective terms, except as such obligations and their
enforceability may be limited by applicable bankruptcy and other similar laws
affecting the enforcement of creditors' rights generally and except that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought (whether at law or in
equity);
B. the Licensor has the right to grant the License and has the right
to disclose the ▇▇▇▇▇▇ Know-how without the Licensee directly or indirectly
being required to pay a royalty to any third party;
C. the execution, delivery and performance by the Licensor of this
Agreement and each other Transaction Document to which it is a party and the
consummation of the Contemplated Transactions to which the Licensor is a party
do not: (i) violate any provision of the Certificate of Incorporation or By-laws
(or comparable instruments) of the Licensor; (ii) require the Licensor or any
other Affiliate of the Licensor to obtain any consent, approval or action of or
waiver from, or make any filing with, or give any notice to, any Governmental
Body or any other person, except as set forth on Schedule E-IC. (the "Licensor
Required Consents"); (iii) if all the Licensor Required Consents are obtained
prior to the date hereof, violate, conflict with or result in a breach or
default under (with or without the giving of notice or the passage of time or
both), or permit the suspension or termination of, any Transferred Contract or
any other material contract to which the Licensor is a party or by which the
Licensor or any of the Assets may be bound or subject, or result in the creation
of any Lien (other than the Permitted Liens) upon the Assets; or (iv) if all the
Licensor Required Consents are obtained prior to the date hereof, to the
knowledge of the Licensor, violate any Law or Order of any Governmental Body
against, or binding upon, the Licensor or upon the Assets;
D. the Licensor is a corporation duly organized, validly existing and
in good standing under the laws of Delaware, and has all requisite power,
authority required to own and/or operate the Assets and the Licensed Technology
as now conducted. The Licensor is duly qualified to conduct business as a
foreign corporation and is in good standing in each state of the United States
where the character of the properties owned or leased by the Licensor or the
nature of its activities makes such qualification necessary;
E. the Licensor has heretofore delivered or made available to the
Licensee a true and complete copy of the Certificate of Incorporation and
By-laws or comparable instruments, of the Licensor as in effect on the date
hereof;
F. as of the date hereof, the Licensor has made filings (the
"Filings") with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended, and/or under the Securities
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, as amended (collectively, the "Acts"). At the time filed and
solely as applicable to the NestorCommerce division of Licensor
("NestorCommerce"), each Filing complied as to form in all material respects
with the applicable requirements of the Acts and the rules and regulations of
the Commission thereunder and, at the time made, no Filing contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading;
G. to the knowledge of the Licensor, other than as set forth within
the Filings and Schedule E-IG, the Licensor solely with respect to Assets (other
than the Permitted Liens) does not have any material direct or contingent
liabilities, commitments or obligations, including, but not limited to, any
guaranty or any unrealized or anticipated losses from any commitments of the
Licensor, in each case relating to NestorCommerce, and there is no basis for
assertion against the Licensor of any such liability, commitment or obligation;
H. since March 31, 2001, except as disclosed in Schedule E-IH, the
Licensor has conducted the business of NestorCommerce in the ordinary course
consistent with past practices and there has not been:
(i) any material adverse change in the Assets or any material
adverse change in the condition (financial or otherwise), results of operations
or prospects of, the Assets or NestorCommerce (collectively, the "Condition of
NestorCommerce"); and
(ii) any change in any method of accounting or accounting
practice by the Licensor;
I. except as disclosed on Schedule E-II, the Licensor is in possession
of and has good and valid title to the Assets free and clear of any Liens. All
of the tangible Assets are in good condition and repair, normal wear and tear
excepted, and are suitable for the uses for which they are currently used;
J. all Transferred Contracts are valid, subsisting, in full force and
effect and binding upon the Licensor and, to the knowledge of the Licensor, the
other parties thereto in all material respects in accordance with their
respective terms subject only to bankruptcy, insolvency or similar laws
affecting the rights of creditors generally and to general equitable principles.
True and correct copies of the Transferred Contracts have been delivered to the
Licensee. The Licensor is not in default (or alleged default) under any such
Transferred Contract nor, to the knowledge of the Licensor, is any other party
thereto in default thereunder and there is no condition that with notice or the
lapse of time or both would constitute a default by the Licensor (or give rise
to a termination right) nor, to the knowledge of the Licensor, does any
condition exist that with notice or the lapse of time or both would constitute a
default by any other party thereto (or give rise to a termination right) under
any such Transferred Contract. except as disclosed on Schedule E-IJ, to the
knowledge of the Licensor, none of the other parties to any such Transferred
Contract intends to terminate or materially alter the provisions thereof by
reason of the Contemplated Transactions or otherwise;
K. with respect to the Trademark Rights, all renewals, affidavits of
incontestability, declarations of use, or any responses have been timely and
appropriately filed; Licensor has exercised its best efforts to ensure
compliance with all registration requirements; and all associated fees and
expenses due and owing as of the date hereof have been paid;
L. except for the ACI License or as disclosed on Schedule E-1L, no
Trademark Rights are subject to any security interest or outstanding Order,
judgment, injunction, decree, stipulation or agreement that restricts the use or
licensing thereof or which would render any such Trademark Rights invalid or
unenforceable;
M. there are no outstanding Orders of any Governmental Body against or
involving the Licensor or the Assets. There are no actions, suits, claims or
counterclaims, examinations, audits or legal, administrative, governmental,
arbitral or other proceedings or investigations (collectively, "Claims")
(whether or not the defense thereof or Liabilities in respect thereof are
covered by insurance), pending or, to the knowledge of the Licensor, threatened
on the date hereof, against or involving the Assets or challenging the
Contemplated Transactions;
N. the Licensor is not in violation of any order, judgment,
injunction, award, citation, decree, consent decree or writ (collectively,
"Orders"), or any law, statute, code, ordinance, rule, regulation or other
requirement, including any environmental laws (collectively, "Laws"), of any
government, municipality or political subdivision thereof, whether federal,
state, local or foreign, or any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality or public
body, or any court, arbitrator, administrative tribunal or public utility (each
a "Governmental Body"), the violation of which would have a material adverse
effect on the Assets;
O. there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of the Licensor who
might be entitled to any fee or commission from the Licensor in connection with
the consummation of the Contemplated Transactions;
P. except as expressly set forth in the footnotes to the audited
Financial Statements, no Claims have been served which have not been resolved
and, to the knowledge of the Licensor, there are no pending or threatened Claims
nor are there any facts or circumstances that could reasonably be expected to
result in a Claim, against the Licensor for injury to any person or property of
employees or any third parties suffered as a result of the ownership, possession
or use of any product sold, or licensed by the Licensor with respect to the
Assets, which could, individually or in the aggregate, have a material adverse
effect on the Condition of NestorCommerce, in each case with respect to the
Assets;
Q. neither this Agreement, the Transaction Documents, the Exhibits,
the Schedules hereto, nor any of the certificates furnished or to be furnished
to the Licensee by or on behalf of the Licensor pursuant to this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading; and
R. the Licensor makes no representations or warranties regarding
intellectual property rights of third parties except in the United States or in
other jurisdictions in which such third parties hold intellectual property
rights corresponding to those held in the United States.
S. attached hereto as Schedule E-IS are the following financial
statements of Licensor (collectively, the "Financial Statements"): (i) the
unaudited consolidated balance sheet and statements of income, change in
stockholders' equity, and cash flow as of and for the fiscal quarter ended March
31, 2001; and (ii) the audited financial statements for the year ended December
31, 2000 contained in the Filings. The Financial Statements have been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, except as specifically indicated in the notes thereto, are
correct and complete in all material respects and present fairly the financial
condition of the Licensor as of the respective dates thereof and are materially
consistent with the books and records of Licensor, subject to normal and
recurring year end adjustments.
T. the Closing Balance Sheet is true, correct and complete in all
material respects and reflects all Assets and Assumed Liabilities of
NestorCommerce as of the Effective Date. "Closing Balance Sheet" shall mean the
balance sheet dated the Effective Date reflecting all Assets and Assumed
Liabilities, to be delivered by Licensor to Licensee on the Closing Date and
attached hereto as Schedule E-IT.
U. Compensation. Schedule E-IU sets forth an accurate, current and
complete list of the name, hire date, position, rate of compensation and any
incentive compensation arrangements, bonuses or commissions or fringe or other
benefits, whether payable in cash or in kind, of each Transferred Employee (as
defined herein below) paying or providing, retirement, health, welfare or other
benefits of any kind or description whatsoever.
V. Licensor Benefit Plans.
(i) Schedule E-IV contains an accurate and complete list of all
employee benefit plans, contributed to, maintained or sponsored by the Licensor
for Transferred Employees (the "Licensor Plans"), to which the Licensor is
obligated to contribute or with respect to which the Licensor has any liability
or potential liability, including all Plans contributed to, maintained or
sponsored by each member of the controlled group of companies, within the
meaning of sections 414(b), 414(c), and 414(m) of the Code, of which the
Licensor is a member. With respect to each Licensor Plan, Licensor has provided
to Licensee an accurate, current and complete written summary of all material
plan terms.
(ii) the Licensor has never maintained or been required to
contribute to or otherwise has had no liability with respect to any Plan subject
to Title IV of ERISA.
(iii) to the knowledge of the Licensor, none of the Licensor
Plans obligates the Licensor to pay separation, severance, termination or
similar type of benefits solely as a result of any transaction contemplated by
this Agreement or solely as a result of a "change in control," as such term is
used in section 280G of the Code (and regulations promulgated thereunder). Other
than as required under Section 601 et seq. of ERISA, to the knowledge of the
Licensor, no Licensor Plan that is a welfare plan provides benefits or coverage
following retirement or other termination of employment.
(iv) to the knowledge of the Licensor, each Licensor Plan and all
related trusts, insurance contracts, and funds have been maintained, funded and
administered in compliance with all applicable material laws and regulations,
including but not limited to ERISA and the Code.
(v) each Licensor Plan, including any associated trust or fund,
has been administered in accordance with its material terms, and to the
knowledge of the Licensor, nothing has occurred with respect to any Licensor
Plan that has subjected or could subject the Licensor Plan or any plan
participants to a penalty under section 502 of ERISA or to an excise tax under
the Code.
(vi) to the knowledge of the Licensor, no circumstance exists and
no event (including any action or the failure to do any act) has occurred with
respect to any Licensor Plan maintained or formerly maintained by Licensor or
any Affiliate, or to which Licensor or any Affiliate is or has been required to
contribute that could subject Licensee to liability, or the assets of Licensee
to any lien, under ERISA or the Code, nor, to the knowledge of the Licensor,
will the transactions contemplated by this Agreement give rise to any such
liability or lien.
W. Except for the licenses specifically listed on Schedule E-IW, the
Transferred Contracts represent all license agreements of Licensor (which are
effective and in force on the Closing Date) with respect to the ▇▇▇▇▇▇
Technology within the Exclusive Field of Use and Non-Exclusive Field of Use.
X. Except for the Third Party Software, the Licensor is the owner of
the ▇▇▇▇▇▇ Technology, and has all necessary rights in the ▇▇▇▇▇▇ Technology
necessary to grant the License hereunder.
Y. as of the Closing Date, the Licensor is solvent and possesses
adequate financing to perform all of the Licensor's obligations under this
Agreement and the Transaction Documents to which it is a party. There is no
fact, matter or state of facts that exists as of the Closing Date (or that would
so exist but for the giving of notice and/or the passage of time) that would in
any material way render the Licensor unable to perform any and/or all of its
respective obligations under this Agreement and the Transaction Documents to
which it is a party; and
Z. the Licensor has all legal right and authority to conduct its
activities as contemplated by this Agreement.
XIV. Representations and Warranties of the Licensee.
-------------------------------------------------
The Licensee hereby represents and warrants to Licensor that:
A. the Licensee has full power, capacity and authority to execute and
deliver this Agreement and each other Transaction Document to which it is a
party and to consummate the Contemplated Transactions. The execution, delivery
and performance of each Transaction Document and the consummation of the
Contemplated Transactions to which the Licensee is a party have been duly and
validly authorized and approved by the board of directors of the Licensee and
all other corporate proceedings on the part of the Licensee are necessary or
required to authorize the execution, delivery and performance by the Licensee of
each Transaction Document or the consummation of the Contemplated Transactions
to which it is a party have been duly and properly taken. This Agreement and the
other Transaction Documents to which the Licensee is a party have been duly and
validly executed and delivered by the Licensee, and (assuming the valid
execution and delivery thereof by the other parties thereto) constitute the
legal, valid and binding agreements of the Licensee, enforceable against the
Licensee in accordance with their respective terms, except as such obligations
and their enforceability may be limited by applicable bankruptcy and other
similar laws affecting the enforcement of creditors' rights generally and except
that the availability of equitable remedies is subject to the discretion of the
court before which any proceeding therefor may be brought (whether at law or in
equity);
B. the execution, delivery and performance by the Licensee of this
Agreement and each other Transaction Document to which it is a party and the
consummation of the Contemplated Transactions to which it is a party do not: (i)
violate any provision of the Certificate of Incorporation of the Licensee; (ii)
require the Licensee to obtain any consent, approval or action of or waiver
from, or make any filing with, or give any notice to, any Governmental Body or
any other person (the "Licensee Required Consents"); (iii) if the Licensee
Required Consents are obtained prior to the date hereof, violate, conflict with
or result in the breach or default under (with or without the giving of notice
or the passage of time or both), or permit the suspension or termination of, any
material Transferred Contract to which the Licensee is a party or by which the
Licensee or its assets may be bound or subject; or (iv) if Licensee Required
Consents are obtained prior to the date hereof, violate any Law or Order of any
Governmental Body against, or binding upon, the Licensee or upon its assets or
business;
C. the Licensee is a corporation duly organized, validly existing and
in good standing under the laws of New Jersey, and has all requisite power,
authority required to operate its business as now conducted. The Licensee is
duly qualified to conduct business as a foreign corporation and is in good
standing in each state of the United States where the character of the
properties owned or leased by the Licensee or the nature of its activities makes
such qualification necessary;
D. as of the Closing Date, the Licensee is solvent and possesses
adequate financing to perform all of the Licensee's obligations under this
Agreement and the Transaction Documents to which it is a party. There is no
fact, matter or state of facts that exists as of the Closing Date (or that would
so exist but for the giving of notice and/or the passage of time) that would in
any material way render the Licensee unable to perform any and/or all of its
respective obligations under this Agreement and the Transaction Documents to
which it is a party;
E. neither this Agreement, the Schedules hereto nor any of the
Transaction Documents contains any untrue statement of a material fact with
respect to the Licensee or omits to state a material fact necessary in order to
make the statements contained herein or therein with respect to the Licensee not
misleading;
F. the Licensee has all legal right and authority to conduct its
activities as contemplated by this Agreement; and
G. except for ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Limited, there is no investment
banker, broker, finder or other intermediary which has been retained by or is
authorized to act on behalf of the Licensee who might be entitled to any fee or
commission from the Licensee in connection with the consummation of the
Contemplated Transactions.