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A G R E E M E N T
Made and entered into as of the 22 day of September, 1997
Between
ENLIGHTEN SOFTWARE SOLUTIONS INC.
a corporation organized and existing
under the laws of the State of California,
with its principal place of business located at
000 Xxxxx Xxx, 0xx Xx., Xxx Xxxxx, Xxxxxxxxxx, 00000
U.S.A.
(hereinafter: "ENlighten")
of the first part
and
XXXXX X. XXXXXXXX,
c/o ENlighten Software Solutions Inc.
of 000 Xxxxx Xxx, 0xx Xx., Xxx Xxxxx, Xxxxxxxxxx,
00000 U.S.A.
(hereinafter: "Xx. XxXxxxxx")
of the second part
and
NEW DIMENSION SOFTWARE INC.
a corporation organized and existing under
the laws of Delaware with its principal place of
business located at 00000 Xxx Xxxxxx Xx., Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000-0000
U.S.A.
(hereinafter: "NDS")
of the third part
WHEREAS ENlighten is the sole owner of all proprietary, commercial and
any other rights of any kind and nature whatsoever pertaining
to certain computer software products listed in SCHEDULE "A"
hereof (hereinafter: the "Purchased Products"); and
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WHEREAS NDS wishes to acquire from ENlighten all proprietary,
commercial and other rights pertaining to the Purchased
Products, including without limitation, their source codes,
customer base, development environments and all other assets
associated with the Purchased Products and ENlighten agrees to
sell to NDS all such proprietary, commercial and other rights
and assets, all subject to and in accordance with the terms
and provisions of this Agreement. Notwithstanding the above,
both parties acknowledge that all copyrights and other
intellectual property rights associated with the name
"ENlighten" will remain the sole and exclusive property of
ENlighten; and
WHEREAS The parties agree that NDS shall also acquire from ENlighten
certain computer equipment and software used for the
development and support of the Purchased Products as specified
in SCHEDULE "B" hereof, that ENlighten shall assign to NDS its
maintenance agreements pertaining to the Purchased Products
and that certain ENlighten's employees will be transferred to
NDS as further specified in this Agreement; and
WHEREAS The parties wish to set forth in writing their mutual
covenants, agreements and understandings regarding the subject
matter hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties hereby agree as follows:
1. PREAMBLE AND CAPTIONS
The Preamble to this Agreement constitutes an integral part hereof. The
captions of this Agreement are provided for the sake of convenience
only and shall not be used to construe the provisions hereof.
2. DEFINITIONS
"ACCLIMATIZATION
PERIOD" a period of 180 days commencing on the Execution
Date.
"XXXXX" Xxxxx Street Software Inc., a corporation
organized and existing under the laws of the
State of California, with its principal place of
business located at Xxx Xxxxxxx Xxxxxx, Xxxxx
0000, XX, XX 00000.
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"CUSTOMERS" ENlighten's current customers that have licensed
one or more of the Purchased Products from
ENlighten.
"DELIVERABLES" Any and all documentation and other data,
information and material pertaining to the
Purchased Products;
"DOCUMENTATION" All design documents, source codes, user
manuals, operating manuals, education materials,
product descriptions and specifications,
technical manuals, supporting materials, and
other information relating to the Purchased
Products or used in conjunction with the
Purchased Products or relating to or used in
conjunction with maintenance services to be
rendered in respect of the Purchased Products,
including technical support logs, whether
distributed in print, magnetic, electronic or
video format as well as any other written
documentation in respect of the Purchased
Products which is in the possession of
ENlighten.
"EFFECTIVE DATE" October 1, 1997.
"EMPLOYEES" ENlighten's employees as will be listed on
Schedule "E" hereof on the Effective Date.
"EXECUTION DATE" The 22 day of September, 1997.
"EQUIPMENT" The entire computer hardware and software
equipment, other than network cable
infrastructure and certain printers, used for
the development and support of the Purchased
Products (as herein defined) as listed on
SCHEDULE "B" hereof.
"PURCHASED PRODUCTS" The computer software products listed and
described in SCHEDULE "A" hereof and/or any one
of them;
"RIGHTS" Any and all proprietary and ownership rights,
title and interest in and to the
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Purchased Products and their source codes,
including, without exception, and without
derogating from the generality thereof, the
rights to develop, redevelop, change, modify,
enhance, translate, convert, sell, market,
distribute, transfer, assign, try and
demonstrate any one of the Purchased Products,
world wide, and to take any action whatsoever in
respect of any of the Purchased Products.
Notwithstanding the above, all copyrights and
other intellectual property rights associated
with the name "ENlighten" will remain the sole
and exclusive property of ENlighten.
"SIERRA" Xxxxxx X. Xxxxxxxx, an individual, Xxxxx X.
Xxxxxxxx, an individual and Sierra Software
Inc., a corporation organized and existing under
the laws of the State of New Mexico, with its
principal place of business located at 0000 X.
Xxxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxx 00000.
"TRANSFER PERIOD" a period of 120 days commencing as of the
Effective Date, or any extension thereof
provided such extended Transfer Period has been
approved by NDS in advance and in writing.
3. ENLIGHTEN'S REPRESENTATIONS
As of the Execution Date, except as set forth in SCHEDULE "D" hereof,
ENlighten hereby warrants and represents to NDS as follows:
3.1. ENlighten is the sole and exclusive owner of the Purchased
Products, their source codes and all Rights pertaining
thereto, including, without limitation, any and all
intellectual, proprietary and commercial rights in and to the
Purchased Products.The Purchased Products and their source
codes are free and clear of any third party right or claim of
any kind whatsoever.
3.2. Neither the Purchased Products nor the Purchased Products'
source codes infringe upon any patent, copyright or trademark
or violate any other right whatsoever of any third party.
3.3. To the best of Enlighten's knowledge, there are no pending or
threatened actions, suits or claims of third parties against
ENlighten regarding or having any material bearing on the
Purchased Products and/or the Purchased Products' source
codes, including,
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without limitation, any action or claim alleging infringement
referred to in Sections 3.1 and 3.2 herein;
3.4. ENlighten has not granted to any third party any rights
whatsoever pertaining, directly or indirectly, to the
Purchased Products and/or their source codes or to the use,
marketing or commercial exploitation thereof which may
materially affect the Rights granted to NDS hereunder.
3.5. Enlighten has entered with Xxxxx into: (a) a Software Purchase
Development Marketing and Sales Agreement dated October 11,
1991 and as amended on February 7, 1996, for the product known
as Safeguard/Reports Plus, a copy of which has been delivered
to NDS (hereinafter: the "SAFEGUARD AGREEMENT"); and (b) a
Distribution Agreement dated February 7, 1996, for the product
known as Entrust, a copy of which has been delivered to NDS
(hereinafter: the "ENTRUST AGREEMENT") (the "Safeguard
Agreement" and the "Entrust Agreement" shall be hereinafter
collectively referred to as: the "XXXXX AGREEMENTS")
ENlighten has not entered into any additional agreements with
Xxxxx other than the Xxxxx Agreements.
3.6. Enlighten has entered with Sierra into a Software Purchase and
Assignment Agreement dated September 9, 1994 and as amended on
December 13, 1996, for the SQL product line, a copy of which
has been delivered to NDS (hereinafter: the "SIERRA
AGREEMENT");
ENlighten has not entered into any additional agreements with
Sierra other than the Sierra Agreement.
3.7. The entering into this Agreement or the consummation of the
transactions contemplated hereby do not breach or violate any
of ENlighten's other undertakings, agreements and/or
obligations.
3.8. ENlighten has taken all corporate action as required for the
authorization, execution, delivery and performance by
ENlighten of this Agreement and the consummation of the
transactions contemplated herein.
3.9. ENlighten hereby represents that the Equipment listed on
Schedule "B" hereof constitutes the entire equipment used by
ENlighten for the development and support of the Purchased
Products, other than network cable infrastructure and certain
printers.
3.10. The Purchased Products are provided by ENlighten to NDS "As
Is". Except as expressly set forth in this Agreement,
ENlighten disclaims any and all representations and
warranties, express or implied, with respect to the Purchased
Products, their merchantability, capacity, suitability or
fitness for a particular purpose.
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3.11. All agreements with Customers to be assigned to NDS in
accordance with the provisions of Section 7 hereunder, will be
assigned to NDS free and clear of all charges, liens and
encumbrances of any kind whatsoever arising out of or securing
any monetary claim by any person, and such agreements
materially constitute all agreements concerning the Purchased
Products between ENlighten, an affiliate or assignee of
ENlighten, and any Customer.
ENlighten has performed all of its material obligations under
such agreements through the Effective Date, there is currently
no unperformed requested maintenance, training and support by
any Customer other than routine maintenance, training and
support in the ordinary course of business, and there are no
material Customer complaints in respect of the Purchased
Products or ENlighten's performance of any of its obligations
under the agreements assigned which have not been addressed to
the apparent satisfaction of the Customer that might have a
material adverse effect on NDS.
4. NDS' REPRESENTATIONS AND UNDERTAKINGS
NDS hereby warrants and represents to ENlighten as follows:
4.1. NDS has examined the Purchased Products and the Purchased
Products' source codes, Documentation and all other data
relevant thereto and has found same to be satisfactory in all
respects. NDS is acquiring the Purchased Products, the
Purchased Products' source codes and the Documentation herein
"as-is" and waives any and all claims and causes of action
against ENlighten in respect thereto.
4.2. The entering into this Agreement or the consummation of the
transactions contemplated hereby do not breach or violate any
of NDS' other undertakings, agreements and/or obligations.
4.3. NDS has taken all corporate action as required for the
authorization, execution, delivery and performance by NDS of
this Agreement and the consummation of the transactions
contemplated herein.
4.4. NDS hereby undertakes to further develop, market and support
the Purchased Products.
4.5. NDS shall make good faith efforts to assist ENlighten in the
collection of any amounts owed to ENlighten by any of its
Customers on account of transactions performed prior to the
Execution Date.
4.6. NDS agrees to use its best efforts to obtain the employment of
all the Employees (as defined in Section 2 above), including
but not limited to providing cash compensation and other cash
and non-cash benefits comparable to those received by such
Employees
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from ENlighten on the Execution Date. The parties acknowledge
that until the Effective Date NDS shall be entitled to delete
from Schedule "E" such employees as it may deem fit at its
sole and exclusive discretion and only such employees who will
be listed on Schedule "E" on the Effective Date will be
considered as "Employees" for the purposes of this Agreement.
5. ACQUISITION AND SALE OF THE PURCHASED PRODUCTS AND OTHER EQUIPMENT
5.1. For the consideration specified in Section 11 hereunder and
contained elsewhere in this Agreement and subject to the terms
and provisions set forth in this Agreement, ENlighten hereby
sells to NDS and NDS hereby acquires the Purchased Products,
the Purchased Products' source codes, the Documentation and
all the Rights pertaining thereto, as well as the Equipment,
all as defined and detailed above.
5.2. It is hereby agreed and acknowledged by the parties that as of
the Effective Date all of the proprietary, commercial,
intellectual property rights and any other Rights of any kind
and nature whatsoever pertaining to the Purchased Products and
their source codes shall be solely and exclusively owned by
and belong to NDS.
5.3. It is hereby further agreed and acknowledged by the parties
that as of the Effective Date NDS shall have the sole and
exclusive ownership of the registered trademarks and
registered tradenames listed on SCHEDULE "C" hereof with
respect to the Purchased Products, and that as of the
Effective Date ENlighten shall discontinue the use of any of
the unregistered trademarks and/or tradenames listed on
Schedule "C" hereof, provided however that all copyrights and
other intellectual property rights associated with the name
"ENlighten" will remain the sole and exclusive property of
ENlighten.
Notwithstanding the above it is hereby agreed between the
parties that NDS shall be entitled to use the name "ENlighten"
subject to ENlighten's prior written consent, which consent
shall not be unreasonably withheld. It is further acknowledged
by the parties that during a period of twelve (12) months as
of the Effective Date, NDS shall be entitled to use the name
"ENlighten" as it appears in the Purchased Products and/or the
Documentation and/or any other Deliverables. NDS acknowledges
that it has no license to use or exploit the name "ENlighten"
in any manner whatsoever other than as stated above. NDS shall
use its best efforts to remove the name ENlighten from all
Purchased Products, Documentation and
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all other materials associated with the Purchased Products
within twelve (12) month period immediately following the
Effective Date.
6. DELIVERY OF THE PURCHASED PRODUCTS AND OTHER EQUIPMENT
By the Effective Date, ENlighten shall transfer and deliver to NDS, FOB
ENlighten's premises, the Purchased Products, their source codes and
all Rights pertaining thereto, the Documentation and all other
Deliverables as herein defined, as well as the Equipment.
Upon the Effective Date ENlighten shall furnish NDS with Xxxx of Sale
in the form attached hereto as SCHEDULE "K".
7. ASSIGNMENT OF CUSTOMER AGREEMENTS
7.1. ENlighten hereby undertakes to do its utmost to execute a
written assignment assigning and transfering to NDS until the
expiration of the initial or any extended Transfer Period, its
entire right, title and interest under any agreements between
ENlighten and any of its Customers, pertaining to the
Purchased Products (including, without limitation, licenses,
leases, rental, maintenance and/or trial agreements) and
wherever necessary, rigorously encourage such Customers to
grant their written consent to such assignment.
7.2. ENlighten further undertakes to execute and deliver any and
all documents and instruments which may be requested by NDS to
confirm or give effect to the foregoing assignment.
7.3. Concurrently with such assignment NDS shall assume the
obligations of ENlighten under each agreement assigned to it
hereunder to the extent, and only to the extent, such
obligations relate to the Purchased Products. In no event
shall NDS assume any obligation under any agreement
(including, without limitation, any obligation to provide
maintenance or support) with respect to any products other
than the Purchased Products.
8. ASSIGNMENT OF THE XXXXX AND SIERRA AGREEMENTS
8.1. ENlighten hereby undertakes to assign and transfer to NDS
until the expiration of the initial or any extended Transfer
Period, its entire right, title and interest under the Xxxxx
and Sierra Agreements, respectively, and to the extent
necessary, to rigorously encourage Xxxxx and Sierra,
respectively, to grant their written consent to such
assignment.
8.2. ENlighten hereby further undertakes to do its utmost, until
the expiration of the initial or any extended Transfer Period,
to cause Sierra to enter into an agreement with NDS pursuant
to which Sierra shall provide support and development services
with respect
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to the SQL Product Line, for a period expiring not earlier
than December 31, 1998.
8.3. ENlighten hereby further undertakes to do its utmost, until
the expiration of the initial or any extended Transfer Period,
to cause Xxxxx to enter into a distribution agreement with NDS
pertaining to the Entrust for Windows product for a period
expiring not earlier than December 31, 1998.
9. TRANSFER OF EMPLOYEES
9.1. ENlighten hereby agrees to do its utmost to transfer the
Employees to NDS, until the expiration of the Transfer Period
or any extended term thereof and to rigorously encourage such
Employees to transfer to NDS' employment and NDS hereby agrees
and undertakes to employ such Employees under such terms and
conditions as shall be agreed upon between them, subject to
the Employees' consent.
ENlighten shall be entitled to either transfer to NDS the
funds accumulated for each such employee as such liabilities
exist per ENlighten's records, for vacation days or to pay
such funds directly to the employee, subject to and in
accordance with the employee's request.
For the avoidance of any doubt it is hereby agreed that any
claims or actions by any of the Employees against ENlighten
created prior to the Effective Date shall remain the
responsibility of ENlighten and ENlighten shall indemnify and
hold NDS harmless against any cost, expense or disbursement
incurred by it in connection with or as a result of any such
claim, demand or action.
10. ADDITIONAL UNDERTAKINGS OF THE PARTIES
10.1. Xx. XxXxxxxx hereby warrants and undertakes as follows: During
the Acclimatization Period, Xx. XxXxxxxx will provide NDS, on
a full time basis, consultation, with respect to various
matters concerning NDS' acceptance, assimilation and
adaptation of the Purchased Products, ENlighten's Employees
and Customers and any other aspects of the transactions
contemplated herein. Xx. XxXxxxxx will sign an appropriate
non-disclosure agreement with NDS.
10.2. Xx. XxXxxxxx will further assist NDS in the establishment of
business relations with Tandem Computers Inc., a Delaware
corporation (hereinafter: "Tandem").
10.3. ENlighten hereby undertakes to use its best efforts to cause
Xx. XxXxxxxx to assume upon himself the above obligations and
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undertakings towards NDS and hereby conveys its consent to
same.
11. CONSIDERATION
In consideration of the Purchased Products and their source codes, the
Documentation and other Deliverables, Rights and other Equipment herein
purchased by NDS and in consideration for the transfer and assignment
by ENlighten to NDS of its Customers and Employees as described above,
ENlighten shall be entitled to receive from NDS the following amounts:
11.1. Upon the Effective Date of this Agreement NDS shall pay
ENlighten the amount of U.S. $2,960,000 (two million nine
hundred and sixty thousand) Dollars less 80% (eighty) percent
of the liabilities assumed by NDS for deferred maintenance
pertaining to the Purchased Products (hereinafter: the
"INITIAL PAYMENT"), and an additional amount of U.S. $300,000
(three hundred thousand) Dollars as an advanced payment on
account of royalties due to ENlighten under sections 11.3,
11.4.1 and 11.4.2 hereof (hereinafter: the "ADVANCED PAYMENT")
subject to the exclusions specified in Section 11.2 below.
11.2. The amounts listed below shall be deposited by NDS upon the
Effective Date, with Fidelity National Title of 0000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 (hereinafter: the
"Escrow Agent") in an interest-bearing escrow account,
together with irrevocable instructions providing for the
release of such amounts as follows:
11.2.1. an amount equal to the sum of all annual maintenance
fees due under any active, non-assignable
maintenance agreement the annual maintenance fees of
which equal or exceed U.S. $20,000 as listed in
SCHEDULE "F" hereof less 80% of the deferred
maintenance pertaining to the Purchased Products
associated with the Customers listed on Schedule
"F". The amount associated with each individual
Customer listed on Schedule "F" together with any
accrued interest thereon will be released to
ENlighten only upon the assignment of each such
agreement to NDS and upon the Escrow Agent's receipt
from ENlighten of a written notice advising him of
the execution of such an assignment accompanied by
NDS' approval of same. The amount associated with
any agreement which has not been assigned to NDS by
the expiration of the initial or any extended
Transfer Period shall be returned to NDS together
with all accrued interest thereon; and
11.2.2. an amount of together with all accrued
interest thereon - will be released to ENlighten
upon its assignment to NDS of the
and upon the Escrow Agent's receipt from ENlighten
of a written notice
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advising him of the execution of such an assignment
accompanied by NDS' approval of same. In the event
the has not been assigned to NDS by
the expiration of the initial or any extended
Transfer Period such amount shall be returned to NDS
together with all accrued interest thereon.
11.2.3. an amount of U.S. together with all accrued
interest thereon - will be released to ENlighten
upon its assignment to NDS of the
and upon the Escrow Agent's receipt from
ENlighten of a written notice advising him of the
execution of such an assignment accompanied by NDS'
approval of same. In the event the
has not been assigned to NDS by the
expiration of the initial or any extended Transfer
Period such amount shall be returned to NDS together
with all accrued interest thereon.
11.2.4. an amount of U.S. together with all accrued
interest thereon - For each who
entered into an with NDS,
ENlighten shall be entitled to receive from NDS the
amount of U.S.
Dollars divided by the total number of
(hereinafter: the ). Such
amount will be paid to ENlighten upon NDS' entering
into an with each such
and upon the Escrow Agent's receipt from NDS of a
written notice advising him of same.
11.2.5. ENlighten and NDS shall enter into an escrow
agreement with the Escrow Agent in the form attached
hereto as SCHEDULE "M".
11.3.
Within 45 days as of the first anniversary of any
between NDS and each one of the actually
by NDS, ENlighten shall be entitled to receive from
NDS for each such an additional
(as herein defined) provided however that such
has not been previously terminated by either party
Such amounts will be deducted
from the Advanced Payment paid to ENlighten in accordance with
the provisions of section 11.1 above.
11.4. ROYALTIES
11.4.1. ENlighten shall be entitled to receive from NDS, for
a period of three (3) years as of the Effective
Date, royalties at the rates specified in SCHEDULE
"G" hereof for any and all sales and upgrades of the
Purchased Products other than those specified in
Section 12 hereunder.
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The percentages specified in Schedule "G"
shall be the percentages applicable upon the date
such sale or upgrade occured and will be paid to
ENlighten out of all amounts collected by NDS on
each sale or upgrade of the Purchased Products, in
accordance with the provisions of Schedule "G"
hereof.
The Purchased Products shall be sold, leased and/or
licensed by NDS to Customers for a price per unit to
be determined by NDS. NDS further undertakes that in
all cases in which the Purchased Products will be
distributed to Customers packaged or bundled
together with or within the framework of the same
business transaction relating to other NDS products,
the Purchased Products will not be sold under
commercial terms less favorable than those
applicable to the other NDS products. For this
purpose, the ENlighten's current price list a copy
of which is attached to this Agreement as SCHEDULE
"H", shall be used as a term of reference to
determine the rate of discount granted by NDS with
respect to such products, to the extent granted.
11.4.2. Additionally, ENlighten shall be entitled to receive
from NDS, for a period of three (3) years as of the
Effective Date, royalties at the rates specified in
SCHEDULE "G" hereof, of the annual maintenance fees
collected by NDS with respect to the Purchased
Products. Payment of such amounts shall be made in
accordance with the provisions of Schedule "G"
hereof.
11.4.3. In addition, ENlighten shall be entitled to receive
from NDS, during a period of three years as of the
Effective Date of this Agreement royalties at the
rate of from all amounts collected by NDS on
sales of CONTROL-M for Tandem to ENlighten's
customers who were not NDS' customers at the
Agreement's Effective Date, as specified in SCHEDULE
"I" hereof. Payment of such amounts shall be made
once annually within 45 days after the end of each
year.
11.4.4. All payments due to ENlighten hereunder shall be
made in U.S. Dollars to ENlighten's bank account as
shall be designated by ENlighten from time to time.
Any such payment will be accompanied by a report
specifying the date of each transaction for which
payment is made, the Purchased Products involved,
the prices charged and the applicable terms of
payment.
11.4.5. Any amount due hereunder not paid on time shall bear
interest at a rate of PRIME (as published by the
U.S. Federal Bank) + 2% (two) percent per annum with
respect to the period commencing on the due date and
ending on the date of actual payment. The interest
shall be paid together with the amount in arrears.
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11.4.6. Any withholding taxes, other taxes or duties
(excluding any taxes based on NDS' income) which NDS
is obliged under law to pay in connection with the
transfer of funds to ENlighten under this Agreement
shall be deducted from the payments due to ENlighten
hereunder. NDS shall provide ENlighten with the
official receipt of payment of any such taxes to the
relevant taxing authority (as applicable).
11.4.7. Other than as stated above, each party will be
responsible for the payment of any and all taxes
imposed upon it by any taxing authority in
connection with the transaction herein contemplated.
11.4.8. During a period of three years as of the Effective
Date of this Agreement, NDS will maintain accurate
and up-to-date records pertaining to the Purchased
Products containing complete data that is needed to
calculate the fees due to ENlighten hereunder, and
will preserve and permit ENlighten to audit such
records in accordance with the provisions of Section
14 of this Agreement.
11.4.9. In the event that after the expiration of the
initial three years after the Effective Date of this
Agreement, the amounts due to ENlighten under
sections 11.3, 11.4.1 and 11.4.2 hereof shall amount
to less than the amount of the Advanced Payment,
ENlighten shall return to NDS, immediately upon its
first demand, the difference between the Advanced
Payment and the amounts so due to it as specified
above.
11.5. CONSULTATION FEES.
In consideration for the consultation services to be provided
to NDS by Xx. XxXxxxxx in accordance with the provisions of
Section 10.1 herein, ENlighten will receive from NDS U.S.
$100,000 (one hundred thousand) Dollars payable in six (6)
equal monthly installments. Payment will be made on the 15th
day of each month, with the first payment to be made on the
15th day of November 1997.
11.6. ADDITIONAL PAYMENTS.
11.6.1. ENlighten shall be entitled to receive from NDS an
amount of U.S.
Dollars if, following efforts of ENlighten and Xx.
XxXxxxxx, and not later than within 24 (twenty four)
months after the Effective Date of this Agreement,
NDS and will enter into an agreement pursuant
to which will sell to NDS its
. Such amount will be paid to ENlighten
within 60 days after the execution by NDS and
of said agreement.
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11.6.2. ENlighten shall be entitled to receive from NDS an
additional amount of U.S.
if, following efforts of ENlighten and Xx.
XxXxxxxx and not later than within 24 (twenty four)
months after the Effective Date of this Agreement,
will enter into a reseller agreement with NDS
under which shall undertake to distribute and
market some or all of NDS' products other than the
Purchased Products. Such amount will be paid to
ENlighten within 60 days after the execution by NDS
and of said agreement.
11.7. PARTICIPATION IN COSTS AND EXPENSES
It is hereby agreed between the parties that as of the
Effective Date of this Agreement and until such time as NDS
shall relocate its employees and the Equipment purchased by it
hereunder to a different location, it shall be entitled to use
ENlighten's facilities and premises for its operations
pertaining to the Purchased Products, in accordance with the
legal restrictions and covenants contained in the ENlighten
lease entered into with Mariner's Island Limited (and
subsequently transferred to BW Corporation) dated April 1,
1995, a copy of which has been delivered to NDS, and in
accordance with local business practices.
In consideration therefore, NDS shall pay ENlighten, on a
monthly basis, the monthly rent and other direct costs and
expenses incurred by ENlighten in connection with the on-going
maintenance of the facilities and Equipment as detailed in
Schedule "L" hereof.
12. ENLIGHTEN TO BE APPOINTED AS NDS' AGENT
12.1. Upon the Effective Date hereof ENlighten shall be appointed as
NDS' independent, non-exclusive agent for the sale of the
Purchased Products for a period commencing as of the Effective
Date of this Agreement and ending January 15, 1998
(hereinafter: the "Agency Period"). As NDS' agent, ENlighten
shall be entitled to perform only such sales to such customers
and of such Purchased Products listed on SCHEDULE "J" hereof
(hereinafter - "PROSPECTIVE CUSTOMERS") but in no event shall
ENlighten be entitled to enter into any agreement pertaining
to any such sale with any such Prospective Customer (on its
own behalf and/or on behalf of NDS) and it is hereby
acknowledged by the parties that any and all agreements
pertaining to any of the sales listed on Schedule "J" will be
solely and exclusively entered into with and executed by NDS.
12.2. It is hereby agreed between the parties that ENlighten shall
be entitled to receive royalties at the rate of on new
sales and upgrades of any of the Purchased Products (not
including first year maintenance) to Prospective Customers
made by NDS in accordance with Schedule "J" hereof during the
Agency Period. Schedule "J" will be reviewed by ENlighten and
NDS on a monthly
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basis and Prospective Customers listed thereon which turned
inactive will be removed therefrom to enable NDS to actively
pursue new business with them.
12.3. For the avoidance of any doubt it is hereby clarified that
sales of Purchased Products made under the Agency Agreement
shall not entitle ENlighten to receive any royalties under
section 11.4.1 above.
13. INDEMNIFICATION
13.1. ENlighten shall indemnify and hold NDS harmless against any
loss, damage, judgment, expense, including attorney's fees, or
any other costs whatsoever incurred by NDS as a result of any
claim, demand or legal action brought against NDS by any third
party whatsoever, including, without limitation any Customer,
arising out of or in connection with any of the Purchased
Products and/or their source codes as they exist on the
Effective Date.
Without derogating from the generality hereof ENlighten
further undertakes to defend, at its expense, any action
brought against NDS to the extent it is based on a claim that
any of the Purchased Products and/or their source codes, as
they exist on the Effective Date, infringe upon or violate any
patent, copyright, trademark or any other right whatsoever of
any third party.
13.2. NDS shall indemnify and hold ENlighten harmless against any
loss, damage, judgment, expense, including attorney's fees, or
any other costs whatsoever incurred by ENlighten as a result
of any claim, demand or legal action brought against ENlighten
by any of the Employees, Customers or any other third party
arising out of or in connection with the Obligations assigned
by ENlighten to NDS herein. Notwithstanding the above, it is
hereby acknowledged by the parties that NDS shall not
indemnify ENlighten for any loss, costs, expenses or any other
disbursments incurred by it as a result of or in connection
with any claim, demand or legal action brought against
ENlighten by any third party arising out of or in connection
with its acting as NDS' agent under Section 12 herein above.
14. AUDITS
14.1. NDS will permit authorized representatives of ENlighten, in
compliance with the terms set forth hereunder, upon 30
(thirty) day prior written notice, but not more than once
annually, to inspect at NDS' premises all books, records,
accounts, journals and ledgers belonging to NDS that pertain
to money owed to ENlighten under this Agreement in relation
with the Purchased Products.
14.2. Such audits will be conducted by an independent auditor to be
agreed upon by the parties who shall have signed an
appropriate non-disclosure agreement with NDS. If the parties
do not agree on
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such auditor within 10 (ten) days of submitting an audit
request, then such audit will be conducted by one of the "big
six" accounting firms to be selected by ENlighten
14.3. It is hereby agreed between the parties that in the event that
a discrepancy exceeding 7.5% exists between NDS' revenue
reports and the results of ENlighten's audit of NDS books, NDS
will remit to ENlighten, within 10 days of its receipt of
ENlighten's demand, the outstanding amount due to ENlighten in
accordance with the results of ENlighten's audit of NDS'
books. Such outstanding amount will be paid to ENlighten
together with any interest accrued thereon in accordance with
the provisions of Section 11.4.5 hereinabove. In addition, any
and all costs of such audit will be borne by NDS.
14.4. This Section shall be in effect for a period of four (4) years
as of the Effective Date.
15. NON COMPETE & NON SOLICITATION
15.1. ENlighten hereby agrees and undertakes not to develop,
produce, manufacture, offer, sell, distribute, provide
consultation or be otherwise engaged in, directly or
indirectly, software products which are directly competitive
with any of the Purchased Products as they exist upon the
Effective Date hereof. This Section shall be in effect for a
term of five (5) years as of the Effective Date
15.2. Both parties agree that neither will directly or indirectly
hire, recruit, induce or attempt to pursuade any person who is
an employee of the other party on the Execution Date hereof or
becomes an employee of the other party during a period of
three years as of the Execution Date, to terminate his or her
relationship with the other party during the term of such
employee's employment with the other party and for a period of
one year thereafter.
16. CONFIDENTIALITY
16.1. ENlighten recognizes and agrees that as of the Effective Date
of the Agreement the Purchased Products and their
Documentation, source codes, computer tapes, user manuals or
any other materials which will be clearly marked as
confidential by NDS (hereinafter: "Confidential Material")
will be of a confidential and proprietary nature and the
valuable property of NDS. ENlighten therefore undertakes not
to disclose and not to allow disclosure to any third party,
either individual or corporate entity, of any information
regarding the Purchased Products and/or any other Confidential
Material.
16.2. Both NDS and ENlighten acknowledge that as a result of this
Agreement, each may have access to proprietary materials of
the other, apart from the Confidential Material, and therefore
NDS and ENlighten each agrees and commits to take the
necessary precautions to prevent transfer of such confidential
information to any unauthorized third parties.
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16.3. This Section shall be in effect for a period of ten (10) years
as of the Execution Date.
17. SEVERABILITY
If any provision of this Agreement is declared void, the validity of
any other provision and of the entire Agreement shall not be affected
thereby.
18. WAIVER
The failure at any time of either party to enforce any of the
provisions of the Agreement, or any right with respect thereto or to
exercise any option herein provided, will in no way be construed to be
a waiver of such provisions, rights or options, or in any way to affect
the validity of this Agreement.
19. COMPLETE AGREEMENT
The provisions herein contained set forth the entire Agreement of the
parties with respect to the subject matter hereof, and supersede all
previous communications, representations or agreements, whether oral or
written, with respect to the subject matter hereof, and no addition to
or modification of this Agreement shall be binding upon either party
unless reduced to writing and duly executed by the parties hereto in
the same manner as the execution of this Agreement.
20. PROPER LAW AND JURISDICTION
This Agreement shall be exclusively governed by, and shall be construed
exclusively in accordance with the laws of the State of California,
U.S.A. and the competent courts of San Mateo, California, shall have
the exclusive jurisdiction over any dispute or controversy with respect
to this Agreement.
21. GOVERNING LANGUAGE
The Agreement is in the English language only, which language shall
control in all respects. No translation, if any, of this Agreement into
any other language shall be of any force or effect in the
interpretation of this Agreement or in a determination of the intent of
either party hereto.
22. ASSIGNABILITY
Neither party may assign or transfer this Agreement or any of its
obligations, undertakings and/or rights thereunder to another party
other than a party's parent company or such parent company's
subsidiaries, or without the other party's prior written consent, which
consent shall not be unreasonably withheld.
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23. NOTICES
Any notice required or authorized to be given hereunder shall be made
in writing and shall be served by hand delivery or by certified letter
return receipt requested or by fax addressed to ENlighten or NDS (as
the case may be), at the following addresses:
To ENlighten: ENlighten Software Solutions Inc.
000 Xxxxx Xxx, 0xx Xx., Xxx Xxxxx, 00000
Xxxxxxxxxx, X.X.X.
Attention: Mr. Xxxxxxx Xxxxxx
Tel.: 000-000-0000
Fax: 000-000-0000
To NDS: New Dimension Software Inc.
00000 Xxx Xxxxxx Xx., Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxx Xxxxxxxxxx
Tel.: 000-000-0000
Fax: 000-000-0000
Or at such other address as such party may designate by ten (10) days'
advance written notice to the other party.
Any notice delivered via over night carrier of recognized national
stature shall be deemed to have been served on the immediately
following day. Any notice given by letter shall be deemed to have been
served seven (7) days after the same shall have been posted, not
including the day of posting, and any notice given by fax shall be
deemed to have been served on the day of sending the message. Proof
that such letter was properly addressed and put into the post, and in
the case of fax that the message was sent to the correct fax number,
shall be conclusive evidence of service.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first herein written.
ENLIGHTEN SOFTWARE SOLUTIONS INC.
BY:_________________________________
____________________________________
XXXXX X. XxXXXXXX
NEW DIMENSION SOFTWARE INC.
BY: _________________________________