PRODUCT PURCHASE AGREEMENT
This PRODUCT PURCHASE AGREEMENT ("PURCHASE AGREEMENT" OR "AGREEMENT") is
entered into on August 30, 1996 ( EFFECTIVE DATE ), by Candle Corporation, a
California corporation with its principal office at 0000 Xxxxxxx Xxxxxxxxx,
Xxxxx Xxxxxx, Xxxxxxxxxx 00000 ("BUYER"), and Xxxxx 0 Systems Inc., a New
York corporation with its principal office at Xxx Xxxx Xxxxx, Xxxxx 0000, Xxx
Xxxx, Xxx Xxxx 00000 ("SELLER"), and refers to the following facts:
RECITALS:
A. Seller and Buyer own, develop and license software products and
provide services;
B. Buyer, Seller and Seller's parent company, Across Data Systems
Inc. ("ACROSS"), entered into a binding letter of intent ("LOI") on
July 25, 1996;
C. Pursuant to the LOI the parties agreed to enter into the
following agreements :
1. A technology license agreement and a distribution agreement
whereby Seller grants to Buyer: a. distribution rights and a technology
license to Seller's product Falcon External Gateway ("FEG"), currently in
development; and b. a 180 day option to enter into a Technology License for
Seller's product DOT/XM, currently in development;
2. This Purchase Agreement whereby Buyer receives from Seller any
and all title, interests and rights to Seller's product MQ Secure
("PRODUCT"), a security product for IBM MQSeries environments, currently in
field test, with general availability expected in the fourth quarter of 1996;
3. A technology license to the Product to enable Seller to integrate
the Product into its product FEG;
4. An agency agreement whereby Seller acquires non-exclusive
distribution rights for certain Buyer products;
5. A stock purchase agreement whereby Buyer purchases stock from
Across and in return receives a seat on the board of directors of Across;
NOW, THEREFORE, Buyer and Seller agree to enter into the following
Purchase Agreement:
1. DEFINITIONS
1.1 "CUSTOMER" means a company or an affiliate thereof, which licensed
from Seller, prior to the Effective Date, any one or more copies of the Product
under the terms of product license agreements, trial or beta test agreements,
or any other agreements between Seller and Customer.
1.2 "AGREEMENTS means the contracts (whether oral or in writing) listed
in Schedule 1, and all correspondence and amendments regarding such agreements
in Seller's Possession or Control.
1.3 "DOCUMENTATION" means the following information in Seller's
Possession or Control: (a) all technical, design, development and
installation information describing the design and development of the
Product, including without limitation source code, source documentation,
source listings and annotations, and test data , the "User's Guides" and all
other such reference manuals and support materials normally distributed to
Customers and potential Customers with the Product.
1.4 "EMPLOYEES" means all officers, agents, affiliates, servants,
contractors, subcontractors and employees of Seller and Buyer.
1.5 "LIENS" means mortgages, deeds of trust, pledges, security
interests, liens, leases, licenses, liabilities, encumbrances, costs and/or
other similar claims.
1.6 "MARKETING INFORMATION" means the following information in
Seller's Possession or Control: all customer and marketing information and
other materials regarding the Product, including without limitation
strategic data, such as marketing and development plans, forecasts and
forecast assumptions and volumes of Seller which have been or are being
discussed, financial data, including price and cost objectives, price lists,
pricing and quoting policies and procedures; and any kind of Customer data,
such as customer lists, data provided by or about prospective, existing or
past customers.
1.7 "PRODUCT" means the latest version of Seller's software product
known as MQ Secure deliverable to Buyer on the Effective Date, any versions
currently in development and all software programming technology, in both
source and object code form, regardless of the stage of development of any
such technology, any prior version of such programs, any other computer
program which contains a substantial portion of the source code of this
Product, any enhancements, modifications, updates, upgrades and derivative
works and any Documentation.
1.8 "IN SELLER'S POSSESSION OR CONTROL" means in the possession or
under the control of Seller or any of Seller Subsidiary or Affiliate or any
of its respective Employees.
1.9 "A BUYER SUBSIDIARY OR AFFILIATE" OR "A SELLER SUBSIDIARY OR
AFFILIATE" means a person or entity controlled by Buyer or Seller or by a
person or entity controlling Buyer or Seller. For this purpose "control"
means ownership or the right to vote more than 50% of the voting securities
of such entity.
2. PURCHASE AND SALE OF THE PRODUCT. Subject to the terms and conditions
herein set forth, subject to the condition that the Buyer obtains an
assignment of the RSA OEM Master Agreement within ten (10) business days of
the Effective Date and upon the representations and warranties made herein:
2.1(A) SALE OF PRODUCT. On the Effective Date (simultaneously with the
execution of this Agreement), Seller shall sell, grant, transfer, and assign
to Buyer all right, title and interest in and to the Product, including
without limitation any copyrights, tradesecrets, trademarks and patents, and
any rights held by any Seller Affiliate or Subsidiary, free and clear of any
Liens, except as set forth in Schedule 3.6 and shall deliver good, clear and
marketable title to, and possession of, all copies of the Product to Buyer by
electronic transfer, together with such bills of sale, assignments and
instruments of conveyance as Buyer may reasonably request to permit such
delivery. On the Effective Date, title to the Product and risk of loss shall
pass to Buyer.
(B) ASSUMPTION OF CERTAIN LIABILITIES. On the Effective Date, Buyer
shall assumes only those liabilities or obligations regarding the Product
listed in Schedule 2.
2.2 PURCHASE PRICE. Buyer agrees to pay Seller for the transfer of
the Product the following fees:
(A) One Hundred Twenty Five Thousand U.S. Dollars ($125,000.00) in
cash payable to Seller by wire transfer on October 1, 1996 and One Hundred
Twenty Five Thousand US Dollars ($125,000.00) payable when the Product is
generally available to Customers for normal business use upon commercial
terms and conditions but in no event later than January 2, 1997. Such amount
of Two Hundred Fifty Thousand US Dollars ($250,000.00) shall be credited
first towards the compensation due under 2.2(b) below; and
(B) A 20% compensation of the Product list price up to a total of Three
Million ($3,000,000.00) U.S. Dollars (which shall include Buyer's payment of
Two Hundred Fifty Thousand US Dollars) or for a three (3) year period,
whichever comes first, for each Product copy or a major portion thereof,
licensed either as a stand alone or integrated together with other Buyer
products to third parties. In the event Buyer licenses the Product to third
parties
under an enterprise license containing a siginificant discount from the list
price, the parties will negotiate in good faith a reasonable adjustment of
the foregoing 20% compensation.
2.2.1 Buyer shall pay the compensation to Seller Sixty (60) days after
the end of each calendar quarter, based upon revenue received from third
parties. Concurrent with each quarterly payment, Buyer shall provide Seller
with an accounting of Buyer's net sales revenue for the respective payment
period. At its option and at its own expense, Seller may obtain an independent
accounting of Buyer's net sales of the Product for such payment period. Should
Seller elect to exercise its option pursuant to this Section 2.2.1, Buyer
agrees to cooperate with Seller in such independent accounting, subject to the
confidentiality provision of this Agreement. In the event the parties disagree
on the independent accounting, the parties shall mutually agree to appoint an
independent third party who will arbitrate the dispute subject to the terms of
this Agreement.
2.2.2 The maximum amount of the payments due Seller under this Agreement
shall be Three Million ($3,000,000.00) U.S. Dollars. Buyer shall not owe any
other payments to Seller for the transfer of the Products.
2.3 INDEPENDENCE. Notwithstanding anything to the contrary contained
in this Agreement, Buyer shall have sole and absolute discretion over the
development, use, and naming of the Product, advertising, promotion, marketing,
distribution, pricing, discounting and other exploitation of the Product.
Buyer's decision as to any initial pricing, any price increases or decreases,
and any product use, development and marketing shall be final and conclusive.
2.4 SELLER'S DISTRIBUTION RIGHTS TO PRODUCT. Seller shall have the
right to distribute the Product pursuant to the terms and conditions of a
distribution agreement to be negotiated by the parties. The compensation rates
due under such distribution agreement shall vary between 15% and 50%.
2.5 LICENSE GRANT OF PRODUCT TO SELLER. Subject to the
non-disclosure, indemnity and any other relevant provisions of this Agreement,
Buyer grants to Seller the following licenses to the Product:
2.5.1 A limited, non-exclusive right and license to use, execute, copy
for its internal use only, the object code version of the Product free of
charge; and
2.5.2 A limited, non-exclusive right and license to use, copy, and
create derivative works to the source code version of the Product to integrate
the Product into Seller's product FEG free of charge.
2.5.3 A limited, non-exclusive right and license to sublicense the source
code version of the Product integrated into the FEG and associated distributed
clients to third parties free of charge.
2.5.4 In the event Seller wishes to integrate the Product into any other
products, Buyer and Seller will review each opportunity on a case by case basis.
2.5.5 The rights and licenses granted above are made without
representations and warranties, except that Seller represents and warrants it
has not by its actions encumbered title of the Product rights grant in Section
2.5
2.6 LIABILITIES. Seller will be solely responsible for the
obligations, commitments and liabilities of Seller to its Employees,
distributors, agents, and Customers which arise from the transactions
contemplated by this Agreement or from events up to and including the Effective
Date. Each party shall remain exclusively responsible for the obligations,
commitments and liabilities of its Employees, distributors, and agents after the
Effective Date.
2.7 INVENTIONS. Seller agrees that after the Effective Date any
inventions, works of authorship, designs, concepts, information or ideas
conceived or made by Seller or any Seller Employees, whether solely or jointly
with others, which were or will be incorporated into or used with the Product
("INVENTIONS"), shall belong to Buyer. Seller agrees to assign without further
consideration, and to cause its Employees to assign, all of their
right, title and interest in and to any such Inventions to Buyer. At Buyer's
expense, Seller will reasonably cooperate with Buyer in obtaining the patents,
copyrights, trademarks or other such rights in such Inventions for Buyer in the
United States and other countries. Seller also agrees that Buyer shall have the
right to keep such Inventions as Proprietary Information if Buyer so chooses.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants that each of the following statements is
true, correct and complete as of the date hereof and shall be true as of the
Effective Date:
3.1 EXISTENCE AND RIGHTS. Seller: (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
without limit as to the duration of its existence, and (b) has all corporate
power and authority to carry out this Agreement and the transactions
contemplated herein.
3.2 AGREEMENT AUTHORIZED. Seller's execution, delivery and performance
of this Agreement has been duly authorized by all necessary corporate and other
action and does not require notice to, or the consent or approval of, any
governmental body or other regulatory authority. This Agreement is a legal,
valid and binding obligation of Seller, enforceable in accordance with its
terms, subject to laws of general application and relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing equitable
remedies.
3.3 NO CONFLICT. Except as set forthin Schedule 3.3, the execution,
delivery and performance of this Agreement will not : (a) modify, breach or
constitute grounds for default under any agreement, indenture, undertaking or
other instrument to which Seller is a party or by which the Product may be bound
or affected; (b) violate any provision of law or any regulation or any order,
judgment, or decree of any court or other agency of government, which could
adversly effect the Product; (c) violate any provision of the Articles of
Incorporation or By-Laws of Seller; or (d) result in the creation or imposition
of (or the obligation to create or impose) any Lien on the Product.
3.4 LIABILITIES. Except as set forth on Schedule 3.4, Seller does not
have any obligations, indebtedness or liabilities, contingent or otherwise,
other than such obligations, indebtedness or liabilities incurred in the
ordinary course of business consistent with prior practice which are not
material to the Product.
3.5 LITIGATION. Except as set forth in Schedule 3.5, there is no
litigation, investigation, arbitration or other proceeding (formal or informal)
pending or, to the best knowledge of Seller, threatened against or affecting the
Product; nor does Seller know or have reason to know of any basis for any such
litigation, investigation, arbitration or other proceeding (formal or informal),
which could adversly effect the Product. Seller is not in default on any order,
writ, injunction, decree or demand of any court or other governmental or
regulatory authority, and there is no suit, action, investigation or other
proceeding commenced, pending or threatened against or affecting Seller in any
court or before any tribunal or governmental body, in which it is sought to
restrain, prohibit or otherwise adversely affect Seller's ability to perform any
or all its obligations under this Agreement, or the consummation of the
transactions contemplated herein.
3.6 TITLE TO AND CONDITION OF PRODUCT AND INTANGIBLE RIGHTS. Except
regarding the RSA code incorporated into the Product as set forth in Schedule
3.6, Seller has all right, good, clear and marketable title and interest in and
to the Product, including without limitation any rights held by any Seller
Subsidiary or Affiliate. Except as set forth in Schedule 3.6, such Product:
(a) is subject to no Liens, including without limitation any Liens for
non-payment of taxes; (b) the legal rights owned by Seller are adequate and
sufficient to permit Buyer to license or sell the Product; and (c) are either
freely transferable or assignable to Buyer or will not be rendered invalid or
affected in any way by the execution, delivery and performance of this
Agreement. Except as set forth in Schedule 3.6, the Product does not infringe
upon or conflict with any rights of third parties; and to the best knowledge of
Seller, no third party has asserted or is threatening to assert any claim
against Seller concerning such an infringement or conflict.
3.7 REGISTRATION LIST. Schedule 3.7 lists all patents, copyrights, and
trade and service marks and names, issued or reissued to it, registered, applied
for or pending under Seller's name or assigned to it as of the date hereof, and
that are included in the Product, along with the registration numbers, dates of
issuance and names of the inventors or authors of such patents, marks, names,
and copyrights Seller shall promptly provide any other related information as
reasonably requested by Buyer and available to Seller or under Seller's
Possession or control.
3.8 CONTRACT LIST. Schedule 3.8 lists all written Agreements regarding
the Product or under which Product portion(s) are used, including without
limitation development, trial, license, lease, rental, sale and all related
nondisclosure and/or confidentiality agreements executed by Employees of Seller
(collectively the "AGREEMENTS"), and all other material contracts, commitments
and undertakings (alone or in the aggregate) regarding the Product ("MATERIAL
OBLIGATIONS"), with copies attached. With respect to oral Agreements or
Material Obligations, Schedule 3.8 describes, to the extent reasonably
practical: (a) the parties to the agreements, the nature of the relationships;
(b) the basic terms of the agreements (e.g., exclusive, perpetual license to
use; non-exclusive license to market for five years); (c) the nature of the
technology, rights or information transferred; and (d) whether such agreements
or obligations are assignable in whole or in part to Buyer. All Agreements and
Material Obligations are valid and binding and in full force and effect, except
as noted in Schedule 3.8. Neither Seller nor, to Seller's knowledge, any other
party to such Agreements or Material Obligations is in default, nor to the
knowledge of Seller is there any basis for any claim of default, and Seller has
not waived any right under any Agreements or Material Obligations, except
defaults and waivers immaterial to such Agreements and Material Obligations.
3.9 NO FINDER'S FEES. Neither Seller nor any of its Employees has
employed or incurred any liability to any broker, finder or agent for any
brokerage fees, finder's fees, commissions or other amounts regarding the
transactions contemplated by this Purchase Agreement.
3.10 NO MATERIAL MISSTATEMENTS. Neither this Agreement nor any other
documents, schedules or certificates furnished or to be furnished to Buyer by
or on behalf of Seller hereunder: (a) contains any untrue statement of a
material fact, or (b) omits to state a material fact necessary in order to make
the statements contained herein not misleading. There is no fact known to
Seller or any of its management (other than matters relating to the economy
generally) which, in Seller's opinion, materially and adversely affects the
Product or Seller's ability to carry out the transactions under this Agreement.
4. REPRESENTATION AND WARRANTIES OF BUYER
Buyer represents and warrants that each of the following statements is
true, correct and complete as of the Closing Date:
4.1 EXISTENCE AND RIGHTS. Buyer (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State of California
without limit as to the duration of its existence, and (b) has all corporate
power and authority to carry out this Agreement and the transactions
contemplated herein.
4.2 AGREEMENT AUTHORIZED. Buyer's execution, delivery and performance
of this Agreement has been duly authorized by all necessary corporate and other
action and do not require notice to, or the consent or approval of, any
governmental body or other regulatory authority. This Agreement is a legal,
valid and binding obligation of Buyer, enforceable in accordance with its terms
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing equitable remedies.
4.3 NO CONFLICT. The execution, delivery and performance of this
Agreement will not (a) modify, breach or constitute grounds for the occurrence
or declaration of a default under any agreement, indenture, undertaking or other
instrument to which Buyer is a party or by which any of its material assets may
be bound or affected; (b) violate any provision of law or any regulation or any
order, judgment, or decree of any court or other agency of government, which
could materially effect the summarized financial condition of Buyer subject to
the
confidentiality provisions set forth in Section 8 below; or (c) violate any
provision of the Articles of Incorporation or By-Laws of Buyer.
4.4 Buyer is not in default on any order, writ, injunction, decree or
demand of any court or other governmental or regulatory authority, and there is
no suit, action, investigation or other proceeding commenced, pending or
threatened against or affecting Buyer in any court or before any tribunal or
governmental body, in which it is sought to restrain, prohibit or otherwise
adversely affect Buyer's ability to perform any or all its obligations under
this Agreement, or the consummation of the transactions contemplated herein.
4.5 NO FINDER'S FEES. Neither Buyer nor any of its employees have
employed or incurred any liability of any broker, finder or agent for any
brokerage fees, finder's fees, commissions or other amounts regarding the
transactions contemplated by this Agreement.
4.6 NO MATERIAL MISSTATEMENTS. Neither this Agreement nor any other
document, schedule or certificate furnished or to be furnished to Seller by or
on behalf of Buyer: (a) contains any untrue statement of a material fact, or
(b) omits to state a material fact necessary in order to make the statements
contained herein not misleading. There is no fact known to Buyer or any of its
management (other than matters relating to the economy generally) which
materially and adversely effects Buyer's ability to carry out the transactions
contemplated by this Agreement.
5. COVENANTS AND AGREEMENTS OF SELLER AND BUYER
5.1 CONDUCT OF BUSINESS From and after the Effective Date of this
Agreement, Seller covenants and agrees:
5.1.1 BUSINESS OPERATIONS. (a) not to transfer, sell or dispose, and has
not transferred, sold or disposed, of the Product or any portions thereof to or
on account of any person, whether in payment of any indebtedness or otherwise;
(b) not to perform and has not performed any act inconsistent with the
representations and warranties of Section 3; and (c) not to make and has not
made any changes (whether by sale, destruction, pledge, lease or otherwise)
regarding the Product, except with Buyer's prior written consent.
5.1.2 CONTRACTS. No contract, obligation, license or other commitment
regarding the Product will be or has been entered into or assumed by or on
behalf of Seller involving incurrence of any Liens.
5.1.3 NO AMENDMENTS. Seller will not terminate, amend or modify, or
allow to be terminated, amended or modified, nor has Seller terminated, amended
or modified or allowed to be terminated, amended or modified any of the
Agreements or Material Obligations or any other agreement or instrument by which
Seller may be bound, if such action would adversely effect the Product or the
ability of Seller to complete this Agreement or the transactions contemplated
hereby.
5.2 COPIES OF THE PRODUCT. On the Effective Date, Seller will
electronically transmit to Buyer at least one complete copy of the Product in
its latest stage of development in Seller's Possession or Control.
5.3 TECHNICAL ASSISTANCE. For a period of two (2) calendar months,
Seller agrees to provide one fulltime employee knowledgeable regarding the
Product, to assist Buyer free of charge with any consulting, education and
technical assistance Buyer may require to make the Product generally available.
Seller agrees to make available to Buyer one additional fulltime employee
knowledgeable regarding the product, to provide an additional sixty (60) days
of telephone assistance to Buyer's Employees free of charge. Should Buyer
require additional training, Seller will provide knowledge regarding the Product
and charge Buyer at an hourly rate of One Hundred and Twenty ($120.00) Dollars,
unless the parties negotiate other fees.
5.4 CONSENTS. On the Effective Date, Seller will deliver to Buyer all
written consents, if any, necessary to Seller's assignment to Buyer of the
Contracts.
5.5 ASSIGNMENT. On the Effective Date, Seller will deliver to Buyer,
from each person who has authored any portion of the Products, a signed copy of
a short-form copyright assignment or other evidence reasonably acceptable to
Buyer that each such person has no rights to the copyrights in any portion of
the Product, attached as Schedule 4.
5.6 XXXX OF SALE. On the Effective Date, Seller will execute and
deliver to Buyer a "Xxxx of Sale" attached as Schedule 5, and evidence
reasonably acceptable to Buyer that all rights to the assets being transferred
hereunder have been conveyed to Buyer and other evidence of Seller reasonably
acceptable to Buyer that such rights are clear and free of any Liens.
5.7 PURCHASE PRICE. On the Effective Date Buyer will pay to Seller
compensation as set forth in Section 2.2.
6. CONDITION OF SELLER'S OBLIGATIONS
The obligations of Seller to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction on the
Effective Date of the following conditions, any of which may be waived, in
writing, exclusively by Seller:
6.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties of Buyer contained in this Agreement shall be true in all material
respects at and as of the Effective Date, as though made on such date and Buyer
shall have delivered to Seller a certificate, dated on the Effective Date and
signed by an officer of Buyer, to such effect, attached as Schedule 6A.
6.2 COVENANTS. Buyer shall have complied with all agreements and
covenants contained herein to be complied with by Buyer prior to or on the
Effective Date and Buyer shall have delivered to Seller a certificate, dated as
of the Effective Date and signed by an officer of Buyer, to such effect.
6.3 DOCUMENTS. Seller shall have received, in form and substance
satisfactory to Seller and its counsel, each and every other document required
to be delivered to it by this Agreement.
7. CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction on the
Effective Date of the following conditions, any of which may be waived, in
writing, exclusively by Buyer:
7.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties of Seller contained in this Agreement shall be true and correct on
the Effective Date, as though made as of such date and Seller shall have
delivered to Buyer a certificate, dated of the Effective Date and signed by an
officer of Seller to such effect, attached as Schedule 6B.
7.2 COVENANTS. Seller shall have complied with all agreements and
covenants contained herein to be complied with by Seller prior to or on the
Effective Date and Seller shall have delivered to Buyer a certificate, dated as
of the Effective Date and signed by an officer of Seller to such effect.
7.5 DELIVERY OF THE PRODUCT. Seller shall deliver the Product to Buyer
by electronic transfer on the Effective Date.
8. CONFIDENTIALITY AND INVENTIONS
8.1 PROPRIETARY INFORMATION. Each party acknowledges that it will have
access to confidential and proprietary information of the other ("PROPRIETARY
INFORMATION"). For purposes of this Agreement, Proprietary Information includes
without limitation, any trade, business or industrial secrets of either party,
and any marketing, financial, customer, business or other related inforamtion
regarding the Product. The parties agree that, upon and after the Effective
Date, all right, title and interest in and to such Product, Marketing
Information, inventions, and any information pertaining to the development,
manufacture, marketing and/or distribution of the Product shall belong to, vest
in, and remain with Buyer.
8.2 IDENTIFICATION AS PROPRIETARY. All other information shall be
confidential only if identified in writing as "confidential" or "proprietary".
8.3 HELD IN CONFIDENCE. All Proprietary Information shall be held in
confidence and neither party shall copy, use, transfer, disclose or exploit the
other party's Proprietary Information to take all reasonable actions to protect
the Proprietary Information in the same manner that a reasonable person protects
its own Proprietary Information, including without limitation access to the
Proprietary Information to those Employees or third parties who reasonably
require such information and who agree to keep such information confidential.
Except as stated in this Agreement, the parties agree that the prohibitions
hereunder against Seller's use or transfer of Proprietary Information include,
but are not limited to the manufacturing, selling, licensing or otherwise
exploiting, directly or indirectly, of any of products or services which embody
or are derived from Proprietary Information, or exercising judgment or
performing analysis or services based upon knowledge of such Proprietary
Information.
After the Effective Date, Seller's Proprietary Information remaining
Seller's property after sale of the Product, shall remain subject to this
Section 8, and all documents and other tangible media regarding such information
(and all copies thereof) given to Buyer by Seller shall be promptly returned to
Seller, and Buyer shall make no further use of such information, and (b) with
respect to Buyer's Proprietary Information (including without limitation the
Product), the agreements of this Section 8 and the Confidentiality Agreement
referenced in this Agreement shall survive and apply, and all documents and
other tangible media pertaining to such information (and all copies thereof)
given to Seller shall be promptly returned to Buyer, and Seller shall make no
further use of such information. No person will be given access to, or a copy
of, any of the information, unless such person has executed a confidentiality
agreement reasonably acceptable to Buyer.
8.4 APPLICABILITY. The provisions of this Section shall not apply to
information which is: available to the public other than by breach of this
Agreement by Seller or its Employees, otherwise rightfully received by Seller or
its Employees from a third party without obligations of confidentiality to
Buyer; independently developed, without incorporation of Proprietary
Information, by Employees of Seller; independently developed by Seller or by
Employees having no access to the Proprietary Information; or disclosed by Buyer
to a third party without restrictions. However, Seller agrees to abide by the
provisions of Section 8, even if Seller has rightfully obtained such information
pursuant to the exceptions outlined in this Section, until Seller has notified
Buyer of such rightful possession and provided a reasonable description of the
method by which such information was obtained, and Buyer has not objected in
writing within fifteen (15) days from receipt of such notice.
8.5 DISCLOSURES. In order to permit Buyer to claim, perfect and
enforce its rights in and to the Proprietary Information, Seller agrees: (i)
to disclose promptly to Buyer in confidence and in writing all Proprietary
Information conceived or made by Seller solely or jointly with others; (ii) to
comply with Buyer's reasonable instructions and to execute and procure all
documents respecting such Proprietary Information as Buyer may reasonably
request to vest, confirm, secure or assign Buyer's right, title and interest
therein (including without limitation related patents and copyrights) in the
United States and any foreign countries; and (iii) to notify and describe to
Buyer in writing all patent and copyright applications related to the Product's
Proprietary Information filed by Seller within five (5) years after the
Effective Date of the contemplated purchase. When Buyer obtains any patent,
copyright or other such protection at its expense (except for labor, overhead
and fixed costs), Seller agrees to
give Buyer all reasonable assistance in preparing and prosecuting any patent,
copyright or other such application filed by Buyer pursuant to this Section 8,
and shall cause to be executed all assignments and other instruments and
documents as Buyer may consider necessary or appropriate to carry out the
intent of this Section 8.
9. PRODUCT CHANGES
OWNERSHIP. On and after the Effective Date, title and full ownership
rights to any modifications, changes, derivative works and enhancements made to
the Product by Seller or its Employees in the course of providing support and
other services under this Agreement ("CHANGES") shall vest in and remain the
sole property of Buyer. Seller agrees that Buyer may supervise and direct the
development of Changes, that such Changes constitute "works made for hire"
within the meaning of Section 101 of the Copyright Act, and that such Changes
constitute and contain intellectual property rights, and valuable proprietary
assets and trade secrets of Buyer, embodying substantial creative efforts and
Proprietary Information. Seller agrees not to contest the trade secret,
confidential or proprietary status or other intellectual property rights of such
Changes, Buyer's ownership of such Changes or Buyer's ownership of any patents,
copyrights, trade secrets or other proprietary rights in or to such Changes.
Seller expressly agrees that such Changes and other rights and information,
whether oral or written, constitute confidential information of Buyer. In the
event that, notwithstanding the foregoing, title to and ownership of any such
Changes initially vests in Seller then Seller shall and hereby does grant,
transfer and assign all such title and ownership and all rights appurtenant
thereto to Buyer.
10. TERMINATION.
1.1 AGREEMENT TERMINATION. This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time: (a) by Buyer or
Seller if there has been a material misrepresentation, breach of warranty, or
breach of covenant by the other in any of its representations, warranties, or
covenants set forth herein; or (b) by mutual written agreement of Buyer and
Seller'; or (c) by Buyer, if Buyer cannot obtain an assignment of the RSA OEM
Master Agreement within ten (10) business days after the Effective Date. In
such case this Agreement shall terminate on the date selected by the parties,
except provided that the provisions of Section 8 shall survive. No such
termination shall terminate the parties' obligations under the LOI, except that
a termination by Buyer because of material breach by Seller shall terminate all
of Buyer's obligations regarding the Product under this Agreement except with
respect to Section 8.
10.2 EFFECT OF TERMINATION. If this Agreement is terminated under
Section 10.1, all obligations of the parties shall terminate without liability
of any party to any other party, except that in the event of termination by
reason of Section 10.1 (b) and the breaching party shall be liable for the
expenses (including attorney's fees, expenses of counsel and court costs) of the
other party in connection herewith.
10.3 RIGHTS TO PROCEED. Notwithstanding any contrary provisions in this
Agreement, if any of the conditions specified in Section 5.1 to 5.6 have not
been satisfied, Buyer may proceed with the transactions contemplated hereby
without waiving any of its rights hereunder; and if any of the conditions
specified in Section 5.7 have not been satisfied, Seller may proceed with the
transactions contemplated hereby without waiving any of its rights hereunder.
11. SURVIVAL AND INDEMNIFICATION
11.1 SURVIVAL. All representations, warranties and covenants of Buyer
and Seller are material, shall be deemed to have been relied upon by the other
party and shall survive until three (3) years following the Effective Date (the
"INDEMNIFICATION PERIOD") regardless of any investigation at any time provided
if a party claiming breach by a representation or warranty has given notice to
either party within such a three (3) year period the representation and warranty
for which a breach has been claimed shall survive until the parties agree or a
determination has been made by a court having jurisdiction, (whether before or
after the date of this Agreement) made by or on behalf of Buyer or Seller or
any information any of them may have obtained or have (whether
before or after the date of this Agreement) in respect thereof and regardless of
any non-exercise by any of them of any termination rights hereunder. Each party
shall have a claim against the other as provided in and subject to the
limitations of Section 11.2 regarding any breach of any representation, warranty
or covenant.
11.2 INDEMNIFICATION
11.2.1 SELLER INDEMNIFICATION OF BUYER. Seller shall defend, indemnify and
hold harmless Candle, its officers, directors, shareholders, agents, employees
and representatives from and against any and all losses, damages, injuries,
causes of action, claims, demands and expenses (whether based upon tort, breach
of contract, patent, trade secret, copyright or other proprietary rights
infringement, or otherwise), including legal, accounting and expert witnesses
fees and expenses, of whatever kind and nature ("LOSS") arising out of or on
account of, or resulting from: (i) Seller's or its successors' or assigns' act
or omission, default in the performance of or breach of any warranty,
representation, referred to herein, or default in the performance of any
warranty, representation, agreement or covenant of any current or prior
Agreements or Material Obligations of Seller ("BREACH"), or (ii) any allegation
or claim by any third party (x) regarding any act or omission or alleged act or
omission constituting (or which, if true, would constitute) a Breach, or (y)
that any of the Product or its use, copying, marketing or other exploitation by
Seller or Buyer or their customers, distributors, successors or assigns
infringes or conflicts with the United States or Canadian rights of any person
not a party hereto (or to the knowledge of Seller or its Employees any other
rights of any such person) except to the extent of modifications to the Product
made by or for Buyer, and, in each instance, which occurs or is incurred, made
or filed during the Indemnification Period (any such Loss being herein referred
to as a "CLAIM").
11.2.2 INDEMNIFICATION OF SELLER. Buyer shall defend, indemnify and hold
harmless Seller (and Seller's assignees upon liquidation to the extent claiming
rights to indemnification to which Seller would have been entitled hereunder)
from and against any and all Losses arising out of or on account of, or
resulting from (i) Buyer's or its successors' or assigns' act or omission,
default in the performance of or breach of any warranty, representation,
agreement or covenant of this Agreement or any other agreement referred to
herein to be executed by Buyer or liability to be assumed by Buyer pursuant to
Section 6.2 hereunder ("BREACH"), or (ii) any allegation or claim by any third
party (x) with respect to any act or omission or alleged act or omission
constituting (or which, if true, would constitute) a Breach, or (y) that any
modification made by or for Buyer to the Product, or the use, copying,
marketing or other exploitation by Buyer or its customers, distributors,
successors or assigns of such modification infringes or conflicts with the
rights of any person not a party hereto and, in each instance, which occurs or
is incurred, made or filed during the Indemnification Period (any such Loss
being herein referred to a "CLAIM").
11.2.3 PROCEDURES FOR INDEMNIFICATION
A. In the event of any Claim hereunder, the party entitled to
indemnification (the "INDEMNITEE") shall, with reasonable promptness, provide
the indemnifying party (the "INDEMNITOR") with written notice (during the
Indemnification Period) and copies of any claims or other documents received;
provided that the Indemnitee's failure to so notify the Indemnitor shall not
relieve the Indemnitor from any liability it might otherwise have on account of
this indemnity, except to the extent that the Indemnitor has been materially
prejudiced by such failure to notify or to the extent that the notice is not
given reasonably promptly after the end of the Indemnification Period.
B. Subject to paragraph C., the Indemnitor may undertake full
responsibility for the defense or prosecution of any claim relating to a
third-party allegation or claim as described in clause (ii) of Sections 13.2.1
and 13.2.2 ("THIRD-PARTY CLAIM") and may contest or settle it on such terms as
the Indemnitor may choose, provided that the Indemnitor shall not have the
right, without the Indemnitee's written consent, to settle any such claim if
such settlement arises from or is part of any criminal action, suit or
proceeding, or contains a stipulation to, confession of judgment with respect
to, or admission or acknowledgment of, any liability or wrongdoing on the part
of the Indemnitee; provided that:
(i) Notice of the Indemnitor's intention to defend, accompanied by an
acknowledgment in writing in form and substance reasonably satisfactory to
counsel for the Indemnitee that such claim is covered in its entirety by this
indemnity (the "ACKNOWLEDGMENT"), shall be delivered to the Indemnitee within
thirty (30) days from the date of receipt by such Indemnitor of notice of the
institution of such action or proceeding.
(ii) Such defense shall be conducted by attorneys reasonably satisfactory
to the Indemnitee and retained by the Indemnitor at the Indemnitor's cost and
expense (in the manner and to the extent herein set forth), but the Indemnitee
shall have the right to participate in such proceedings and to be separately
represented by attorneys of its own choosing. The Indemnitee shall be
responsible for the costs for such separate representation unless the Indemnitee
has reasonably concluded that the interests of the Indemnitee and of the
Indemnitor in the action conflict in such a manner and to such an extent as to
require, consistent with applicable standards of professional responsibility,
the retention of separate counsel for the Indemnitee, in which case the
Indemnitor shall pay for the separate counsel chosen by the Indemnitee.
(iii) If the Indemnitor fails to deliver the Acknowledgment or fails to
choose counsel reasonably satisfactory to the Indemnitee, the Indemnitor shall
not thereafter be entitled to elect to defend and the Indemnitor shall be bound
by and shall be liable for the result obtained by the Indemnitee, including
without limitation the amount of any judgment or good faith out-of-court
settlement or compromise and all costs and related fees of counsel incurred by
Indemnitee. If at any time the Indemnitee reasonably concludes that the
Indemnitor will be unable to indemnify the Indemnitee for any claim, the
Indemnitee shall be entitled to assume and control the defense with counsel of
its own choosing.
C. Notwithstanding anything to the contrary contained in paragraph B.,
to the extent that any Third-Party Claim against Buyer relates to the Product,
Buyer shall have the right, at its election exercisable at any time by written
notice to Seller specifically referencing this Section 11.2.3C., to undertake
full responsibility for the defense or prosecution of such Claim and to contest
or settle it on such terms as Buyer may choose; provided that Seller's
indemnification obligations shall not apply to the extent the Seller reasonably
objected in writing to Buyer (specifying the reasons for their objection)
within ten (10) business days from Seller's receipt of notice from Buyer of a
proposed settlement or compromise; and provided, further, that Seller's
indemnification obligations shall not apply to Buyer's attorneys' fees incurred
after the date on which Buyer has assumed such control.
12. WARRANTY.
EXCEPT AS SET FORTH HEREIN, THE PRODUCT IS PROVIDED "AS IS" WITHOUT
WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE PRODUCT IS
WITH BUYER.
EXCEPT WITH RESPECT TO SELLER'S BREACH OF THE WARRANTY OF TITLE AND THE
INDEMNITY SECTION, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY
FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT
LIMITATION LOST PROFITS, ARISING UNDER THIS AGREEMENT. IN NO EVENT SHALL
SELLER'S OR BUYER'S LIABILITY EXCEED THE AMOUNTS PAID PURSUANT TO THIS
AGREEMENT.
13. COVENANT NOT TO COMPETE
14.1 COVENANT. Subject to Section 2.5, for a period of three (3) years,
commencing on the Closing Date of the contemplated transaction, and ending
three (3) years thereafter, Seller will not, directly or indirectly, within any
county in any state, provision or political subdivision of the United States,
Mexico or Canada, or any other country in which Buyer or Seller conducts
business (the "TERRITORY") pertaining to the development, manufacture, marketing
and/or distribution of any products providing enhanced security for IBM MQ
Series environments and would compete with MQ Secure (the "SELLER BUSINESS"):
(i) develop any code or products as part of a professional services engagement
that performs functions substantially similar to the Product; (ii) engage in any
Seller Business for its own account; or (iii) obtain an interest, as an
individual, partner, shareholder, director, officer, principal, agent, employee,
trustee, consultant, advisor, manager, salesman, operator or in any other
ownership relationship or management capacity, in any entity or association
conducting any Seller Business. (iv) Seller will not develop any code or
products as part of a professional services engagement that performs functions
substnatially similar to the Product.
In additon, Seller will not develop or distribute a product competing with
Candle System Management Solutions, as defined in Attachment 1, for the duration
of the distribution and agency agreements.
In cases where Seller identifies Customers, including Microsoft, with
unique systems management requirements, Buyer and Seller agree to negotiate at
project initiation a strategy for development of solutions to address the
requirements. In these cases, Buyer and Seller agree to discuss the following
issues: who should develop the solution, technology to be utilized, mutual
licensing and distribution arrangements. For any of these Seller customer
solutions which become products, Buyer will automatically retain distribution
rights and technology license rights and the option to purchase these products
at the same royalty rates as Seller's Product FEG subject to mutually
satisfactory negotiated agreements and subject to caps to be negotiated.
13.2. EXCEPTIONS. The foregoing (a) shall not prohibit the ownership by
Seller of up to five percent (5%) of the issued and outstanding capital stock
of a publicly-held corporation carrying on such Seller Business, so long as
Seller does not participate in the control or take an active part in the
management or direction thereof and does not act as consultant or in any other
way render services thereto; and (b) shall apply only for so long as Candle, or
its successors or assignee of the Proprietary Information carries on a business
similar to the Seller Business within such Territory.
13.3 INDEPENDENT OBLIGATIONS. Each covenant and provision of this
Section shall, be construed as a separate agreement, independent of any other
provision of this Agreement, the unenforceability of which shall not preclude
the enforcement of any other of said covenants or provisions or of any other
obligation of Seller hereunder, and the existence of any claim or cause of
action of Seller against Buyer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Buyer of any of
said covenants.
14. GENERAL PROVISIONS
14.1 ASSIGNMENTS. Except as otherwise expressly provided by the terms
of this Agreement, Seller may not transfer or assign this Agreement, except to
the successor or assignee of all or substantially all of its business or
substantially all of its assets upon liquidation, or to the purchaser of all or
substantially all of the right, title and interest in and to the Product, which
successor, assignee or purchaser expressly assumes the relevant obligations of
this Agreement. Any assignment in derogation of the foregoing shall be void.
Buyer may enter into an agreement to assign this Agreement to a third party or
otherwise dispose of the Product, provided that such assignee agrees in writing
to be bound by all the terms of this Agreement.
14.2 MUTUAL RESPONSIBILITY. Except as otherwise provided herein, each
party shall be responsible for any costs, expenses and claims (including
attorneys' fees and professional and brokers' fees and commissions) arising out
of its negotiation, execution and performance of this Agreement.
14.3 LABOR MATTERS. This Agreement does not constitute an offer by
Buyer to any Employee of Seller to become an Employee of Buyer on or after the
Closing Date or to assume any obligations under any any employee benefit,
pension or welfare plan or program to which Seller is a party or sponsor.
14.4 SOLICITATION OF EMPLOYEES. Each party agrees for a period of
twelve (12) months from the Effective Date not to solicit or hire any of the
employees of the other party, provided, however, that neither party shall be
restricted from hiring any such employee who is solicited by general advertising
or periodicals of general solicitation.
14.5 FORCE MAJEURE. Neither party shall be responsible or liable for
any failure to perform due to acts of God or of a public enemy, acts of a
government or any state or political subdivision thereof, fires, floods,
explosions or other catastrophes, epidemics and quarantine restrictions,
strikes, riots, slowdowns or labor stoppages of any kind, freight embargoes,
unusually severe weather, delays of a supplier due to such causes, or causes
beyond such party's reasonable control. In such events, the performance of such
party's obligations shall be suspended during, but not longer than, the period
of existence of such cause and the period reasonably required to perform the
obligation. Both parties shall use their best efforts to minimize the
consequences of force majeure.
14.6 ALTERATIONS AND WAIVERS. The waiver, amendment, or modification of
any provision of this Agreement or any right, power or remedy hereunder, whether
by agreement of the parties or by custom, course of dealing or trade practice,
shall not be effective unless in writing and signed by the party against whom
enforcement of such waiver, amendment or modification is sought. No failure or
delay by either party in exercising any right, power or remedy with respect to
any of the provisions of this Agreement shall operate as a waiver of such
provisions with respect to such occurrence.
14.7 VALIDITY, FORUM, LAWS AND CONSTRUCTION. (a) Disputes or
controversy (except for those related to copyright and any other intellectual
property claims) between the parties hereto arising under this Agreement or in
any other agreement or document executed and delivered by the parties in
connection with the transactions contemplated hereby shall, upon written demand
of any party hereto, be submitted to and be resolved by binding arbitration in
the City of Los Angeles pursuant to the rules, regulations, practices and
procedures then prevailing of the American Arbitration Association. Any award
or decision rendered shall be made by means of a written opinion explaining the
arbitrator(s)' reasons for the award or decision, and the award or decision
shall be final and binding upon the parties hereto. The arbitrator(s) may not
amend or vary any provision of this Agreement. Judgment on the award renedered
by the arbitrator(s) may be entered in any court having Jurisdiction.
(b)The legal relations between the parties shall be governed by the laws of
the State of California, regardless of the choice of law provisions of
California or any other jurisdiction. Litigation or arbitration of disputes
under this Agreement shall be conducted in Los Angeles, California. The parties
further agree not to disturb such choice of forum, hereby waive the personal
service of any and all process upon them, and consent that such service of
process may be made by certified or registered mail, return-receipt requested,
addressed to the parties as set forth in Section 14.18.
14.8 INJUNCTIVE RELIEF. The parties agree that damages will be an
inadequate remedy in the event of a breach or intended or threatened breach by
Seller or any of its Employees of any of the covenants of Seller, and that any
such breach will cause Buyer great and irreparable injury and damage.
Accordingly, Seller agrees that Buyer shall be entitled, without waiving any
additional rights or remedies otherwise available to Candle, to injunctive and
other such equitable relied in the event of a breach or intended or threatened
breach of any of said covenants by Seller or any Employee of Seller.
14.9 SEVERABILITY. Subject to the provisions of this Agreement, in the
event any provision of this Agreement or the application of any such provision
shall be held to be illegal or unenforceable in any jurisdiction, such
provision, if not material to the Agreement as a whole, shall, as to such
jurisdiction, be ineffective to the extent of such illegality or
unenforceability; provided, however that such illegal or unenforceable
provision(s) shall be curtailed, limited or eliminated only to the extent and
only in those jurisdictions necessary to remove such liability or
unenforceability with respect to the applicable law in the applicable
jurisdiction as it shall then be applied, but if such provision is material to
the Agreement as a whole, the parties shall use their best efforts to replace
the provision that is contrary to law with a legal one approximating to the
extent possible the original intent of the parties, and if they are unable to do
so, the remainder of the Agreement shall be unenforceable.
14.10 ATTORNEYS' FEES. In the event of any dispute or controversy
arising out of this Agreement, the prevailing party shall be entitled to
reimbursement of its costs, including court and arbitration costs and attorneys'
and expert witnesses' fees and costs.
14.11 PARTIES INDEPENDENT. Each party is an independent contractor, and
this Agreement shall not be construed as creating a partnership, joint venture
or employment relationship between the parties or as creating any other form of
legal association that would impose liability on one party for the act or
failure to act of the other party. Neither of the parties (including its
Employees or others acting on its behalf) is a representative of the other for
any purpose, and no such party has any power or authority to represent, act for,
bind, or otherwise create or assume any obligation on behalf of the other party
for any purpose whatsoever. All financial obligations associated with each
party's business are the sole responsibility of such party.
14.12 CONFIDENTIALITY OF AGREEMENT. Subject to Section 8, each of the
parties represents, warrants and agrees that neither it nor its counsel or
agents will disclose, disseminate or cause to be disclosed or disseminated, the
substance and terms of this Agreement or the Letter of Intent, except where:
(a) disclosure is reasonably necessary to carry out and make effective the terms
of this Agreement; (b) a party hereto is required by law to respond to any
demand for information from any court, governmental entity or governmental
agency, or as otherwise may be required by federal or state laws; (c) disclosure
is necessary to be made to a party's independent accountants and attorneys for
tax audit or other business purposes; and (d) the parties may mutually agree in
writing.
14.13 KNOWLEDGE. For purposes of this Agreement, to know or have
knowledge, or to be aware of or believe, any matter shall mean to know or have
knowledge, be aware or believe, after due inquiry.
14.14 SALES TAXES. Seller shall be solely responsible for the payment of
any and all sales and use taxes and any other taxes or other charges assessed by
any governmental authority on the sale contemplated by this Agreement; provided
Seller shall have no obligation to pay any tax based on Buyer's income. Except
as set forth in the immediately preceding sentence, Buyer shall pay any sales,
use, and withholding taxes and any other taxes imposed by any jurisdiction as a
result of (I) use or ownership of the Product or (ii) the performance of any
provisions of this Agreement.
14.15 BINDING. This Agreement shall be binding upon and inure to the
benefit of each of the parties and, to the extent permitted by Section 14.1,
their respective successors and assigns.
14.16 COMPLETE AGREEMENT; MODIFICATIONS. This Agreement and any
schedules, exhibits and documents referred to herein or executed
contemporaneously herewith constitute the entire agreement among the parties
with respect to the subject matter hereof, and may not be amended, altered or
modified except by a writing signed by the parties. This Agreement supersedes
all prior written, and all prior and contemporaneous oral, agreements,
representations, warranties, statements, promises and understandings with
respect to the subject matter hereof, including without limitation the Letter of
Intent and the non-disclosure license agreement entered into by the parties.
14.17 NO THIRD-PARTY BENEFICIARIES. Nothing contained in this Agreement
shall be construed to give any person other than Buyer and Sellers any legal or
equitable right, remedy or claim under this Agreement.
14.18 HEADINGS. Section headings are included solely for convenience,
are not to be considered a part of this Agreement, and are not intended to be
full and accurate descriptions of their contents.
14.19 NOTICES. All notices or other communications which shall or may be
given pursuant to this Agreement shall being writing, shall be effective upon
receipt, and shall be delivered by personal delivery, certified or registered
air mail, or by facsimile transmission, addressed as follows (or as is provided
in the future by written notice):
IF TO BUYER CORPORATION: GENERAL COUNSEL, 0000 XXXXXXX XXXX, XXXXX XXXXXX,
XX 00000
IF TO LEVEL 8 INC.:
WITH A COPY TO:
14.20 COUNTERPARTS. This Agreement may be executed in any number of
copies, each of which shall be deemed an original and all of which together
shall constitute one and the same instrument.
14.21 LANGUAGE INTERPRETATION. In the interpretation of this Agreement,
unless the context otherwise requires, (a) words importing the singular shall be
deemed to import the plural and vice versa, (b) words denoting gender shall
include all genders, (c) references to persons shall include corporations or
other bodies and vice versa, and (d) references to parties, sections, schedules,
paragraphs and exhibits of and to this Agreement.
14.22 FURTHER ASSURANCES. Each party agrees to execute and deliver any
and all further documents, and to perform such other acts (including without
limitation the immediate notification of any reissues or extensions of the
patents, trademarks, tradenames and copyrights set forth in Schedule 3.7
hereto), as may be necessary or expedient to carry out and make effective the
purposed and transactions contemplated by this Agreement. Buyer will cooperate
with Seller upon its request, to the extent reasonable (which in no event shall
include the incurrence by Buyer of any Liens), in minimizing sales, use or
other taxes payable in connection with the purchase by Buyer of the Products.
14.23 CUMULATIVE RIGHTS. The rights, powers and remedies of each party
shall be in addition to, and not in limitation of, all rights, powers and
remedies provided at law or in equity, or under any other agreement between the
parties. All of such rights, powers and remedies shall be cumulative, and may
be exercised successively or concurrently.
14.24 ADVICE OF LEGAL COUNSEL. Each party acknowledges and represents
that, in executing this Agreement, it has had the opportunity to seek advice as
to its legal rights from legal counsel and that the person signing on its behalf
has read and understood all of the terms and provisions of this Agreement.
14.25 USE OF NAME. For four (4) years after the Effective Date, Buyer
shall have the right, but not the obligation, to use and publish Seller's
name and biographical material when publicizing, advertising, exploiting, and
distributing the Products; provided Buyer will provide Seller with reasonable
prior notice and copies of such materials, and Seller shall have a right of
continuous approval over such uses, exercisable by written notice to Buyer
specifying the nature of any objection.
14.26 PARTNERSHIP ALLIANCES. The parties may explore other cooperative
development partnerships that may result in products that could be distributed
by either party. As Buyer formulates its distribution alliances, Seller agrees
to participate in appropriate announcements.
Subject to mutually satisfactory license and other agreements, Seller will
utilize existing Buyer products or components in service engagements wherever
practical and feasible. Where this use of existing Buyer products or components
is not feasible, Seller will build custom components that will integrate with
Buyer's Technology, Candle Command Center products or other Buyer products,
where feasible and practical.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement at Los
Angeles, California, at and as of the day and year first set forth above.
CANDLE CORPORATION LEVEL 8 SYSTEMS, INC.
BY: BY:
--------------------- --------------------------
TITLE: TITLE:
--------------------- ------------------------
DATE: DATE:
--------------------- -------------------------
SCHEDULE 1
SELLER'S CONTRACTS
A. WRITTEN CONTRACTS - CUSTOMERS LIST
NONE
B. ORAL CONTRACTS
NONE
C. DISTRIBUTION AGREEMENTS
NONE
SCHEDULE 2
ASSUMPTION OF SELLER'S LIABILITIES
NONE
SCHEDULE 3
SELLER'S LIABILITY FOR REPRESENTATIONS AND WARRANTIES
SCHEDULE 3.1
Liabilites
Litigation
Title to and Condition of Assets
Intangible Rights
Registration List:
Unregistered intellectual property rights are as follows:
SCHEDULE 4
INTELLECTUAL PROPERTY ASSIGNMENT
1. I have prepared, written, created, or developed certain software, materials
or works during my employment with Level 8 Systems Inc., a New York corporation
("SELLER"), that are incorporated into the product, known as MQ Secure (THE
"WORKS").
2. I hereby grant, transfer, assign, and convey to Seller, its successors and
assigns, the entire title, right, interest, ownership and all subsidiary rights
in and to the Works, including but not limited to the right to secure any
intellectual property right registration therein and to any resulting
registration in Seller's name as claimant, and the right to secure renewals,
reissues, and extensions of any such copyright or other intellectual property
right registrations in the United States of America or any foreign country;
3. Whether the intellectual property rights in the Works shall be preserved
and maintained or registered in the United States of America or any foreign
country shall be at the sole discretion of Seller.
4. I hereby confirm that Seller and its successors and assigns, own the entire
title, right and interest in the Works, including the right to reproduce,
prepare derivative works based upon the copyright in the Works, distribute by
sale, by rental, lease or lending or by other transfer of ownership; to perform
publicly; and to display, in and to the Works, whether or not the Works
constitute a "work made for hire" as defined in 17 U.S.C. Section 101.
5. I acknowledge that I acted in my capacity as a regular Seller employee at
all times in connection with the Works and that I retain no rights in the Works.
6. I agree to take all actions and cooperate as is necessary to protect the
copyrightability of the Works and further agree to execute any documents that
might be necessary to perfect Seller's ownership of copyrights in the Works or
Seller's successors and assigns;
7. All terms of this Assignment are applicable to any portion or part of the
Works, as well as the Works in their entirety;
DATED: August___, 1996
------------------ -----------------------------------
WITNESS: Individual
SCHEDULE 5
XXXX OF SALE
Level 8 Systems Inc., a New York corporation with a principal place of business
at Xxx Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 ("Seller"), in
consideration of One Dollar ($1.00) and other valuable consideration paid by
Candle Corporation, a California corporation with a principal place of business
in Santa Monica, California (Buyer), the receipt of which is hereby
acknowledged, does hereby grant, sell, transfer and deliver to Buyer subject to
the terms of a Purchase Agreement dated August __, 1996 ("the Agreement"), by
and between Seller and Buyer, the following described assets:
All software programming technology, in both source and object code form,
regardless of the stage of development of any such technology, relating to
the software programs known as MQ Secure ("Product"), together with any
related documentation, and any other computer program containing a
substantial portion of the source code of the Product.
TO HAVE AND TO HOLD the Product to Buyer, its successors and assigns, to their
own use and behalf forever. Seller hereby covenants with Buyer that it is the
lawful owner of said Product, and that it is free and clear from all Liensand
subject to the terms of Agreement, that it has good right to sell the same as
aforesaid; and that Seller will warrant and defend the same unto Buyer and its
successors and assigns against the lawful claims and demands of all persons.
Seller sells the Product to Buyer subject to the warranties and representations
contained in Sections 4 and 7 of the Agreement, and apart from the warranties
contained in Sections 4 and 6 Seller makes no other warranties, express or
implied.
IN WITNESS WHEREOF, ____________ in his capacity as President of Seller,
has hereunto set his hand and seal this ____ day of August, 1996.
ATTEST: XXXXX 0 SYSTEMS INC. a _______ corporation
_________________________________ _________________________________________
STATE OF __________________
Personally appeared before me the above named _______________and
acknowledged that the foregoing instrument is his free act and deed in his
capacity as President of Seller, and the free act and deed of said Seller.
Before me,
---------------------
Notary Public
SCHEDULE 6A
CERTIFICATE OF BUYER'S REPRESENTATIONS AND WARRANTIES
Candle Corporation ("BUYER") hereby certifies and warrants that all
representations, warranties and covenants of Buyer contained in Sections ___ and
__of a certain Purchase Agreement by and between Buyer and Seller, dated
____________, 1996 ("AGREEMENT"), and in all statements, certificates, schedules
and other documents delivered pursuant to the Agreement or in connection with
the transactions contemplated thereby, are true and accurate as of the date
herewith. Buyer also certifies and warrants that it has performed and complied
with all covenants, agreements and conditions as required by the Agreement to be
performed or complied with on or before the date hereof.
DATED: ___, 1996
ATTEST:
Its: President
-------------------------
CANDLE CORPORATION
By: Xxxxxx X. Xxxxxxxx
Chairman
SCHEDULE 6B
CERTIFICATE OF SELLER'S REPRESENTATIONS AND WARRANTIES
Level 8 Systems, Inc. ("SELLER") hereby certifies and warrants that all
representations, warranties and covenants of Buyer contained Sections __ and __
of a certain Purchase Agreement by and between Buyer and Seller dated ___, 1996
(the "AGREEMENT"), and in all statements, certificates, schedules and other
documents delivered pursuant to the Agreement or in connection with the
transactions contemplated thereby, are true and accurate as of the date
herewith. Seller also certifies and warrants that it has performed and complied
with all covenants, agreements and conditions as required by the Agreement to
be performed or complied with on or before the date hereof.
DATED: ___, 1996
LEVEL 8 SYSTEMS, INC.
-----------------------
By:
-------------------
WITNESS Its: President
ATTACHMENT 1
Candle System Management Solutions includes, but is not limited to the
following:
Performance Management
Systems Automation
Security
Software Distribution
Command and Control
Backup Restore
Event Manager
Configuration
Inventory
Alert Management
Response Time Monitoring
Problem Management
