<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
-------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 27, 1995
--------------------
INFORMATION RESOURCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-11428 36-2947987
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
150 NORTH CLINTON
CHICAGO, ILLINOIS 60661
(address of principal executive offices) (zip code)
(312) 726-1221
(Registrant's telephone number)
================================================================================
<PAGE>
ITEM 2. DISPOSITION OF ASSETS
On July 27, 1995 (the "Closing Date"), Information Resources, Inc. ("IRI")
completed the sale to Oracle Corporation ("Oracle") of certain assets and
related application products relating to its on-line analytical processing
("OLAP" or "the General Software Business") business previously operated by IRI
Software, IRI's software division ("IRI Software"). The sale transaction was
consummated pursuant to the terms of an Amended and Restated Asset Purchase
Agreement dated as of June 12, 1995 between IRI and Oracle (the "Purchase
Agreement"). IRI and Oracle also entered into certain on-going licensing and
support agreements.
Pursuant to the Purchase Agreement, IRI has sold to Oracle its Express
technology and the family of general-purpose Express-based products including
the base DataServer platform and general application products such as the
Express Financial Management System (FMS), the Express Enterprise Information
System (EIS) and the ExpressView object-oriented tool for OLAP.
IRI has retained ownership of its DataServer family of sales and marketing
applications including DataServer Targeter, Partners, The Category Manager and
Promotion Planner. IRI has also retained the Apollo space management system and
IRI Logistics software products.
Oracle has paid IRI $100 million (subject to adjustment) and assumed certain
liabilities relating to the acquired assets and related business. Pursuant to
the terms of an Escrow Agreement dated as of the Closing Date, $11.8 million of
the purchase price has been deposited in an interest bearing escrow trust.
Pursuant to the terms of a Licenses-Back Agreement dated as of the Closing
Date, Oracle has agreed to license back to IRI, on a nonexclusive, worldwide and
perpetual basis, certain software technology underlying certain software
products (including, in particular, Express and DataServer Analyzer) to enable
IRI to continue providing software products and support services to the consumer
packaged goods industry.
In connection with the sale, Mr. Jeffrey Stamen resigned as President of IRI
Software and assumed responsibilities as Senior Vice President of the OLAP
products division of Oracle. Mr. Stamen remains a director of IRI.
The foregoing is qualified in its entirety by reference to the Purchase
Agreement and IRI's press releases dated June 12, 1995 and July 28, 1995, copies
of which are attached hereto as exhibits and which are hereby incorporated by
reference herein. The Purchase Agreement contains provisions with respect to
conditions to closing and termination.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro forma financial information.
--------------------------------
(1) Pro forma condensed consolidated financial information
(unaudited) of the Information Resources, Inc. (see Attachment 1
immediately following the signature page)
(c) Exhibits
--------
2.1 Amended and Restated Asset Purchase Agreement dated as of June
12, 1995
20.1 Press Release, dated June 12, 1995 issued by Information
Resources, Inc.
20.2 Press Release, dated July 28, 1995 issued by Information
Resources, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
INFORMATION RESOURCES, INC.
Date: August 10, 1995 By
----------------------------------
Gary M. Hill
Executive Vice President - Finance
Chief Financial Officer
<PAGE>
ATTACHMENT 1
SUMMARIZED UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION OF INFORMATION RESOURCES, INC.
Upon consummation of the sale described in Item 2, Information Resources,
Inc. ("IRI"), provides a variety of information, software and consulting
services and products to its customers. IRI is a leading provider of
information services to the consumer packaged goods industry, supplying
proprietary data bases, analytical models and software that enable consumer
packaged goods manufacturers and retailers to make better, more cost-effective
decisions in marketing and selling their products. IRI also offers services to
assist manufacturers, retailers and wholesalers of consumer packaged goods in
the implementation of various Efficient Consumer Response initiatives, including
logistics services, "pay-for-performance" promotions and supply chain re-
engineering.
The following information sets forth, for the periods and at the dates
indicated, summarized unaudited pro forma condensed consolidated financial
information for IRI. This information is derived from the historical
consolidated financial statements and notes thereto and reflects (a) the
condensed consolidated results of operations as if the following transactions
had occurred on December 31, 1993 and (b) the condensed consolidated balance
sheet as if the sale of the General Software Business occurred on March 31,
1995.
The transactions impacting pro forma financial information are:
(1) In July 1995 IRI sold its General Software Business to Oracle
for approximately $100 million.
(2) In July 1995 IRI repaid all of its outstanding bank borrowings
using a portion of the cash proceeds of the sale.
The pro forma condensed consolidated financial information reflects: (1)
recognition of the estimated impact of the sale of the General Software Business
to Oracle and (2) the decrease in net interest expense resulting from the
assumed payment of bank loans with proceeds from the sale. The net gain on the
sale of the General Software Business to Oracle is not reflected in the
unaudited pro forma condensed consolidated statements of operations for the
periods presented. In addition, in accordance with the rules and regulations of
the Securities and Exchange Commission, interest income on the remaining excess
cash proceeds from the sale of the General Software Business after repayment of
bank indebtedness and related expenses has not been benefited in the unaudited
pro forma condensed consolidated statements of operations for the periods
presented.
The pro forma unaudited condensed consolidated financial information is not
necessarily indicative of the consolidated results of operations as they might
have been if the sale had been consummated on the assumed dates.
(1)
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT I
INFORMATION RESOURCES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
Pro Forma Adjustments
Historical Add (Deduct) Pro Forma
----------------------- ------------------------------------------ ---------
Sale of
March 31, 1995 General Software Use of March 31,
As Reported Business (a) Proceeds (b) 1995
----------- ------------ ------------ ----
(In thousands)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............. $ 11,785 $ 88,200 ($76,100) $ 23,885
Accounts receivable, net.............. 140,314 (30,663) 109,651
Deferred income taxes................. 4,636 4,636
Prepaid expenses and other............ 8,843 (501) 8,342
Escrow trust cash investment.......... 11,800 11,800
-------- -------- --------- --------
Total current assets.................. 165,578 68,836 (76,100) 158,314
Property & equipment, net............... 64,603 (5,783) 58,820
Investments............................. 19,628 19,628
Other assets
Deferred data procurement costs, net.. 98,282 98,282
Capitalized software, net............. 24,187 (16,868) 7,319
Goodwill, net......................... 8,818 (672) 8,146
Other................................. 12,973 (490) 12,483
-------- -------- --------- --------
$394,069 $ 45,023 ($76,100) $362,992
======== ======== ========= ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of capitalized
leases.............................. $ 2,023 $ (28) $ -- $ 1,995
Current maturities of long-term debt.. 3,000 (3,000)
Accounts payable...................... 30,003 (2,189) 27,814
Accrued liabilities................... 21,862 9,906 (15,100) 16,668
Deferred revenue...................... 23,313 (6,211) 17,102
Other................................. 5,775 5,775
-------- -------- --------- --------
Total current liabilities............. 85,976 1,478 (18,100) 69,354
Long-term debt.......................... 55,000 (55,000)
Long-term capitalized leases............ 2,881 (53) 2,828
Deferred income taxes................... 13,166 19,650 (3,000) 29,816
Deferred gain........................... 4,359 4,359
Other liabilities....................... 1,788 (52) 1,736
-------- -------- --------- --------
Total liabilities....................... 163,170 21,023 (76,100) 108,093
Stockholders' equity.................... 230,899 24,000 254,899
-------- -------- --------- --------
$394,069 $ 45,023 ($76,100) $362,992
======== ======== ========= ========
</TABLE>
Notes:
(a) Reflects: (1) the sale of certain assets and liabilities of IRI's General
Software Business to Oracle for the total cash proceeds of $100 million,
including $88.2 million at closing and $11.8 million of cash to an interest
bearing escrow trust; (2) the accrual of approximately $15.1 million of
related expenses of sale, principally severance and professional fees; and
(3) the estimated gain on sale net of income taxes.
(b) Reflects the assumed repayment of bank loans bearing interest at a floating
rate and the payment of estimated severance, income taxes arising from the
sale after utilization of net operating loss carryforwards, and other
transaction costs.
(2)
<PAGE>
INFORMATION RESOURCES, INC. ATTACHMENT I
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
Historical Add (Deduct) Pro Forma
----------- -------------------------------------- -------------
Year Ended Sale of Reduction
December 31, General of Interest Income Year Ended
1994 Software on Debt Tax Decermber 31,
As Reported Business (a) Payment (b) Expense (c) 1994
------------ ------------ ----------- ----------- -------------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Revenues.......................... $ 376,570 $(63,244) $ $ $ 313,326
Costs and expenses
Operating expenses............... (325,507) 58,519 (266,988)
Selling, general and
administrative expenses......... (45,757) 11,966 (33,791)
---------- -------- ------ ------- ----------
Operating profit.................. 5,306 7,241 12,547
Interest expense and other, net... (1,580) 1,827 247
Litigation provision.............. (8,275) (8,275)
Equity in loss of
affiliated companies............ (9,173) (9,173)
---------- -------- ------ ------- ----------
Income (loss) before income taxes,
minority interests and cumulative
effect of change in accounting
principle....................... (13,722) 7,241 1,827 (4,654)
Income tax benefit (expense)...... 3,822 (3,627) 195
---------- -------- ------ ------- ----------
(9,900) 7,241 1,827 (3,627) (4,459)
Minority interest................. 979 979
---------- -------- ------ ------- ----------
Income (loss) before cumulative
effect of change in accounting
principle....................... $ (8,921) $ 7,241 $1,827 $(3,627) $ ($3,480)
========== ======== ====== ======= ==========
Loss before cumulative effect of
change in accounting principle per
common and common equivalent
share........................... $ (0.34) /(d)/$ (0.13)
========== ==========
Weighted average common and
common equivalent shares......... 26,056,000 26,056,000
========== ==========
</TABLE>
Notes:
(a) Reflects the decrease in revenues and costs and expenses resulting from the
sale of IRI's General Software Business to Oracle before income tax
effects.
(b) Reflects the decrease in interest expense resulting from the assumed use of
excess cash to repay average outstanding bank indebtedness of approximately
$28 million at the average historical rate of 7.8% at January 1, 1994. The
excess cash proceeds used are comprised of $100 million of cash received at
closing less $11.8 million invested in an interest bearing escrow trust;
$15.1 million used to pay severance and other expenses of the sale; and $3
million used to pay income taxes after utilization of net operating loss
carryforwards.
(c) Reflects income tax expense, calculated at the statutory rate, resulting
from the elimination of the operating loss of the General Software Business
and lower interest expense from the assumed payment of bank debt
obligations.
(d) If the remaining cash proceeds of approximately $54 million were invested in
U.S. Treasury securities, with an annual yield of 5.3%, pro forma net loss
before cumulative effect of change in accounting principle would be
benefited by $.07 per share.
(3)
<PAGE>
INFORMATION RESOURCES, INC. ATTACHMENT I
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
Historical Add (Deduct) Pro Forma
------------ -------------------------------------- -------------
Three Months
Ended Sale of Reduction Three Months
March 31, General of Interest Income Ended
1995 Software on Debt Tax March 31,
As Reported Business (a) Payment (b) Expense (c) 1995
------------ ------------ ----------- ----------- -------------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Revenues........................... $ 104,795 $(18,405) $ $ $ 86,390
Costs and expenses
Operating expenses................ (98,151) 17,287 (80,864)
Selling, general and
administrative expenses.......... (11,624) 2,834 (8,790)
---------- -------- ------ ------- ----------
Operating profit (loss)............ (4,980) 1,716 (3,264)
Interest expense and other, net.... (954) 1,096 142
Equity in loss of
affiliated companies............. (49) (49)
---------- -------- ------ ------- ----------
Income (loss) before income taxes.. (5,983) 1,716 1,096 (3,171)
Income tax benefit (expense)....... 2,692 (1,125) 1,567
---------- -------- ------ ------- ----------
Net income (loss).................. $ (3,291) $ 1,716 $1,096 $(1,125) $ (1,604)
========== ======== ====== ======= ==========
Net loss per common and
common equivalent share.......... $ (0.12) /(d)/$ (0.06)
========== ==========
Weighted average common and
common equivalent shares.......... 26,615,000 26,615,000
========== ==========
</TABLE>
Notes:
(a) Reflects the decrease in revenues and costs and expenses resulting from the
sale of IRI's General Software Business to Oracle before income tax
effects.
(b) Reflects the decrease in interest expense resulting from the assumed use of
excess cash to repay average outstanding bank indebtedness of approximately
$44 million at the average historical rate of 10.0% at January 1, 1995. The
excess cash proceeds used are comprised of: $100 million of cash received
at closing less $11.8 million invested in an interest bearing escrow trust;
$15.1 million used to pay severance and other expenses of the sale; and $3
million used to pay income taxes after utilization of net operating loss
carryforwards.
(c) Reflects income tax expense, calculated at the statutory rate, resulting
from the elimination of the operating loss of the General Software Business
and lower interest expense from the assumed payment of bank debt
obligations.
(d) If the remaining cash proceeds of approximately $38 million were invested
U.S. Treasury securities, with an annual yield of 6.7%, pro forma net loss
would be benefited by $.01 per share.
(4)
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT DESCRIPTION NUMBERED PAGE
- ------- ----------- -------------
<C> <S> <C>
2.1 Amended and Restated Asset Purchase Agreement,
dated as of June 12, 1995 by and between IRI
and Oracle
20.1 Press Release, dated June 12, 1995
20.2 Press Release, dated July 28, 1995
</TABLE>
<PAGE>
______________________________________________________
ASSET PURCHASE AGREEMENT
Between
INFORMATION RESOURCES, INC.
Seller,
and
ORACLE CORPORATION
Buyer
______________________________________________________
June 12, 1995
______________________________________________________
Amended and Restated effective as of June 12, 1995
<PAGE>
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
This Amended and Restated Asset Purchase Agreement (the "AGREEMENT")
is entered into as of June 12, 1995, by and between Information Resources, Inc.,
a Delaware corporation ("SELLER" or "IRI"), and Oracle Corporation, a Delaware
corporation ("BUYER"). Certain capitalized terms used herein are defined in
Section 10.1 hereinbelow and the location of the definition of certain other
capitalized terms are set forth in Section 10.2 hereinbelow.
WHEREAS, Seller and Buyer entered into a Purchase Agreement dated as
of June 12, 1995 (the "ORIGINAL AGREEMENT") and now wish to amend and restate
the Original Agreement; and
WHEREAS, Seller has a division known as IRI Software which is engaged
in the business of developing, marketing, licensing, supporting and providing
related services for business information and decision support software
products; and
WHEREAS, a portion of IRI Software's assets and activities relate
directly to the business of another division of Seller known as the Information
Services Group, which provides syndicated data and related software products and
services and other information services primarily to manufacturers and retailers
of consumer packaged goods (the "DATA BUSINESS"); and
WHEREAS, Buyer desires to acquire from Seller, and Seller desires to
sell to Buyer, certain assets and certain of the liabilities of IRI Software on
the terms and subject to the conditions set forth in this Agreement (henceforth
in this Agreement the term "DIVISION" refers to the IRI Software Division of
Seller); and
WHEREAS, certain other assets and liabilities of the Division will
remain with Seller and not be transferred to Buyer, including the name IRI
Software, all as more particularly set forth herein; and
WHEREAS, this Agreement and the agreements attached as exhibits hereto
set forth the terms and conditions upon which Buyer and Seller have segregated
the assets and liabilities of the Division and designated those which will stay
with Seller for use in connection with the Data Business and those which will be
assigned to or assumed by Buyer; and
WHEREAS, Buyer and Seller acknowledge that this Agreement and the
agreements attached as exhibits hereto collectively constitute the agreements
necessary to accomplish the transactions contemplated by this Agreement and are
parts of an integrated arrangement between the parties with respect to the
purchase and sale of the Assets (as defined in Section 1.1) and certain licenses
and other relationships between the parties, and that separate agreements have
been used for the sake of convenience.
<PAGE>
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties and covenants hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
SALE AND PURCHASE
SECTION 1.1 Transfer of Assets. Subject to the terms and conditions
hereof, Seller and each Seller Subsidiary shall sell, assign, grant, transfer,
convey and deliver to Buyer, or to any subsidiary or subsidiaries of Buyer
designated by Buyer, and Buyer shall purchase and accept from Seller and each
Seller Subsidiary as of the Closing Date (as defined in Section 1.9 below), the
following tangible and intangible assets of the Division, wherever situated, as
the same shall exist on the Closing Date (collectively, the "ASSETS"):
(a) Software Products. The software products owned, licensed, or
under development by Seller or any Seller Subsidiary and listed in Schedule
1.1(a), including without limitation any and all source and object codes,
binaries, interfaces for third party databases, supplements, modifications,
ports to hardware platforms, updates, custom modules (to the extent owned or
licensed by Seller), corrections and enhancements to past versions of such
products, shipping versions of such products and versions of such products
currently under development, in each case as existing as of the Closing Date;
and any and all English and foreign language versions of past versions of such
products, shipping versions of such products and versions of such products
currently under development; and any and all related back-up tapes and archival
tapes from Seller's storage facilities, in each case as existing as of the
Closing Date (collectively, the "PRODUCTS");
(b) Tools. The software design and development tools and scripts, and
modifications and additions to such tools and scripts, listed in Schedule
1.1(b), which were or are used in the development, operation or maintenance of
the Products, including without limitation any and all source and object codes,
binaries, supplements, modifications, updates, corrections and enhancements to
past and current versions of such tools and scripts and versions of such tools
and scripts under development, and any and all related back-up tapes and
archival tapes from Seller's storage facilities, in each case as existing as of
the Closing Date (collectively, the "TOOLS");
(c) Intellectual Property Rights.
(i) The patents and patent applications, copyright registrations,
trademarks, service marks, and trade names listed in Schedule 1.1(c), together
with all associated goodwill;
(ii) Any and all design and code documentation, methodologies,
processes, trade secrets, copyrights, design information, product information,
technology, formulae, routines, engineering specifications, technical manuals
and data, drawings, inventions know-how, techniques, engineering work papers,
and programmer's notes, which are necessary
-2-
<PAGE>
to, used in, or derived from the Assets (as defined in the other subparagraphs
of this Section 1.1); and
(iii) A perpetual, worldwide, unrestricted, non-exclusive royalty-
free license to such other intellectual property of Seller, including without
limitation the trademarks indicated on Schedule 1.3(c) as being licensed from
Seller to Buyer, as may be necessary to develop, operate, market or maintain the
Products and Tools ((i) through (iii) collectively, the "INTELLECTUAL
PROPERTY");
(d) Transferred Agreements. All rights of Seller under the agreements
entered into between Seller and third parties named therein in the operation of
the Division and listed in Schedule 1.1(d) (collectively, the "TRANSFERRED
AGREEMENTS");
(e) Tangible Assets. The tangible personal property listed in
Schedule 1.1(e) or set forth in the Closing Date Balance Sheet (as defined in
Section 1.6 below) (collectively, the "TANGIBLE ASSETS") and the leases with
respect to such property listed in Schedule 1.1(e) (collectively, the "EQUIPMENT
LEASES");
(f) Real Property Leases. The real property leasehold interests
listed in Schedule 1.1(f) except for those identified on Schedule 1.1(f) as not
being assigned to Buyer (collectively, the "REAL PROPERTY LEASES");
(g) Books, Records and Other Materials. All books and records used in
connection with the Assets and the Assumed Liabilities (as defined in Section
1.2 below), including without limitation any and all (i) customer and marketing
materials relating to the Products or the Tools, such as product documentation,
sales and marketing collateral, white papers, product data sheets, performance
benchmark reports, customer training materials, sales training materials, and
sales presentation materials; (ii) customer support materials relating to the
Products or Tools, such as support training materials, support bulletins
(including, without limitation, copies of any and all information on electronic
bulletin boards); (iii) data contained in Seller's customer support organization
computer system relating to the Products or Tools; (iv) all customer and vendor
lists relating to the Products and Tools; and (v) all financial books and
records relating to the Assets and Assumed Liabilities (collectively, the "BOOKS
AND RECORDS");
(h) Testing Materials. Any and all technical information and
materials relating to testing and correcting defects in the Products and the
Tools (including, without limitation, regression tests, test beds, test plans,
software defect database and historical defect data, and other documents and
materials which are used in maintaining, enhancing and correcting errors in the
Products and the Tools and providing continued customer technical support
(collectively, the "DOCUMENTATION"));
(i) Permits. All licenses, permits, authorizations and other
approvals from any federal, state, local or foreign governmental, public, or
self-regulatory body or authority relating to the Assets or the Assumed
Liabilities (collectively, the "PERMITS"); and
-3-
<PAGE>
(j) Other Assets. All current assets set forth on the Closing Date
Balance Sheet (collectively, the "CURRENT ASSETS"), all long-term assets set
forth on the Closing Date Balance Sheet (collectively, the "LONG-TERM ASSETS")
and such other assets of the Division as relate primarily to the Assets and are
not listed specifically as Excluded Assets.
SECTION 1.2 Assumption of Liabilities and Obligations. Buyer, or any
subsidiary or subsidiaries of Buyer designated by Buyer, shall assume and be
obligated to discharge only those liabilities and obligations arising out of or
resulting from the operation of the business conducted with the Assets and
ownership of the Assets that are set forth below (the "ASSUMED LIABILITIES"):
(a) Balance Sheet Liabilities. Each liability specifically set forth
in the Closing Date Balance Sheet (as defined in Section 1.6 below); provided,
however, that Buyer shall assume such liabilities only to the extent of the
dollar amounts set forth in the Closing Date Balance Sheet;
(b) Post-Closing Contractual Obligations. Any obligation relating to
the period on or after the Closing Date under the Transferred Agreements, the
Equipment Leases and the Real Property Leases; and
(c) Other Post-Closing Liabilities. Any and all liabilities arising
out of Buyer's operation and ownership of the Assets on or after the Closing
Date.
SECTION 1.3 Excluded Assets. Each of Seller and each Seller
Subsidiary shall retain all of its rights, title and interest in and to the
assets of Seller and each Seller Subsidiary that are not related to the Division
and the following assets related to the Division (collectively, the "EXCLUDED
ASSETS"):
(a) Software Products. The software products owned, licensed, or
under development by Seller or any Seller Subsidiary and listed in Schedule
1.3(a), including without limitation any and all source and object codes,
binaries, interfaces for third party databases, supplements, modifications,
ports to hardware platforms, updates, custom modules (to the extent owned or
licensed by Seller or any Seller Subsidiary), corrections and enhancements to
past versions of such products, shipping versions of such products and versions
of such products currently under development, in each case as existing as of the
Closing Date; and any and all English and foreign language versions of past
versions of such products, shipping versions of such products and versions of
such products currently under development; and any and all related back-up tapes
and archival tapes from Seller's or any Seller Subsidiary's storage facilities,
in each case as existing as of the Closing Date (collectively, the "SELLER
PRODUCTS");
(b) Tools. The software design and development tools and scripts, and
modifications and additions to such tools and scripts listed in Schedule 1.3(b),
which were or are used in the development, operation or maintenance of the
Seller Products, including without limitation any and all source and object
codes, binaries, supplements, modifications, updates, corrections and
enhancements to past and current versions of such tools and scripts and versions
of such tools and scripts under development, and any and all related back-up
tapes and archival
-4-
<PAGE>
tapes from Seller's storage facilities, in each case as existing as of the
Closing Date (collectively, the "SELLER TOOLS");
(c) Intellectual Property Rights.
(i) The patents and patent applications, copyright registrations,
trademarks, service marks, and trade names listed in Schedule 1.3(c), together
with all associated goodwill;
(ii) Any and all design and code documentation, methodologies,
processes, trade secrets, copyrights, design information, product information,
technology, formulae, routines, engineering specifications, technical manuals
and data, drawings, inventions know-how, techniques, engineering work papers,
and programmer's notes, which are necessary to, used in, or derived from the
Excluded Assets (as defined in the other subparagraphs of this Section 1.3); and
(iii) (A) A perpetual, worldwide, unrestricted, nonexclusive royalty-
free license to the tools indicated on Schedule 1.1(b) and the trademarks
indicated on Schedule 1.1(c) as being licensed from Buyer to Seller, and (B) the
licenses to such other Assets as are set forth in the Technology License
Agreement and the VAR Agreement ((i) through (iii) collectively, "SELLER
INTELLECTUAL PROPERTY");
(d) Transferred Agreements. All rights of Seller and each Seller
Subsidiary under all agreements entered into between Seller or a Seller
Subsidiary and third parties, other than Transferred Agreements, the Equipment
Leases and the Real Property Leases;
(e) Tangible Assets. All tangible personal property of Seller and
each Seller Subsidiary, other than the Tangible Assets, and any leases with
respect to such property;
(f) Real Property Leases. The real property leasehold interests of
Seller and each Seller Subsidiary other than the Real Property Leases;
(g) Books, Records and Other Materials. All books and records of
Seller and each Seller Subsidiary other than the Books and Records;
(h) Testing Materials. Any and all technical information and
materials relating to testing and correcting defects in the Seller Products and
the Seller Tools (including, without limitation, regression tests, test beds,
test plans, software defect database and historical defect data, and other
documents and materials which are used in maintaining, enhancing and correcting
errors in the Seller Products and the Seller Tools and providing continued
customer technical support);
(i) Permits. All licenses, permits, authorizations and other
approvals from any federal, state, local or foreign governmental, public, or
self-regulatory body or authority relating to Seller, any Seller Subsidiary or
their assets (other than the Permits);
-5-
<PAGE>
(j) Seller Subsidiary Stock. All outstanding shares of capital stock
of each Seller Subsidiary; and
(k) Other Assets. All current assets of Seller and each Seller
Subsidiary, other than the Current Assets, and all long-term assets of Seller
and each Seller Subsidiary of the type included in Long-Term Assets, other than
the Long-Term Assets, all tax refunds, deferred tax assets, the benefits of all
accrued income taxes, and other tax benefits, whether in the form of a tax
receivable, tax credit, refund or otherwise, relating to the income taxes of
Seller and each Seller Subsidiary ("TAX ASSETS") and such other assets of the
Division as relate primarily to the Excluded Assets and are not listed
specifically as Assets.
SECTION 1.4 Excluded Liabilities. Except for those liabilities
expressly assumed by Buyer or any subsidiary designated by Buyer pursuant to
Section 1.2, Buyer shall not assume and shall not be liable for, and Seller and
each Seller Subsidiary shall retain and remain solely liable for and obligated
to discharge, all of the debts, contracts, agreements, commitments, obligations
and other liabilities of any nature whatsoever of Seller and each Seller
Subsidiary, whether known or unknown, accrued or not accrued, fixed or
contingent, including, without limitation, the following:
(a) Product Warranty Claims. Except as provided under and pursuant to
the terms of the Update and Support Agreement (as defined in Section 1.8 below),
any product warranty claims (i) by a distributor or reseller relating to any
Assets shipped by Seller or any Seller Subsidiary to such distributor or
reseller on or prior to the Closing Date or (ii) by an end-user relating to any
Assets shipped by Seller or any Seller Subsidiary to such end user on or prior
to the Closing Date;
(b) Breaches of Contracts. Any liability for breaches by Seller or
any Seller Subsidiary prior to the Closing of any instrument, purchase order or
contract;
(c) Taxes. Except as otherwise provided in Section 1.2, any liability
or obligation for Taxes (as defined in Section 2.12) attributable to or imposed
upon Seller or any Seller Subsidiary, or attributable to or imposed upon the
Division or the Assets for any period (or portion thereof) through the Closing,
including, without limitation, Taxes imposed upon Seller or any Seller
Subsidiary as a result of the transactions contemplated by this Agreement;
(d) Legal Proceedings. Any liability or obligation arising as a
result of any legal or equitable action or judicial or administrative proceeding
initiated at any time, to the extent relating to any action or omission prior to
the Closing by or on behalf of Seller or any Seller Subsidiary, including,
without limitation, any liability for infringement of intellectual property
rights or violations of federal or state securities or other laws;
(e) Benefit Plans. Any liability or obligation arising prior to the
Closing out of any "EMPLOYEE BENEFIT PLAN," as such term is defined by the
Employee Retirement Income Security Act of 1974 ("ERISA") or other employee
benefit;
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(f) Employees. Any liability or obligation for making payments of any
kind (including as a result of this sale of Assets or as a result of the
termination of employment by Seller of employees, or other claims arising out of
the terms and conditions of employment with Seller, or for vacation or severance
pay or otherwise) to employees of Seller or in respect of payroll taxes for
employees of Seller, unless set forth in Article V of this Agreement; and
(g) License Agreements. Except as provided under and pursuant to the
terms of the Update and Support Agreement, any liability or obligation of Seller
or any Seller Subsidiary to licensees under the License Agreements (as defined
in Section 2.7 below).
SECTION 1.5 Certain Tax Matters.
(a) Sales, Use and Property Taxes. Except as provided in Sections
1.5(b) and (c) below, Seller shall be responsible for paying, shall promptly
discharge when due, and shall reimburse, indemnify and hold harmless Buyer and
each subsidiary of Buyer from, any sales or use, transfer, real property gains,
excise, stamp, or other Taxes which are in the nature of sales, use, or property
tax, imposed on Seller, any Seller Subsidiary, Buyer or any subsidiary of Buyer
(and specifically excluding income taxes or Taxes in the nature of income taxes
imposed on Buyer or any subsidiary of Buyer) resulting directly from the sale of
Assets contemplated by this Agreement. Upon the request of Seller, Buyer and
its subsidiaries shall provide reasonable assistance to Seller and the Seller
Subsidiaries in securing for Seller all available exemptions from Federal,
foreign, state and local sales, use, and value-added taxes that could result
from the sale of Assets contemplated hereunder; provided, however, that nothing
in the foregoing shall require Buyer to discharge such taxes unless Buyer or
such subsidiary is reimbursed contemporaneously with the discharge of any such
taxes.
(b) VAT Tax Matters. Seller agrees to review the transactions
contemplated by this Agreement and determine in its judgment in good faith
whether any value added taxes ("VAT") are due in countries outside the United
States in which Assets are being transferred (collectively, the "FOREIGN
COUNTRIES"), as a result of the transfer by Seller or any subsidiary of Seller
to Buyer or any subsidiary of Buyer of Assets. In the event Seller determines
that any such VAT is due, Seller or the relevant subsidiary of Seller shall
present to Buyer or the relevant subsidiary of Buyer an appropriate invoice
which sets forth the amount of VAT reasonably determined by Seller to be due.
Buyer agrees to (i) pay, or cause to be paid, such VAT and any other VAT (and
related interest and penalties) determined to be due by any Foreign Country tax
authority with respect to any such transfer, in which case Buyer or the relevant
Buyer subsidiary will have the right to submit to any relevant tax authority a
request for reimbursement of or credit for such VAT, and/or (ii) at Buyer's
expense submit to the relevant tax authority a request for a determination or
ruling that such VAT is not in fact due. Any such payment made under (i) in the
prior sentence shall be paid by Buyer within the time periods required by the
relevant tax authorities, provided the invoice is timely provided by Seller. If
any such tax authority determines or rules that any such VAT is not due, Seller
and Buyer agree to use reasonable efforts to request reimbursement or return of
any such VAT previously paid and Seller agrees to reimburse to Buyer
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any amounts of any such VAT paid by Buyer or any Buyer subsidiary to Seller or
Any Seller Subsidiary and not yet paid to the relevant tax authority.
(c) Italian Taxes. Buyer agrees to reimburse Seller for any transfer
Taxes (including any penalties relating thereto) imposed on Seller or any Seller
Subsidiary as a result of the transfer of the Assets from Seller's Subsidiary
organized in Italy to Buyer and any subsidiary designated by Buyer; provided,
however, that such reimbursement obligations shall not exceed $100,000 and
provided that such reimbursement shall not be required to the extent any such
transfer Tax would have been imposed on Seller or such Seller Subsidiary if all
Assets being transferred by the Italian Seller Subsidiary were transferred to
Buyer's Italian subsidiary.
SECTION 1.6 Purchase Price; Adjustment.
(a) Purchase Price. In consideration of the acquisition of the Assets
under Section 1.1 and assumption of liabilities under Section 1.2, and subject
to adjustments as provided in Section 1.6(b), Buyer agrees to pay and deliver to
Seller for and on behalf of Seller and each Seller Subsidiary that is
transferring assets one hundred million dollars ($100,000,000), subject to
adjustment as provided in subsection (b) of this Section 1.6 (the "PURCHASE
PRICE"), payable at the Closing by (i) wire transfer of immediately available
funds in the amount of ninety two million dollars ($92,000,000) to an account or
accounts designated by Seller and (ii) wire transfer of immediately available
funds in the amount of eight million ($8,000,000) to an account designated by
the Escrow Agent pursuant to the terms of the Escrow Agreement (as defined in
Section 1.8 below).
(b) Adjustment.
(i) The Purchase Price shall be increased or decreased in the amount
by which the Net Book Value (as defined below) reflected on the Closing Date
Balance Sheet (as defined in Section 1.6(b)(ii) below) exceeds or is less than
the Net Book Value reflected on the March 31 Balance Sheet (as defined in
Section 2.8 below). "NET BOOK VALUE" means, in the case of either the March 31
Balance Sheet or the Closing Date Balance Sheet, the aggregate dollar amount of
the net book value shown on such balance sheet, excluding accounts identified as
goodwill, capitalized software and patents and trademarks.
(ii) Within sixty (60) days after the Closing Date, Seller shall
prepare and deliver to Buyer a balance sheet as of the Closing Date and relating
to the business conducted with the Assets (the "CLOSING DATE BALANCE SHEET").
The monetary amounts for the accounts included in the Closing Date Balance Sheet
shall be prepared in accordance with generally accepted accounting principles on
a basis consistent with the March 31 Balance Sheet. Such Closing Date Balance
Sheet shall attach Seller's calculation of the adjustments required to the
Purchase Price. Buyer and its representatives shall be entitled to review all
work papers and other supporting documentation used by Seller in or relevant to
the creation of the Closing Date Balance Sheet, and shall be permitted to make
inquiries of personnel and representatives of Seller, during the sixty (60) day
period in which Seller is preparing the Closing Date Balance Sheet and for a
period of ten (10) business days after receipt of the Closing Date Balance
Sheet.
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(iii) The Closing Date Balance Sheet provided by Seller to Buyer
shall become final and binding upon Buyer for purposes of calculating the
adjusted Purchase Price under this Section 1.6(b) ten (10) business days after
delivery thereof to Buyer unless Buyer within such time period delivers written
notice to Seller of its disagreement as to any item included in the Closing Date
Balance Sheet or in Seller's calculation of the adjustment to the Purchase Price
required hereunder ("NOTICE"). Any such Notice shall specify in reasonable
detail the nature of such disagreement and the basis and supporting evidence for
Buyer's position with respect to the disputed items. Seller and Buyer shall
attempt in good faith to resolve any disagreement for a period of ten (10)
business days following the date of the Notice and, if they are unable to do so
within such period, shall submit the disputed items to Price Waterhouse (the
"ARBITRATOR"), whose decision with respect to the matters disputed in the Notice
shall be final and binding. The Arbitrator shall render its decision with
respect to such matters within fifteen (15) days after they are submitted to it.
Seller and Buyer shall each provide promptly all information and documents
within their respective possession that the Arbitrator, in its sole discretion,
deems necessary in order to make its decision with respect to the disputed
matters. The fees and expenses of the Arbitrator shall be borne equally by
Seller and Buyer.
(iv) Within five business days after the Closing Date Balance Sheet is
finally determined either through agreement of Seller and Buyer or through
arbitration as described in subsection (iii) above, Buyer shall pay to Seller or
Seller shall pay to Buyer, as the case may be, by wire transfer the net amount
owed pursuant to the Purchase Price adjustment provisions of this Section 1.6.
Upon payment of the Purchase Price adjustment, as described further in Section
1.12 below, Seller shall pay to Buyer an amount equal to the Cash account on the
Closing Date Balance Sheet and Buyer shall pay to Seller an amount equal to the
amount shown on the Closing Date Balance Sheet as Due to Corporate. In
addition, upon payment of the Purchase Price adjustment, Seller shall pay to
Buyer an amount equal to any consideration paid at Closing by any subsidiary of
Buyer to Seller or any Seller Subsidiary in connection with the transfer of
Assets and the assumption of the Assumed Liabilities.
SECTION 1.7 Allocation of Purchase Price. For purposes of complying
with the requirements of Section 1060 of the Internal Revenue Code of 1986, as
amended (the "CODE"), the Purchase Price shall be allocated in accordance with
fair market value as provided in the purchase price allocation schedule to be
prepared and agreed upon by Buyer and Seller prior to the Closing. Each of
Buyer and Seller agrees to prepare its federal, state and foreign income tax
returns for all current and future tax reporting periods and file Form 8594 (and
corresponding state forms) with respect to transfer of the Assets to Buyer in a
manner consistent with such allocation. If any state, federal or foreign taxing
authority challenges such allocation, the party receiving notice of such
challenge shall give the other prompt written notice of such challenge, and the
parties shall cooperate in good faith in responding to it in order to preserve
the effectiveness of the allocation.
SECTION 1.8 Other Agreements. At the Closing, Seller and Buyer shall
enter into the Update and Support Agreement in the form of EXHIBIT A (the
"UPDATE AND SUPPORT AGREEMENT"), the Licenses-Back Agreement in the form of
EXHIBIT B (the "TECHNOLOGY LICENSE
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AGREEMENT"), and the Escrow Agreement in the form of EXHIBIT C (the "ESCROW
AGREEMENT"). In addition, at the Closing Seller and Buyer shall enter into an
addendum to the Value-Added Reseller Agreement between Buyer and Seller dated
May 15, 1995 to reflect the inclusion of the Products as products eligible for
resale as full use application programs in such agreement and to reflect that
Buyer shall continue to make the Products available to Seller under such Value-
Added Reseller Agreement as long as Seller is not in breach of the Agreement and
such Products are made available to any other Buyer reseller (the "VAR
AGREEMENT"). Seller shall pay Sublicense Fees for the Products equal to Buyer's
Standard Commercial list price for the Products less a reseller discount as may
be negotiated between the parties.
SECTION 1.9 Closing. Subject to the terms and conditions of this
Agreement, the transfer of the Assets contemplated hereby (the "CLOSING") shall
take place on such date, as soon as practicable after all conditions precedent
in Articles VI and VII have been satisfied or waived, as the parties may agree
(the "CLOSING DATE").
SECTION 1.10 Actions at the Closing. At the Closing, Seller shall
deliver the Assets to Buyer, Buyer shall deliver the Purchase Price to Seller
and Escrow Agent in accordance with the provisions of Section 1.6(a), and Buyer
and Seller shall take such actions and execute and deliver such agreements,
bills of sale, and other instruments and documents as necessary or appropriate
to effect the transactions contemplated by this Agreement in accordance with its
terms, including without limitation the following:
(a) Seller and each Seller Subsidiary shall deliver to Buyer a general
bill of sale and an assignment and assumption agreement with respect to each
Transferred Agreement, Equipment Lease and Real Property Lease assigned to
Buyer, in each case duly executed by Seller, assigning to Buyer all of Seller's
right, title and interest in and to the Assets, including without limitation all
of Seller's rights as a licensor of any of the Assets, in forms reasonably
satisfactory to Buyer and Seller. Buyer may designate one or more of its
subsidiaries in place of Buyer as the recipient of certain of the Assets, and as
the party to assume certain of the Assumed Liabilities, in which case Seller or
the Seller Subsidiary transferring such Assets or Assumed Liabilities shall
transfer such Assets and Assumed Liabilities to Buyer or the subsidiary or
subsidiaries designated by Buyer pursuant to an asset transfer agreement in a
form agreed to by Buyer and Seller (the "SUBSIDIARY TRANSFER DOCUMENTS").
(b) Buyer shall deliver the Purchase Price to Seller and to the Escrow
Agent in accordance with the provisions of Section 1.6.
(c) Seller and each Seller Subsidiary shall provide reasonable
evidence of valid title to such of the Assets as Buyer may reasonably request in
writing prior to the Closing and as are material to the operation of the
business conducted with the Assets, in form and substance reasonably
satisfactory to Buyer.
(d) Seller and each Seller Subsidiary shall deliver to Buyer any
assignments, and any required consents to assignment, that it has obtained in
respect of the Transferred Agreements, the Equipment Leases and the Real
Property Leases assigned to Buyer, duly
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executed by the appropriate parties having the authority to so assign or consent
to assign, in form and substance as Buyer shall reasonably request.
(e) At the Closing, Seller and each Seller Subsidiary shall deliver to
Buyer any and all documents required to satisfy the conditions set forth in
Article VI below and any other closing documents reasonably requested by Buyer,
including without limitation the license, on terms to be reasonably negotiated
between Buyer and Seller, contemplated by Section 1.3(c)(iii)(A).
(f) At the Closing, Buyer shall deliver to Seller any and all
documents required to satisfy the conditions set forth in Article VII of this
Agreement and any other closing documents reasonably requested by Seller,
including without limitation the license, on terms to be reasonably negotiated
between Buyer and Seller, contemplated by Section 1.1(c)(iii).
(g) Subsequent to the Closing Date, Seller shall, and shall cause
Seller Subsidiaries to, from time to time execute and deliver, upon the request
of Buyer, all such other and further materials and documents and instruments of
conveyance, transfer or assignment as may reasonably be requested by Buyer to
effect, record or verify the transfer to, and vesting in Buyer, of Seller's and
the Seller Subsidiaries' right, title and interest in and to the Assets, free
and clear of all Liens (as defined in Section 2.6 below), in accordance with the
terms of this Agreement.
SECTION 1.11 Transition Matters.
(a) Responsibilities. Upon execution of this Agreement, each of Buyer
and Seller shall appoint representatives to participate on a transition team for
the purpose of working with the other party's transition team to anticipate and
resolve issues relating to the sale of the Assets to Buyer and the transition of
the business conducted with the Assets to Buyer. In addition, the transition
teams shall facilitate the allocation during the sixty (60) day period following
the Closing of jointly used assets, such as computer equipment, and the break
down into separate parts of local area networks in a manner which reflects the
allocation of the Assets and Excluded Assets as provided in this Article I and
the relative current usage of such computer equipment and local area networks.
Any such allocation shall result in an appropriate allocation of net book value
between Buyer and Seller and any necessary payment relating thereto.
(b) Completed Tasks. Notwithstanding the provisions of Section
1.11(a) above, Seller and Buyer agree that the Excluded Assets include the
assets listed on Schedule 1.11(b)(i) hereto. All other data center, network and
voice assets located at Seller's Waltham, Massachusetts property shall be
included within the Assets, including without limitation, the IBM mainframe (IRI
06-IBM 9121-260 & guest) and the Fujitsu switch. Seller agrees to migrate to
another location on to a computer owned by Seller all usage of such IBM
mainframe, including without limitation usage by any timesharing client, within
ninety days after Closing. Notwithstanding the terms of the Subsidiary Transfer
Documents and the Bill of Sale and Assignment and Assumption Agreement, Seller
and Buyer further agree to allocate equipment
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owned or leased by Seller, and not addressed in Schedule 1.11 (b)(i) between
Assets and Excluded Assets based on the principles outlined in Schedule
1.11(b)(ii) hereto.
(c) Sublease. Seller and Buyer agree to enter into at Closing a
sublease of the Real Property Lease for the Waltham, Massachusetts facility,
under which Buyer will sublease to Seller a portion of the space in the Waltham,
Massachusetts facility on terms previously agreed to between Buyer and Seller.
Buyer and Seller further agree that no other subleases will be entered into with
respect to any Real Property Leases. Buyer and Seller also agree that any of
Seller's employees that are not Transferred Employees and are located in
facilities that are the subject of the Real Property Leases, and any of the
Transferred Employees that are located in facilities that are not the subject of
the Real Property Leases, shall each be entitled to remain in such facilities
during the thirty day period after Closing without charge by either party to the
other.
SECTION 1.12 Cash and Payables. Notwithstanding the Subsidiary
Transfer Documents and the other provisions of this Article I, Seller and each
Seller Subsidiary shall retain for its account the cash retained in the Division
accounts shown on the Closing Date Balance Sheet and shall satisfy their
obligations to transfer to Buyer the cash reflected in the Closing Date Balance
Sheet by making the payment contemplated in Section 1.6(b)(iv) and Buyer shall
satisfy its obligations to assume the liabilities shown in the account on the
Closing Date Balance Sheet as due to corporate by making the payment
contemplated in Section 1.6(b)(iv). The parties acknowledge that payment of
certain Assumed Liabilities set forth in Section 1.2(a) may be administratively
more practical to be paid by Seller, or may in certain instances be required to
be discharged by Seller. In such instances, if after the Closing Date Seller
makes payments of liabilities reflected in the Closing Date Balance Sheet, Buyer
will promptly reimburse Seller for such payments as they are made from time to
time after the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Each representation and warranty set forth below is qualified by any
exceptions or disclosures set forth in the Seller Disclosure Schedule, copies of
which have been previously provided to Buyer by Seller (collectively, the
"SELLER DISCLOSURE SCHEDULE"), which exceptions specifically reference the
Section(s) qualified by the exceptions. Seller represents and warrants to Buyer
as follows:
SECTION 2.1 Organization. Each of Seller and each Seller Subsidiary
is a corporation duly formed and validly existing under the laws of its
jurisdiction of organization and has full corporate power and authority and
legal right to own and operate the Assets and to carry on the business of the
Division as presently conducted, to execute and deliver this Agreement and all
of the other agreements and instruments to be executed and delivered by Seller
or such Seller Subsidiary pursuant hereto, and to consummate the transactions
contemplated hereby and thereby. Seller is qualified to do business as a
foreign corporation in each state of the United States or other jurisdiction in
which it is required to be qualified, except in states and other jurisdictions
in which the failure to qualify, in the aggregate, would not have a material
adverse effect on the Assets.
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SECTION 2.2 Authority. The execution and delivery of this Agreement
(and all other agreements and instruments contemplated hereunder) by Seller and
each Seller Subsidiary, the performance by Seller and each Seller Subsidiary of
its obligations hereunder and thereunder, and the consummation by Seller and
each Seller Subsidiary of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action by the Board of Directors of Seller
and each Seller Subsidiary, and no other act or proceeding on the part of or on
behalf of Seller, any Seller Subsidiary or any of their shareholders is
necessary to approve the execution and delivery of this Agreement and such other
agreements and instruments, the performance by Seller and each Seller Subsidiary
of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby. The signatory officers of Seller
and each Seller Subsidiary have the power and authority to execute and deliver
this Agreement and all of the other agreements and instruments to be executed
and delivered by Seller and each Seller Subsidiary pursuant hereto, to
consummate the transactions hereby and thereby contemplated and to take all
other actions required to be taken by Seller and each Seller Subsidiary pursuant
to the provisions hereof and thereof.
SECTION 2.3 Execution and Binding Effect. This Agreement has been
duly and validly executed and delivered by Seller and constitutes, and the other
agreements and instruments to be executed and delivered by Seller and each
Seller Subsidiary pursuant hereto, upon their execution and delivery by Seller
or any such Seller Subsidiary, will constitute (assuming, in each case, the due
and valid authorization, execution and delivery thereof by Buyer), legal, valid
and binding agreements of Seller and each Seller Subsidiary, enforceable against
Seller and each Seller Subsidiary in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency, moratorium,
or other laws affecting the enforcement of creditors' rights generally or
provisions limiting competition, and by equitable principles.
SECTION 2.4 Consents and Approvals of Governmental Entities. Except
for approvals under the HSR Act (as defined in Section 6.6 below) and Foreign
Filings (as defined in Section 4.13 below), there is no requirement applicable
to Seller or any Seller Subsidiary to make any filing, declaration or
registration with, or to obtain any permit, authorization, consent or approval
of, any Governmental Entity as a condition to the lawful consummation by Seller
or any Seller Subsidiary of the transactions contemplated by this Agreement and
the other agreements and instruments to be executed and delivered by Seller or
any Seller Subsidiary, except for such filings the failure of which to make
would not have a material adverse affect on the transactions contemplated
hereby.
SECTION 2.5 No Violation. Neither the execution, delivery and
performance of this Agreement and all of the other agreements and instruments to
be executed and delivered pursuant hereto, nor the consummation of the
transactions contemplated hereby or thereby, will, with or without the passage
of time or the delivery of notice or both, (a) conflict with, violate or result
in any breach of the terms, conditions or provisions of the articles or bylaws
of Seller or any Seller Subsidiary, (b) conflict with or result in a violation
or breach of, or constitute a default or require consent of any Person (or give
rise to any right of termination, cancellation or acceleration) under, any of
the terms, conditions or provisions of any Transferred Agreement, the Equipment
Leases
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or the Real Property Leases, any notice, bond, mortgage, indenture, license,
franchise, permit, agreement, lease or other instrument or obligation to which
Seller or any Seller Subsidiary is a party or by which Seller, any Seller
Subsidiary or any of the properties or assets of Seller or any Seller Subsidiary
may be bound, where such conflict, violation, breach, default or consent would
have a material adverse effect on the business conducted with the Assets or the
Assets or (c) violate any statute, ordinance or law or any rule, regulation,
order, writ, injunction or decree of any Governmental Entity applicable to
Seller or any Seller Subsidiary or by which any properties or assets of Seller
or any Seller Subsidiary may be bound, where such violation would have a
material adverse effect on the business conducted with the Assets or the Assets.
No "BULK SALES" provisions of any state commercial code apply to the
transactions contemplated by this Agreement.
SECTION 2.6 Assets Generally.
(a) The Assets include all properties, tangible and intangible,
currently used by Seller or any Seller Subsidiary in operating the business
conducted with the Assets and necessary for Buyer to operate the business
conducted with the Assets after the Closing Date in a manner substantially
equivalent to the manner in which Seller has operated the business conducted
with the Assets prior to and through the Closing Date. Except as set forth in
the Seller Disclosure Schedule, Seller's operation of the business conducted
with the Assets does not require any licenses or other consents from, or royalty
payments to, any other Person.
(b) Seller holds valid title, license to or leasehold interest in (as
reflected in Article I hereof) all of the Assets and has the complete and
unrestricted power and the unqualified right to sell, assign and deliver the
Assets to Buyer. Upon consummation of the transactions contemplated by this
Agreement, Buyer will acquire valid title, license or leasehold interest (as
reflected in Article I hereof) to the Assets free and clear of any mortgages,
pledges, liens, security interests, encumbrances, charges or other claims of
third parties of any kind, other than non-exclusive licenses to use, market and
sub-license the Products granted by Seller to Seller Distributors (as defined in
Section 4.17 below) and non-exclusive licenses to use the Products granted by
Seller to end-users in the ordinary course of business (collectively, "LIENS")
and other than Liens created by or through Buyer. Except for those Seller
Distributors that Buyer requests not to be terminated, all Seller Distributors
are being terminated as such, or the agreements between such Seller Distributors
and Seller or the applicable Seller Subsidiary are being amended, in each case
pursuant to Section 4.17 below. No Person other than Seller and Seller's
Subsidiaries has any right or interest in the Assets, including the right to
grant interests in the Assets to third parties, except for Assets licensed or
leased from third parties which are set forth in the Seller Disclosure Schedule
and identified as such and except for those licenses referred to in the
preceding two sentences.
(c) Except for object code, end-user, nonexclusive licenses listed in
the Seller Disclosure Schedule, all of which restrict the number of users of the
licensed products, neither Seller nor any Seller Subsidiary has granted to any
Person or entity, and to Seller's knowledge, no Person or entity, other than
Seller and Seller's Subsidiaries (including, without limitation, any independent
contractors who have performed services related to the Division), holds any
rights in,
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or licenses, or rights to acquire licenses, to produce, distribute, license,
sublicense, sell, use in development or otherwise use, any of the Products,
Tools or Intellectual Property.
(d) None of the Assets that constitute tangible personal property,
other than Assets held under capitalized leases reflected on the March 31
Balance Sheet and on the Closing Date Balance Sheet, is held under any lease,
security agreement, conditional sales contract, lien, or other title retention
or security arrangement.
(e) Except as provided in this Agreement and the agreements
contemplated by Section 1.8, immediately after Closing, no restrictions will
exist on Buyer's right to sell, resell, license or sublicense the Products,
Tools or Intellectual Property, nor will any such restrictions be imposed as a
consequence of the transactions contemplated by this Agreement or by any
agreement referenced in this Agreement.
(f) No Person has a license to use or the right to acquire a license
to use any future version of the Products or Tools, and nothing restricts
Seller's ability to charge its customers for any such new version. No Person
has a right to acquire a license to use any Products, Tools or Intellectual
Property. After the Closing, Buyer will not be prevented by any act of Seller
from changing prices charged to existing or future licensees of the Products for
support of Products and Tools. Except as set forth in the Seller Disclosure
Schedule and except for the escrow agents disclosed in Schedule 6.2, no Person
has any rights under any source code escrow agreement relating to the Products.
(g) No Person other than Seller, Seller's Subsidiaries and the escrow
agents listed in the Seller Disclosure Schedule has been provided access to
source code (except for Data Server Support Materials (defined in the Technology
License Agreement)) for any Product, Tool or Intellectual Property, and no
Person will have the right to gain access to any such source code as a result of
the transactions contemplated hereby.
(h) None of the Seller Distributors has an exclusive right to
distribute or resell any Product or Tool. All of the Terminated Distributor
Agreements are terminable upon notice by Seller of ninety (90) days or less.
(i) No technology licensed to Seller by Symmetry Corporation under a
License Agreement dated March 13, 1988, as amended in May 1990, is incorporated
in any of the Products. Seller is not required to obtain the consent of
Softbridge Microsystems Corporation to transfer the Agreement between Seller and
Softbridge Microsystems Corporation dated January 31, 1992, as a transferred
Agreement as contemplated by this Agreement.
(j) The interface included with the Products between the Terradata
database and the Products operates in a commercially reasonable manner. All
versions of the Products other than the DOS versions of PC Express do not
include any code or Technology of Tenberry Systems, Inc., Application
Techniques, Inc. or Graphic Software System. Seller is in the process of
developing the OS2 version of the Products. Seller does not presently intend
to, nor will it, incorporate any code or Technology of ASI (or its successor)
into such OS2 version, and such
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OS2 version is currently scheduled to be completed by the end of 1995. The
Products (other than, in the case of Rawlings, Nelson, Wolf, Inc., FCRS) do not
include any code or Technology of Rawlings, Nelson, Wolf, Inc. or DharmaSystems,
Inc.
(k) Seller owns all rights, title and interests in and to the
technology and other intellectual property rights developed under (i) the
Software Development Agreement dated October 22, 1994 and related Services
Agreement dated October 21, 1994, each with Technology Resources International
U.S., Inc., (ii) the Software Development Agreement dated July 18, 1994 with BFL
Software Ltd. and (iii) the Letter Agreements dated January 28, 1993 and
December 14, 1993 with Vlamis Software Solutions, excepting only the right of
Vlamis to retain a copy of the source code developed under such agreement for
support purposes only. The work contemplated to be performed by such third
parties under such agreements has been completed and there are no continuing
obligations on Seller or any such consultant, other than payment, under such
agreements. The technology and other intellectual property rights developed for
Seller's product line under such agreements are included in the Assets.
(l) Seller has received consent from Application Techniques, Inc. to
transfer to Buyer all of Seller's rights and obligations relating to the period
after Closing under the Distribution Agreement between Seller and Application
Techniques, Inc. dated August 12, 1992.
(m) The amounts paid prior to the date hereof in the aggregate by
Seller's Consulting Customers to Seller with respect to projects or commitments
remaining to be completed after Closing is commensurate in all material respects
with the efforts expended to date by Seller with respect to such property and
commitments. The employees of Seller that are consultants immediately prior to
the Closing constitute sufficient consulting resources to perform in the
ordinary course of business the services required as of Closing to be performed
after Closing for Seller's Consulting Customers.
SECTION 2.7 Support Agreements.
(a) As part of the Seller Disclosure Schedule, Seller has provided to
Buyer a list (including names, addresses, contact names and telephone numbers),
which is complete in all material respects, of all agreements or other
arrangements pursuant to which Seller is obligated to provide support services
with respect to the Products to the extent that such agreements or other
arrangements relate to the business conducted with the Assets (such agreements,
as supplemented below, are referred to collectively as the "LICENSE
AGREEMENTS"). For purposes of the prior sentence, the term "business conducted
with the Assets" does not include the Data Business. Except for the nonstandard
license agreements listed in the Seller Disclosure Schedule (the "NONSTANDARD
LICENSE AGREEMENTS"), all of the License Agreements are in all material respects
in the form of the license agreement identified as the Standard License
Agreement set forth in the Seller Disclosure Schedule (the "STANDARD LICENSE
AGREEMENT"). The versions of the Products currently supported by Seller or any
Seller Subsidiary are set forth in the Seller Disclosure Schedule. Prior to the
Closing, Seller will supplement the Seller Disclosure Schedule with any
addresses, contact names and telephone numbers omitted from the initial Seller
Disclosure Schedule and to include: (i) all Standard License Agreements entered
into between the date hereof
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and the Closing; (ii) any non-Standard License Agreements which were
inadvertently omitted from the Seller Disclosure Schedule and that do not,
individually or in the aggregate, add to the Buyer's costs for the provision of
the Update and Support Services, other than in a de minimis respect; and (iii)
all non-standard License Agreements that were entered into between the date
hereof and the Closing with the written consent of the Buyer.
(b) Neither Seller nor any Seller Subsidiary has granted any third
party the right to furnish support or maintenance services with respect to any
Products to any other third party.
(c) No agreement for support or maintenance of the Products by Seller
obligates Seller or any Seller Subsidiary, and no agreement would obligate Buyer
after the Closing Date, to provide any change in functionality or other
alteration in the performance of the Products or to provide new products or
technology. No agreement pursuant to which Seller or any Seller Subsidiary has
licensed the use of the Products to any third party obligates Seller or any
Seller Subsidiary to provide any change in functionality or other alteration in
the performance of the Products or to provide new products or technology.
(d) Except as set forth in the Seller Disclosure Schedule, Seller has
not provided any warranties, express or implied, with respect to the Products.
Seller is in compliance with all warranties described in the Seller Disclosure
Schedule.
SECTION 2.8 Financial Information. Seller has delivered to Buyer a
special purpose balance sheet for the business conducted with the Assets at
March 31, 1995 (the "MARCH 31 BALANCE SHEET"), a copy of which is set forth in
the Seller Disclosure Schedule, and will deliver to Buyer the Closing Date
Balance Sheet. The monetary amounts for the accounts included in the March 31
Balance Sheet and the Closing Date Balance Sheet have been or, in the case of
the Closing Date Balance Sheet, will have been prepared in accordance with
generally accepted accounting principles, consistently applied. The March 31
Balance Sheet fairly presents the financial condition of the business conducted
with the Assets as of March 31, 1995 and the Closing Date Balance Sheet will
fairly present the financial condition of the business conducted with the Assets
as of the Closing Date. Except as set forth in the March 31 Balance Sheet or
the Closing Date Balance Sheet, the business conducted with the Assets has no
liabilities, contingent or otherwise, other than (i) in the case of the March 31
Balance Sheet liabilities incurred in the ordinary course of business subsequent
to March 31, 1995, and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in the March 31 Balance Sheet or the
Closing Date Balance Sheet. The deferred revenue line item on the March 31
Balance Sheet consists of all billed but unearned update and support fees of the
Division as of March 31, 1995. The deferred revenue line item on the Closing
Date Balance Sheet will consist of all billed but unearned update and support
fees of the business conducted with the Assets as of the Closing Date. Seller
has delivered to Buyer the results of operations information of the business
conducted with the Assets set forth in the Seller Disclosure Schedule (the
"RESULTS OF OPERATIONS INFORMATION"). The monetary amounts included in the
Results of Operations Information have been prepared in accordance with
generally accepted accounting principles, consistently applied. The Results of
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Operations Information was derived from Seller's accounting books and records
and fairly presents the information it purports to represent for the periods
indicated. There are no Tax Assets set forth in the March 31 Balance Sheet and
there will be no Tax Assets set forth in the Closing Date Balance Sheet. A
majority of the employees currently occupying the space leased under each Real
Property Lease are Division Employees (as defined in Section 5.1(a)). The
Results of Operations Information, the March 31 Balance Sheet and the Closing
Date Balance Sheet reflect or, in the case of the Closing Date Balance Sheet,
will reflect, the inclusion of the Real Property Leases and the Equipment Leases
within the assets and liabilities that generated such financial information.
The revenues for the "General Software" portion of the Division set forth in the
Results of Operations Information do not include any material amount of revenues
from the Data Business.
SECTION 2.9 Intellectual Property. The Assets do not infringe any
trade name, trademark, copyright, trade secret, patent or any other intellectual
property right of any Person. There is no pending or, to Seller's knowledge,
threatened claim by Seller against any Person for infringement, misuse or
misappropriation of any Intellectual Property. Neither Seller nor any Seller
Subsidiary is obligated or under any liability whatsoever to make any payments
by way of royalties, fees or otherwise to any owner of, licensor of, or other
claimant to, any patent, trademark, trade name, copyright, trade secret or other
intellectual property rights, with respect to the use thereof or in connection
with the business conducted with the Assets. Seller has no pending
applications, current registrations or prosecutions with the Patent and
Trademark Office or any corresponding United States state or foreign authority
relating to the Intellectual Property. Seller owns or has all necessary rights
to use all trade secrets, including know-how, inventions, designs, processes,
and technical data required for the development, operation, license and sale of
all of the Assets. All of the Intellectual Property is owned by Seller free and
clear of any rights or claims of any former employees, consultants, officers and
directors of Seller or any Seller Subsidiary and former employers of all current
and former employees, consultants, officers and directors of Seller or any
Seller Subsidiary. Seller has adhered to reasonable standards of
confidentiality to protect the secrecy and confidentiality of the Intellectual
Property. The source code for the Products and the Tools constitute trade
secrets of Seller that are presently valid and protectable, and are not part of
the public knowledge or literature. All fees to maintain Seller's rights in the
Intellectual Property, including, without limitation, patent and trademark
registration and prosecution fees and all professional fees in connection
therewith pertaining to the Intellectual Property due and payable on or before
the Closing Date, have been paid by Seller or will be paid by Seller within a
reasonable period after the Closing.
SECTION 2.10 Employees.
(a) All employees, consultants, officers, directors and shareholders
of Seller or any Seller Subsidiary that have had access to Intellectual Property
(other than trademarks, service marks and tradenames) are parties to a written
agreement ("PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT"), under which each
such person or entity (i) is obligated to disclose and transfer to Seller or any
Seller Subsidiary, without the receipt by such person of any additional value
therefor (other than normal salary or fees for consulting services), all
inventions, developments and discoveries which, during the period of employment
with or performance of
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services for Seller or any Seller Subsidiary, he or she makes or conceives of
either solely or jointly with others, that relate to any subject matter with
which his or her work for Seller or any Seller Subsidiary may be concerned, or
relate to or are connected with the business conducted with the Assets, products
or projects of Seller or any Seller Subsidiary, or involve the use of the time,
material or facilities of Seller or any Seller Subsidiary, and (ii) is obligated
to maintain the confidentiality of proprietary information of Seller or any
Seller Subsidiary. To Seller's knowledge, none of Seller's or any Seller
Subsidiary's employees, consultants, officers or directors is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would conflict with their obligation to promote the
interests of Seller of the business conducted with the Assets or that would
conflict with the business conducted with the Assets. To Seller's knowledge,
neither the execution nor delivery of this Agreement, nor the carrying on of the
business conducted with the Assets by its employees and consultants, will
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any contract, covenant or instrument under which
any of such persons or entities are now obligated. It is currently not necessary
nor will it be necessary for Seller to utilize in its operations of the Assets
nor will Seller utilize in its operations of the Assets any inventions of any of
such persons or entities (or people it currently intends to hire) made or owned
prior to their employment by or affiliation with Seller or any Seller
Subsidiary, nor is it or will it be necessary to utilize any other assets or
rights of any such persons or entities (or people it currently intends to hire)
made or owned prior to their employment with or engagement by Seller or any
Seller Subsidiary, in violation of any registered patents, trade names,
trademarks or copyrights or any other limitations or restriction to which any
such persons or entity is a party or to which any of such assets or rights may
be subject. To Seller's knowledge, none of Seller's or any Seller Subsidiary's
employees, consultants, officers, directors or shareholders that has had
knowledge or access to information relating to the Assets has taken, removed or
made use of any proprietary documentation, manuals, products, materials, or any
other tangible item from his or her previous employer relating to the Assets by
such previous employer which has resulted in Seller's or any Seller Subsidiary's
access to or use of such proprietary items included in the Assets, and Seller
and each Seller Subsidiary will not gain access to or make use of any such
proprietary items in the Division, except to the extent that any such activities
would not have a material adverse effect on the Assets or the business conducted
with the Assets.
(b) Except for the Proprietary Information and Inventions Agreements,
there are no written or oral contracts of employment between Seller and any
Division Employee (as defined in Section 5.1 below).
(c) Except as contemplated under this Agreement, Seller is not aware
that any Division Employee intends to terminate his or her employment with
Seller, nor does Seller have a present intention to terminate the employment of
any Division Employee.
SECTION 2.11 Licenses and Permits. Each of Seller and each Seller
Subsidiary does not hold, and is not required by any applicable law or
regulation of any Governmental Entity to hold, any governmental licenses,
registrations, permits or authorizations pertaining to the business conducted
with the Assets.
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SECTION 2.12 Taxes. For purposes of this Agreement, the term "TAXES"
shall mean all sales and use taxes, real and personal property taxes, gross
receipts taxes, documentary transfer taxes, employment taxes, withholding taxes,
unemployment insurance contributions and other taxes or governmental charges of
any kind, however denominated, including any interest, penalties and additions
to tax in respect thereto, under any federal, state, local, foreign or other
applicable tax law. All taxes of Seller, each Seller Subsidiary and any other
person for which Buyer could bear successor liability or become a charge or lien
against the Assets have been or will be paid on a timely basis. Seller and each
Seller Subsidiary has duly and timely filed (or will file prior to the Closing)
such returns and reports of Taxes required to be filed prior to Closing, and all
such returns and reports are true, correct, and complete in all material
respects. There are no liens for Taxes on any of the Assets. Seller and each
Seller Subsidiary has complied with all record keeping and tax reporting
obligations relating to income and employment taxes due with respect to
compensation paid to employees or independent contractors. Except for Seller
Subsidiaries organized in foreign jurisdictions, Seller and each Seller
Subsidiary is not a "FOREIGN PERSON" within the meaning of Section 1445(f)(3) of
the Code. There are no pending or, to Seller's knowledge, threatened
proceedings with respect to Taxes for which Buyer could bear successor liability
beyond what is set forth in the Closing Date Balance Sheet or which could become
a charge against the Assets, and there are no outstanding waivers or extensions
of statutes of limitations with respect to assessments of Taxes, of Seller or
any Seller Subsidiary for which Buyer could bear successor liability beyond what
is set forth in the Closing Date Balance Sheet or which could become a charge
against the Assets. No agreement or arrangement regarding compensation of any
employee providing services to the Division or any Seller Subsidiary requires
any payments which will result in the disallowance of any tax deduction for
Buyer pursuant to Section 280G of the Code or an excise tax to the recipient of
such payment pursuant to Section 4999 of the Code.
SECTION 2.13 Employee Benefit and Compensation Plans. Except as
provided in Article V or set forth in the Closing Date Balance Sheet, Buyer will
incur no liability with respect to, or on account of, and Seller will retain any
liability for, and on account of, any employee benefit plan of Seller, any of
its affiliates or any predecessor employer of any employee, including, but not
limited to, liabilities Seller may have to such employees under all incentive
compensation plans, bonus plans, pension and retirement plans, profit-sharing
plans (including, any profit-sharing plan with a cash-or-deferred arrangement
subject to Section 401(k) of the Code (a "401(K) PLAN")) stock purchase and
option plans, savings and similar plans, medical, dental, travel, accident,
life, disability and other insurance and other plans or arrangements, whether
written or oral and whether "QUALIFIED" or "NON-QUALIFIED" under the Code, or to
any employee as a result of termination of employment by Seller as contemplated
by this Agreement. Neither Seller nor any Seller Subsidiary has, with respect
to any Division Employee, maintained or contributed to, or been obligated or
required to contribute to, a "MULTIEMPLOYER PLAN," as such term is defined in
Section 3(37) of ERISA. Neither Seller nor any Seller Subsidiary is a party to
any collective bargaining agreement covering any Division Employee and Seller
knows of no effort to organize any such employee as a part of any collective
bargaining unit.
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SECTION 2.14 Compliance with Law. The operation of the business
conducted with the Assets has been conducted in all material respects in
accordance with all applicable laws, regulations and other requirements of
Governmental Entities having jurisdiction over the same.
SECTION 2.15 Litigation; Other Claims.
(a) There are no claims, actions, suits, inquiries, proceedings, or
investigations against Seller or any Seller Subsidiary relating to the business
conducted with the Assets, the Division Employees or the Assets which are
currently pending or, to Seller's knowledge, threatened, at law or in equity or
before or by any Governmental Entity; and
(b) There are no grievance or arbitration proceedings pending, or to
Seller's knowledge, threatened. There are no actual, and to Seller's knowledge,
threatened, strikes or work stoppages with respect to the business conducted
with the Assets and the Division Employees.
SECTION 2.16 Product Liability. There are no claims, actions, suits,
inquiries, proceedings or investigations pending, or threatened by Seller, or,
to Seller's knowledge, threatened against Seller or any Seller Subsidiary,
relating to any of the Assets containing allegations that the Assets are
defective or were improperly designed or manufactured or improperly labeled or
otherwise improperly described for use.
SECTION 2.17 Environmental.
(a) Seller's operation of the business conducted with the Assets and
ownership of the Assets are, and have been, in compliance in all material
respects with all applicable environmental laws, permit requirements, use
restrictions, and waste control requirements, and no releases of any hazardous
substance requiring notification to a Governmental Entity have occurred on any
of the Assets; and no hazardous substances are used on any of the Assets except
in compliance in all material respects with applicable law. There is no
environmental action, suit, proceeding or investigation pending, or, to Seller's
knowledge, threatened against or affecting any of the Assets which could be
reasonably expected to materially and adversely affect the business conducted
with the Assets or the Assets, and no governmental entity has served upon Seller
any notice claiming any outstanding violation of any environmental statute,
ordinance or regulation or noting the need for any repair or redemption with
respect to the Assets, requesting data or access, requiring testing or other
investigation relating to environmental conditions, or requiring any change in
the Assets or in Seller's means or methods of conducting the business conducted
with the Assets.
(b) For purposes of this Agreement, the term "HAZARDOUS SUBSTANCE"
shall mean any substance which is listed or otherwise defined as "HAZARDOUS" or
"TOXIC" under applicable law; as well as any petroleum product or nuclear
materials; and the term "APPLICABLE LAW" as used in this Section 2.17 shall
include any local, state, federal and/or foreign laws and regulations that
govern the existence and/or remedy of contamination on property, the protection
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of the environment from contamination, the control of hazardous wastes, or other
activities involving hazardous substances, including building materials.
SECTION 2.18 Defaults. Neither Seller nor any Seller Subsidiary is
in default under or with respect to any judgment, order, writ, injunction or
decree of any court or any Governmental Entity which could reasonably be
expected to materially adversely affect the business conducted with the Assets
or any of the Assets. There does not exist any default by Seller or, to the
knowledge of Seller, by any other Person, or event that, with notice or lapse of
time, or both, would constitute a default under any agreement (including,
without limitation, any of the Transferred Agreements, Equipment Leases or Real
Property Leases) entered into by Seller or any Seller Subsidiary as part of the
operations of the business conducted with the Assets which could reasonably be
expected to materially and adversely affect the business conducted with the
Assets or the Assets, and no notices of breach thereof have been received by
Seller or any Seller Subsidiary.
SECTION 2.19 No Material Adverse Change. From March 31, 1995 to the
date of this Agreement, there has not been, and from March 31, 1995 through the
Closing Date there shall not have been, any material adverse change in the
business conducted with the Assets, or in the condition, financial or otherwise,
of the business conducted with the Assets, or in the Assets, or any damage,
destruction or loss, whether or not covered by insurance, which has materially
adversely affected the business conducted with the Assets or the Assets. For
purposes of this Section 2.19, a decline in revenues of less than 25% for the
quarter ending June 30, 1995 as compared to projected revenues of $19.64 million
shall not by itself be deemed to constitute a material adverse change in the
financial condition or results of operations of the business conducted with the
Assets.
SECTION 2.20 Full Disclosure. Seller is not aware of any facts
pertaining to the Assets which it believes affect the business conducted with
the Assets or the Assets in a material adverse manner or which are likely in the
future to affect the business conducted with the Assets or the Assets in a
material adverse manner. Neither this Agreement nor any other agreement,
exhibit, schedule or certificate being entered into or delivered pursuant hereto
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein contained not misleading.
SECTION 2.21 Brokers and Finders. Neither Seller nor any of Seller's
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fee, commission or finders fee in connection
with the transactions contemplated by this Agreement.
SECTION 2.22 Fair Consideration; No Fraudulent Conveyance. The sale
of the Assets pursuant to this Agreement is made in exchange for fair and
equivalent consideration, and Seller is not now insolvent and Seller will not be
rendered insolvent by the sale, transfer and assignment of the Assets pursuant
to the terms of this Agreement. Seller is not entering into this Agreement and
the other agreements referenced in this Agreement with the intent to defraud,
delay or hinder its creditors and the consummation of the transactions
contemplated by this Agreement, and the other agreements referenced in this
Agreement, will not have any such effect. The transactions
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contemplated in this Agreement or any agreements referenced in this Agreement
will not constitute a fraudulent conveyance, or otherwise give rise to any right
of any creditor of Seller whatsoever to any of the Asserts in the hands of Buyer
after the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
SECTION 3.1 Organization. Buyer is a corporation duly formed and
validly existing under the laws of Delaware, and has full corporate power and
authority and the legal right to execute and deliver this Agreement and all of
the other agreements and instruments to be executed and delivered by Buyer
pursuant hereto, and to consummate the transactions contemplated hereby and
thereby.
SECTION 3.2 Authority. The execution and delivery of this Agreement
(and all other agreements and instruments contemplated hereunder) by Buyer, the
performance by Buyer of its obligations hereunder and thereunder, and the
consummation by Buyer of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action by the Board of Directors of Buyer,
and no other act or proceeding on the part of Buyer or its shareholders is
necessary to approve the execution and delivery of this Agreement and such other
agreements and instruments, the performance by Buyer of its obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby. The signatory officers of Buyer have the power and
authority to execute and deliver this Agreement and all of the other agreements
and instruments to be executed and delivered by Buyer pursuant hereto, to
consummate the transactions hereby and thereby contemplated and to take all
other actions required to be taken by Buyer pursuant to the provisions hereof
and thereof.
SECTION 3.3 Execution and Binding Effect. This Agreement has been
duly and validly executed and delivered by Buyer and constitutes, and the other
agreements and instruments to be executed and delivered by Buyer pursuant
hereto, upon their execution and delivery by Buyer, will constitute (assuming,
in each case, the due and valid authorization, execution and delivery thereof by
Seller), legal, valid and binding agreements of Buyer, enforceable against Buyer
in accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, moratorium, or other laws affecting the
enforcement of creditors' rights generally or provisions limiting competition,
and by equitable principles.
SECTION 3.4 Consent and Approvals. Except for approvals under the
HSR Act (as defined in Section 6.6 below) and Foreign Filings, there is no
requirement applicable to Buyer to make any filing, declaration or registration
with, or to obtain any permit, authorization, consent or approval of, any
Governmental Entity as a condition to the lawful consummation by Buyer of the
transactions contemplated by this Agreement and the other agreements and
instruments to be executed and delivered by Buyer pursuant hereto, except for
such filings referred to in the Seller Disclosure Schedule and such filings the
failure of which to make would not have a material adverse effect on the
transactions contemplated hereby.
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SECTION 3.5 No Violation. Neither the execution, delivery and
performance of this Agreement and all of the other agreements and instruments to
be executed and delivered pursuant hereto, nor the consummation of the
transactions contemplated hereby or thereby, will, with or without the passage
of time or the delivery of notice or both, (a) conflict with, violate or result
in any breach of the terms, conditions or provisions of the articles or bylaws
of Buyer, (b) conflict with or result in a violation or breach of, or constitute
a default or require consent of any Person (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any notice, bond, mortgage, indenture, license, franchise,
permit, agreement, lease or other instrument or obligation to which Buyer is a
party or by which Buyer or any of its properties or assets may be bound, where
such conflict, violation, breach, default or consent would have a material
adverse effect on the business or assets of Buyer, or (c) violate any statute,
ordinance or law or any rule, regulation, order, writ, injunction or decree of
any Governmental Entity applicable to Buyer or by which any of its properties or
assets may be bound, where such violation would have a material adverse effect
on the business or assets of Buyer.
SECTION 3.6 Brokers and Finders. Neither Buyer nor any of Buyer's
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fee, commission or finders fee in connection
with the transactions contemplated by this Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1 Access to Information.
(a) Prior and subsequent to the Closing, Seller will permit Buyer to
make a full and complete investigation of the Assets and to receive from Seller
and each Seller Subsidiary all information of Seller relating to the Assets or
reasonably related to Seller's conduct of the business conducted with the
Assets, subject to applicable confidentiality and nondisclosure provisions.
Without limitation on this right, Seller will give to Buyer and its accountants,
legal counsel, and other representatives full access, during normal Division
hours, at a mutually agreeable location arranged in advance, to all of the
books, records, files, documents, properties, and contracts of Seller and each
Seller Subsidiary relating to the Assets or reasonably related to Seller's
conduct of the business conducted with the Assets and allow Buyer and any such
representatives to make copies thereof. Seller shall maintain and make
available the information and records specified in this Section 4.1(a) in the
ordinary course of Seller's business and document retention policies, as if the
transactions contemplated by this Agreement had not occurred.
(b) At all times following the Closing, each party shall provide the
other party (at such other party's expense) with such reasonable assistance,
including the provision of available relevant records or other information and
reasonable access to and cooperation of any personnel within their employ, as
may be reasonable requested by either of them in connection
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with the preparation of any financial statement or tax return, or any audit or
examination by any taxing authority, or any judicial or administrative
proceeding relating to liability for Taxes.
SECTION 4.2 Third Party Consents. Seller and Buyer shall use
commercially reasonable best efforts to obtain, within the applicable time
periods required, all waivers, permits, consents and approvals and to effect all
registrations, filings and notices with or to third parties or Governmental
Entities which are necessary to consummate the transactions contemplated by this
Agreement.
SECTION 4.3 Certain Notifications. At all times prior to the
Closing, Seller and Buyer shall promptly notify the other party in writing of
the occurrence of any event which will result, or has a reasonable prospect of
resulting, in the failure to satisfy any of the conditions specified in Article
VI hereof, in the case of Seller, or Article VII, in the case of the Buyer.
SECTION 4.4 Reasonable Efforts. The parties shall use commercially
reasonable efforts (i) to cause to be fulfilled and satisfied all of the
conditions to the Closing to be fulfilled and satisfied by each of them, (ii) to
cause to be performed all of the matters required of each of them at the Closing
and (iii) to cause the Transferred Agreements, the Equipment Leases and the Real
Property Leases to be assigned to Buyer.
SECTION 4.5 Seller's Conduct of Division Prior to Closing. During
the period from the date of this Agreement to the Closing Date, Seller will
conduct the business conducted with the Assets in its ordinary and usual course,
consistent with past practice, and will use all reasonable efforts to preserve
intact all rights, privileges, franchises and other authority of the Division,
to retain the Division Employees, and to maintain favorable relationships with
licensors, licensees, suppliers, contractors, distributors, customers, and
others having relationships with the business conducted with the Assets.
Without limiting the generality of the foregoing, and except as approved in
writing by Buyer in advance, prior to the Closing, Seller:
(a) will not create, incur or assume (i) any indebtedness for borrowed
money that will appear on the Closing Date Balance Sheet, other than
intercompany charges, or borrowings under capital leases entered into in the
ordinary course of business, or (ii) any obligation which would in any material
way adversely affect the Assets or Buyer's ability to conduct the business
conducted with the Assets in substantially the same manner and condition as
conducted by Seller and the Seller Subsidiaries on the date of this Agreement;
(b) except to the extent an obligation is established in a written
agreement in existence prior to the date hereof and except for increases of
compensation made in connection with annual reviews, which increases are in the
ordinary course of business consistent with past practice, will not change in
any manner the compensation of, or agree to provide additional benefits to, or
enter into any employment agreement with, any Division Employee, except as
contemplated in Section 5.3 below and except for such benefits provided to
substantially all of Seller's similarly situated employees;
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(c) will maintain insurance coverage in amounts adequate to cover the
reasonably anticipated risks of the business conducted with the Assets;
(d) will not sell, dispose of or encumber any of the Assets or license
any Assets to any Person except object code licenses on a non-exclusive basis in
a manner and on terms consistent with past practice;
(e) will not enter into any agreements or commitments relating to the
business conducted with the Assets, except on commercially reasonable terms in
the ordinary course of business of the business conducted with the Assets;
(f) will comply in all material respects with all laws and regulations
applicable to the business conducted with the Assets;
(g) will not enter into any agreement with any third party for the
distribution of any of the Assets;
(h) as provided in Article V, will use reasonable efforts to assist
Buyer in employing after the Closing Date those Division Employees to whom
offers of employment are made by Buyer, including without limitation by
implementation of the employee bonus program as described in Schedule 5.4, and
will not (and will cause its subsidiaries not to) solicit such employees to
remain in the employ of Seller after the Closing Date;
(i) will not change or announce any change to the Products except with
Buyer's written consent or at Buyer's request; and
(j) will not expand the use of Products and Tools within the
organization of Seller and the Seller Subsidiaries, other than in the ordinary
course of the business of the Assets, consistent with past practice.
SECTION 4.6 No Other Bids. Until the earlier to occur of (a) the
Closing or (b) the termination of this Agreement pursuant to its terms, Seller
shall not, and Seller shall not authorize any of its officers, directors,
employees or other representatives to, directly or indirectly, (i) initiate,
solicit or encourage (including by way of furnishing information regarding the
Division or the Assets) any inquiries, or make any statements to third parties
which may reasonably be expected to lead to any proposal, concerning the sale of
the Division, or (ii) negotiate, engage in any substantive discussions, or enter
into any agreement, with any Person concerning the sale of the Division or the
business conducted with the Assets.
SECTION 4.7 Ancillary Agreement. At the Closing, Seller and Buyer
agree to enter into the Ancillary Agreement in the form of Schedule 4.7 hereto.
SECTION 4.8 Tax Returns. Seller shall, to the extent that failure to
do so could adversely affect the business conducted with the Assets or the
Assets following Closing, (a) continue to file within the time period for filing
all returns and reports relating to Taxes, and
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such returns and reports shall be true, correct and complete, and (b) except for
Taxes set forth in the Closing Date Balance Sheet, be responsible for and pay
when due any and all Taxes attributable to or levied or imposed upon (i) the
Assets or the business conducted with the Assets for periods (or portions
thereof) ending on or prior to the Closing, and (ii) the operations of the
Seller. To the extent Taxes are reflected on the Closing Date Balance Sheet and
are required by law to be paid by Seller or any Seller Subsidiary, Buyer shall
pay such Taxes when due or promptly reimburse Seller or any Seller Subsidiary
for such Taxes after presentation of evidence of payment by Seller or any Seller
Subsidiary.
SECTION 4.9 Post-Closing Cooperation. Seller agrees that, if
requested by Buyer, it will cooperate with Buyer in enforcing the terms of any
agreements between Seller and any third party involving the Division, including
without limitation terms relating to confidentiality and the protection of
intellectual property rights. In the event that Buyer is unable to enforce its
intellectual property rights against a third party as a result of a rule or law
barring enforcement of such rights by a transferee of such rights, Seller agrees
to reasonably cooperate with Buyer by assigning to Buyer such rights as may be
required by Buyer to enforce its intellectual property rights in its own name.
If such assignment still does not permit Buyer to enforce its intellectual
property rights against the third party, Seller agrees to initiate proceedings
against such third party in Seller's or any Seller Subsidiary's name, provided
that Seller shall be entitled to participate in such proceedings, all at Buyer's
expense. Each of Buyer and Seller also will use commercially reasonable efforts
to avoid the release of source code relating to the Products to any licensees
pursuant to the terms of any source code escrow agreement in existence at the
Closing.
SECTION 4.10 No Post-Closing Retention of Copies. Immediately after
the Closing, Seller shall deliver to Buyer or destroy copies of Assets in
Seller's or any Seller Subsidiary's possession that are in addition to copies
delivered to Buyer as part of the Closing, whether such copies are in paper
form, on computer media or stored in another form; provided, however, that (i)
Seller is entitled to possess such copies to the extent expressly permitted by
this Agreement or the Technology License Agreement, and (ii) Seller may retain
and use copies of financial books and records relating to the Division.
SECTION 4.11 Public Announcements. On and prior to the Closing Date,
Buyer and Seller shall advise and confer with each other prior to the issuance
of any reports, statements or releases concerning this Agreement (including the
exhibits hereto) and the transactions contemplated herein. Neither Buyer or
Seller will make any public disclosure prior to the Closing or with respect to
the Closing unless both parties agree on the text and timing of such public
disclosure; provided, however, that nothing contained herein shall prevent
either party at any time from furnishing any information to any Governmental
Entity or prevent Buyer or Seller from issuing any release when it believes in
its sole discretion it is legally required to do so.
SECTION 4.12 Seller's Materials. After the Closing, Buyer shall have
the right to sell existing inventory and to use existing packaging, labeling,
containers, advertising materials, brochures, technical data sheets and
documentation and any similar materials acquired pursuant to Section 1, which
bear any of Seller's trade names, trademarks or service marks that are not
conveyed to Buyer pursuant to Section 1.1(c) hereof until the earlier of (i)
twelve (12) months
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after the Closing Date or (ii) the date existing stocks of such materials are
exhausted; provided, however that such materials are only used with the products
to which they relate as of the Closing Date and in a manner which would not be
misleading to a purchaser of such products.
SECTION 4.13 Certain Filings.
(a) Foreign Filings. Buyer has delivered to Seller a list (the
"INITIAL LIST") of the foreign countries in which Buyer believes filings are
required or recommended to be made with Governmental Entities with respect to
the transactions contemplated by this Agreement, and the nature of the filing.
As soon as possible after the date of this Agreement, and in any event within
fourteen (14) days after the date of this Agreement, Buyer shall deliver to
Seller a list of those foreign countries included in the Initial List in which
such filings (the "FOREIGN FILINGS") shall be made. Seller and Buyer shall
cooperate to make the Foreign Filings as promptly as practicable.
(b) HSR Act. Buyer and Seller shall, as soon as practical after the
date hereof, but in no event later than ten (10) days following the date hereof,
file the Notification and Reports Forms under the HSR Act with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "ANTITRUST DIVISION") and shall use commercially reasonably efforts to
respond as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or documentation. Each of Buyer
and Seller will use commercially reasonable efforts to obtain a waiver from the
applicable waiting period under the HSR Act. The parties shall coordinate the
preparation, timing and filing of notification under the HSR Act so as to timely
present such notices and to avoid substantial errors and inconsistencies between
such notices in the description of the transactions. Notwithstanding any
provision of this Agreement to the contrary, in no event shall Buyer, any
Affiliate of Buyer, Seller or any Seller Subsidiary be required to divest itself
or dispose of any of its properties or assets or make special payments or grant
any special concessions or in any way diminish or impair its control, ownership,
or operation of any of its properties or assets in order to obtain any waivers,
permits, licenses, approvals, authorizations, qualification, orders or consents
required in connection with the consummation of the transaction contemplated by
this Agreement, unless mutually agreed by and between Seller and Buyer.
SECTION 4.14 Seller Subsidiaries. Seller agrees to cause each Seller
Subsidiary to comply with the terms of this Agreement, including without
limitation causing each Seller Subsidiary to transfer to Buyer any Assets owned
or controlled by such Seller Subsidiary.
SECTION 4.15 Division. Upon Closing, Buyer will establish a
separate division for the division operated with the Assets, although Buyer
shall be under no obligation to maintain such division.
SECTION 4.16 Accounts Receivable. During the 365 day period after
the Closing Date, Buyer will use reasonable efforts to collect the accounts
receivable of the Division shown on the Closing Date Balance Sheet ("ACCOUNTS
RECEIVABLE") in the ordinary course of business, without discount, except as
agreed to by Seller. In the event payment of any Account Receivable is made
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to Seller or any Seller Subsidiary, Seller or such Seller Subsidiary shall
promptly pay to Buyer the amount of such collected Account Receivable. All
accounts receivable collected by Buyer, Seller or any Seller Subsidiary from
third parties that owe Accounts Receivable and other accounts receivable created
after the Closing relating to the business conducted with the Assets shall be
credited to the account indicated on the installment of payment or accompanying
writing or in the event no such indication is provided to unpaid accounts
receivable of such debtor in order of the date of the invoice relating thereto
(least recent to most recent). From time to time after the Closing, Buyer will
provide to Seller reasonable information as requested by Seller, including,
without limitation, the outstanding amount of the Accounts Receivable and the
status of the collection of such Accounts Receivable. Buyer hereby authorizes
Seller to contact any customer included in the Accounts Receivable whose account
is over 120 days past due.
SECTION 4.17 Termination of Certain Agreements. Unless otherwise
requested in writing by Buyer and except as otherwise set forth in Schedule 4.17
hereto, Seller shall, and shall cause each Seller Subsidiary to, provide notice
of termination, on or within thirty days following the Closing Date, to each
Person which has the right to sublicense, sell or distribute any of the Products
or Tools, all of which Persons are listed in Schedule 4.17 hereto or will be
added to Schedule 4.17 on or prior to the Closing (the "SELLER DISTRIBUTORS");
provided, however, that with respect to agreements with Seller Distributors
located in France, Germany, Holland, Belgium, Spain and Italy, Seller shall be
permitted to make such notices within 60 days following Closing; and further
provided that Buyer and its subsidiaries shall provide reasonable assistance to
Seller and the Seller Subsidiaries in connection with making all notices and
effecting a termination or amendment as contemplated in this Section 4.17, it
being understood that Seller and the Seller Subsidiaries shall retain primary
responsibility for all such actions. All agreements (the "TERMINATED
DISTRIBUTOR AGREEMENTS") under which such Seller Distributors distribute
Products or Tools shall become terminated as a result of such notices in
accordance with their terms. Seller will include in the notice of termination a
statement that, in accordance with the terms of the relevant Terminated
Distributor Agreement, upon termination of the relevant Terminated Distributor
Agreement the Distributor will no longer be entitled to distribute Products or
Tools or sell service or update rights to the Products or Tools.
Notwithstanding the foregoing, in lieu of any such termination Seller may amend
any such Terminated Distribution Agreement to permit the resale or distribution
of Products to the extent permitted under the Technology License Agreement or
the VAR Agreement.
SECTION 4.18 Post-Closing Distribution of Products. Following the
Closing, neither Seller, nor any Seller Subsidiary, nor any Seller Distributor
shall have the right to, or shall, promote, market, reproduce, sublicense or
distribute Products or Tools except pursuant to the terms of the VAR Agreement
or the Technology License Agreement. After the Closing Date, neither Seller,
nor any Seller Subsidiary, nor any Person who has been granted license rights to
the Products or Tools from Seller or any Seller Subsidiary shall be entitled to
receive support services or any copy, update or new version of the Products or
Tools except pursuant to the Update and Support Agreement, except for those end
users supported by Seller Distributors pursuant to the terms of the Terminated
Distributor Agreements and those end users supported by Seller as a result of
such end users being omitted from Section 2.7 of the Seller Disclosure Schedule.
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SECTION 4.19 Access to the Data Center. During the two (2) year
period after Closing, Buyer agrees to provide the Seller reasonable access upon
reasonable notice to the data center for the Products located in Waltham,
Massachusetts to permit Seller's software development engineers to use the
hardware located in such data center for the purposes contemplated by the
Technology License Agreement and to have access and to use the Excluded Assets
identified in Schedule 1.11(b)(i). Such access will be provided to the extent
capacity exists on such hardware for such development. Seller shall reimburse
Buyer for such access as provided in Schedule 4.19 attached hereto. In the
event Seller wishes to terminate its right of access to such data center and its
obligation to pay costs related thereto, Seller shall provide Buyer sixty (60)
days advanced written notice of such termination. Buyer also agrees to provide
Seller with thirty (30) days written notice of any material change to be made by
Buyer in the ratio between Seller and Buyer of use of the data center.
SECTION 4.20 Third Party Licenses Seller agrees to use reasonable
efforts to assist Buyer in negotiating a license between Buyer and Strategic
Mapping, Inc. on terms substantially similar to those set forth in the OEM
License and Supply Agreement between Seller and Strategic Mapping, Inc. dated
October 29, 1993 and amended September 30, 1994. In addition, Buyer and Seller
agree to use reasonable efforts to assist each other in negotiating a license
between Seller and Three D Graphics, Inc. under which Seller is licensed
technology for use with Seller's Apollo products on terms substantially similar
to those set forth in the Agreement dated November 4, 1991 between Three D
Graphics, Inc. and Seller (the "EXISTING THREE D AGREEMENT"), and the Existing
Three D Agreement is modified appropriately to remove Apollo from the Existing
Three D Agreement. Buyer also agrees to use reasonable efforts to assist Seller
in negotiating reasonably requested revisions to the Distribution Agreement
between Seller and Healthcare Microsystems Inc. dated June 28, 1991, as amended
on December 15, 1992, which assistance shall include, upon Seller's request,
offering HCM to become a VAR for the Products on Buyer's standard terms and
eligibility requirements if Buyer makes VAR arrangements generally available for
the Products.
SECTION 4.21 Existing Agreement between Buyer and Seller. At the
Closing, Buyer and Seller agree to terminate the ISV Agreement dated May 20,
1993 between Buyer and Seller.
SECTION 4.22 Future Agreements. In the event Seller enters into any
material agreement between the date of this Agreement and the Closing that
relates primarily to the business conducted with the Assets, at the request of
Buyer, Seller agrees to include any such agreement within the Transferred
Agreements.
SECTION 4.23 Terradata Platform. Commencing upon Closing and for so
long as the Terradata database is commercially offered and Procter & Gamble uses
the Terradata database platform with Seller's Products, but in no event longer
than a period of six years after the Closing, Buyer agrees to support the
interface between the Terradata database platform and the Products for the
purpose of enabling Seller to engage in its business with Procter & Gamble.
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SECTION 4.24 Support. Notwithstanding the terms of the Update and
Support Agreement attached hereto as Exhibit A, Buyer and Seller agree that the
Nonstandard License Agreements that are subject to the terms of the Update and
Support Agreement are all those agreements listed on Attachment 2.7C(ii) of the
Seller Disclosure Schedule. Notwithstanding the foregoing sentence, Buyer and
Seller agree that the agreements marked with an "R" on Attachment 2.7C(ii) (the
"REJECTED AGREEMENTS"), and any of the agreements with Ameritech Services, Inc.,
Stop & Shop Company, Amoro, Bank of America National Trust and Savings
Association or Bankers Trust Company which are indicated in writing to Seller by
Buyer as being Rejected Agreements within ten (10) days after receipt by Buyer
of copies of such agreements, are not License Agreements for purposes of the
Update and Support Agreement. Support services with respect to the Rejected
Agreements shall be provided by Seller. In the event Seller wishes or is
required to provide updates under any such Rejected Agreement, Seller may
purchase such updates from Buyer for an annual fee equal to twenty five percent
(25%) of Buyer's standard technical support (i.e., update and technical support)
fees.
SECTION 4.25 Real Property Leases. Schedule 1.1(f) indicates which
consents to assignment of Real Property Leases have not been obtained.
Notwithstanding the other terms of this Agreement and any transfer document
entered into pursuant to this Agreement, each such Real Property Lease shall not
be assigned to Buyer until a consent to assignment is obtained. Upon Closing,
Buyer shall take possession of each such property and pay to Seller an
appropriately allocated portion of the amounts due under each such Real Property
Lease for the period during which Buyer is in possession of such property. If
Seller fails to obtain a consent to assignment with respect to any such Real
Property Lease during the one hundred twenty (120) day period following Closing,
Buyer shall have the right to vacate the premises relating thereto without any
such Real Property Lease having been transferred to Buyer, provided that Buyer
has provided reasonable cooperation to Seller to obtain such consents.
SECTION 4.26 Code Not Transferred. In the event Buyer becomes
obligated pursuant to an agreement in existence on the Closing Date to license a
version of the Product from Buyer that includes third party software which has
not been transferred to Buyer, Seller agrees to provide commercially reasonable
assistance to Buyer to either license the software directly from Seller to the
customer to the extent permitted by the third party owner of such software or
seek the authorization from the third party to allow Buyer to license the
software to the customer.
SECTION 4.27 Melbourne and Milano Leases. Seller and Buyer agree
that the Real Property Leases do not include the leases indicated on Schedule
1.1(f) as not transferring to Buyer. With respect to the Melbourne, Australia
and Milano, Italy leases listed on Schedule 1.1(f) (including the two automobile
leases relating to the Milano facility) that are not transferring to Buyer,
Buyer agrees to pay to Seller all of Seller's reasonably incurred costs
(including without limitation leasehold costs and all termination payments)
associated with Seller's termination of such leases, including without
limitation reasonable attorney's fees. Seller agrees that Buyer shall have the
right to participate in and/or lead and control the negotiations and terms for
the termination of such leases.
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SECTION 4.28 Use of Employees. Buyer agrees to make available to
Seller after the Closing the services of the Transferred Employees listed on
Schedule 4.28 attached hereto for the purpose of providing reasonable assistance
to Seller in (i) the preparation, analysis, and interpretation of the Closing
Date Balance Sheet, (ii) complying with Seller's obligations under Section
1.5(b), and (iii) the transition of the Assets and Assumed Liabilities from
Seller and the Seller Subsidiaries to Buyer and its subsidiaries. Seller agrees
to reimburse Buyer for such services an amount equal to a reasonable allocation
of Buyer's direct costs associated with employment of such Transferred
Employees; provided, however, that no such reimbursement will be required in
connection with any reasonable assistance by such employees relating to Seller's
obligations under Section 1.5(b).
SECTION 4.29 Consulting Agreements.
(a) Consulting Agreement. During the one year period following the
Closing, Buyer agrees to provide consulting services to customers of Seller as
an independent contractor to Seller. Such services shall be performed in
satisfaction of Seller's obligations to its customers under consulting
agreements which obligate Seller to perform consulting services after the
Closing and which were entered into by Seller on or prior to the Closing Date as
part of the business conducted with the Assets ("SELLER'S CONSULTING
CUSTOMERS"), but which consulting agreements are not transferring to Buyer as
part of the transactions contemplated by this Agreement. Such consulting
services shall be provided to Seller pursuant to the terms of Buyer's standard
form consulting agreement, a copy of which is attached hereto as Schedule 4.29,
except to the extent that this Section 4.29 conflicts with such agreement in
which case this Section 4.29 shall govern..
(b) Reimbursement. Seller agrees to compensate Buyer for the
services described in Section 4.29(a) above by paying monthly to Buyer an amount
equal to the consulting payments made to Seller for such services under the
agreements between Seller and the relevant Seller Consulting Customers. Buyer
and Seller agree to use reasonable efforts to cause Seller's Consulting
Customers to pay to Buyer all consulting payments required to be made under the
agreements between Seller and the Seller Consulting Customers. Seller agrees
that Buyer shall not be obligated to provide any consulting services for any
Seller Consulting Customer that has not made a required consulting payment to
Seller or Buyer within sixty days past its due date.
(c) New Agreements. Seller and Buyer agree to cooperate in
negotiating with Seller's Consulting Customers to cause the consulting
agreements between Seller and Seller's Consulting Customers to be terminated and
new consulting agreements entered into in replacement thereof between Buyer and
Seller's Consulting Customers on terms reasonably acceptable to Buyer..
(d) Information. Seller agrees that Buyer may retain copies of all
consulting agreements between Seller and Seller's Consulting Customers that come
into Buyer's possession as a result of the transfer of the Assets contemplated
by this Agreement. Each of Buyer and Seller agrees to provide to the other
copies of any consulting agreements between Seller and Seller's Consulting
Customers that are in its possession.
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(e) Limits on Services. Seller and Buyer agree that Buyer shall have
the right during the one hundred twenty day period following the Closing to
evaluate the agreements between Seller and Seller's Consulting Customers and the
related consulting projects and terms of engagement. At any time, but on only
one occasion during such one hundred twenty day period, Buyer shall have the
right to eliminate its obligations under this Section 4.29 to Seller with
respect to any Seller Consulting Customer so long as Buyer makes such
determination with respect to at least ten Seller Consulting Customers, or if
lower that ten, ten percent of Seller's Consulting Customers. If Buyer elects
to eliminate any such obligation as provided in the prior sentence, Seller shall
have the right during the thirty (30) day period following notification from
Buyer of such election to request Buyer to continue to perform such services
with respect to any or all of such Seller Consulting Customers and Buyer shall
perform such services in a manner that is consistent with Buyer's standard
consulting practices and at rates payable by Seller equal to Buyer's GSA rates,
subject to Buyer's right to restrict its obligations under this sentence at the
time of Seller's request to the extent Buyer does not have sufficient resources
available in the relevant geographic location as a result of Buyer's other
commitments.
SECTION 4.30 Certain Transferred Agreement. Seller and Buyer agree
that assignment of Seller's rights and obligations under the following agreement
shall only be effective to the extent that such assignment does not have the
legal effect of triggering a release of source code: the Software License and
Maintenance Agreement between Seller and Villeroy Bosch AG, dated September 28,
1994. In the event Seller is, for that reason, required to provide all or part
of the services required under either of such Transferred Agreements, Buyer
shall provide to Seller such of Buyer's resources as are reasonably necessary in
the circumstances to enable Seller to meet its obligations under such agreement.
For doing so, Buyer shall receive such part of the compensation derived from
such agreement as is commensurate with the resources provided by Buyer.
SECTION 4.31 Foreign Subsidiaries. Seller and Buyer agree that all
transfers of Assets and Assumed Liabilities in countries outside the United
States which will occur at Closing are intended to be effective as of Closing
and, as between Seller and Buyer and for purposes of this Agreement, shall be
treated as being effective as of Closing even if the laws of any such foreign
jurisdiction require a different result. To the extent the laws of any such
foreign jurisdiction require a different result, Seller and Buyer each will use
best efforts to effect such transfers in any such jurisdiction as soon as
practicable after Closing.
SECTION 4.32 Equipment Leases. Seller and Buyer agree to use
reasonable efforts after Closing to obtain all required consents to transfer the
Equipment Leases, or to modify existing equipment leases to which Seller is a
party for the purpose of allocating the equipment leases as appropriate between
Seller and Buyer. Seller and Buyer agree to share equally in the costs
associated with obtaining any such consents and any premiums associated with
early payoffs of such equipment leases as a result of any failure to obtain
consent.
SECTION 4.33 License to Develop, Operate, Market or Maintain
Programs. Seller hereby grants to Buyer, effective as of the Closing, a
perpetual, worldwide, unrestricted, non-exclusive, royalty-free, transferable
license to such intellectual property of Seller (other than the
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intellectual property of Seller being conveyed to Buyer under Sections 1.1(c)(i)
and (ii)), including, without limitation, the trademarks listed on Schedule
1.3(c) as may be necessary for Buyer to develop, operate, market or maintain all
or any part of the Products and Tools. Buyer hereby grants to Seller, effective
as of the Closing, a perpetual, worldwide, unrestricted, nonexclusive, royalty-
free, transferable license to the tools indicated on Schedule 1.1(b) and the
trademarks indicated on Schedule 1.1(c) as being licensed from Buyer to Seller.
Each of Buyer and Seller shall, and shall cause their respective subsidiaries
to, treat all intellectual property licensed to such party under this paragraph
in a manner consistent with the procedures utilized to protect their own
intellectual property of a like kind and nature.
ARTICLE V
EMPLOYEE MATTERS
SECTION 5.1 Transferred Employees.
(a) Offer of Employment. Subject to and in accordance with the
provisions of Article V, Buyer (or a subsidiary or subsidiaries of Buyer
designated by Buyer) will offer employment to no fewer than 600 of the
approximately 740 employees who are employed in the Division as of the date of
this Agreement (such approximately 740 employees are referred to as the
"DIVISION EMPLOYEES"). Seller has delivered to Buyer a list setting forth the
names, home addresses, compensation levels, stock option position, if any, and
job titles of all Division Employees; provided, however, that with respect to
Division Employees located outside of the United States, Seller shall not be
required to provide Buyer with such information in violation of applicable law,
regulation, employment agreement or restriction under agreements with trade
associations or workers' councils. Prior to the Closing, Buyer and it
subsidiaries, after notice to Seller as to the timing and method of contact,
shall have the right to contact the employees on such list (without consent of
country managers or other personnel of Seller or any Seller Subsidiary) for the
purposes of making offers of employment with Buyer (or a subsidiary or
subsidiaries of Buyer designated by Buyer) after the Closing Date and receiving
written acceptances of such employment (in each case contingent on consummation
of the transactions contemplated by this Agreement). Upon Closing, Buyer (or a
subsidiary or subsidiaries of Buyer designated by Buyer) shall hire all Division
Employees to whom it has made an offer in accordance with this Article V and who
accept such offer in the manner and within the time frame reasonably established
by Buyer. Each such employee who is employed by Seller or any Seller Subsidiary
on the Closing Date and who actually transfers to employment with Buyer (or a
subsidiary or subsidiaries of Buyer designated by Buyer) at or after the Closing
Date as a result of an offer of employment made by Buyer or any Buyer subsidiary
is hereafter referred to as a "TRANSFERRED EMPLOYEE." On a periodic basis
following the date hereof and prior to the Closing, Buyer shall advise Seller of
its intentions with respect to Division Employees it desires to extend or has
extended offers to and the general status of discussions with such employees.
Notwithstanding such periodic disclosures made to Seller, Buyer and its
subsidiaries shall not be obligated to hire such employees unless an offer of
employment is subsequently made to, and accepted by, the applicable Division
Employee.
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(b) Transition. The employment of the Transferred Employees by Seller
or any relevant Seller Subsidiary shall end at the close of business on the
Closing Date and the employment of the Transferred Employees by Buyer shall
commence at 12:01 a.m. on the day after the Closing Date, except as to those
Transferred Employees who are on disability leave of less than twenty-six (26)
weeks, authorized leave of absence or military service as of the Closing Date,
in which case such Transferred Employees shall remain employees of Seller or the
relevant Seller Subsidiary until, and will commence employment with Buyer as of,
12:01 a.m. on the date they return to active employment. Transferred Employees
shall not include any person on a disability leave of more than twenty-six (26)
weeks. The terms of employment with Buyer (or a subsidiary or subsidiaries of
Buyer designated by Buyer) shall be as mutually agreed to between each
Transferred Employee and Buyer (or a subsidiary or subsidiaries of Buyer
designated by Buyer), subject to the succeeding provisions of this Article V.
Between the date of this Agreement and the Closing Date, Seller or the relevant
Seller Subsidiary will provide each Employee with the same level of compensation
as that currently provided by Seller or the relevant Seller Subsidiary, unless
prohibited by applicable laws, regulations, employment agreements or
restrictions under agreements with trade associations or workers' councils.
(c) Retention of Employees Prior to Closing. Seller and the Seller
Subsidiaries agree to use reasonable efforts to (i) retain the Division
Employees as employees of the Division until the Closing Date, and (ii) assist
Buyer and its subsidiaries in securing the employment after the Closing Date of
those Division Employees to whom Buyer (or a subsidiary or subsidiaries of Buyer
designated by Buyer) makes offers of employment under subsection (a), provided,
however, that Seller shall not be required to incur any financial obligation
beyond continuing to pay for current employee compensation and benefits in
connection with the foregoing unless otherwise required by this Agreement, and
further provided that Seller shall not be restricted from terminating any
Division Employee for Cause if Buyer is advised a reasonable period of time in
advance of such action. Neither Seller nor any Seller Subsidiary shall transfer
any Division Employee to employment with Seller or any Seller Subsidiary outside
of the Division prior to the Closing or without the consent of Buyer. Seller
shall notify Buyer promptly if, notwithstanding the foregoing, any Division
Employee terminates employment with Seller or any Seller Subsidiary after the
date of this Agreement but prior to the Closing.
(d) Employees Other than Transferred Employees. Any Division
Employees who do not become Transferred Employees will remain employees of
Seller after the Closing. Any severance payments made to such employees
(collectively the "SEVERANCE PAYMENT AMOUNTS") shall be Seller's responsibility;
provided, however, that Buyer shall promptly reimburse Seller, after delivery to
Buyer of evidence of payment by Seller, for 50% of any such Severance Payment
Amounts, up to $750,000, with respect to those Division Employees whose
employment Seller elects to terminate, and with respect to whom Seller provides
Buyer and the employee written notice of the election to terminate within one
month after the Closing Date. For purposes of this Agreement, Severance Payment
Amounts include any severance payments made by Buyer or any subsidiary of Buyer
to any Division Employee that is not a Transferred Employee and that becomes an
employee of Buyer or any Buyer Subsidiary by operation of law or as a result of
the transactions contemplated by this Agreement. Any termination of employment
by Buyer or any subsidiary of Buyer that is commenced during the ninety (90) day
period after the
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Closing of any employee described in the prior sentence shall be deemed to be a
termination contemplated by this Agreement of employment with Seller or any
Seller Subsidiary under Section 8.2. Buyer agrees to use reasonable efforts to
minimize any Severance Payment Amounts paid to any such employee.
(e) United Kingdom. Notwithstanding the other terms of this Section
5.1, Seller and Buyer agree that the nineteen (19) Division Employees listed on
Schedule 5.1(e) shall be hired by Buyer (or a subsidiary or subsidiaries
designated by Buyer) for the ninety (90) day period after Closing. Buyer and
its subsidiaries shall have the option of retaining all or any portion of such
employees after such ninety day period or terminating any or all of such
employees effective at the end of such ninety day period. If the termination
process for any or all of such employees is commenced before the end of such
ninety (90) day period, all of such terminated employees shall not be considered
Transferred Employees for purposes of this Agreement. Further, any payments
made by Buyer (or any subsidiary or subsidiaries designated by Buyer) to any
such employee as a result of such termination shall be Seller's responsibility
and shall be considered Severance Payment Amounts for purposes of Section 5.1(d)
of this Agreement. With respect to any termination by Buyer (or any subsidiary
of Buyer) of any such employee on or prior to the ninetieth day after the
Closing Date, such termination shall be deemed to be a termination contemplated
by this Agreement of employment with Seller or any Seller Subsidiary under
Section 8.2. Buyer agrees to use reasonable efforts to minimize any Severance
Payment Amounts paid to any such employee.
SECTION 5.2 Compensation and Benefits of Transferred Employees.
(a) Immediately after Closing, Transferred Employees shall receive,
within Buyer's standard compensation plans, compensation substantially
comparable to the levels received prior to the Closing from Seller or any Seller
Subsidiary, except that each Key Employee will be offered and initially paid a
salary at least equal to that paid by Seller prior to the Closing. Transferred
Employees shall receive standard Buyer employee benefits for employees of
comparable status. Coverage for Transferred Employees under Buyer's benefit
plans and programs shall commence as of 12:01 a.m. on the day after the Closing
Date. Buyer shall give each Transferred Employee credit for such Transferred
Employee's years of most recent continuous service (including time during
approved leaves of absences of less than twenty-six (26) weeks) with Seller or
any Seller Subsidiary for purposes of determining participation and benefit
levels under all of Buyer's vacation policies and benefit plans and programs
(including, without limitation, Buyer's 401(k) Plan), unless otherwise
prohibited by law or the terms of any of Buyer's benefit plans and programs that
cannot be amended by action of the Board of Directors of Buyer alone, and
without limitations on coverage for pre-existing conditions, waiting period or
proof of insurability (except that proof of insurability may be required for
life insurance coverage exceeding $750,000).
(b) In the event that any Transferred Employee is terminated by Buyer
or any subsidiary of Buyer within six (6) months after the Closing Date, Buyer
or such subsidiary of Buyer shall pay the applicable Severance Payment Amount to
such Transferred Employee on a basis no less favorable than the severance
policies of Seller set forth in Schedule 5.1(d). In the
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event that such termination is for Cause, then Buyer (or its subsidiary) shall
be obligated to pay only the amounts required by applicable law.
(c) Buyer will provide relocation benefits consistent with its normal
employment practices for those Transferred Employees whom Buyer determines in
its sole discretion to relocate to satisfy business requirements.
(d) Buyer shall request that its medical and dental plan providers
give credit for calendar year 1995, at no cost to Buyer or the Transferred
Employee, for deductibles satisfied during calendar year 1995 by the Transferred
Employee or his or her covered dependents under the medical and dental plans of
Seller or any Seller Subsidiary in which such individuals were enrolled.
SECTION 5.3 Key Employees; Division. Buyer will offer employment
agreements to those key Division senior managers and engineers who are set forth
on Schedule 5.3 ("KEY EMPLOYEES"), including offering to employ Jeffrey Stamen
as Buyer's Senior Vice President of a new division to be formed by Buyer
relating to the Division. Such employment agreements shall be on terms
determined by Buyer and reasonably acceptable to Seller.
SECTION 5.4 Options; Bonus Program. Transferred Employees who hold
vested options to acquire Seller stock as of the Closing Date will be entitled
to exercise those options at or following the Closing Date in accordance with
the terms of the applicable stock option plans and agreements under which they
were issued. Buyer will grant Buyer stock options to Transferred Employees who
are Key Employees, and such other Transferred Employees as Buyer shall determine
in its sole discretion, in such amounts and on such terms as it determines in
its sole discretion. Seller has established a bonus program, which is described
in Schedule 5.4 hereto and which will be implemented by Seller at its expense.
SECTION 5.5 Other Employees of the Business. With respect to each
employee of the Division as of the Closing Date who is not a Transferred
Employee (each a "NON-TRANSFERRED EMPLOYEE"), Seller agrees to either terminate
such Non-Transferred Employee's employment with Seller or any Seller Subsidiary
prior to the Closing or offer such Non-Transferred Employee continued employment
with Seller or any Seller Subsidiary other than in the Division. Seller further
acknowledges that the Non-Transferred Employees shall not be employees of Buyer
after the Closing.
SECTION 5.6 No Right to Continued Employment or Benefits. No
provision in this Agreement shall create any third party beneficiary or other
right in any Person (including any beneficiary or dependent thereof) for any
reason, including, without limitation, in respect of continued employment (or
resumed employment) with Seller, any Seller Subsidiary or Buyer or in respect of
any benefits that may be provided, directly or indirectly, under any plan or
arrangement maintained by Seller, any Seller Subsidiary, Buyer or any subsidiary
of Buyer. Except as otherwise expressly provided in this Agreement, Buyer is
under no obligation to hire any employee of Seller or any Seller Subsidiary,
provide any Employee with any particular benefits, or
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make any payments or provide any benefits to those employees of Seller whom
Buyer chooses not to employ.
SECTION 5.7 No Solicitation or Hire by Buyer. In the event that the
Agreement terminates prior to Closing, then the restrictions imposed by this
Section 5.7 shall apply and shall survive the termination of this Agreement.
(a) Buyer will not solicit during the six month period after
termination of this Agreement any Division Employee for employment in the
products division of Buyer or any of its Affiliates. For purposes of this
Section 5.7, the term "SOLICIT" shall not include the following activities by
Buyer: (i) advertising for employment in any bulletin board (including
electronic bulletin boards), newspaper, trade journal or other publication
available for general distribution to the public; (ii) participation in any
hiring fair or similar event open to the public not targeted at Seller's
employees; (iii) use of recruiting or employee search firms that have been
instructed by Buyer not to target employees of the Division; and (iv)
negotiating with and/or offering employment to any Division Employee who
initially contacts Buyer or one of its Affiliates or who engages in discussions
with Buyer or one of its Affiliates as a result of any of the activities
included in clauses (i)-(iii). Buyer may employ any Division Employee provided
that neither it nor any of its Affiliates has solicited such Division Employee
in contravention of this Section 5.7.
(b) Buyer will not hire during the one year period after termination
of this Agreement any of the Key Employees in any capacity, whether as an
employee, consultant or otherwise.
ARTICLE VI
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer are subject to the fulfillment, prior to or
on the Closing Date, of each of the following conditions, all or any of which
may be waived by Buyer in writing, except as otherwise provided by law:
SECTION 6.1 Representations and Warranties True; Performance;
Certificate.
(a) The representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date with the same effect as though such representations and warranties had been
made or given again at and as of the Closing Date;
(b) Seller shall have performed and complied with all of its
agreements, covenants and conditions required by this Agreement to be performed
or complied with by it prior to or at the Closing Date;
(c) The conditions in set forth in this Article VI have been fulfilled
or satisfied, unless otherwise waived in writing by Buyer; and
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(d) Buyer shall have received a certificate, dated as of the Closing
Date, signed and verified by an officer of Seller on behalf of Seller and solely
in his or her capacity as an officer of Seller, certifying to the matters set
forth in Section 7.1(a)-(c).
SECTION 6.2 Consents. All consents required to transfer the
Transferred Agreements, the Equipment Leases and the Real Property Leases
identified on Schedule 6.2 to Buyer on the terms and conditions provided to
Seller, without change as a result of the transfer to Buyer, shall have been
obtained.
SECTION 6.3 Other Agreements. Seller shall have executed and
delivered each of the Agreements attached as exhibits hereto, including without
limitation the agreements reflected in EXHIBITS A THROUGH C hereto, and the VAR
Agreement, and such agreements shall remain in full force and effect.
SECTION 6.4 No Proceeding or Litigation.
(a) No preliminary or permanent injunction or other order shall have
been issued by any Governmental Entity, nor shall any statute, rule, regulation
or executive order be promulgated or enacted by any Governmental Entity which
prevents the consummation of the transactions contemplated by this Agreement.
(b) No suit, action, claim, proceeding or investigation before any
Governmental Entity shall have been commenced and be pending against Seller or
Buyer, or any of their respective Affiliates, associates, officers or directors,
seeking to prevent the sale of the Assets or asserting that the sale of the
Assets would be illegal or create liability for damages.
SECTION 6.5 Documents. This Agreement, any other instruments of
conveyance and transfer and all other documents to be delivered by Seller to
Buyer at the Closing and all actions of Seller required by this Agreement or
incidental thereto, and all related matters, shall be in form and substance
reasonably satisfactory to Buyer and Buyer's counsel.
SECTION 6.6 Governmental Filings. Seller and Buyer shall have made
the filing required pursuant to the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR ACT") and the Foreign Filings, with Governmental
Entities, and any approvals related thereto shall have been obtained or any
applicable waiting periods shall have expired. If a proceeding or review
process by a Governmental Entity is pending in which a decision is expected,
Buyer shall not be required to consummate the transactions contemplated by this
Agreement until such decision is reached or rendered, notwithstanding Buyer's
legal ability to consummate the transactions contemplated by this Agreement
prior to such decision being reached or rendered.
SECTION 6.7 No Material Adverse Change. There shall have been no
material adverse change in the financial condition, results of operations or
business of the business conducted with the Assets on the Closing Date as
compared with the date of this Agreement. For purposes of this Section 6.7, a
decline in revenues of less than 25% for the quarter ending June 30, 1995 as
compared to projected revenues of $19.64 million shall not by itself be deemed
to constitute a
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material adverse change in the financial condition or results of operations of
the business conducted with the Assets.
SECTION 6.8 Opinion of Seller's Counsel. Buyer shall have received
an opinion from Freeborn & Peters, dated as of the Closing Date, conforming in
form and substance to EXHIBIT D.
SECTION 6.9 Key Employees. A sufficient number of the Key Employees
shall have executed an employment agreement with Buyer in a form reasonably
acceptable to Buyer so as to permit Buyer to continue to operate the business
conducted with the Assets.
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller under this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following
conditions, all or any of which may be waived in writing by Seller, except as
otherwise provided by law.
SECTION 7.1 Representations and Warranties True; Performance.
(a) The representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date with the same effect as though such representations and warranties had been
made or given again at and as of the Closing Date;
(b) Buyer shall have performed and complied with all of its
agreements, covenants and conditions required by this Agreement to be performed
or complied with by it prior to or at the Closing Date;
(c) The conditions in set forth in this Article VII have been
fulfilled or satisfied, unless otherwise waived in writing by Seller; and
(d) Seller shall have received a certificate, dated as of the Closing
Date, signed and verified by an officer of Buyer on behalf of Buyer and solely
in his or her capacity as an officer of Buyer, certifying to the matters set
forth in Sections 7.1(a)-(c).
SECTION 7.2 Other Agreements. Buyer shall have executed and
delivered each of the Agreements attached as exhibits hereto, including without
limitation the agreements reflected in EXHIBITS A THROUGH C hereto, and the VAR
Agreement, and such agreements shall remain in full force and effect.
SECTION 7.3 No Proceeding or Litigation.
(a) No preliminary or permanent injunction or other order shall have
been issued by any Governmental Entity, nor shall any statute, rule, regulation
or executive order be
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promulgated or enacted by any Governmental Entity which prevents the
consummation of the transactions contemplated by this Agreement.
(b) No suit, action, claim, proceeding or investigation before any
Governmental Entity shall have been commenced and be pending against Seller or
Buyer, or any of their respective Affiliates, associates, officers or directors,
seeking to prevent the sale of the Assets or asserting that the sale of the
Assets would be illegal or create liability for damages.
SECTION 7.4 Documents. This Agreement, any other instruments of
conveyance and transfer and all other documents to be delivered by Buyer to
Seller at the Closing and all actions of Buyer required by this Agreement or
incidental thereto, and all related matters, shall be in form and substance
reasonably satisfactory to Seller and Seller's counsel.
SECTION 7.5 Governmental Filings. Buyer and Seller shall have made
the filing required pursuant to the HSR Act, the Foreign Filings and any other
required filings, other than any filings in foreign countries not involving a
Foreign Filing, with Governmental Entities, and any approvals shall have been
obtained or any applicable waiting periods shall have expired. If a proceeding
or review process by a Governmental Entity is pending in which a decision is
expected, Seller shall not be required to consummate the transactions
contemplated by this Agreement until such decision is reached or rendered,
notwithstanding Seller's legal ability to consummate the transactions
contemplated by this Agreement prior to such decision being reached or rendered.
SECTION 7.6 Opinion of Buyer's Counsel. Seller shall have received
an opinion from Buyer's counsel, Venture Law Group, dated as of the Closing
Date, conforming in form and substance to EXHIBIT E.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Survival of Representations and Warranties. The
representations and warranties of Seller in Article II and Buyer in Article III
shall survive for a period of one year after the Closing Date, and shall
thereafter automatically expire. No investigation, or knowledge acquired, by
Buyer or on behalf of Buyer with respect to any breach of any representation or
warranty made by Seller or any other matter shall affect Buyer's rights to
indemnification pursuant to this Article VIII.
SECTION 8.2 Indemnification by Seller. Seller shall indemnify and
hold harmless Buyer and its Affiliates and each of their officers, directors,
employees, agents, successors and assigns ("BUYER INDEMNITEES") for any and all
liabilities, losses, damages, claims, costs and expenses, interest, awards,
judgments and penalties (including, without limitation, legal costs and expenses
and interest on the amount of any Loss from the date suffered or incurred) (a
"LOSS") arising out of, resulting from or caused by:
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(a) any inaccuracy or misrepresentation in or breach of any of the
representations or warranties made by, or covenants or agreements of Seller
contained in this Agreement;
(b) except as specifically set forth in Article V, any claim arising
out of the termination, prior to the Closing or as contemplated by this
Agreement, of employment with Seller or any Seller Subsidiary by any employee of
Seller or any Seller Subsidiary; and
(c) except for liabilities assumed under Section 1.2, all liabilities
or obligations, including, without limitation, those relating to Taxes, (whether
known or unknown, accrued or not accrued, fixed or contingent) of Seller or any
Seller Subsidiary arising out of or resulting from the operation of the Division
prior to the Closing.
(d) any lack of authority of any person who executes any document on
behalf of Seller's subsidiaries organized outside of the United States, and any
violation of any law of any foreign country or other claim related thereto;
(e) any failure of any transfer of Assets or assumption of Assumed
Liabilities to become effective at Closing; and
(f) any claim by any Division Employee to any brokerage fee,
commission or finders fee in connection with the sale of the Assets contemplated
by this Agreement.
In addition, Seller shall indemnify Buyer for the difference between
the aggregate dollar amount of accounts receivable set forth on the Closing Date
Balance Sheet, net of the bad debt reserve included on the Closing Date Balance
Sheet, and the actual amount of such accounts receivable collected by Buyer
during the 365 day period following the Closing. Any such indemnification
payment shall be made by Seller to Buyer within thirty (30) days after Buyer's
presentation to Seller of a listing of such accounts receivable collected by
Buyer during such 365 day period. Upon such payment by Seller, Buyer shall
assign to Seller its remaining interest in the accounts receivable set forth on
the Closing Date Balance Sheet that remain uncollected. Seller's obligation to
indemnify Buyer under this Section 8.2 shall not be limited in time or amount;
provided, however, that any claim under Section 8.2(a) for any inaccuracy or
misrepresentation in or breach of any of the representations or warranties made
by Seller, must be made prior to the first anniversary of the Closing Date; and
provided further that Seller's aggregate liability for claims made solely for
breaches of representations and warranties under Section 8.2(a) shall not exceed
Fifty Two Million Dollars ($52,000,000); and provided further that Seller shall
have no liability for claims made solely for breaches of representations and
warranties under Section 8.2(a) until the aggregate amount of all claims made
under Section 8.2(a) by Buyer Indemnitees exceeds Five Hundred Thousand Dollars
($500,000), at which time Seller shall be liable for all such claims.
SECTION 8.3 Indemnification by Buyer. Buyer shall indemnify and hold
harmless Seller, each Seller Subsidiary and each of their officers, directors,
employees, agents, successors and assigns ("SELLER INDEMNITEES") for any and all
Losses arising out of or resulting from:
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(a) any inaccuracy or misrepresentation in or breach of any of the
representations or warranties made by, or covenants or agreements of Buyer
contained in this Agreement;
(b) a liability or obligation, including, without limitation, those
relating to Taxes, (whether known or unknown, accrued or not accrued, fixed and
determined or contingent) of Buyer, or any direct or indirect subsidiary or
transferee of Buyer to which all or any part of the business conducted with the
Assets is transferred, arising out of or resulting from the operation by Buyer
of the business conducted with the Assets on and after the Closing Date, other
than a liability or obligation for which any Buyer Indemnitee is entitled to
indemnification from Seller pursuant to the provisions of Section 8.2(a);
(c) any claim arising out of the failure of Buyer, or any direct or
indirect subsidiary of Buyer, to perform its obligations assumed pursuant to
Section 1.2 under the Transferred Agreements, Real Property Leases and Equipment
Leases; and
(d) any lack of authority of any person who executes any document on
behalf of Buyer's subsidiaries organized outside of the United States, and any
violation of any law of any foreign country or other claim relating thereto.
Buyer's obligation to indemnify Seller under this Section 8.3 shall
not be limited in time or amount; provided, however, that any claim under
Section 8.3(a) for any inaccuracy or misrepresentation in or breach of any of
the representations or warranties made by Buyer must be made prior to the first
anniversary of the Closing Date.
SECTION 8.4 Indemnification Procedure.
(a) Whenever any Loss shall be asserted against or incurred by a Buyer
Indemnitee or Seller Indemnitee (the "INDEMNIFIED PARTY"), the Indemnified Party
shall give written notice thereof (a "CLAIM") to Seller or Buyer, respectively
(the "INDEMNIFYING PARTY"). The Indemnified Party shall furnish to the
Indemnifying Party in reasonable detail such information as the Indemnified
Party may have with respect to the Claim (including in any case copies of any
summons, complaint or other pleading which may have been served on it and any
written claim, demand, invoice, billing or other document evidencing or
asserting the same). The failure to give such notice shall not relieve the
Indemnifying Party of its indemnification obligations under this Agreement.
(b) Any controversy involving only Buyer and Seller regarding whether
a Claim is properly chargeable in its entirety against the Escrow (as defined in
Section 8.5 below), under the terms of this Article VIII, where the amount of
the claim is liquidated, is less than $1.5 million, involves only a claim for
money damages, and does not relate to the ownership of any intellectual property
rights, shall be settled by binding arbitration administered by the American
Arbitration Association ("AAA") in accordance with its Commercial Arbitration
Rules and the Supplementary Procedures for Large, Complex Disputes, and judgment
upon the award rendered
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through arbitration may be entered in any court having jurisdiction thereof.
Such arbitration shall be held in Los Angeles, California, unless the parties
mutually agree in writing to change the location, before three neutral
arbitrators appointed in the manner prescribed in AAA Commercial Arbitration
Rule 13 from among the Los Angeles Panelists of the Large, Complex Dispute
Resolution Program Panel. The fees and expenses of the Arbitrator shall be borne
equally by Buyer and Seller. Each party shall be responsible for its own legal
fees and expenses for the proceeding.
(c) If the Claim is based on a claim of a person that is not a party
to this Agreement, the Indemnifying Party shall, at its expense, undertake the
defense of such Claim with attorneys of its own choosing reasonably satisfactory
to the Indemnified Party. In the event the Indemnifying Party, within a
reasonable time after receiving notice of a Claim from the Indemnified Party,
fails to defend the Claim, the Indemnified Party may, at the Indemnifying
Party's expense, undertake the defense of the Claim and may compromise or settle
the Claim, all for the account of the Indemnifying Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such Claim, the Indemnifying Party shall not be liable to the
Indemnified Party under this Section 8.4 for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof, except
for such expenses incurred in connection with cooperation with, or at the
request of, the Indemnifying Party; provided, however, that the Indemnified
Party shall have the right to employ counsel to represent it if, in the
Indemnified Party's reasonable judgment, based upon the advice of counsel, it is
advisable, in light of the separate interests of the Indemnified Party and the
Indemnifying Party, for the Indemnified Party to be represented by separate
counsel, and in that event the reasonable fees and expenses of such separate
counsel shall be paid by the Indemnifying Party.
(d) The Indemnifying Party shall not consent to entry of any judgment,
except with the consent of the Indemnified Party given in its sole discretion,
or enter into any settlement, except with the consent of the Indemnified Party,
which such consent shall not be unreasonably withheld or delayed. In the event
the Indemnified Party refuses to consent to the entry of a judgment or a
settlement for which Indemnifying Party is solely and entirely responsible and
has indicated its sole and entire responsibility in writing to the Indemnified
Party, following such refusal, the liability of the Indemnifying Party to the
Indemnified Party will be fixed at the amount of any money damages provided in
the proposed judgment or settlement.
SECTION 8.5 Escrow. Seller's obligation to indemnify the Buyer
Indemnitees pursuant to the provisions of Section 8.2 shall be secured by an
escrow account (the "ESCROW") established and maintained in accordance with the
provisions of the Escrow Agreement. Eight Million Dollars ($8,000,000) of the
Purchase Price otherwise payable to Seller at the Closing shall be contributed
to the Escrow and shall be distributed (together with earnings thereon) at the
time and in the manner set forth in the Escrow Agreement.
ARTICLE IX
TERMINATION
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SECTION 9.1 Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing:
(a) By mutual written consent of Buyer and Seller;
(b) By Buyer or Seller, if the Closing shall not have occurred on or
before August 15, 1995;
(c) By either party, if the other party shall become subject to the
jurisdiction of a court in a proceeding under Title 11 of the United States
Bankruptcy Code prior to the Closing; or
(d) By Buyer or Seller if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement.
SECTION 9.2 Procedure and Effect of Termination. In the event of
termination of this Agreement by any or all of the parties pursuant to Section
9.1 hereof, written notice thereof shall forthwith be given to each other party
specifying the provision hereof pursuant to which such termination is made and,
except for those terms of this Agreement which survive a termination, this
Agreement shall forthwith become void and there shall be no liability on the
part of the parties hereto (or their respective officers, directors, partners or
Affiliates), except as set forth in Section 9.3 below, as a result of any breach
of this Agreement by any party or to the extent a party is entitled to
indemnification under Article VIII.
SECTION 9.3 Reimbursement of Expenses. In the event that Closing of
the transactions contemplated by this Agreement does not occur because of a
failure of conditions precedent to Closing that are within the control of either
party to be fulfilled, then, in addition to any other remedies available, the
party having control over the fulfillment of such conditions precedent shall
reimburse the other party for its expenses incurred in connection with such
transactions, up to a maximum amount of $300,000.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"AFFILIATE" shall mean any Person controlling, controlled by or under
common control, with the relevant Person.
"CAUSE" shall mean (i) any act or failure to act in bad faith, (ii)
persistent unavailability for service, habitual neglect, misconduct or
dishonesty, or (iii) conviction of a crime (other than ordinary traffic
violations).
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"CPG ENTITIES" shall have the meaning assigned in the Technology
License Agreement.
"DATASERVER" means the Division software family of Products identified
under the heading DataServer on Schedule 1.1(a), or any derivative or successor
products, improvements or future versions thereof.
"GOVERNMENTAL ENTITY" shall mean any court, or any Federal, state,
municipal or other governmental authority, department, commission, board, agency
or other instrumentality (domestic or foreign).
"JOINT VENTURE" shall mean those entities identified as Seller
Affiliates in the Technology License Agreement, and all similar joint venture
companies formed in the future by Seller with the other parties to the joint
venture arrangement.
"PERSON" shall mean an individual, corporation, partnership, trust or
unincorporated organization or Governmental Entity.
"SELLER SUBSIDIARY" shall mean those direct and indirect
majority-owned subsidiary corporations of Seller.
"SYNDICATED PRODUCT MOVEMENT DATA" shall have the meaning assigned in
the Technology License Agreement.
"TECHNOLOGY" means and includes without limitation source code,
flowcharts, technical material or other related information.
SECTION 10.2 Certain Other Defined Terms.
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
AAA Section 8.4(b)
Accounts Receivable Section 4.16
Agreement Preamble
Antitrust Division Section 4.13(b)
Arbitrator Section 1.6(b)(iii)
Assets Section 1.1(a)
Assumed Liabilities Section 1.2
Books and Records Section 1.1(g)
Buyer Preamble
Buyer Indemnitees Section 8.2
Claim Section 8.4(a)
Closing Section 1.9
Closing Date Section 1.9
Closing Date Balance Sheet Section 1.6(b)(ii)
Code Section 1.7
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Current Assets Section 1.1(j)
Data Business Preamble
Division Preamble
Division Employees Section 5.1(a)
Documentation Section 1.1(h)
Equipment Leases Section 1.1(e) and listed in Schedule 1.1(e)
ERISA Section 1.4(e)
Escrow Section 8.5
Escrow Agreement Section 1.8, Exhibit C
Excluded Assets Section 1.3
Existing Three D Agreement Section 4.20
Foreign Countries Section 1.5(b)
Foreign Filings Section 4.13(a)
FTC Section 4.13(b)
HSR Act Section 6.6
Indemnified Party Section 8.4(a)
Indemnifying Party Section 8.4(a)
Initial List Section 4.13(a)
Intellectual Property Section 1.1(c) and listed in Schedule 1.1(c)
Key Employees Section 5.3
Licensors Agreements Section 2.7
Liens Section 2.6(b)
Long-Term Assets Section 1.1(j)
Loss Section 8.2
March 31 Balance Sheet Section 2.8
Net Book Value Section 1.6(b)(i)
Nonstandard License Agreements Section 2.7
Non-Transferred Employee Section 5.5
Notice Section 1.6(b)(iii)
Original Agreement Preamble
Permits Section 1.1(i)
Products Section 1.1(a) and listed in Schedule 1.1(a)
Proprietary Information and Section 2.10(a)
Inventions Agreement
Purchase Price Section 1.6(a)
Real Property Leases Section 1.1(f) and listed in Schedule 1.1(f)
Rejected Agreements Section 4.24
Results of Operations Information Section 2.8
Seller Preamble
Seller Disclosure Schedule Article II
Seller Distributors Section 4.17 and listed in Schedule 4.17
Seller Indemnitees Section 8.3
Seller Intellectual Property Section 1.3(c)(iii)
Seller Products Section 1.3(a)
Seller's Consulting Customers Section 4.29
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Seller Tools Section 1.1(b)
Severance Payment Amounts Section 5.1(d)
Standard License Agreement Section 2.7(a)
Subsidiary Transfer Documents Section 1.10
Tangible Assets Section 1.1(e) and listed in Schedule 1.1(e)
or the Closing Date Balance Sheet
Tax Assets Section 1.3(k)
Taxes Section 2.12
Technology License Agreement Section 1.8, Exhibit B
Terminated Distributor Agreement Section 4.17
Tools Section 1.1(b) and listed in Schedule 1.1(b)
Transferred Agreements Section 1.1(d) and listed in Schedule 1.1(d)
Transferred Employee Section 5.1(a)
Update and Support Agreement Section 1.8, Exhibit A
VAR Agreement Section 1.8
VAT Section 1.5(b)
401(k) Plan Section 2.13
</TABLE>
ARTICLE XI
GENERAL TERMS AND CONDITIONS
SECTION 11.1 Notices. Every notice or other communication required or
contemplated by this Agreement by either party shall be delivered by (i)
personal delivery, (ii) postage prepaid, return receipt requested, registered or
certified mail (airmail if available), or the equivalent of registered or
certified mail under the laws of the country where mailed, (iii) internationally
recognized express courier, such as Federal Express, UPS or DHL, (iv) "tested"
telex (a telex for which the proper answer back has been received), or (v)
facsimile with a confirmation copy sent simultaneously in the manner
contemplated by clauses (i), (ii) or (iii) of this Section 11.1, in each case
addressed to the party for whom intended at the following address:
(1) If to Seller:
Information Resources, Inc.
150 North Clinton Street
Chicago, Illinois 60661
Attention: General Counsel
Facsimile Number: (312) 726-1091
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With a copy to:
Thomas G. Fitzgerald, Esq.
Freeborn & Peters
311 South Wacker Drive, Suite 3000
Chicago, Illinois 60606
Facsimile Number: (312) 360-6571
(2) If to Buyer:
Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065
Attention: General Counsel
Facsimile Number: (415) 506-7114
With a copy to:
Donald M. Keller, Jr., Esq.
Venture Law Group
2800 Sand Hill Road
Menlo Park, California 94025
Facsimile Number: (415) 854-1121
or at such other address as the intended recipient previously shall have
designated by written notice to the other party. Notice by registered or
certified mail shall be effective on the date it is officially recorded as
delivered to the intended recipient by return receipt or equivalent, and in the
absence of such record of delivery, the effective date shall be presumed to have
been the sixth (6th) business day after it was deposited in the mail. All
notices and other communications required or contemplated by this Agreement to
be delivered in person or sent by courier shall be deemed to have been delivered
to and received by the addressee and shall be effective on the date of personal
delivery; notices delivered by "tested" telex or by facsimile with simultaneous
confirmation copy by registered or certified or equivalent mail or courier shall
be deemed delivered to and received by the addressee and effective on the date
sent. Notice not given in writing shall be effective only if acknowledged in
writing by a duly authorized representative of the party to whom it was given.
SECTION 11.2 Force Majeure. No party hereto shall be liable for failure
to perform, in whole or in material part, its obligations under this Agreement
if such failure is caused by any event or condition not existing as of the date
of this Agreement (unless reasonably foreseeable by such party) and not
reasonably within the control of the affected party, including without
limitation, by fire, flood, typhoon, earthquake, explosion, strikes, labor
troubles or other industrial disturbances, unavoidable accidents, war (declared
or undeclared), acts of terrorism, sabotage, embargoes, blockage, acts of
Governmental Entities, riots, insurrections, or any other cause
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beyond the control of the parties; provided, only, that the affected party
promptly notifies the other party of the occurrence of the event of force
majeure and takes all reasonable steps necessary to resume performance of its
obligations so interfered with.
SECTION 11.3 No Agency. This Agreement shall not constitute an
appointment of any of the parties hereto as the legal representative or agent of
any other party hereto nor shall any party hereto have any right or authority to
assume, create or incur in any manner any obligation or other liability of any
kind, express or implied, against, or in the name or on behalf of, the other
party hereto.
SECTION 11.4 Severability. In the event any provision of this Agreement
shall be determined to be invalid or unenforceable under applicable law, all
other provisions of this Agreement shall continue in full force and effect
unless such invalidity or unenforceability causes substantial deviation from the
underlying intent of the parties expressed in this Agreement or unless the
invalid or unenforceable provisions comprise an integral part of, or are
inseparable from, the remainder of this Agreement. If this Agreement continues
in full force and effect as provided above, the parties shall replace the
invalid provision with a valid provision which corresponds as far as possible to
the spirit and purpose of the invalid provision.
SECTION 11.5 Assignment and Succession. Except as expressly permitted
herein, no party may assign or otherwise transfer any rights, interests or
obligations under this Agreement without the prior written consent of the other
party, which consent may be withheld in the sole and absolute discretion of such
party for any reason whatsoever or for no reason and any attempted assignment in
violation of this provision shall be void and of no effect.
SECTION 11.6 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement or consent to any
departure by any party therefrom, shall in any event be effective without the
written concurrence of the other party hereto. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it is given. No notice to or demand on any party in any case shall entitle any
other party to any other or further notice or demand in similar or other
circumstances.
SECTION 11.7 Further Assurances. Each of the parties hereto agrees
that, from and after the Closing, upon the reasonable request of the other party
hereto and without further consideration, such party will execute and deliver to
such other party such documents and further assurances and will take such other
actions (without cost to such party) as such other party may reasonably request
in order to carry out the purpose and intention of this Agreement including but
not limited to the effective consummation of the transactions contemplated under
the provisions of this Agreement, the transfer of the Assets to Buyer, the
vesting in Buyer of title to the Assets in accordance with the provisions of
this Agreement, and the correction of errors and defects in any such documents.
SECTION 11.8 Absence of Third-Party Beneficiaries. No provisions of
this Agreement, express or implied, are intended or shall be construed to confer
upon or give to any Person other than the parties hereto, any rights, remedies
or other benefits under or by reason of
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this Agreement unless specifically provided otherwise herein, and except as so
provided, all provisions hereof shall be personal solely between the parties to
this Agreement.
SECTION 11.9 Governing Law. The validity, construction, performance and
enforceability of this Agreement shall be governed in all respects by the laws
of the State of Delaware, without reference to the choice-of-law principles
thereof.
SECTION 11.10 Interpretation. This Agreement, including any exhibits,
addenda, schedules and amendments, has been negotiated at arm's length and
between persons sophisticated and knowledgeable in the matters dealt with in
this Agreement. Each party has been represented by experienced and
knowledgeable legal counsel. Accordingly, any rule of law or legal decision
that would require interpretation of any ambiguities in this Agreement against
the party that has drafted it is not applicable and is waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
purposes of the parties and this Agreement.
SECTION 11.11 Entire Agreement. The terms of this Agreement and the
other writings referred to herein and delivered by the parties hereto are
intended by the parties to be the final expression of their agreement with
respect to the subject matter hereof and may not be contradicted by evidence of
any prior or contemporaneous agreement; provided, however, that the terms of a
certain confidentiality letter agreement, dated December 8, 1994, by and between
Seller and Buyer shall survive the execution and, if terminated, the termination
of this Agreement. The parties further intend that this Agreement, together
with the exhibits and schedules hereto, shall constitute the complete and
exclusive statement of its terms and shall supersede the Original Agreement.
The parties acknowledge and agree that this Agreement and exhibits and schedules
hereto constitute the agreements necessary to accomplish the transactions
contemplated by this Agreement and are parts of an integrated arrangement
between the parties with respect to the purchase and sale of the Assets and the
operation of the Division by Buyer after the Closing, and that separate
agreements have been used for the sake of convenience.
SECTION 11.12 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
SECTION 11.13 Expenses. Except as otherwise set forth in Article IX,
each of the parties agrees to pay its own expenses in connection with the
transactions contemplated by this Agreement, including without limitation legal,
consulting, accounting and investment banking fees, whether or not such
transactions are consummated.
SECTION 11.14 Consents. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing.
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<PAGE>
SECTION 11.15 Headings. The article and section headings contained in
this Agreement are for reference purposes only and will not affect in any way
the meaning or interpretation of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of Seller and Buyer as of the date first above
written.
INFORMATION RESOURCES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
ORACLE CORPORATION
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
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<PAGE>
EXHIBITS
--------
Exhibit A Update and Support Agreement
Exhibit B Technology License Agreement
Exhibit C Escrow Agreement
Exhibit D Seller's Counsel Opinion
Exhibit E Buyer's Counsel Opinion
SCHEDULES
---------
Schedule 1.1(a) Products
Schedule 1.1(b) Tools
Schedule 1.1(c) Intellectual Property Rights
Schedule 1.1(d) Transferred Agreements
Schedule 1.1(e) Tangible Assets and Equipment Leases
Schedule 1.1(f) Real Property Leases
Schedule 1.3(a) Seller Products
Schedule 1.3(b) Seller Tools
Schedule 1.3(c) Seller Intellectual Property Rights
Schedules 1.11(b)(i) Data Center Assets
Schedules 1.11(b)(ii) Asset Division Rules
Seller Disclosure Schedule
Schedule 4.7 Ancillary Agreement
Schedule 4.17 Seller Distributors
Schedule 4.19 Data Center Costs
Schedule 4.28 Employees to be Made Available to Seller
Schedule 4.29 Consulting Agreement
Schedule 5.1(d) Severance Policies
Schedule 5.1(e) United Kingdom Transition Employees
Schedule 5.3 Key Employees
Schedule 5.4 Employee Bonus Program
Schedule 6.2 Consents and Approvals Required to
Consummate Transactions
ATTACHMENTS
-----------
Attachment 2.6(B)(8) VAC Agreements
Attachment 2.7A License Agreements
Attachment 2.7B Standard License Agreement
Attachment 2.7C Provisions of Nonstandard License Agreements
Attachment 2.7D Versions to be Supported
Attachment 2.8A March 31 Balance Sheet
Attachment 2.8B Results of Operations
Attachment 2.10 Non-Competition Agreement
Attachment 2.12 Tax Matters
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EXHIBIT A
---------
UPDATE AND SUPPORT AGREEMENT
This Update and Support Agreement (the "AGREEMENT") is entered into as of
July 27, 1995, by and among Information Resources, Inc., a Delaware corporation
("SELLER"), and Oracle Corporation, a Delaware corporation ("BUYER").
WHEREAS, Seller and Buyer have entered into an Amended and Restated Asset
Purchase Agreement (the "PURCHASE AGREEMENT") dated as of June 12, 1995 which
provides for Seller to sell to Buyer, and Buyer to acquire and assume from
Seller, certain assets and liabilities of a division of Seller known as IRI
Software on the terms and conditions set forth in the Purchase Agreement (terms
bearing initial capital letters which are defined in the Purchase Agreement but
not herein shall have the meanings therein assigned); and
WHEREAS, the Purchase Agreement provides for Seller and Buyer to enter into
an agreement for Buyer to perform certain update and support services on behalf
of Seller to certain customers holding licenses to Products entitling them to
update and support services after the Closing Date.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties and covenants set forth hereinafter and
in the Purchase Agreement, the parties hereto agree as follows:
SECTION 1 Appointment and Acceptance. Seller hereby appoints Buyer, and
Buyer agrees to act, as Seller's exclusive agent to perform on Seller's behalf
the Update and Support Services (defined below) during the term of this
Agreement throughout the world. The Update and Support Services shall be
provided to (i) end user customers of Seller holding licenses to Products
entitling them to update and support services after the Closing Date and listed
on Attachment 2.7A to the Seller Disclosure Schedule as of the date of execution
of the Purchase Agreement or added to the Seller Disclosure Schedule after
execution and before the date hereof in accordance with the terms of the
Purchase Agreement, (ii) from the date of this Agreement to the date of
termination of the Terminated Distributor Agreements applicable to the relevant
Seller Distributors (such period as it relates to any particular Terminated
Distributor Agreement is referred to herein as the "TERMINATION PERIOD"), each
Seller Distributor to the extent such Update and Support Services relate to the
business conducted with the Assets, and (iii) after the Termination Period, end-
user customers of the Seller Distributors holding licenses entitling them to
update and support rights that are assigned to Seller under the terms of the
Terminated Distributor Agreements and that relate to the business conducted with
the Assets. (Such persons and licenses, to the extent such persons and licenses
relate to the Products and business conducted with the Assets, are hereinafter
referred to as "DIVISION CUSTOMERS" and "LICENSE AGREEMENTS.") In addition, the
parties acknowledge and agree that, to the extent that any of Seller's or Seller
Subsidiaries' License Agreements that relate to the business conducted with the
Assets and that are not listed on Attachment 2.7A to the Seller Disclosure
Schedule or Schedule
<PAGE>
4.17 of the Purchase Agreement are discovered or disclosed within sixty (60)
days after Closing, and such undisclosed licenses are Standard License
Agreements, or are in non-standard form but do not, individually or in the
aggregate, add to Buyer's costs for the provision of the Update and Support
Services (as defined in Section 2 below) other than in a de minimis respect,
such non-disclosed licenses shall be deemed to be "License Agreements" subject
to this Agreement. Except as otherwise provided in this Agreement and except for
VARs and Seller Distributors, to the extent permitted under the Technology
License Agreement and the VAR Agreement, Seller shall not, nor shall it engage
any other party to, perform the Update and Support Services with respect to the
Products.
SECTION 2 Update and Support Services.
(a) For purposes of this Agreement, the term "UPDATE AND SUPPORT
SERVICES" shall mean those basic level services for the Products described in
Buyer's standard support arrangements attached as ATTACHMENT 1, those services
described in the Seller Standard License Agreement, a copy of which is attached
in ATTACHMENT 2 and those services required under the other Nonstandard License
Agreements included in Section 2.7 of the Seller Disclosure Schedule to the
extent that such Nonstandard License Agreements are listed and the specific
nonstandard update and support services are described in the schedule attached
hereto as ATTACHMENT 3. In accordance with Section 2.7 of the Purchase
Agreement, Seller has provided Buyer with a list showing all the Division
Customers currently receiving update and support services from Seller including
the customer's name, address, contact name and telephone number.
(b) Buyer shall have no obligation to perform Update and Support
Services with respect to a Division Customer in any of the circumstances set
forth below in this Section 2(b), provided that (i) Buyer has identified such
customer to Seller in writing, (ii) Buyer has notified both Seller and the
customer of the problem identified below, (iii) the problem identified below has
been left uncured for thirty (30) days from the giving of such notice:
(i) where supported software code has been altered or modified,
other than in a manner authorized by a License Agreement described in
the Seller Disclosure Schedule;
(ii) where supported software is not properly licensed and
maintained at a revision level listed in Schedule 2(b) hereto or is not
used with at least the minimum required hardware and prerequisite software
specified in the applicable software product description; or
(iii) where services are required due to improper treatment or
use of the supported software.
Effective from the time Buyer's obligations to perform Update and Support
Services with respect to any Division Customer cease pursuant to this Section
2(b), Seller shall be entitled to retain or receive two-thirds of the update and
support revenue from the applicable License Agreement. Notwithstanding the
terms of this Section 2(b), Buyer shall be required to continue to provide
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<PAGE>
updates to any such Division Customer during the term of this Agreement to the
extent required under the terms of the applicable License Agreement.
(c) In the case of any License Agreement which requires Seller to
provide any services beyond those supported by Buyer under Section 2(a) above
("SPECIAL SERVICES"), Buyer shall provide such Special Services for no
additional compensation as long as the cost to Buyer of doing so is de minimis.
If, in Buyer's reasonable judgment, the cost of providing any Special Services
is not de minimis, then Buyer shall determine in its reasonable judgment the
price at which Buyer is willing to provide such Special Services, and notify
Seller of such Special Services and price. In such event, Seller, at its
option, shall elect (i) to have Buyer provide such Special Services with Seller
paying to Buyer the price determined by Buyer, or (ii) to perform the Special
Services itself. In the event Seller elects to perform the Special Services
itself, Buyer shall assign back to Seller that portion of the update and support
revenue derived from the applicable License Agreement which reasonably relates
to the value of the Special Services, considered in light of all the services
required by the License Agreement, and Buyer shall continue to provide only
those obligations with respect to the License Agreement as are required under
Section 2(a) above. Notwithstanding the other terms of this Agreement, in the
event Buyer becomes obligated under this Agreement to provide support services
to Division Customers with respect to software which has not been transferred to
Buyer, each such obligation shall be considered a "Special Service" and Seller
shall have the option of having Buyer perform such Special Service as provided
in this paragraph, and Buyer shall be obligated to perform such service, only if
Seller can provide Buyer with authorized access to the source code for such
software if Buyer is required to perform, and only to the extent Buyer is
required to perform, such Special Services.
(d) Buyer's obligations to deliver the Update and Support Services
under this Agreement shall commence upon execution and delivery of this
Agreement and shall terminate with respect to each Division Customer as provided
in Section 6(a) hereof, unless earlier terminated as provided in Sections 6(b)
or 6(c) hereof.
SECTION 3 Division Customer Conversions.
(a) It is understood that each of the License Agreements grants the
Division Customer a perpetual license, for a one-time paid-up license fee, to
use a Product. Each of the License Agreements separately entitles the Division
Customer to obtain specified Update and Support Services from Seller for payment
of certain ongoing fees to be paid annually thereafter.
(b) Upon execution of this Agreement, Buyer shall commence the process
of soliciting all Division Customers to terminate their existing arrangements
with Seller for the provision of update and support services and enter into new
arrangements with Buyer for the provision of update and support services. Such
agreements shall be on terms determined by Buyer in its sole discretion. Buyer
shall use commercially reasonable efforts to effect the conversion of all
Division Customers to such new update and support agreements within the one year
period following the execution of this Agreement. In the event requested by
Buyer, Seller will take any reasonable action permitted under any License
Agreement for which Update and Support Services are being performed under this
Agreement to terminate then existing update and support arrangements with
Seller.
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<PAGE>
(c) Effective upon the first anniversary of the Closing Date, Seller
hereby assigns to Buyer, and Buyer assumes, all of Seller's remaining
obligations to provide Update and Support Services under such of the License
Agreements as at that time have not been converted to Buyer update and support
arrangements.
SECTION 4 Royalty Assignment; Payment Terms.
(a) In consideration of the provision by Buyer of the Update and
Support Services to Seller, and pursuant to the terms of the Purchase Agreement,
Seller hereby assigns to Buyer all rights of Seller under the License Agreements
to receive payments of money from the Division Customers after the Closing for
update and support services. Seller shall retain all rights to update and
support revenue under Seller's support agreements that are not covered by this
Agreement.
(b) Promptly following the Closing, Seller shall notify all Division
Customers of the assignment of Seller's rights under the License Agreements and
direct that all further update and support payments due under the License
Agreements be made directly to Buyer in accordance with mailing instructions
given to Seller by Buyer at the time of execution of this Agreement. The form
of such notice to Division Customers shall be jointly agreed upon by Buyer and
Seller.
(c) All update and support payments received by Seller during the
first twelve calendar months following the Closing Date shall be paid by Seller
to Buyer within fifteen (15) days after the end of such month, without deduction
for taxes or any other charges or offsets. Thereafter, all update and support
payments received by Seller during each calendar quarter following the first
anniversary of the Closing Date shall be paid by Seller to Buyer within thirty
(30) days after the end of such quarter, without deduction for taxes or any
other charges or offsets.
(d) Within sixty (60) days after the end of each calendar quarter,
Seller shall provide Buyer with a compilation, including reasonably available
supporting documentation, if requested, of the actual update and support
payments received by Seller for License Agreements for such quarter. For this
purpose, Seller shall provide Buyer with reasonable access to the underlying
financial information in order for Buyer to confirm the accuracy of the amounts.
In the event such amount varied from the amount actually paid by Seller for the
months during such prior quarter, the next monthly payment owed by Seller to
Buyer shall be adjusted upward or downward to reflect such difference.
(e) After the Closing, Buyer shall be responsible for timely
preparation and distribution of invoices for update and support payment amounts
due from Division Customers under the License Agreements. Seller agrees to
provide reasonable assistance to Buyer in the preparation and distribution of
such invoices.
(f) In the event that Seller and Buyer disagree as to the amounts due
to Buyer under Section 4(a) through (d) above after Seller delivers its
compilation of payments received by Seller, then so much of the adjustment as
the parties do agree upon shall be taken into account in the next payment made
by Seller to Buyer. The correct amount of the remaining disputed portion
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of such adjustment, if any, shall be resolved by the parties promptly escalating
the dispute to the chief accounting officer for each of Seller and Buyer for
expeditious resolution. If such process does not achieve a resolution, the
correct amount of the remaining disputed portion of such adjustment, if any,
shall be resolved by Price Waterhouse, whose determination shall be final and
binding.
(g) Buyer shall provide Seller with detailed monthly invoices for all
Special Services provided during each month, showing for each customer for whom
Special Services were provided during the month, to the extent applicable, the
customer's name, address, a detailed description of the Special Services
provided to the customer, hours, rate, and such other identifying information as
Seller may from time to time reasonably request. Disagreements between the
parties as to amounts due shall be handled in accordance with the procedure
specified in Section 4(f) above.
SECTION 5 Objecting Customers. Notwithstanding the foregoing provisions
of this Agreement, for those Division Customers that object to having Buyer
provide Update and Support Services under such customer's License Agreement and
which require Seller to provide all such services, Buyer shall provide to Seller
such of the Update and Support Services as are reasonably necessary in the
circumstances to enable Seller to meet its obligations to such customers. In
the event Seller is required to provide all or part of the services required
under such License Agreements, Seller shall receive a commensurate part of the
support payments under such License Agreement. Disagreements between the
parties as to amounts due shall be handled in accordance with the procedure
specified in Section 4(f).
SECTION 6 Termination. This Agreement and the obligations hereunder of
each of the parties to the other shall terminate as follows:
(a) With respect to each Division Customer, upon the sooner to occur
of (i) execution by said customer of an update and support agreement with Buyer,
as contemplated by Section 3 hereof, or (ii) the first anniversary of the
Closing Date and the assignment and assumption as contemplated by Section 3(c);
(b) By mutual written consent of Seller and Buyer; and
(c) Upon a material default by either party in the performance of any
of its obligations to the other under this Agreement if such default is not
cured within 180 days after written notice thereof and written election to
terminate by the notifying party.
Notwithstanding the foregoing, the provisions of Section 2(b) and 2(c)
of this Agreement shall survive any termination of this Agreement.
GENERAL TERMS AND CONDITIONS
SECTION 7 Notices. Every notice or other communication required or
contemplated by this Agreement by either party shall be delivered by (i)
personal delivery, (ii) postage prepaid,
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return receipt requested, registered or certified mail (airmail if available),
or the equivalent of registered or certified mail under the laws of the country
where mailed, (iii) internationally recognized express courier, such as Federal
Express, UPS or DHL, (iv) "tested" telex (a telex for which the proper answer
back has been received), or (v) telefacsimile with a confirmation copy sent
simultaneously in the manner contemplated by clauses (i), (ii) or (iii) of this
Section 7, in each case addressed to the party for whom intended at the
following address:
(1) If to Seller:
Information Resources, Inc.
150 North Clinton Street
Chicago, Illinois 60661
Attention: General Counsel
Facsimile Number: (312) 726-1091
With a copy to:
Thomas G. Fitzgerald, Esq.
Freeborn & Peters
311 South Wacker Drive, Suite 3000
Chicago, Illinois 60606
Facsimile Number: (312) 360-6571
(2) If to Buyer:
Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065
Attention: Thomas Theodores, Vice President, Corporate Legal
Facsimile Number: (415) 506-7114
With a copy to:
Donald M. Keller, Jr., Esq.
Venture Law Group
2800 Sand Hill Road
Menlo Park, California 94025
Facsimile Number: (415) 854-1121
or at such other address as the intended recipient previously shall have
designated by written notice to the other party. Notice by registered or
certified mail shall be effective on the date it is officially recorded as
delivered to the intended recipient by return receipt or equivalent, and in the
absence of such record of delivery, the effective date shall be presumed to have
been the sixth (6th) business day after it was deposited in the mail. All
notices and other communications required or contemplated by this Agreement
delivered in person or sent by courier shall be
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deemed to have been delivered to and received by the addressee and shall be
effective on the date of personal delivery; notices delivered by "tested" telex
or by facsimile with simultaneous confirmation copy by registered or certified
or equivalent mail or courier shall be deemed delivered to and received by the
addressee and effective on the date sent. Notice not given in writing shall be
effective only if acknowledged in writing by a duly authorized representative of
the party to whom it was given.
SECTION 8 Force Majeure. No party hereto shall be liable for failure to
perform, in whole or in material part, its obligations under this Agreement if
such failure is caused by any event or condition not existing as of the date of
this Agreement (unless reasonably foreseeable by such party) and not reasonably
within the control of the affected party, including without limitation, by fire,
flood, typhoon, earthquake, explosion, strikes, labor troubles or other
industrial disturbances, unavoidable accidents, war (declared or undeclared),
acts of terrorism, sabotage, embargoes, blockage, acts of governmental entities,
riots, insurrections, or any other cause beyond the control of the parties;
provided, only, that the affected party promptly notifies the other party of the
occurrence of the event of force majeure and takes all reasonable steps
necessary to resume performance of its obligations so interfered with.
SECTION 9 Severability. In the event any provision of this Agreement
shall be determined to be invalid or unenforceable under applicable law, all
other provisions of this Agreement shall continue in full force and effect
unless such invalidity or unenforceability causes substantial deviation from the
underlying intent of the parties expressed in this Agreement or unless the
invalid or unenforceable provisions comprise an integral part of, or are
inseparable from, the remainder of this Agreement. If this Agreement continues
in full force and effect as provided above, the parties shall replace the
invalid provision with a valid provision which corresponds as far as possible to
the spirit and purpose of the invalid provision.
SECTION 10 Assignment and Succession. Except as expressly permitted
herein, no party may assign or otherwise transfer any rights, interests or
obligations under this Agreement other than to a wholly-owned subsidiary without
the prior written consent of the other party, which consent may be withheld in
the sole and absolute discretion of such party for any reason whatsoever or for
no reason and any attempted assignment in violation of this provision shall be
void and of no effect.
SECTION 11 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement or consent to any
departure by any party therefrom, shall in any event be effective without the
written concurrence of the other party hereto. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it is given. No notice to or demand on any party in any case shall entitle any
other party to any other or further notice or demand in similar or other
circumstances.
SECTION 12 Further Assurances. Each of the parties hereto agrees that
upon the reasonable request of the other party hereto and without further
consideration, such party will execute and deliver to such other party such
documents and further assurances and will take such other actions (without cost
to such party) as such other party may reasonably request in order to carry out
the purpose and intention of this Agreement.
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SECTION 13 Absence of Third-Party Beneficiaries. No provisions of this
Agreement, express or implied, are intended or shall be construed to confer upon
or give to any Person other than the parties hereto, any rights, remedies or
other benefits under or by reason of this Agreement unless specifically provided
otherwise herein, and except as so provided, all provisions hereof shall be
personal solely between the parties to this Agreement.
SECTION 14 Governing Law. The validity, construction, performance and
enforceability of this Agreement shall be governed in all respects by the laws
of the State of Delaware, without reference to the choice-of-law principles
thereof.
SECTION 15 Interpretation. This Agreement, including any exhibits,
addenda, schedules and amendments, has been negotiated at arm's length and
between persons sophisticated and knowledgeable in the matters dealt with in
this Agreement. Each party has been represented by experienced and
knowledgeable legal counsel. Accordingly, any rule of law or legal decision
that would require interpretation of any ambiguities in this Agreement against
the party that has drafted it is not applicable and is waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
purposes of the parties and this Agreement.
SECTION 16 Entire Agreement. The terms of this Agreement and the other
writings referred to herein and delivered by the parties hereto are intended by
the parties to be the final expression of their agreement with respect to the
subject matter hereof and may not be contradicted by evidence of any prior or
contemporaneous agreement. The parties further intend that this Agreement,
together with the exhibits and schedules hereto, shall constitute the complete
and exclusive statement of its terms. The parties acknowledge and agree that
this Agreement, the Purchase Agreement and exhibits and schedules hereto and
thereto constitute the agreements necessary to accomplish the transactions
contemplated by this Agreement and the Purchase Agreement and are parts of an
integrated arrangement between the parties with respect to the purchase and sale
of the Assets (as defined in the Purchase Agreement) and the operation of the
business conducted with the Assets (as defined in the Purchase Agreement) by
Buyer after the Closing Date.
SECTION 17 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument. Execution
and delivery of this Agreement by exchange of facsimile copies bearing the
facsimile signature of a party hereto shall constitute a valid and binding
execution and delivery of this Agreement by such party. Such facsimile copies
shall constitute enforceable original documents.
SECTION 18 Expenses. Each of the parties agrees to pay its own expenses
in connection with the transactions contemplated by this Agreement, including
without limitation legal, consulting, accounting and investment banking fees,
whether or not such transactions are consummated.
SECTION 19 Consents. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing.
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SECTION 20 Headings. The article and section headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
SECTION 21 Subsidiaries. For purposes of this Agreement, the term
"Seller" includes Information Resources, Inc. and each Affiliate of Information
Resources, Inc. that is a party to a License Agreement. For purposes of this
Agreement, the term "Buyer" includes Oracle Corporation and each Affiliate of
Oracle Corporation designated by Oracle Corporation in writing as included
within the term "Buyer." Each of Information Resources, Inc. and Oracle
Corporation agrees to cause each of its respective Affiliates that are included
within the definitions of Seller and Buyer to comply with the terms of this
Agreement.
SECTION 22 Definitions. Terms used herein bearing initial capital letters
and defined in the Purchase Agreement but not defined herein have the meanings
assigned in the Purchase Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of Seller and Buyer as of the date first above
written.
INFORMATION RESOURCES, INC.
By ____________________________________________
Edward S. Berger
Vice President
ORACLE CORPORATION
By ____________________________________________
David J. Roux
Senior Vice President, Corporate Development
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EXHIBIT B
---------
LICENSES-BACK AGREEMENT
between
INFORMATION RESOURCES, INC.
and
ORACLE CORPORATION
SIGNATURE PAGE
--------------
This Strategic Alliance and Licenses-Back Agreement (the "Agreement") is made by
and between ORACLE CORPORATION ("Oracle"), 500 Oracle Parkway, Redwood City,
California 94065, a Delaware corporation, and INFORMATION RESOURCES, INC.
("IRI"), 150 North Clinton Street, Chicago, Illinois, 60661, a Delaware
corporation.
AGREEMENT ACKNOWLEDGMENT
------------------------
The undersigned hereby acknowledge that they have read and that they fully
understand the terms of the attached Agreement, the terms and conditions of
which hereby are incorporated and acknowledged by this reference.
The undersigned hereby agree that by signing below they become parties to this
Agreement and agree to be bound by all terms, conditions, and obligations
contained herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the ___th day of July 1995 (the
"Effective Date").
ORACLE CORPORATION INFORMATION RESOURCES, INC.
By: __________________________ By: ___________________________
David J. Roux Edward S. Berger,
Senior Vice President Vice President
Corporate Development
EXECUTED IN DUPLICATE
- ---------------------
<PAGE>
EXHIBIT B
---------
LICENSES-BACK AGREEMENT
-----------------------
RECITALS
A. Oracle and IRI have entered into an Asset Purchase Agreement dated as
of June 12, 1995 (the "Asset Purchase Agreement") providing for the
purchase by Oracle of a portion of IRI's Software Division ("Division")
and certain related assets and liabilities (the "Transaction").
B. As part of the Transaction, IRI desires to license-back from Oracle
certain software technology and other intellectual property related to
the Division.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements,
representations, warranties and covenants hereinafter set forth, Oracle and IRI
agree as follows:
ARTICLE I
---------
DEFINITIONS
1.1. CPG ENTITIES
"CPG Entities" shall mean manufacturers, distributors, resellers, brokers, and
retailers that subscribe to or otherwise directly or indirectly purchase
Syndicated Product Movement Data services and that are engaged primarily in the
business of manufacturing or selling consumer packaged goods (such as food,
beverage and liquor, health and beauty care supplies, household products,
tobacco, and drug/pharmaceutical products) which are sold primarily in or by
mass merchandisers, grocery stores, drug stores, convenience stores, pet stores
and/or club stores. For purposes of this Section 1.1, the parties agree that all
customers of IRI as of the Effective Date listed on Schedule 1.1 shall be
considered CPG Entities, regardless of whether each entity on Schedule 1.1 fits
within the scope of the first sentence of this Section 1.1. IRI shall list the
names of CPG Entities that become customers of IRI after the Effective Date by
providing written notice thereof to Oracle on a quarterly basis. IRI shall
specify the divisions (if applicable) of the CPG Entities that are Sublicensees
of the Programs, including customers of its Timesharing Business, under this
Agreement.
1.2. DATABASE AND APPLICATIONS VENDORS
"Database and Applications Vendors" shall mean any entities that develop,
license to third parties and distribute general purpose database or applications
software in the ordinary course of business, such as IBM, Sybase, Informix,
Computer Associates, Microsoft, SAP, Baan, SAA, Peoplesoft, and their successor
companies.
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1.3. DATASERVER SUPPORT MATERIALS
"DataServer Support Materials" shall mean the fourth generation language Source
Materials stripped of any comments, written in Express language, for DataServer
and Analyzer, that is provided to IRI Sublicensees to enable them to internally
diagnose the software, make internal corrections, modify the software for
compatibility with other systems, and make other internal modifications to the
software to meet their particular needs. DataServer Support Materials do not
include, and shall not include, Source Materials for the Express platform
software.
1.4. DISTRIBUTOR
"Distributor" shall mean a third party, including any IRI subsidiary and IRI
Affiliate, that is appointed by IRI or its Distributor to market and Sublicense
Programs under the terms of this Agreement. The term "Distributor" shall
include, but not be limited to, resellers, original equipment manufacturers,
value added relicensors, dealers, agents, and subdistributors.
1.5. DOCUMENTATION
"Documentation" shall mean the written reference materials (in printed and
machine-readable form) to be furnished in conjunction with a software product
including, without limitation, instructions and end user guides.
1.6. INTERNAL USE
"Internal Use" shall mean the right to reproduce, install and use the Programs
on any and all internal systems only for IRI's (and that portion of the IRI
Affiliates' own business which is strictly engaged in providing Syndicated
Product Movement Data and related services) internal data processing operations,
and internal product development and support.
1.7. SYNDICATED PRODUCT MOVEMENT DATA
"Syndicated Product Movement Data" shall mean the following types of data which
as of the Effective Date are sold by IRI and A.C. Nielsen Company in the United
States and substantially similar data sold by substantially similar entities
outside the United States: (i) data relating to the sale and movement of
consumer packaged goods (such as food, beverage and liquor, health and beauty
care supplies, household products, tobacco, and drug/pharmaceutical products)
whether collected by manual store audit, electronic scanners, or other means and
collected from mass merchandisers, grocery stores, drug stores, convenience
stores, pet stores and/or club stores, and (ii) panel data collected from
samples of individual households.
1.8. IRI
"IRI" shall mean IRI and any other corporation, joint venture, partnership,
firm, association, trust or any other entity in which IRI, directly or
indirectly, holds a fifty percent (50%) or more ownership interest of such
entity.
1.9. IRI AFFILIATE
"IRI Affiliate" shall mean the joint ventures entities listed in Schedule 1.9
(i) in which IRI holds less than a fifty percent (50%) ownership interest and
(ii) which are engaged in the business of
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providing Syndicated Product Movement Data and related services. Upon Oracle's
written consent, which consent shall not be unreasonably withheld, IRI may add
such future joint ventures to Schedule 1.9. The foregoing notwithstanding, IRI
may add such a future joint venture without Oracle's written consent if IRI
holds at least a fifteen percent (15%) ownership interest in such joint venture.
1.10. OBJECT MATERIALS
"Object Materials" shall mean all materials, in machine-readable form, necessary
to run a Program. Object Materials include, without limitation, the executable
software code, and as required for some functions, the help, message, and
overlay files. Object Materials shall be deemed to include all Documentation as
defined in Section 1.5 herein.
1.11. ORACLE
"Oracle" shall mean Oracle and any other corporation, joint venture,
partnership, firm, association, trust or any other entity in which Oracle,
directly or indirectly, holds a fifty percent (50%) or more ownership interest
of such entity.
1.12. PROGRAMS
"Programs" shall mean the Object Materials form of the computer software
products listed in Schedule 1.12 (in particular, Express, Data Server and
Analyzer) in IRI's possession on the Effective Date, and the logical successor
products thereto.
1.13. QSCAN
"QScan" shall mean the suite of products, including DataServer, Express and PC
Express, required to run DataServer, used solely for the purposes of analyzing
mass merchandisers, grocery stores, convenience stores, drug stores, pet stores
and/or club stores Product Movement Data, along with other associated data
collected by mass merchandisers, grocery stores, drug stores, convenience
stores, pet stores and/or club stores, and exchanged for data for use in IRI's
and IRI Affiliates' Syndicated Product Movement Data databases in lieu of fees
or other consideration as payment.
1.14. SOURCE MATERIALS
"Source Materials" shall mean the complete source code from which object code is
compiled, together with internal system documentation, used for a software
product or technology. Source Materials shall include, without limitation, the
complete fully commented source code, as well as all other materials, in both
machine readable and hard-copy form which are used to build or test the
Programs, and shall exclude any software tools actually used to build,
translate, localize or test the Source Materials, except to the extent necessary
and as reasonably requested by IRI to make use of the source code provided
pursuant to this Agreement, but only if IRI is unable to obtain such tools from
a third party and Oracle has the contractual rights to provide any such third
party tools. As used herein, the term "fully commented source code" shall mean
source code that includes all comments that have been made by or for a party.
Source Materials shall include the existing electronically readable source
documentation, help materials, tutorial programs, and other Documentation,
appropriate debug code, and all translations and localizations owned by Oracle,
and porting kits and all port-specific source code.
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1.15. SUBLICENSE/SUBLICENSEE
"Sublicense" shall be any end user license granted by IRI or by its Distributors
for use of the Programs. "Sublicensee" shall be a party who is granted a
Sublicense, either directly by IRI or indirectly by a Distributor.
1.16. TIMESHARING BUSINESS
"Timesharing Business" shall mean that portion of IRI's business in which
Sublicensees access Syndicated Product Movement Data service databases that are
maintained by IRI or IRI Affiliates on IRI's or IRI Affiliates', as may be
applicable, CPUs. As part of the Timesharing Business, IRI and IRI Affiliates
allow their respective customers to use DataServer solely for the purpose of
manipulating and preparing reports from and analyses of (or have such reports
and analyses prepared on their behalf) Product Movement Data accessed through
such IRI and IRI Affiliates databases.
1.17. UPDATES
"Updates" shall mean enhancements, improved releases, new versions, and
generally available bug fixes which generally are made available at no
additional charge to Oracle customers who purchase Oracle technical support
services.
ARTICLE II
----------
LICENSES-BACK OF PRODUCTS TO IRI BY ORACLE
2.1. TERMS OF LICENSES-BACK
2.1.A. PROGRAM LICENSES.
Oracle hereby grants IRI the following nonexclusive, worldwide, perpetual
licenses to the Programs, subject to payment of the fees set forth in Article
III:
(i) license to promote, market, reproduce, Sublicense and
distribute Object Materials versions of the Programs, and in
connection therewith DataServer Support Materials, to CPG
Entities for use in accessing, analyzing or manipulating data
principally comprised of Syndicated Product Movement Data;
(ii) license to IRI and IRI Affiliates' to use Object Materials
versions of the Programs, and in connection therewith DataServer
Support Materials, in IRI and IRI Affiliates' Timesharing
Business;
(iii) license to use Object Materials versions of the Programs and
DataServer Support Materials for IRI's and IRI Affiliates'
Internal Use; and
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(iv) license to IRI and IRI Affiliates to use DataServer, Express, and
DataServer Support Materials for QScan.
2.1.B. Scope of Sublicensing Rights.
IRI's Sublicensing rights under this Agreement also shall include the right, for
itself and through its Distributors, to:
(i) for Sublicenses granted, make and deliver to the Sublicensee
Object Materials copies of the Programs and DataServer Support
Materials, in accordance with Section 2.1.A above;
(ii) reproduce and use the Programs to provide training and technical
support to its Sublicensees;
(iii) reproduce and use the Programs for demonstrations to third
parties and for preparing documentation and marketing,
promotional and other materials to further IRI's marketing and
distribution efforts under this Agreement;
(iv) reproduce and use the Programs to the extent necessary for
marketing, supporting, distributing and using the Programs and
for safekeeping and archival purposes; and
(v) grant, at no charge, trial Sublicenses for a reasonable period of
time so that IRI's prospective Sublicensees and Distributors may
have the opportunity to evaluate the Programs.
2.1.C. DISTRIBUTORS.
Oracle grants IRI the right to appoint Distributors and to Sublicense such
Distributors to promote, market, reproduce and grant Sublicenses of the Programs
licensed to IRI pursuant to Sections 2.1.A(i) under the terms of this Agreement.
IRI shall have the right to grant Distributors the right to appoint other
Distributors to promote, market, reproduce and grant Sublicenses only in
accordance with the scope of the rights granted to IRI hereunder.
Notwithstanding anything in this Agreement to the contrary, IRI shall not
appoint Database and Applications Vendors to promote, market, reproduce,
Sublicense and distribute to other entities any of the Programs for a period of
six (6) years from the Effective Date.
2.1.D. Trademarks
Oracle hereby grants IRI and its Distributors a nonexclusive license to use in
connection with Sublicensing the Programs pursuant to Sections 2.1.A the product
name(s) and trademarks for the Programs used by Oracle for the Programs from
time to time, including without necessarily limiting the same, the product
name(s) and trademarks listed in Schedule 2.1.D hereto. Nothing in this
Agreement confers upon IRI any right to use any other Oracle trademark, trade
name or service mark in connection with any product, service, promotion or
publication.
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<PAGE>
IRI's use of Oracle's trademarks shall be in compliance with Oracle's trademark
policies and procedures in effect from time-to-time. IRI agrees not to use the
Trademark "ORACLE", or any mark beginning with the letters "Ora," or any other
mark likely to cause confusion with the trademark "ORACLE" as any portion of
IRI's tradename or trademark for IRI's products. IRI shall have the right to
use the trademark "ORACLE" solely to refer to the Programs and related services.
IRI agrees with respect to each registered trademark of Oracle, to include in
each advertisement, brochure, or other such use of the trademark, the trademark
symbol "circle R" and the following statement:
_______ is a registered trademark of Oracle Corporation, Redwood City,
California
Unless otherwise notified in writing by Oracle, IRI agrees, with respect to
every other licensed trademark of Oracle, to include in each advertisement,
brochure or other such use of the trademark, the symbol "TM" and the following
statement:
_______ is a trademark of Oracle Corporation, Redwood City, California
IRI shall not market the Programs in any way which implies that the Programs are
the proprietary product of IRI or of any party other than Oracle. Oracle shall
not have any liability to IRI for any claims made by third parties relating to
IRI's use of Oracle's trademarks.
2.1.E. REQUIRED PROVISIONS OF SUBLICENSES.
Each Sublicense granted by IRI or by its Distributors must be in written form,
whether executed by the Sublicensee or deemed accepted through a "shrink wrap"
or "on-line" agreement. IRI and its Distributors shall use the same or
equivalent agreements for Sublicensing the Programs as they do for licensing IRI
applications software products; provided, however, that each such Sublicense
agreement shall have at a minimum the terms (or substantially similar terms) set
forth in Schedule 2.1.E hereto.
2.2. SOURCE MATERIALS LICENSE
IRI shall have the right to retain Source Materials versions of DataServer and
Analyzer in such form as they exist on the Effective Date and Oracle shall
provide Source Materials versions of Updates (including new versions for which
Oracle charges its customers who purchase Oracle technical support services) to
IRI as they become available. IRI shall have a license to use Source Materials
versions of DataServer and Analyzer to (i) develop and maintain IRI applications
software products and to support IRI's Sublicensees; (ii) modify, edit, format,
translate, create works based on and otherwise change the Source Materials
versions of Data Server and Analyzer ("Source Modifications"); and (iii) subject
to payment of Sublicense Fees for the Programs, to promote, market, reproduce,
Sublicense and distribute Object Materials versions of the Source Materials
versions of Data Server and Analyzer to CPG Entities, including customers of
IRI's Timesharing Business and QScan, for use in accessing, analyzing or
manipulating data principally comprised of Syndicated Product Movement Data.
IRI shall own all right, title and interest ("Intellectual Property Rights") to
the Source Modifications. Except as set forth below, IRI
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hereby grants Oracle a royalty-free, paid-up, nonexclusive, worldwide, perpetual
license to promote, market, reproduce, Sublicense, and distribute such Source
Modifications and all Intellectual Property Rights thereto for use in or with
all or any portion of Oracle's software products and for its own Internal Use
purposes. IRI shall provide Source Materials versions of any Source
Modifications to Oracle as soon as practicable but in no event later than when
they are first made available to any Sublicensee or Distributor; provided,
however, that IRI shall not provide Oracle with, and Oracle shall have no
license thereto, any Source Modification that would result in a breach of
Section 2 of the Ancillary Agreement to the Asset Purchase Agreement if Oracle
incorporated such Source Modifications into Oracle products and/or marketed and
distributed such Source Modifications. Oracle shall have no obligation to
provide technical support services to IRI or its Sublicensees and Distributors
for Source Modifications, unless otherwise mutually agreed in writing by the
parties.
2.3. DISCONTINUED PROGRAMS
In the event that Oracle removes a Program from its price list and ceases to
provide technical support services for such Program (the "Discontinued
Program"), then IRI shall have the right to obtain the Source Materials for such
Discontinued Program for the following purposes: (i) for Internal Use (ii) to
provide support to Sublicensees of the Discontinued Program, (iii) to modify,
edit, format, translate, create works based on and otherwise change the
Discontinued Program ("IRI Modifications"), and (iv) subject to payment of the
fees set forth in Section 3.4, to promote, market, reproduce, Sublicense and
distribute Object Materials versions of the Discontinued Program to Distributors
and Sublicensees, including customers of IRI's Timesharing Business and QScan,
for use in accessing, analyzing or manipulating data principally comprised of
Syndicated Product Movement Data. IRI shall own all right, title and interest
in any Intellectual Property Rights to the IRI Modifications. Except as set
forth below, IRI hereby grants Oracle a royalty-free, paid-up, nonexclusive,
worldwide, perpetual license to promote, market, reproduce, Sublicense, and
distribute such IRI Modifications and all Intellectual Property Rights thereto
for use in or with all or any portion of Oracle's software products and for its
own Internal Use purposes. IRI shall provide Source Materials versions of any
IRI Modifications as soon as practicable but in no event later than when they
are first made available to any other licensee or Distributor; provided,
however, that IRI shall not provide Oracle with, and Oracle shall have no
license thereto, any IRI Modification that would result in a breach of Section 2
of the Ancillary Agreement to the Asset Purchase Agreement if Oracle
incorporated such IRI Modifications into Oracle products and/or marketed and
distributed such IRI Modification. Oracle shall provide IRI with written notice
of its intent to discontinue technical support for Express and/or DataServer
pursuant to Section 5.2.D, and shall provide IRI with Source Materials therefor
promptly following such notice.
2.4. INTELLECTUAL PROPERTY RIGHTS
Oracle further grants IRI a worldwide, nonexclusive, nontransferable and paid-up
license to all Intellectual Property Rights necessary to use the Programs; such
Intellectual Property Rights are included in the licenses granted to IRI under
this Agreement. Other than as licensed herein, Oracle shall retain all right,
title and interest in any Intellectual Property Rights in the Programs.
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2.5. MARKETING AND PRICING
Except as expressly specified in this Agreement, IRI shall have no obligation to
market the Programs. IRI shall have full freedom and flexibility in the design
and implementation of its marketing efforts, and IRI may discontinue any of its
marketing efforts at any time. In addition, IRI shall be free to determine
unilaterally its pricing schedules for Sublicenses of the Programs.
2.6. ONGOING COOPERATION EFFORTS
For a period of three (3) years following the Effective Date, Oracle shall
support, maintain and enhance the Express Platform, DataServer, and Analyzer.
For a period of six (6) years following the Effective Date, the parties will
work together on an ongoing basis to coordinate development and compatibility
between their products to the extent commercially practicable and to develop and
enhance gateway technology to provide more seamless consistency between other
Oracle products and the Programs.
ARTICLE III
-----------
FEES AND PAYMENTS
3.1. ROYALTY-FREE INITIAL THREE YEAR PERIOD
During the three (3) year period following the Effective Date, the Program
licenses granted to IRI in Section 2.1.A, and IRI Affiliates in Sections
2.1.A.(ii), 2.1.A.(iii), and 2.1.A(iv), including the right to receive Updates
(including new versions for which Oracle charges its customers who purchase
Oracle technical support services) thereto, shall be royalty-free licenses.
3.2. SUBLICENSE FEES FOR YEARS FOUR THROUGH SIX
3.2.A. Sublicense Fee Rates.
Beginning on July _, 1998 and ending on July _, 2001 (the "Transition Period"),
IRI shall pay Oracle a fee equal to the lesser of fifty percent (50%) of
Oracle's standard commercial list price and the MFC Option (as hereinafter
defined) for the Programs Sublicensed by IRI and its Distributors pursuant to
Section 2.1.A.(i).
3.2.B. Timesharing Business License Fees.
During the Transition Period, IRI shall pay Oracle a license fee equal to the
lesser of fifty percent (50%) of Oracle's standard commercial list price and the
MFC Option (as hereinafter defined) for the Programs used in IRI's and IRI
Affiliates' Timesharing Business in excess of the copies and/or users identified
on the Timesharing List (as hereinafter defined). For purposes of calculating
the license fees applicable to IRI's and IRI Affiliates' Timesharing Business,
the Timesharing Business shall be treated as a single enterprise system and each
employee and consultant of a IRI and IRI Affiliates customer provided access to
the Timesharing Business shall be deemed a user of the system. On July __,
1998, IRI agrees to provide Oracle with a listing of the Programs and number of
users by Customer (i.e., the parties will work together to put in place a
procedure by
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July __, 1998 for identifying computers and numbers of users per computer on
which the Programs are installed, as appropriate and in accordance with Oracle's
general policies) as installed and in use in IRI's Timesharing Business (the
"Timesharing List"). It is expressly understood that IRI and IRI Affiliates may
substitute users within a customer account, but not from one customer account to
another customer account.
3.2.C. Internal Use License Fees.
On July ___, 1998, IRI agrees to provide Oracle with a listing of the Programs
and number of users (i.e., the parties will work together to put in place a
procedure by July __, 1998 for identifying computers and number of users per
computer on which the Programs are installed, as appropriate and in accordance
with Oracle's general policies) as installed and for Internal Use pursuant to
Section 2.1.A(iii) (the "Internal Use List"). During the Transition Period, IRI
and IRI Affiliates may purchase the Programs from Oracle subject to the payment
of a license fee equal to the lesser of fifty percent (50%) of Oracle's standard
commercial list price and the MFC Option (as hereinafter defined) for each copy
and/or user of the Programs in excess of the copies and/or users identified on
the Internal Use List.
3.2.D. Updates and New Versions.
During the Transition Period, IRI shall be entitled to receive Updates
(including new versions of the Programs for which Oracle charges its customers
who purchase Oracle technical support services) for an annual fee equal to fifty
percent (50%) of one-half of the standard technical support (i.e., Update and
technical support) fee charged by Oracle; provided, however, that IRI shall pay
a fee equal to the lesser of fifty percent (50%) of Oracle's standard commercial
list price and the MFC Option (as hereinafter defined) for Sublicenses made
pursuant to Section 2.1.A (i) of new versions for which Oracle charges its
customers who purchase Oracle technical support services.
3.2.E. Most Favored Customer Option.
During the Transition Period, if Oracle enters into an agreement with a value
added reseller of the Programs which contains pricing terms for that particular
year for comparable volume commitments that as a whole are more favorable to
such value added reseller than the pricing terms provided herein to IRI, then
IRI shall have the option (the "MFC Option") of entering into an agreement with
Oracle on terms substantially similar to those granted to such reseller for that
particular year. This provision shall not apply to single system integration
deals or other agreements that do not grant general reseller rights.
3.3. FEES FOR YEARS SEVEN AND BEYOND
On July __, 2001, the fees and the MFC Option set forth in Section 3.2
automatically shall terminate. Thereafter, commercial rates as may be
negotiated between the parties shall apply to all new licenses of Programs and
technical support services purchased by IRI after July __, 2001.
3.4. DISCONTINUED PROGRAMS LICENSE FEES
Notwithstanding any other provision of this Agreement, after the Transition
Period, IRI's right to Sublicense Object Materials copies of Discontinued
Programs pursuant to Section 2.3 shall be
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subject to the payment of a fee equal to fifteen percent (15%) of the amounts
received by IRI for Sublicenses of Discontinued Programs.
ARTICLE IV
----------
PAYMENT TERMS AND REPORTING
4.1. PAYMENT TERMS
Within sixty (60) days after the end of each calendar quarter, IRI shall pay to
Oracle all Sublicense fees accruing to Oracle for that particular calendar
quarter. License and Sublicense fees shall be deemed to accrue and shall be
calculated in accordance with Oracle's price list in effect on the date that (1)
IRI recognizes revenue for Sublicenses or (2) on the date that Oracle ships a
Program to IRI for Internal Use or for use in IRI's Timesharing Business or, if
shipment is not required, on the date of installation.
4.2. TAXES
The fees due under this Agreement do not include taxes. If Oracle is required
to pay sales, use, property, value-added, or other federal, state or local taxes
based on the licenses granted under this Agreement, or the Sublicenses granted
by IRI, then such taxes shall be billed to and paid by IRI. This section 4.2
shall not apply to taxes based on Oracle's income for which Oracle shall be
solely responsible.
4.3. REPORTING
Within sixty (60) days after the last day of each quarter, IRI shall send Oracle
a report detailing, for that calendar quarter, the revenues due to Oracle under
this Agreement as a result of IRI and its Distributors' Sublicensing activities
and IRI's Timesharing Business and Internal Use licenses under this Agreement.
4.4. RECORDS; INSPECTION
IRI shall keep accurate books of accounts and records pertaining to IRI's
Internal Use, Timesharing Business licenses, QScan Sublicenses and the
Sublicensing activities and revenues of IRI and its Distributors. Such records
shall include, without limitation, executed Sublicense agreements, the number of
copies of Programs used or Sublicensed by IRI and its Distributors, the
computers on which the Programs are installed (the parties will work together to
put in place a procedure by July __, 1998 for identifying the computer on which
the Programs are installed, as appropriate and in accordance with Oracle's
general policies), and the number of users using the Programs. No more than
once during any twelve (12) month period, Oracle, at Oracle's sole expense,
shall be entitled to employ an independent Certified Public Accountant who is
not compensated based on the results of the audit and who is reasonably
acceptable to Oracle, to inspect such books of accounts and records upon
reasonable notice to IRI, and at a reasonable time during normal business hours
for the purpose of verifying the Sublicense fees payable to Oracle pursuant to
this Agreement. Unless necessary to establish in a court of law Oracle's right
to payment of Sublicensee fees payable hereunder, Oracle's auditor shall hold
all information obtained in strict confidence; shall not disclose such
information to any other person or entity
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(except Oracle or its Board of Directors or shareholders) without IRI's prior
written consent; and shall not disclose to Oracle any information regarding
IRI's business other than any noncompliance by IRI with any amounts owed
hereunder. If an audit reveals that IRI has underpaid fees to Oracle, IRI shall
be invoiced for such underpaid fees based on Oracle's pricing as set forth in
this agreement for the Programs in effect at the time the audit is completed. If
the underpaid fees exceed five percent (5%) of the applicable Sublicense fees,
then IRI shall pay Oracle's reasonable costs of conducting the audit. IRI shall
have comparable rights to audit the books and records of Oracle through an
independent Certified Public Accountant with respect to the MFC Option.
ARTICLE V
---------
TECHNICAL RESPONSIBILITIES
5.1. IRI TECHNICAL RESPONSIBILITIES
IRI and its Distributors shall provide all technical support to their
Sublicensees and Distributors, including installation assistance, training,
maintenance, and consulting. At IRI's request, Oracle shall provide technical
support services to certain of IRI's Sublicensees located in Europe, to be
mutually agreed upon, at Oracle's standard commercial rates.
5.2. ORACLE TECHNICAL SUPPORT RESPONSIBILITIES
5.2.A. Ongoing Support Services.
A limited number of Oracle support personnel designated by Oracle in writing
will provide a limited number of IRI support personnel designated by IRI in
writing with the following second line technical support services on a per
incident and "time and materials" fee basis for such services ("Technical
Support"):
(i) Telephone consultation, assistance, and advice from 9:00 a.m. to
5:00 p.m. Eastern Standard Time on Mondays through Fridays,
excluding holidays.
Oracle shall not be required to provide Technical Support with respect to
modified versions of a Program unless the following conditions are met: if IRI
or its Sublicensees have modified a Program, then IRI shall be required to
reproduce the technical problem in an unmodified version of the Program before
requesting Technical Support from Oracle. IRI shall make every effort to avoid
making burdensome requests for assistance. IRI may purchase additional
technical support services at Oracle's standard commercial rates, as may be
negotiated between the parties, and upon Oracle's standard commercial terms.
5.2.B. Development Support Services.
Oracle shall provide a limited number of personnel from IRI's development
organization, as may be designated by IRI in writing from time to time, with
access to a limited number of personnel from Oracle's development organization,
as may be designated by Oracle in writing from time to time, for the purpose of
making reasonable requests for information regarding Oracle changes and
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modifications to DataServer and Express and the development of Oracle
applications software products for use with DataServer and Express. Oracle's
obligation to provide such services shall be subject to the availability of
qualified engineering personnel at the time the request is made and shall be
provided at Oracle's standard consulting rates.
5.2.C. Updates.
Oracle shall provide Object Materials versions of Updates (and of new versions
of the Programs for which Oracle charges its customers who purchase Oracle
technical support services) to IRI as they become available, but in no event
later than when they are first made available to any other Oracle distributor or
licensee. IRI shall have the right to use "alpha" versions of Updates (and of
new versions of the Programs for which Oracle charges its customers who purchase
Oracle technical support services) only for its own Internal Use purposes. IRI
shall obtain Oracle's prior written consent before Sublicensing, including its
Timesharing Business, "beta" versions of Updates (and of new versions of the
Programs for which Oracle charges its customers who purchase Oracle technical
support services).
5.2.D. Cessation of Support Services.
Except as provided in section 2.3, Oracle may discontinue Technical Support to
IRI upon ninety (90) days written notice for the Programs or for any portions
thereof, provided that Oracle discontinues Technical Support for such Programs
or such portions thereof to all other Oracle distributors and licensees; and
provided, however, that Oracle shall provide IRI with one (1) year written
notice or such other notice period as Oracle generally provides to all other
licensees of DataServer and/or Express, whichever is greater, of its intent to
discontinue Technical Support for DataServer and/or Express. Should Oracle
elect to discontinue Technical Support while this Agreement is in effect, IRI
shall have the right to retain a copy of the Source Materials that are relevant
to the unsupported Programs or portion thereof, and shall have access to Oracle
development personnel during the notice period in accordance with Section 5.2.B.
Subject to the other terms of this Agreement, IRI may use the Source Materials
retained under this Section 5.2.D solely for the purpose of continuing technical
support for existing Sublicenses.
ARTICLE VI
----------
TERM AND TERMINATION
6.1. INITIAL TERM
This Agreement shall become effective on the Effective Date set forth on the
Signature Page attached hereto, and unless it is terminated shall remain in
effect perpetually.
6.2. TERMINATION OF THE AGREEMENT
6.2.A. Termination by IRI.
IRI may terminate this Agreement at any time; provided, however, that
termination shall not relieve IRI of its obligation to pay all fees that have
accrued against IRI under this Agreement.
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6.2.B. Breach.
If either party materially breaches this Agreement and fails to correct the
breach within ninety (90) days following written notice specifying the breach,
or fails to commence to correct the breach within such ninety (90) day period if
the breach cannot reasonably be cured within ninety (90) days and thereafter
makes good faith efforts to remedy such breach, then the nondefaulting party may
terminate this Agreement, after expiration of such cure period, upon written
notice of termination to the defaulting party.
6.3. RIGHTS UPON TERMINATION
6.3.A. Continued Rights.
The termination of this Agreement shall not affect any paid-up right or license
granted hereunder, including any annual Sublicenses granted by IRI and IRI
Affiliates in the Timesharing Business. In the event of termination of this
Agreement, in whole or in part, any right, license or Sublicense granted by IRI
or its Distributors, and its and their successors, assigns and Sublicensees,
prior to such termination and any corresponding Sublicense Fee obligations of
IRI hereunder, shall survive and continue. Without limiting the generality of
the foregoing, (i) IRI may continue to exercise the rights and licenses granted
hereunder for a period of up to six (6) months after termination to fill any
orders received by IRI or its Distributors from Sublicensees prior to the
effective date of termination, and (ii) IRI may continue to exercise the rights
and licenses granted hereunder as necessary to provide maintenance and support
only for existing Sublicensees for a one (1) year period.
6.3.B. Use of Source Materials.
If (a) Oracle materially breaches this Agreement and fails to timely cure such
breach, and IRI terminates this Agreement for cause, or (b) any of the following
events occur: (i) any assignment of substantially all of Oracle's assets for
the benefit of creditors or the appointment of a receiver to take possession of
substantially all of Oracle's assets, (ii) any dissolution of or substantial
attachment or execution of judgment against Oracle's assets, or (iii) the filing
of any voluntary or involuntary petition in bankruptcy, or any similar law, by
or against Oracle which is not dismissed within forty-five (45) days of filing,
then IRI, at its option and upon notice to Oracle, shall receive and have
perpetual rights to:
(i) All Source Materials, Object Materials, Documentation, and other
materials related to the Programs then in IRI's possession and in
a standard software escrow to be established and maintained by
Oracle;
(ii) The right to make all necessary changes, modifications,
additions, enhancements and mergers to the Programs including,
without limitation, development of future enhancements to the
Programs; and
(iii) A perpetual worldwide license to market and Sublicense the
Programs then in Oracle's possession, subject to a Sublicense fee
payment of fifteen
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percent (15%) of amounts received by IRI for such Sublicenses and
subject to the other terms of this Agreement.
6.3.C. Survival.
In addition to the provisions of Sections 6.3.A and 6.3.B above, the parties'
rights and obligations under Sections 2.2 (Internal Use License), 2.4
(Intellectual Property Rights), Article VI (Term and Termination) and Article
VII (General Terms and Conditions) shall survive expiration or termination of
this Agreement.
ARTICLE VII
-----------
GENERAL TERMS AND CONDITIONS
7.1. NONDISCLOSURE
Neither party shall disclose, use or permit the disclosure or use by others of
any Proprietary Information received from the other party hereto for any other
purpose during this Agreement or at any time thereafter for any reason
whatsoever, except as expressly authorized by this Agreement. Proprietary
Information shall not include any information that (i) is not marked or
designated as confidential and is provided for a purpose or in a manner that
reasonably contemplates disclosure to or use by others, (ii) is or becomes a
matter of public knowledge through no action or inaction of the party receiving
the Proprietary Information, (iii) was in the receiving party's possession
before receipt from the party providing such Proprietary Information, (iv) is
rightfully received by the receiving party from a third party without any duty
of confidentiality, (v) is disclosed to a third party by the party providing the
Proprietary Information without a duty of confidentiality on the third party,
(vi) is independently created by the receiving party, and the receiving party
can demonstrate through tangible evidence the independence of such creation,
(vii) is disclosed pursuant to a valid order of any governmental authority
provided that the party intending to make disclosure in such circumstances has
given the other party prompt notice prior to making such disclosure and the
opportunity for such other party to seek a protective order or other appropriate
remedy prior to such disclosure, or (viii) is disclosed with the prior written
approval of the party providing such Proprietary Information.
"Proprietary Information" includes, but is not limited to, trade secrets
(including, without limitation, source code), Source Materials, software, know-
how, data, formula, processes, customer lists, marketing information, methods
and procedures of operation, business or marketing plans, proposals, and
Documentation, and other information, tangible or intangible, relating to or
used in the business of either party or any of its affiliates or customers that
is provided pursuant to this Agreement.
In furtherance, and not in limitation of the foregoing, each party agrees to do
the following with respect to any such Proprietary Information: (i) instruct
and require all of its employees, agents and consultants to maintain the
confidentiality of such Proprietary Information and not to use such Proprietary
Information except as expressly permitted herein; (ii) exercise either at least
the same degree of care to safeguard the confidentiality of (and prevent the
unauthorized use of) such
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information as that party exercises to safeguard the confidentiality of its own
Proprietary Information of like kind and importance, or a reasonable degree of
care, whichever is greater; (iii) restrict disclosure of such Proprietary
Information to those of its employees, agents and consultants who have a "need
to know" consistent with the purposes for which such Proprietary Information was
disclosed; and (iv) require such employees and consultants to sign (or have
signed) standard confidential or nondisclosure agreements requiring them to keep
such Proprietary Information in confidence. Each party further agrees not to
remove or destroy any proprietary or confidential legends or markings placed
upon any documentation or other materials.
In addition to the other requirements of this Section 7.1, IRI shall maintain
Source Materials in accordance with the following procedures: (i) IRI shall
designate a manager who shall have responsibility for preserving the security of
the Source Materials at all times; (ii) IRI shall (A) maintain such Source
Materials (including any media containing such Source Materials) in a room or
locker to which access may be obtained only through a key or computerized card-
access security device or (B) if in machine-readable form on any computer
equipment, limit access to the Source Materials through a password-based
computer control facility; and (iii) no person other than such manager and other
personnel specifically designated by such manager (on a "need to know" basis in
accordance with this Section 7.1) may have access to the Source Materials. This
paragraph shall not limit IRI's right to provide DataServer Support Materials to
customers pursuant to Section 2.1.A.
Notwithstanding the above, IRI and Oracle agree that the Programs and the other
Assets (as defined in the Asset Purchase Agreement) transferred to Oracle
pursuant to the Asset Purchase Agreement and the software licensed from Oracle
hereunder shall be Proprietary Information of Oracle for purposes of this
Section 7.1 and subject to the disclosure and use restrictions of this Section
7.1, except for such materials as hereafter become a part of the public domain
through no fault of IRI.
Notwithstanding the above and except as provided in Section 4.7 of the Asset
Purchase Agreement, nothing in this Agreement shall be deemed to preclude either
IRI or Oracle from developing, acquiring, using, marketing, licensing, or
selling any software performing the same or a similar function as the other
party's programs so long as such software does not include any code taken from
the other party's programs or otherwise infringe on the other's intellectual
property rights.
This Section 7.1 shall survive the expiration or termination of this Agreement.
7.2. COPYRIGHT
All copies of the Programs licensed and Sublicensed hereunder shall bear a
copyright notice. Such copyright notice shall be placed on the Documentation,
the sign-on screen, and within the Source Materials.
Each party will promptly report to the other party any apparent copyright
infringement relating to the Programs that comes to its attention.
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7.3. NO PRODUCT REPRESENTATIONS AND WARRANTIES; INTELLECTUAL PROPERTY
WARRANTY AND INFRINGEMENT INDEMNITY
THE PROGRAMS ARE PROVIDED "AS IS" WITHOUT WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT, EXCEPT AS HEREAFTER SPECIFICALLY
PROVIDED.
Oracle represents and warrants, to the best of its knowledge, that as of the
date of licensing to IRI (a) Oracle is the sole owner of the Updates and new
versions for which Oracle charges its customers who purchase Oracle technical
support services, except for any portions thereof to be designated as third
party materials in writing, for which Oracle shall have sole responsibility for
payment of royalties and other charges related thereto, (b) Oracle has full
right and title to assign or grant the rights and/or licenses granted to IRI
under this Agreement, (c) the Updates and new versions for which Oracle charges
its customers who purchase Oracle technical support services have not been
published under circumstances which have caused a loss of Intellectual Property
Rights therein, and (d) the Updates and new versions for which Oracle charges
its customers who purchase Oracle technical support services do not infringe on
any Intellectual Property Rights, or rights of privacy, publicity or similar
rights of any third party, nor has any claim of such infringement been
threatened or asserted, and no such claim is pending against Oracle or, insofar
as Oracle is aware, against any entity from which Oracle has obtained such
rights. It is expressly understood that the foregoing representations and
warranties shall not apply to any infringement caused by the Programs (or any
portion thereof) in their form as transferred to Oracle as part of the
Transaction on the Closing Date which are included in the Updates and new
versions for which Oracle charges its customers who purchase Oracle technical
support services, except as expressly set forth.
Oracle shall, at Oracle's expense, indemnify, defend and hold IRI and its
directors, officers, employees, agents, Distributors and Sublicensees harmless
from and against any and all liabilities, losses, damages, costs and expenses
(including reasonable attorneys' fees) incurred by IRI in connection with any
claim that the Updates and new versions for which Oracle charges its customers
who purchase Oracle technical support services licensed and used within the
scope of this Agreement infringe an Intellectual Property Right of any third
party, provided that: (a) IRI promptly notifies Oracle in writing of the claim,
and (b) at Oracle's request and expense, IRI provides Oracle with all reasonable
assistance, information and authority to perform the foregoing. Oracle agrees
not to enter into a settlement agreement without IRI's written consent, which
consent will not be unreasonably withheld.
Oracle shall have no liability for any claim of infringement if such
infringement is caused by modifications made by IRI to the Programs or the
Updates and new versions for which Oracle charges its customers who purchase
Oracle technical support services and the unmodified Programs and Updates and
new versions for which Oracle charges its customers who purchase Oracle
technical support services do not infringe such third party's Intellectual
Property Rights. In addition, it is expressly understood that Oracle shall have
no liability for any claim of infringement if such infringement is caused by (or
to the extent that it relates to) the Programs (or
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any portion thereof) in their form as transferred to Oracle as part of the
Transaction on the Effective Date.
Failure to comply with the obligations described in this Section 7.3 shall
constitute a material breach of this Agreement.
7.4. PUBLICITY
Except for a mutually agreed-upon joint press release or releases to be issued
by the parties relating to the subject matter of this Agreement, neither party
shall disclose to any third party any details of this Agreement, or even the
fact of its existence, without the specific prior written approval of the other
party, which approval shall not be unreasonably withheld, unless such disclosure
is required by law in order to enforce its rights under this Agreement or to
comply with applicable securities laws.
7.5. EXPORT
The parties agree to comply fully with all laws and regulations to assure that
neither Programs, nor any direct products thereof, are exported, directly or
indirectly, in violation of any applicable law. Upon IRI's request, Oracle
shall advise IRI of all relevant export classifications of the Programs.
7.6. LIMITATION OF LIABILITY
NEITHER PARTY SHALL HAVE ANY LIABILITY ARISING FROM THIS AGREEMENT FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT
LIMITED TO RELIANCE, COVER, OR LOSS OF ANTICIPATED PROFIT, EVEN IF THE PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR FEES OWED TO ORACLE
UNDER ARTICLE III, DAMAGES FOR BREACH OF ORACLE'S INTELLECTUAL PROPERTY RIGHTS
IN THE PROGRAMS, AND FOR DAMAGES FOR TERMINATION OF THIS AGREEMENT BY ORACLE IN
A MANNER NOT PERMITTED HEREUNDER OR BY APPLICABLE LAW, NEITHER PARTY'S LIABILITY
FOR DAMAGES RELATING IN ANY WAY TO THIS AGREEMENT OR THE CONDUCT OF THE PARTIES
IN FURTHERANCE HEREOF UNDER ANY LEGAL THEORY, WHETHER CONTRACT, TORT, PRODUCT
LIABILITY, BREACH OF IMPLIED DUTY, OR OTHERWISE SHALL EXCEED (I) $20,000,000 FOR
THE PERIOD BEGINNING JULY __, 1995 AND ENDING JULY __, 1998, (II) $10,000,000
FOR THE PERIOD BEGINNING JULY __, 1998 AND ENDING JULY __, 2001, AND (III)
$5,000,000 THEREAFTER.
The provisions of this Section 7.6. allocate the risks under this Agreement
between IRI and Oracle and are an intrinsic part of the bargain between the
parties. The terms of this Agreement reflect this allocation of risks and the
limitation of liability specified herein.
7.7. EQUITABLE RELIEF; SPECIFIC PERFORMANCE
It is recognized and expressly agreed by all the parties that monetary damages
would be inadequate to compensate for breach of Oracle's intellectual property
rights in the Programs or
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termination of the Agreement by Oracle in a manner not permitted hereunder or by
applicable law and that rights which are subject to this Agreement are unique
and are of such a nature as to be inherently difficult or impossible to value
monetarily. Accordingly, the parties agree that (a) any violation or threatened
violation of this Agreement will cause irreparable injury, and that, in addition
to any other remedy available under this Agreement, the nonbreaching party or
parties shall be entitled immediately to obtain injunctive relief, preliminary
or otherwise, against the threatened breach or the continuation of any such
breach without the necessity of proving actual damages, and (b) in the event of
any Controversy (i.e., any claim or dispute arising under or relating to this
Agreement, including any claim or dispute concerning the (a) interpretation, (b)
validity, (c) performance or (d) enforceability of this Agreement), the terms of
this Agreement shall be enforceable in court by a decree of specific
performance. Such remedies shall be cumulative and not exclusive, and shall be
in addition to any other remedy which the parties may have. It is the express
intent of the parties that the remedies in this Section 7.7. be liberally
granted.
7.8. NOTICES
Every notice or other communication required or contemplated by this Agreement
by either party shall be delivered by (i) personal delivery, (ii) postage
prepaid, return receipt requested, registered or certified mail (airmail if
available), or the equivalent of registered or certified mail under the laws of
the country where mailed, (iii) internationally recognized express courier, such
as Federal Express, UPS or DHL, (iv) "tested" telex (a telex for which the
proper answer back has been received), or (v) telefacsimile with a confirmation
copy sent simultaneously in the manner contemplated by clauses (i), (ii) or
(iii) of this Section 7.8., in each case addressed to the party for whom
intended at the following address:
(1) If to IRI:
Information Resources, Inc.
150 North Clinton Street
Chicago, Illinois 60613
Attention: General Counsel
Facsimile Number: (312) 726-1091
(2) If to Oracle:
Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065
Attention: General Counsel
Facsimile Number: (415) 506-7114
or at such other address as the intended recipient previously shall have
designated by written notice to the other party. Notice by registered or
certified mail shall be effective on the date it is officially recorded as
delivered to the intended recipient by return receipt or equivalent, and in the
absence of such record of delivery, the effective date shall be presumed to have
been the sixth (6th) business day after it was deposited in the mail. All
notices and other communications
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required or contemplated by this Agreement delivered in person or sent by
courier shall be deemed to have been delivered to and received by the addressee
and shall be effective on the date of personal delivery; notices delivered by
"tested" telex or by facsimile with simultaneous confirmation copy by registered
or certified or equivalent mail or courier shall be deemed delivered to and
received by the addressee and effective on the date sent. Notice not given in
writing shall be effective only if acknowledged in writing by a duly authorized
representative of the party to whom it was given.
7.9. FORCE MAJEURE
No party hereto shall be liable for failure to perform, in whole or in material
part, its obligations under this Agreement if such failure is caused by any
event or condition not existing as of the date of this Agreement (unless
reasonably foreseeable by such party) and not reasonably within the control of
the affected party, including without limitation, by fire, flood, typhoon,
earthquake, explosion, strikes, labor troubles or other industrial disturbances,
unavoidable accidents, war (declared or undeclared), acts of terrorism,
sabotage, embargoes, blockage, acts of Governmental Entities (i.e., any court,
or any Federal, state, municipal or other governmental authority, department,
commission, board, agency or other instrumentality), riots, insurrections, or
any other cause beyond the control of the parties; provided, only, that the
affected party promptly notifies the other party of the occurrence of the event
of force majeure and takes all reasonable steps necessary to resume performance
of its obligations so interfered with.
7.10. NO AGENCY
This Agreement shall not constitute an appointment of any of the parties hereto
as the legal representative or agent of any other party hereto, nor shall any
party hereto have any right or authority to assume, create or incur in any
manner any obligation or other liability of any kind, express or implied,
against, or in the name or on behalf of, the other party hereto.
7.11. SEVERABILITY
In the event any provision of this Agreement shall be determined to be invalid
or unenforceable under applicable law, all other provisions of this Agreement
shall continue in full force and effect unless such invalidity or
unenforceability causes substantial deviation from the underlying intent of the
parties expressed in this Agreement or unless the invalid or unenforceable
provisions comprise an integral part of, or are inseparable from, the remainder
of this Agreement. If this Agreement continues in full force and effect as
provided above, the parties shall replace the invalid provision with a valid
provision which corresponds as far as possible to the spirit and purpose of the
invalid provision.
7.12. ASSIGNMENT AND SUCCESSION
Except for an assignment by Oracle to any parent corporation, affiliate,
subsidiary, or successor in interest to Oracle, neither party may assign any
rights, duties, obligations or privileges under this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
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7.13. AMENDMENTS AND WAIVERS
No amendment, modification, termination or waiver of any provision of this
Agreement or consent to any departure by any party therefrom, shall in any event
be effective without the written concurrence of the other party hereto. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it is given. No notice to or demand on any party in
any case shall entitle any other party to any other or further notice or demand
in similar or other circumstances.
7.14. FURTHER ASSURANCES
Each of the parties hereto agrees that, from and after the Effective Date, upon
the reasonable request of the other party hereto and without further
consideration, such party will execute and deliver to such other party such
documents and further assurances and will take such other actions (without cost
to such party) as such other party may reasonably request in order to carry out
the purpose and intention of this Agreement including but not limited to the
effective consummation of the transactions contemplated under the provisions of
this Agreement, the licensing of third party technology to Oracle in accordance
with the provisions of this Agreement, and the correction of errors and defects
in any such documents.
7.15. ABSENCE OF THIRD-PARTY BENEFICIARIES
No provisions of this Agreement, express or implied, are intended or shall be
construed to confer upon or give to any Person other than the parties hereto,
any rights, remedies or other benefits under or by reason of this Agreement
unless specifically provided otherwise herein, and except as so provided, all
provisions hereof shall be personal solely between the parties to this
Agreement.
7.16. GOVERNING LAW AND JURISDICTION
This Agreement, and all matters arising out of or relating to this Agreement,
shall be governed by the procedural and substantive laws of the State of
California and shall be deemed to be executed in Redwood City, California.
7.17. FEDERAL GOVERNMENT SUBLICENSES
If IRI grants a Sublicense to the United States government, the Programs shall
be provided with "Restricted Rights" and IRI will place a legend, in addition to
applicable copyright notices, on the Documentation, and on the tape or diskette
label, substantially similar to the following legend:
RESTRICTED RIGHTS LEGEND
Use, duplication or disclosure by the Government is subject to
restrictions as set forth in subparagraph (c)(1)(ii) of the Department
of Defense Regulations Supplement ("DFARS") 252.227-7013, Rights in
Technical Data and Computer Software (October 1988), and Federal
Acquisition Regulation ("FAR") 52.227-14, Rights in Data-General,
including Alternate III (June 1987), as applicable. Oracle Corporation,
500 Oracle Parkway, Redwood City, CA 94065.
7.18. INTERPRETATION
This Agreement, including any exhibits, addenda, schedules and amendments, has
been negotiated at arm's length and between persons sophisticated and
knowledgeable in the matters dealt with in
21
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this Agreement. Each party has been represented by experienced and knowledgeable
legal counsel. Accordingly, any rule of law (including California Civil Code
Section 1654) or legal decision that would require interpretation of any
ambiguities in this Agreement against the party that has drafted it is not
applicable and is waived. The provisions of this Agreement shall be interpreted
in a reasonable manner to effect the purposes of the parties and this Agreement.
7.19. ENTIRE AGREEMENT
The terms of this Agreement and the other writings referred to herein and
delivered by the parties hereto are intended by the parties to be the final
expression of their agreement with respect to the subject matter hereof and may
not be contradicted by evidence of any prior or contemporaneous agreement. The
parties further intend that this Agreement, together with the exhibits and
schedules hereto, shall constitute the complete and exclusive statement of its
terms. The parties acknowledge and agree that this Agreement, the Asset
Purchase Agreement and exhibits and schedules hereto and thereto constitute the
agreements necessary to accomplish the transactions contemplated by this
Agreement and the Asset Purchase Agreement and are parts of an integrated
arrangement between the parties with respect to the purchase and sale of the
Programs and the operation of the Programs by Oracle after the Effective Date,
and that separate agreements have been used for the sake of convenience.
7.20. COUNTERPARTS
This Agreement may be executed simultaneously in multiple counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Execution and delivery of this
Agreement by exchange of facsimile copies bearing the facsimile signature of a
party hereto shall constitute a valid and binding execution and delivery of this
Agreement by such party. Such facsimile copies shall constitute enforceable
original documents.
7.21. EXPENSES
Each of the parties agrees to pay its own expenses in connection with the
transactions contemplated by this Agreement, including without limitation legal,
consulting, accounting and investment banking fees, whether or not such
transactions are consummated.
7.22. CONSENTS
Whenever this Agreement requires or permits consent by or on behalf of any party
hereto, such consent shall be given in writing.
7.23. HEADINGS
The article and section headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.
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EXHIBIT C
---------
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT (this "AGREEMENT") is made and entered into as of
July 27, 1995 by and between Information Resources, Inc., a Delaware corporation
(the "SELLER"), Oracle Corporation, a Delaware corporation (the "BUYER"), and
First Interstate Bank of California, a California Corporation, as Escrow Agent
(the "ESCROW AGENT").
A. Buyer and Seller have entered into an Amended and Restated Asset
Purchase Agreement dated as of June 12, 1995 (the "PURCHASE AGREEMENT"),
pursuant to which Seller has agreed to sell to Buyer, and Buyer has agreed to
purchase from Seller, certain of Seller's assets. Capitalized terms not
otherwise defined herein shall have the respective meanings ascribed to them in
the Purchase Agreement.
B. Pursuant to Article VIII of the Purchase Agreement, Seller has agreed
to indemnify Buyer and hold it harmless against certain losses, costs, expenses,
liability, judgments or damages (the "INDEMNITY").
C. Pursuant to Section 1.6(a) of the Purchase Agreement, Seller and Buyer
wish to establish an escrow account into which $8,000,000 shall be deposited and
held subject to the terms and conditions hereinafter set forth.
D. In addition, the Seller and the Buyer wish to establish an escrow
account into which $3,820,000 shall be deposited and held subject to the terms
and conditions hereinafter set forth.
Accordingly, the parties hereto agree as follows:
1. Deposit of Escrow Fund.
(a) To secure the Indemnity, Buyer will deposit directly with the
Escrow Agent $8,000,000 (the "ESCROW DEPOSIT") in an account entitled "SELLER
ESCROW ACCOUNT" (the "ESCROW ACCOUNT"). The Escrow Deposit and such other
amounts from time to time held by the Escrow Agent in the Escrow Account or
invested by the Escrow Agent pursuant to Section 6 hereof, up to the amount of
$8,000,000 plus any additions and less any reductions permitted herein, is
hereinafter referred to as the "ESCROW FUND." The Escrow Fund specifically
excludes any interest or other return (collectively, "INTEREST AND EARNINGS") on
the Escrow Deposit or subsequent investment by the Escrow Agent except that
Interest and Earnings on assets held in the Disputed Fund (defined below in
Section 4 (b)) shall become part of the Escrow Fund.
(b) In addition, the Buyer will deposit directly with the Escrow Agent
$3,820,000, which amount represents the net Purchase Price with respect to the
Assets located in France transferred to Buyer and the liabilities assumed by
Buyer the payment of which is deferred pending the consummation of the transfer
of such assets and liabilities and the fulfillment of
<PAGE>
certain other conditions (the "French Fund"). Interest or other earnings on the
French Fund shall become part of the French Fund.
(c) The Escrow Agent is directed to hold, oversee and dispose of the Escrow
Fund and Interest and Earnings, and the French Fund as hereinafter set forth.
2. Escrow Fund. To secure the Indemnity, Seller hereby grants a security
interest to Buyer in all cash, securities, accounts, contract rights, general
intangibles, documents, instruments or other property from time to time held or
later acquired by the Escrow Agent for the Escrow Fund pursuant to this
Agreement and all cash, additional securities or other property at any time and
from time to time receivable or otherwise distributable in respect of, or in
exchange for, or in substitution of any of the foregoing, together with the
proceeds thereof; provided, however, that with respect to assets that have been
paid out of the Escrow Fund to Seller in accordance with the terms hereof, such
security interest shall terminate upon such payment. The Escrow Fund shall be
held by the Escrow Agent as agent for the Buyer and Seller for the purpose of
securing the payment or satisfaction of the Indemnity.
3. Charges Against Escrow Fund. In the event that, and from time to
time, as Buyer determines that it is entitled to indemnification from the Escrow
Fund, Buyer shall provide written notice (the "CLAIMS NOTICE") to the Escrow
Agent and Seller of its claim against the Escrow Fund. The Claims Notice shall
state (i) the amount of the claim (ii) that such amount is properly chargeable
against the Escrow Fund under the terms hereof or of the Purchase Agreement, and
(iii) the basis, with reasonable specificity, of the underlying claim. Unless
the Escrow Agent receives a Disputed Claim Notice (as defined below) from Seller
pursuant to Section 4, the Escrow Agent shall deliver to Buyer, out of the
Escrow Fund, a check in an amount equal to the amount specified in Buyer's claim
for indemnification. Delivery is to be made by depositing such check in
certified mail, return receipt requested, on the 30th day (or as soon as
practicable thereafter) after receipt by the Escrow Agent of written notice of
such claim for indemnification. Notwithstanding the foregoing, Buyer and Seller
agree that Buyer may provide a Claims Notice with respect to Seller's
indemnification obligation in Section 8.2 of the Purchase Agreement involving
uncollected accounts receivable at any time prior to the Release Date so long as
such Claims Notice reasonably specifies the maximum amount of uncollected
accounts receivable as of the end of the tenth full month following the date of
this Agreement; provided, however, that no deduction will be made against the
Escrow Fund with respect to such uncollected amounts receivable until the
expiration of the 365 day period following the Closing Date, and then only in
accordance with the terms hereof.
4. Dispute of Claim.
(a) Seller shall have the right to dispute a claim for indemnification
by delivering to the Escrow Agent and to the Buyer written notice ("DISPUTED
CLAIM NOTICE"). The Disputed Claim Notice shall be delivered to Buyer and
Escrow Agent within 10 business days following Seller's receipt of the Claim
Notice. The Disputed Claim notice shall state the basis, with reasonable
specificity, of Seller's dispute with respect to the validity or the amount of
the claim in question.
2
<PAGE>
(b) Upon receipt of the Disputed Claim Notice from Seller, the Escrow
Agent shall set aside in a separate fund (the "DISPUTED FUND"), the amount of
cash under dispute as specified in the Disputed Claim Notice. The Escrow Agent
shall take no action with respect to the Disputed Fund, except:
(i) Upon the joint written instructions of Buyer and Seller;
(ii) Upon written notice from Buyer or Seller that the dispute with
respect to any amount or amounts deposited in the Disputed Fund has been
determined and resolved by final nonappealable order, decree or judgment entered
by a court of competent jurisdiction, which notice shall be accompanied by a
certified copy of any such order, decree or judgment; or
(iii) Upon written notice from the Buyer or Seller that the dispute
with respect to the amount or amounts deposited in the Disputed Fund has been
resolved by an Arbitrator, appointed pursuant to Section 8.4(b) of the Purchase
Agreement, accompanied by a copy of the Arbitrator's order.
Upon notice in accordance with (i), (ii) or (iii) above directing any
amount in the Disputed Fund to be released and not be paid over to Buyer, such
amount shall be transferred to the Escrow Fund or, if the termination date of
this Agreement shall have passed and no further claims are outstanding
hereunder, the Escrow Agent shall cause such amount to be delivered to Seller,
free and discharged from this Agreement. Upon notice in accordance with (i),
(ii), or (iii) above directing any amount held in the Disputed Fund to be
delivered to Buyer, the Escrow Agent shall cause such amount to be so delivered
to Buyer. Any amount remaining in the Disputed Fund following resolution of
the dispute with respect thereto in the manner set forth above shall be
transferred to the Escrow Fund or, if the termination date of this Agreement
shall have passed and no further claims are outstanding hereunder, such amount
shall be delivered to Seller, free and discharged from this Agreement. If the
amount necessary to satisfy any claim for indemnification, as ultimately
determined in the manner herein provided, is in excess of the amount held in the
Disputed Fund with respect thereto, an additional amount necessary to satisfy
such claim shall be delivered from the Escrow Fund to Buyer in the manner set
forth in Section 3.
5. Termination:
(a) Release of Escrow Fund. On July 27, 1996 (the first anniversary
of the Closing) (the "RELEASE DATE") the Escrow Agent shall release to Seller
the balance of the Escrow Fund then held by it hereunder; provided, however,
that (a) any amounts from the Escrow Fund to which Buyer has given Claims Notice
prior to the Release Date pursuant to Section 3, and (b) any amounts then held
(or to be held) in the Disputed Fund, shall continue to be held hereunder by the
Escrow Agent, and this Agreement shall continue in full force and effect until
the existing dispute with respect thereto has been resolved. Any amounts
retained as provided in the immediately preceding clauses (a) and (b) shall
continue to be so held until a final determination is made with respect thereto
as herein provided or, if any such dispute has not been resolved after eight (8)
years from the date hereof, all amounts then held by the Escrow Agent in the
Escrow Fund or the Disputed Fund shall be paid over by the Escrow Agent to an
appropriate court in the County of San Francisco, California, in interpleader
proceedings in which Buyer and Seller shall
3
<PAGE>
be joined as parties. On the Release Date, the Escrow Agent shall release
Interest and Earnings on the Escrow Fund to the Seller. Interest and Earnings on
the Disputed Fund shall continue to be held by the Escrow Agent until final
disposition of the dispute pursuant to Section 3.
(b) Release of the French Fund. Escrow Agent shall release the French
Fund to Seller only in accordance with the following provisions.
(i) Seller shall deliver to the Escrow Agent a certificate of
Seller's Designee that the Conditions Precedent to the release of the French
Fund identified pursuant to an agreement between Seller and Buyer have been
satisfied or fulfilled (the "French Certificate"). Upon receipt of the French
Certificate, the Escrow Agent shall deliver by overnight courier a copy of the
French Certificate to the Buyer for receipt by the Buyer on the next business
day. Buyer shall have five (5) business days following receipt of French
Certificate to notify the Escrow Agent by overnight courier of any objections to
the French Certificate. Such notification shall be delivered by Buyer via
overnight courier for receipt by the Escrow Agent on the next business day. If
the Escrow Agent has not received an Objection Notice (as defined below) from
the Buyer of any objection to the French Certificate within six (6) business
days of Escrow Agent's receipt of the French Certificate, the Escrow Agent shall
immediately thereafter release to the Seller the French Fund at Seller's
direction.
(ii) If the buyer objects to the French Certificate, the Buyer shall
so notify the Escrow Agent by delivering notice of such objection (the
"Objection Notice") to the Escrow Agent by overnight courier for receipt by the
Escrow Agent on the next business day. The Objection Notice shall state in
reasonable detail the basis of Buyer's objection to the French Certificate.
Upon receipt of the Objection notice, the Escrow Agent shall deliver by
overnight courier a copy of the Objection Notice to the Seller for receipt by
the Seller on the next business day.
(iii) Upon receipt of Objection Notice, Escrow Agent shall continue
to hold the French Fund until otherwise directed by (i) the joint written
instructions of Buyer and Seller or (ii) the written instructions from a court
of competent jurisdiction. If no instruction identified in subparagraphs (i) or
(ii) are provided within 90 days following the date hereof, Escrow Agent shall
have the right to terminate the portion of this Agreement which relates to the
French Fund and to place as stakeholder the French Fund into the hands a court
of competent jurisdiction.
6. Investment of Escrow Fund. Subject to the limitations provided
herein, any moneys in the Escrow Fund and any Interest and Earnings shall be
invested, upon the written or facsimile instructions from the Seller to the
Escrow Agent, at the Seller's discretion, in specific investments within the
following categories that can be liquidated within 90 days: (i) obligations or
guarantees of the United States, (ii) commercial paper rated A-1, P-1 or A-2 or
P-2, (iii) time deposits with, including certificates of deposit issued by, any
office located within the United States of any bank or trust company organized
under Federal law or under the law of any state of the United States or of the
District of Columbia and that has capital, surplus and undivided profits of at
least $500 million; and (iv) shares of Pacifica Treasury Money Market Fund, a
no-load, diversified open-end investment management company for which First
Interstate Capital Management, Inc., serves as Investment Advisor and Fund
Manager and which is rated AAAm by
4
<PAGE>
Standard & Poor's and Aaa by Moody's (the "Pacifica Fund"); provided, however,
that with respect to the French Fund, any moneys held in the French Fund shall
be invested solely in the Pacifica Fund. The Escrow Agent or its affiliates may
receive fees from the investment company for providing certain services. The
Escrow Agent shall have no responsibility with respect to the investment
performance of the Pacifica Fund or to make recommendations with respect to the
purchase or sale of such shares. In the absence of written instruction, the
Escrow Agent shall invest in shares of the Pacifica Fund. In the event that the
Escrow Agent is required to liquidate instruments held in the Escrow Fund to
satisfy a claim or claims, any penalties for early withdrawal shall be paid from
the assets of the Escrow Fund directly.
7. Designated Officers. Seller and Buyer shall, if their designees
change from those specified in Schedule A, provide the Escrow Agent with a
Certificate of Designation (a) advising the Escrow Agent of the names of their
designees who are authorized to execute any written notice, instruction or
certificate to the Escrow Agent required or permitted by the terms of this
Agreement, and (b) bearing the signatures of such designated persons. The
initial designees of Buyer and Seller are set forth in Schedule A. Each
notice, instruction or other certificate required or permitted by the terms
hereof shall be in writing, shall be executed by one of the persons listed on
the Certificate of Designation and shall be communicated by Federal Express or
similar overnight service, to the parties hereto at the respective addresses set
forth in Schedule A, or at such other address as any such party may designate by
notice given to the other parties.
All notices, instructions or certificates given hereunder shall be sent via
Federal Express or similar overnight service and shall be effective upon
receipt. The Escrow Agent is not obligated to take any action with respect to
any request or demand of Seller or Buyer unless properly executed and delivered
in the form required hereunder.
8. Regarding the Escrow Agent. In consideration of the acceptance by the
Escrow Agent of its duties hereunder, it is agreed by all parties hereto that:
(a) The Escrow Agent's duties and responsibilities shall be limited to
those expressly set forth in this Agreement; provided, however, that with the
Escrow Agent's written consent, this Agreement may be amended at any time or
times by an instrument in writing signed by or on behalf of all of the then
parties in interest.
(b) The Escrow Agent is authorized, in its reasonable discretion, to
disregard any and all notices or instructions given by any of the parties hereto
or by any other person, firm or corporation, except only (i) such notices or
instructions as are herein specifically provided for, and (ii) orders or process
of the Arbitrator selected pursuant to Section 4 and (iii) orders or process of
any court entered or issued with jurisdiction. If any property subject hereto
is at any time attached, garnished or levied upon or under any court order or in
case the payment, assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any court order, or in case any order,
judgment or decree shall be made or entered by any court affecting such property
or any part thereof, then, and in any of such events, the Escrow Agent is
authorized, in its sole discretion, to rely upon and comply with any such order,
writ, judgment or decree which it is advised by legal counsel of its own
choosing is binding upon it; and if it complies with any such order, writ,
judgment or decree it shall not be liable to any of the parties
5
<PAGE>
hereto or to any other person, firm or corporation by reason of such compliance
even though such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
(c) The Escrow Agent shall not be personally liable for any act taken
or omitted hereunder if taken or omitted by it without negligence or willful
misconduct. It shall also be fully protected in relying upon any written
notice, demand, certificate or document which is in good faith believes to be
genuine.
(d) The Escrow Agent shall not be responsible for the sufficiency or
accuracy of the form, execution, validity or genuineness of documents now or
hereafter deposited hereunder, nor shall it be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
and delivering or purporting to execute or deliver any such document.
(e) If the Escrow Agent believes it to be reasonably necessary to
consult with counsel concerning any of its duties in connection with this
Agreement, or in case it becomes involved in litigation on account of being
Escrow Agent hereunder or on account of having received property subject hereto,
then in either case, its costs, expenses, and reasonable attorneys' fees shall
be paid out of the Escrow Fund unless such litigation is instituted by or
against either of Seller or Buyer and such litigation results in an adjudication
against either of them, in which event such costs, expenses and fees shall be
paid by the party or parties (on a pro-rata basis based upon the relative
adjudication against each party) against whom the adjudication was made.
(f) The Escrow Agent shall be entitled to reasonable fees and costs
for its services hereunder to be shared equally (on a several but not joint
basis) by Seller and Buyer. The Escrow Agent's fee schedule has been delivered
to Seller and Buyer prior to the execution of this Escrow Agreement. The Seller
shall bear all brokerage commissions, investment transaction fees, and other
charges reasonably incurred in connection with the investment, reinvestment or
sale of any portion of the Escrow Funds and any Interest and Earnings.
9. Indemnification. The Buyer and the Seller hereby agree to jointly and
severally hold the Escrow Agent harmless and to indemnify the Escrow Agent
against any loss, liability, claim, expense or demand arising out of or in
connection with the performance of its obligations in accordance with the
provisions of this Escrow Agreement, except to the extent such loss, liability,
claim, expense or demand arises out of the negligence or willful misconduct of
Escrow Agent. The foregoing indemnity set forth in this paragraph shall
survive the termination of this Escrow Agreement.
10. Resignation, Removal of Escrow Agent. The Escrow Agent may at any
time resign by giving 30 days' written notice of resignation to Seller and
Buyer. Seller and Buyer may at any time remove the Escrow Agent by giving
written notice signed by such parties to the Escrow Agent. If the Escrow Agent
shall resign or be removed, a successor Escrow Agent, which shall be either a
bank, trust company or title company having an office in the County of San
Francisco, California, shall be appointed by written instrument executed and
delivered by both Buyer and Seller to the Escrow Agent and to such successor
Escrow Agent, and upon the
6
<PAGE>
resignation or removal of the predecessor Escrow Agent, the successor Escrow
Agent shall, without any further act, deed or conveyance, become vested with all
the right, title and interest to all property held hereunder, of such
predecessor Escrow Agent; but nevertheless such predecessor Escrow Agent shall,
on the written request of Seller, Buyer or such successor Escrow Agent execute
and deliver to such successor Escrow Agent an instrument transferring to such
successor Escrow Agent all right, title and interest hereunder in and to the
property in the Escrow Fund and all other rights hereunder, of such predecessor
Escrow Agent. If no successor Escrow Agent is appointed at the end of 30 days
after notice of resignation by the Escrow Agent, the Escrow Agent shall pay over
all cash and property held by the Escrow Agent hereunder to an appropriate court
in the County of San Francisco, California, in interpleader proceedings in which
Buyer and Seller shall be joined as parties.
11. Entire Agreement, Etc. This Agreement and other agreements referred
to herein constitute the entire Agreement between the parties with respect to
the subject matter hereof. No change in, addition to, or waiver of the terms
and conditions hereof shall be binding upon any of the parties hereto unless
approved in writing by the other parties hereto or their duly appointed
representatives.
12. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors, assigns and
legal representatives.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which is an original but all of which together shall
constitute one and the same instrument.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written by their officers or
agents thereunto duly authorized.
INFORMATION RESOURCES, INC.
By ________________________
___________________________
Name and Title
ORACLE CORPORATION
By ________________________
___________________________
Name and Title
ESCROW AGENT
By ________________________
___________________________
Name and Title
By ________________________
___________________________
Name and Title
8
<PAGE>
EXHIBIT D
---------
SELLER'S COUNSEL OPINION
1. Each of Seller and each Seller Subsidiary (limited to U.K., France and
Germany for purposes of this agreement) that is transferring Assets to Buyer is
a corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation and has all necessary corporate power and
authority to own and operate its business, to enter into the Purchase Agreement
and each of the agreements attached as an Exhibit thereto and to consummate the
transactions contemplated thereby.
2. Each of the Purchase Agreement and each of the agreements attached as
an Exhibit thereto or delivered pursuant to the terms of the Purchase Agreement
by Seller or any Seller Subsidiary has been duly and validly authorized and is
valid and binding on Seller and each such Seller Subsidiary enforceable in
accordance with its terms (it being understood that no opinion is being provided
with respect to the licensing arrangements or the noncompete or nonsolicitation
provisions).
3. Neither the execution and delivery of the Purchase Agreement and the
other documents delivered by Seller or any Seller Subsidiary pursuant to the
terms of the Purchase Agreement, nor the consummation of the transactions
contemplated thereby, will constitute a default, or an event that would with
notice or lapse of time or both constitute a default, under, or violation or
breach of, Seller's certificate of incorporation or bylaws, any contractual
obligation filed as an Exhibit to Seller's Annual Report on Form 10-K or any
interim report on Form 10-Q, or any Transferred Agreement, any Equipment Lease
or any Real Property Lease listed on Schedule 6.2, or any judgment, order,
statute, rule or regulation of Federal or Illinois law, in each case to which
Seller or any Seller Subsidiary is a party, or by which Seller or any Seller
Subsidiary or Seller's or any Seller Subsidiary's assets may be bound (it being
understood that no opinion is being provided with respect to the Update and
Support Agreement).
4. Except as set forth in the Seller Disclosure Schedule, which references
certain required approvals of Governmental Entities (other than those required
as a result of any contract with any Governmental Entity), all of which have
been obtained, no current approval, order or authorization of, or regulation,
qualification, designation, declaration or filing with any Governmental Entity
(other than those required as a result of any contract with any Governmental
Entity) under Federal or Illinois law on the part of Seller or any Seller
Subsidiary is required in connection with the execution, delivery and
performance of the Purchase Agreement and the other documents delivered by
Seller or any Seller Subsidiary pursuant to the Purchase Agreement and each of
the agreements attached as an Exhibit thereto.
5. The Bulk Transfer provisions of the Uniform Commercial Code as enacted
in Massachusetts or Illinois do not apply to the transactions contemplated by
the Purchase Agreement.
<PAGE>
EXHIBIT E
---------
BUYER'S COUNSEL OPINION
1. Buyer is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation and has all necessary
corporate power and authority to enter into the Purchase Agreement and each of
the agreements attached as an Exhibit thereto and to consummate the transactions
contemplated thereby.
2. Each of the Purchase Agreement and the agreements attached as an
Exhibit thereto has been duly and validly authorized and is valid and binding on
Buyer and enforceable in accordance with its terms (it being understood that no
opinion is being provided with respect to the licensing arrangements or the non-
compete and non-solicitation of employees provisions).
3. Except as set forth in Seller's Disclosure Schedule, which references
certain required approvals of Governmental Entities (other than those required
as a result of any contract with any Governmental Entity), all of which have
been obtained, no current approval, order or authorization of, or regulation,
qualification, designation, declaration or filing with any Governmental Entity
(other than those required as a result of any contract with any Governmental
Entity) under Federal or California law on the part of Buyer is required in
connection with the execution, delivery and performance of the Purchase
Agreement and the agreements attached as an Exhibit thereto.
4. Neither the execution and delivery of the Purchase Agreement and the
agreements attached as an Exhibit thereto, nor the consummation of the
transactions contemplated thereby, will constitute a default, or an event that
would with notice or lapse of time or both constitute a default, under, or
violation of, Buyer's certificate of incorporation, bylaws, any contractual
obligation filed as an Exhibit to Buyer's Annual Report on Form 10-K or any
interim report on Form 10-Q, or any statute, rule or regulation, or any judgment
or order known to such counsel, of Federal or California law to which Buyer is a
party, or by which Buyer or Buyer's assets may be bound.
<PAGE>
INFORMATION RESOURCES, INC. ANNOUNCES $100 MILLION ASSET
SALE AND TECHNOLOGY AGREEMENT WITH ORACLE CORPORATION
CHICAGO, IL, June 12, 1995 -- Information Resources, Inc. (IRIC on NASDAQ)
announced today the signing of a definitive agreement with Oracle Corporation
(ORCL on NASDAQ) which is expected to create significant advances in the fields
of data warehousing, analytics and related decision support software. The
agreement includes: (1) the transfer of ownership to Oracle of IRI Software's
EXPRESS technology for on-line analytical processing (OLAP) along with certain
related application products; (2) the payment by Oracle to IRI of approximately
$100 million; (3) IRI's continued ownership of its state-of-the-art Express-
based software application products for use with electronic point-of-sale
scanner data; and (4) a series of on-going cross-licensing and remarketing
provisions between IRI and Oracle.
The transaction is subject to regulatory approval and is expected to close in
July.
Oracle will acquire the underlying EXPRESS technology and the family of general-
purpose Express-based products. This would include the base DataServer platform
and general application products, including the Express Financial Management
System(FMS), the Express Enterprise Information System(EIS) and the new
ExpressView object-oriented tool for OLAP.
IRI will retain ownership of its DataServer family of sales and marketing
applications for the consumer packaged goods (CPG) industry, including
DataServer Targeter, The Partners, The Category Manager and Promotion Planner,
as well as the Apollo space management system and IRI Logistics software
products. IRI will also continue to provide marketing and primary support
activities for the entire Express product line within the CPG industry. IRI will
be licensed as a Value Added Reseller (VAR) of the Oracle7 database and
developer tools, while Oracle will be licensed to adapt and generalize IRI's
Express-based sales and marketing management applications for the non-CPG
market.
Gian Fulgoni, IRI's chief executive officer said: "This agreement aligns the
world's best analytical processing technology--EXPRESS--with the world's best
relational database and data warehousing technology--that of Oracle. The
resulting information tools for industry and government agencies world-wide will
be truly unparalleled. Moreover, this will allow IRI to build powerful
applications upon a significantly stronger base technology -- a particularly
important benefit for our InfoScan clients."
<PAGE>
"Not only do we retain the application products and consulting services so
crucial to our CPG clients, but we expect that Oracle's expertise, market
stature and commitment to open systems will make the EXPRESS platform, upon
which these applications are built, the worldwide OLAP standard. This should
greatly strengthen our marketplace position both in CPG application software
and, importantly, in syndicated information. We will retain our own extensive
application development capability to keep our information products on the
leading edge of software technology, while leveraging the future enhancements
that Oracle will develop."
Fulgoni added: "We anticipate that the transaction will be non-dilutive to IRI
shareholders and that the $100 million proceeds will be substantially sheltered
by tax loss carry-forwards. Among other uses, the proceeds will allow us to
further develop our international information services. The technology being
transferred to Oracle represented approximately $65 million in sales in 1994,
while the consumer packaged goods business which we retain represented some $50
million in revenue.
"While we had a number of financing alternatives available to us, this
transaction stood out clearly as the best course of action, because it
effectively precluded any need for a dilutive equity investment on the part of a
"strategic partner," while also presenting us with a compelling opportunity to
add dramatic competitive advantages to our core products."
"IRI and Oracle had been working together as part of a standard remarketing
agreement," said Jeffrey Stamen, the president of IRI Software who will head
Oracle's new OLAP Products Division. "However, as this relationship developed,
it became clear that there were significant synergies that could best be
realized through a realignment of ownership and tighter integration of base
technologies. Oracle has achieved widespread acceptance of its database
software products, and is well-positioned to help establish EXPRESS-based
applications in the Information Technology mainstream. Clearly, this will boost
IRI's InfoScan business which has been built using this technology."
Commenting further, Fulgoni said: "Approximately 300 employees within IRI
Software will remain with IRI, focusing their efforts on the consumer packaged
goods industry. We anticipate that more than 600 of the current IRI Software
employees in development, marketing, sales and client service will join Oracle,
ensuring that all of IRI's clients receive continuity of support. We are also
pleased that Jeffrey Stamen will be able to remain on the IRI Board of
Directors.
<PAGE>
"We are very careful in evaluating acquisitions," said David Roux, Oracle's
senior vice president of corporate development. "We view this as a unique
opportunity to extend our lead in the data warehouse market. This market is
fast-growing and the addition of IRI Software's well-managed OLAP business unit
complements Oracle's core product line, including database, tools and
applications."
Oracle Corporation, a $2 billion company with headquarters in Redwood Shores,
CA, is the world's leading supplier of information management software. Oracle
software runs on personal digital assistants, set-top devices, PCs,
workstations, minicomputers, mainframes and massively parallel computers. The
company offers its products along with related consulting, education and support
services, in more than 90 countries around the world.
Information Resources, Inc., a Chicago-based company with 1994 revenues of $376
million, provides a variety of information, software and consulting services
with a particular focus on the Consumer Packaged Goods industry. IRI services
include proprietary databases, advanced analytics and software application
products to assist clients in testing, executing, monitoring, and evaluating
sales, marketing and distribution programs. IRI's services are marketed in 26
countries worldwide.
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Oracle is a registered trademark of Oracle Corporation. Oracle7 and Oracle
Applications are trademarks of Oracle Corporation.
InfoScan is a registered trademark of Information Resources, Inc. IRI Software
and EXPRESS are trademarks of Information Resources, Inc.
For further information, please contact:
Robert J. Bregenzer
Senior Vice President
Information Resources, Inc.
(312) 726-1221
[email protected]
<PAGE>
IMMEDIATELY Robert J. Bregenzer
Information Resources, Inc.
(312) 726-1221
INFORMATION RESOURCES COMPLETES AGREEMENT WITH ORACLE
CHICAGO, IL, July 28, 1995 --- Information Resources, Inc. (IRIC on NASDAQ)
announced today that it has completed the previously-announced sale of a portion
of its software business to Oracle Corporation (ORCL on NASDAQ).
Proceeds from the sale of approximately $100 million will be used to retire
existing bank debt, to pay transaction fees and for general corporate purposes.
Information Resources, Inc., a Chicago-based company, provides a variety of
information, software and consulting services with a particular focus on the
consumer packaged goods industry. IRI's services include proprietary databases,
advanced analytics and software application products to assist clients in
testing, executing, monitoring and evaluating sales, marketing and distribution
programs. The Company markets its services in 26 countries worldwide.
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