Skunkware Acquisition Agreement - Peregrine Systems Inc. and Skunkware Inc.
SKUNKWARE ACQUISITION AGREEMENT
This Acquisition Agreement ("Agreement") dated November 29, 1995, is
entered into effective as of October 31, 1995 by and among Peregrine Systems,
Inc., a Delaware corporation ("Peregrine"), Peregrine/Bridge Transfer
Corporation, a Delaware corporation and a wholly-owned subsidiary of Peregrine
(the "Subsidiary"), and Skunkware, Inc., a Delaware corporation (the "Buyer").
RECITALS
A. Peregrine, located in San Diego, California, has transferred and
assigned to the Subsidiary all assets and related liabilities connected with
Peregrine's database software division (known as "Skunkware") that is presently
operated from the Company's facilities in Texas (the "Business").
B. The parties hereto desire to provide for the purchase by the Buyer of
all of the outstanding shares of capital stock of the Subsidiary and to effect
the other transactions contemplated by this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
SUBSIDIARY STOCK AND ROYALTY PAYMENT
1.1 PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of
this Agreement, Peregrine hereby assigns, transfers, and sells, and the Buyer
hereby purchases, 1,000 shares of common stock, $.001 par value per share, of
the Subsidiary (the "Shares") for an aggregate purchase price of $559,144.46,
payable by check to Peregrine.
1.2 ROYALTY PAYMENTS. In connection with the change of ownership of the
Subsidiary resulting from the sale and purchase of the Shares, the Subsidiary
agrees to pay Peregrine a royalty equal to seven percent (7%) on the gross
license revenues derived from licensed sales beginning November 1, 1995 by the
Subsidiary or any affiliate of all software products, now existing and to be
developed in the future, but exclusive of the software products previously
acquired by Peregrine that are specifically identified in EXHIBIT B attached
hereto and exclusive of the software products licensed for resale or acquired in
the future by the Subsidiary (the software products for which royalties are
payable hereunder referred to herein as the "Software Products"). Such royalty
payments will be payable on a quarterly basis commencing January 1, 1996, will
be limited to $600,000 in any single calender year period, and will be
considered fully paid upon the first to occur of (i) after discounting at the
rate of 9% per annum for each quarterly payment made from the date of payment to
October 31, 1995, accumulated payments valued at $677,000 having been made to
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Peregrine or (ii) November 1, 2001 if all quarterly payments required by this
Section 1.2 have been made.
1.3 ACCESS TO PRODUCT INFORMATION. For as long as royalty payments are
due and owing to Peregrine pursuant to Section 1.2 above, the Subsidiary shall
make available and maintain until the expiration of two years after the end of
the year to which they pertain, complete books, records and accounts regarding
licensed sales by the Subsidiary or any affiliate of the Software Products, in
order to calculate and confirm the Subsidiary's payment obligations hereunder.
Upon reasonable notice to the Subsidiary, and not more than twice a year,
Peregrine or its designated representative shall have the right to examine such
books, records and accounts during the Subsidiary's normal business hours to
verify the Subsidiary's activities (including those activities of its
affiliates) under this Agreement. Where such examination discloses a shortfall
of more than five percent (5%) for the period being audited, the Subsidiary
agrees to pay or reimburse Peregrine for its reasonable auditing expenses upon
written request by Peregrine.
ARTICLE II.
LICENSE OF SOFTWARE
2.1 SOFTWARE LICENSE. Concurrently with the execution of this Agreement,
Peregrine Bridge Subsidiary, Inc., a wholly owned subsidiary of Peregrine, and
the Subsidiary have entered into a Software License Agreement, a copy of which
is attached as EXHIBIT A hereto (the "License Agreement").
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PEREGRINE
Peregrine hereby represents and warrants to Buyer as follows, except as
disclosed in a schedule of exceptions attached as EXHIBIT B hereto (the
"Disclosure Schedule"):
3.1 ORGANIZATION. Each of Peregrine and the Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to own
and lease all of its properties and assets and to carry on its business as it is
now being conducted. Neither of Peregrine nor the Subsidiary is qualified to do
business as a foreign corporation in any state other than California, Texas and
New Hampshire in the case of Peregrine.
3.2 AUTHORITY. Peregrine has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Peregrine and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Peregrine. This
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Agreement has been duly executed and delivered by Peregrine and constitutes a
valid and binding obligation, enforceable against Peregrine in accordance with
its terms. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby will not, result in any
violation of, or default under, any provision of the Certificate of
Incorporation or Bylaws of either Peregrine or the Subsidiary or any agreement,
instrument, judgment or law applicable to Peregrine or the Subsidiary, other
than such violations or defaults which individually or in the aggregate would
not have a material adverse effect on the Subsidiary.
3.3 SUBSIDIARY CAPITAL STRUCTURE. The authorized capital stock of the
Subsidiary consists of 1,000 shares of Common Stock, $.001 par value per share.
At the date of this Agreement, all of the Shares are issued and outstanding and
held by Peregrine. All of the Shares are validly issued, fully paid and
nonassessable, and free of any liens, encumbrances or claims of any kind (other
than restrictions on transfer under applicable securities laws), and not subject
to preemptive or similar rights. There are no rights, commitments or agreements
of any character to which Peregrine or the Subsidiary is a party or by which it
is bound obligating the Subsidiary to issue, deliver or sell additional shares
of the capital stock of the Subsidiary or obligating the Subsidiary to enter
into any such right, commitment or agreement.
3.4 CORPORATE RECORDS. Full and complete copies of the Certificate of
Incorporation, Bylaws and corporate records of the Subsidiary have been made
available to the Buyer.
3.5 LIABILITIES AND OBLIGATIONS. Included as part of the Disclosure
Schedule attached hereto is a schedule of all liabilities and obligations of the
Subsidiary as of the date of this Agreement (the "Liabilities"). The Subsidiary
has no liability or obligation except as set forth on such schedule, and except
for customary obligations related to the conduct of business by the Subsidiary
in corporate form, including the payment of corporate franchise taxes, foreign
qualification fees and the like.
3.6 ASSETS. The Subsidiary has good title to all of the rights,
properties and assets identified in Disclosure Schedule attached hereto (the
"Assets"), free and clear of all liens, claims and encumbrances other than
(a) the lien of current taxes not yet due and payable, and (b) possible liens
and encumbrances which do not in any case materially detract from the value of
the asset subject thereto and which have not arisen otherwise than in the
ordinary course of business. Subject to the foregoing, Peregrine offers no
representation or warranty with respect to the condition, suitability or fitness
for any particular purpose of any of the Assets.
ARTICLE IV.
ADDITIONAL AGREEMENTS
4.1 EMPLOYEES. Effective on the date hereof, the Subsidiary has offered
employment to each of the individuals identified on EXHIBIT C attached hereto
(the "Employees"), and each of the Employees has accepted such employment with
the Subsidiary. In connection with such
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acceptance, each Employee has waived all claims for severance and any other
employment claims relating to each Employee's employment by Peregrine prior
to the effective date of this Agreement.
4.2 RESOURCE SHARING AGREEMENT. Peregrine and the Subsidiary agree to
negotiate in good faith and to enter into an agreement mutually acceptable to
Peregrine and the Subsidiary with respect to the Subsidiary's access to
Peregrine administrative or computer resources on a transitional basis to enable
the Subsidiary to continue operations with minimal disruption resulting from the
transactions contemplated by this Agreement. Any such agreement shall provide
reasonable compensation to Peregrine at commercial rates.
4.3 LEASE ASSIGNMENT. Peregrine and the Subsidiary agree to use their
reasonable best efforts to obtain the approval of INTCO Properties L.P., the
lessor of the premises of the Business located in Austin, Texas, with respect to
the assignment from Peregrine to the Subsidiary of the real property lease for
such premises.
ARTICLE V.
MISCELLANEOUS
5.1 AMENDMENT. This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by the party against which enforcement
of the amendment, modification or supplement is sought.
5.2 ASSIGNMENT. Neither this Agreement nor any right created hereby shall
be assignable by any party hereto.
5.3 NOTICE. Any notice or communication must be in writing and given by
depositing the same in the United States mail, addressed to the party to be
notified, postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person. Such notice shall be deemed
received on the date on which it is hand-delivered or on the third business day
following the date on which it is so mailed. For purposes of notice, the
addresses of the parties shall be:
If to the Buyer or Skunkware, Inc.
to the Subsidiary: c/o John Moores
JMI Services, Inc.
1119 St. Paul Street
Baltimore, Maryland 21202
With a copy to: Mr. Charles E. Noell
JMI Services, Inc.
1119 St. Paul Street
Baltimore, Maryland 21202
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If to Peregrine: Peregrine Systems, Inc.
12670 High Bluff Drive
San Diego, California 92130
Attn: Mr. David A. Farley
With a copy to: Douglas H. Collom, Esq.
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Any party may change its address for notice by written notice given to the
other parties.
5.4 ENTIRE AGREEMENT. This Agreement and the exhibits hereto supersede
all prior agreements and understandings relating to the subject matter hereof.
5.5 COSTS, EXPENSES AND LEGAL FEES. Whether or not the transactions
contemplated hereby are consummated, each party hereto shall bear its own costs
and expenses in connection with the transaction contemplated hereby.
5.6 GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed and enforced in accordance with the
laws of the State of California.
5.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"PEREGRINE" PEREGRINE SYSTEMS, INC.
a Delaware corporation
By: /s/ David A. Farley
-----------------------------------
David A. Farley
Chief Financial Officer
"BUYER" SKUNKWARE, INC.
a Delaware corporation
By: /s/ Charles E. Noell
-----------------------------------
Charles E. Noell
President
"SUBSIDIARY" PEREGRINE/BRIDGE TRANSFER CORPORATION
a Delaware corporation
By: /s/ John Woodall
-----------------------------------
John Woodall
President
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EXHIBIT A
SOFTWARE LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT, dated November 29, 1995 and effective as
of October 31, 1995 (the "Effective Date"), is made and entered into between
Peregrine Bridge Subsidiary, Inc., a Delaware corporation with principal offices
at 12670 High Bluff Drive, San Diego, California 92130 ("Bridge"), and
Peregrine/Bridge Transfer Corporation, a Delaware corporation, with an address
at 6034 West Courtyard, Suite 230, Austin, Texas 78730 ("Transfer Corp.").
IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE PARTIES AGREE
AS FOLLOWS:
SECTION 1
GRANT OF RIGHTS
1.1 LICENSE GRANT. Bridge hereby grants to Transfer Corp. a
non-exclusive, perpetual, nontransferable (except as provided in Section
8.2), worldwide, royalty bearing license to use, modify, prepare and have
prepared derivative works of, perform, and display the software described in
EXHIBIT A attached hereto (the "Software"), in source code and object code
form, to incorporate the Software in or bundle it with Transfer Corp.'s
products and to reproduce and have reproduced, distribute and sublicense
copies of the Software, and any modifications and derivative works thereof
prepared by or on behalf of Transfer Corp., to Transfer Corp.'s customers
either as stand-alone products or for use in conjunction with Transfer
Corp.'s products. Bridge further grants to Transfer Corp. a non-exclusive,
perpetual, worldwide license to use, prepare and have prepared derivative
works of, and reproduce and have reproduced the documentation for, the
Software (the "Documentation") and derivative works thereof prepared by or
for Transfer Corp., and to distribute the Documentation and such derivative
works in connection with Transfer Corp.'s authorized distribution of the
Software.
1.2 SUBLICENSE RIGHTS. Transfer Corp. shall have the right to grant and
authorize sublicenses of the rights granted pursuant to Section 1.1 to its
affiliates and to value added resellers ("VARs") and original equipment
manufacturers ("OEMs") with the prior written approval of Bridge, which shall
not be unreasonably withheld. Transfer Corp. shall enter into written
agreements with all such affiliates, VARs and OEMs who are given access to the
Software or Documentation that ensure that such sublicensees abide by the
restrictions on the Software contained in this Agreement.
1.3 END USER LICENSING. Transfer Corp. and its permitted sublicensees
shall distribute the Software pursuant to written license agreements on
reasonable terms and conditions determined by them in their discretion.
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1.4 COPYRIGHT NOTICES. Transfer Corp. will, and will ensure that its
sublicensees, reproduce Bridge's copyright notice(s) for the Software in the
same manner and location as Transfer Corp. includes copyright notices of other
third party software.
1.5 OWNERSHIP. Transfer Corp. shall own all modifications and derivative
works of the Software made at the expense of Transfer Corp., subject to Bridge's
ownership of the underlying Software. Such derivative works shall be subject to
the royalty obligations of Transfer Corp. and other restrictions on the Software
in this Agreement.
1.6 RIGHT OF FIRST OFFER TO PURCHASE THE SOFTWARE. Transfer Corp. will
have the right of first offer to purchase all of Bridge's right, title and
interest in the Software and Documentation (A) if Bridge decides to offer the
Software for sale or decides to license another party to use and distribute the
Software or (B) if Peregrine Systems, Inc., Bridge's parent corporation,
decides to sell all or substantially all of its assets. In the event that
Bridge decides to offer the Software for sale or license to another entity, or
Peregrine Systems decides to sell all or substantially all of its assets as
described above, Bridge will give written notice thereof to Transfer Corp.
Transfer Corp. may purchase the Software and Documentation following receipt of
such notice and may do so by paying Bridge in cash on or prior to consummation
of either of the transactions described in (A) or (B) above an amount equal to
One Million Ninety Thousand Dollars ($1,090,000) less the sum of all royalty
payments and license fees made hereunder to the date of payment of such purchase
price. Upon any purchase by Transfer Corp. of all Bridge's right, title and
interest in the Software and Documentation, Transfer Corp. agrees to grant, and
does hereby grant, to Bridge's parent company, Peregrine Systems, Inc.
("Peregrine") a non-exclusive, perpetual, irrevocable, worldwide license to use,
prepare and have prepared derivative works of, and reproduce and incorporate in
Peregrine's products existing as of the Effective Date and distribute solely as
part of such products the Software or any portions or derivative works thereof.
SECTION 2
CONSIDERATION, REPORTS AND AUDIT RIGHTS
2.1 ROYALTIES. In consideration for the license granted pursuant to
Section 1, Transfer Corp. agrees to pay royalties to Bridge as follows:
Transfer Corp. shall pay royalties to Bridge in the amount of two percent (2%)
of gross revenues from sales of products containing the Software sold by
Transfer Corp. or received from its sublicensees in the form of license fees or
royalties for sublicensing the Software. Royalties shall be payable to Bridge
quarterly within thirty (30) days of the end of each calendar quarter after the
Effective Date. Transfer Corp. will submit with each royalty payment a written
report of its sales of products containing the Software and its sublicensing
activities showing the basis for the royalty payments made, including a report
with enough information to enable Bridge to determine its royalty obligations to
the former sole stockholder of Bridge Technology, Inc., pursuant to Section 1.4
of the Agreement and Plan of Reorganization dated March 16, 1995. Once total
royalties paid to Bridge hereunder reach One Million Ninety Thousand Dollars
($1,090,000), the license granted herein to Transfer Corp. shall be fully paid
and no more
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royalties will be due to Bridge. In addition to payment of royalties
hereunder, Transfer Corp. shall pay Bridge upon execution of this Agreement
a nonrefundable license fee in the amount of Two Hundred Thousand Dollars
($200,000), which shall be credited against future royalties due to Bridge.
For purposes of this Agreement, "gross revenue from sales of products" shall
mean Transfer Corp.'s gross proceeds actually received from sale of products
containing the Software, or any portion thereof, after deducting product
returns for credit or cash and sales taxes and freight and insurance charges,
if the same are included in the customer invoice as part of the price of such
products.
2.2 TAXES. Transfer Corp. shall be responsible for and shall pay any and
all taxes imposed on the licensing and delivery of the Software and
Documentation to Transfer Corp. This shall include, without limitation, sales,
use, property, license, value added, excise, franchise, foreign withholding, or
income taxes, other than such taxes which are imposed by the United States or
any political subdivision thereof on the net income of Bridge.
2.3 REPORTS AND AUDIT RIGHTS. Transfer Corp. agrees to make and maintain
until the expiration of two (2) years after the end of the year to which they
pertain, complete books, records and accounts regarding Transfer Corp's copying
and distribution and sublicensing activities regarding the Software, in order to
calculate and confirm Transfer Corp.'s royalty obligations hereunder. Upon
reasonable notice of Bridge and no more than once a year, Bridge, or Bridge's
representative, shall have the right to examine such books, records and accounts
during Transfer Corp's normal business hours to verify Transfer Corp.'s copying
and distribution activities under this Agreement and its revenues earned from
sublicensing rights in the Software to third parties, in order to calculate and
confirm Transfer Corp.'s royalty obligations hereunder. If any such examination
discloses a shortfall in payment to Bridge, Transfer Corp. shall pay such
amounts to Bridge within thirty (30) days of such disclosure. Where such
examination discloses a shortfall of more than five percent (5%) for the period
being audited, Transfer Corp. agrees to pay or reimburse Bridge for its
reasonable auditing expenses upon written request by Bridge.
SECTION 3
WARRANTY DISCLAIMER AND INDEMNIFICATION
3.1 DISCLAIMER OF WARRANTY. THE SOFTWARE AND DOCUMENTATION ARE LICENSED
"AS IS". BRIDGE MAKES AND TRANSFER CORP. RECEIVES NO WARRANTIES IN CONNECTION
WITH THE SOFTWARE OR DOCUMENTATION, EXPRESS, IMPLIED, STATUTORY OR IN ANY
COMMUNICATION BETWEEN BRIDGE AND TRANSFER CORP. BRIDGE SPECIFICALLY DISCLAIMS
ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
AGAINST INFRINGEMENT WITH RESPECT TO THE SOFTWARE AND DOCUMENTATION AND THEIR
USE, OPERATION, DISTRIBUTION OR SUPPORT.
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3.2 INFRINGEMENT INDEMNITY.
(a) INDEMNITY. Bridge agrees, at its expense, to defend or, at its
option, to settle, any claim or proceeding brought against Transfer Corp. on
the issue of infringement of any copyright or trade secret of any third party
by the Software or Documentation as used within the scope of this Agreement,
and to indemnify Transfer Corp. against all damages, costs, liability and
expense (including court costs and reasonable fees of attorney and other
professionals) which may be assessed against Transfer Corp. under any such
claim or proceeding. Transfer Corp. shall provide Bridge with (i) prompt
written notice after Transfer Corp. first becomes aware of such claim or
proceeding, (ii) sole control and authority over the defense or settlement
thereof and (iii) proper and full information and assistance to settle and/or
defend any such claim or action. Without limiting the foregoing, if a final
injunction is, or Bridge believes, in its sole discretion, is likely to be,
entered prohibiting the use of the Software or Documentation by Transfer
Corp. as contemplated herein, Bridge may, at its sole option and expense,
either: (A) procure for Transfer Corp. the right to use the infringing
Software or Documentation as provided herein, (B) replace the infringing
Software or Documentation with non-infringing, functionally equivalent
products; or (C) suitably modify the infringing Software or Documentation so
that it is not infringing.
(b) EXCEPTIONS. Notwithstanding the provisions of Section 3.2(a)
above, Bridge assumes no liability for (i) infringement claims arising from
combination of the Software or Documentation with other software or products not
provided by Bridge, but not covering the Software or Documentation standing
alone, (ii) the modification of the Software or Documentation unless such
modification was made by Bridge, or (iii) any claims, demands, or proceedings
arising out of the BMC Dispute (which is more particularly referenced in the
Skunkware Acquisition Agreement dated concurrently herewith among Peregrine
Systems, Transfer Corp. and Skunkware, Inc.).
(c) If exercise by Transfer Corp. of any rights granted to Transfer
Corp. herein is enjoined, or in Transfer Corp.'s opinion is likely to be
enjoined, Bridge at its option and expense may: (i) procure from the person or
persons claiming infringement a license for Transfer Corp. and its licensees and
sublicensees at all levels to continue to exercise all rights granted under this
Agreement with respect to the Software and Documentation, or (ii) modify the
allegedly infringing item to avoid the infringement, without materially
impairing performance of the Software or Documentation.
3.3 TRANSFER CORP. INDEMNITY. Transfer Corp. agrees to indemnify Bridge
and to hold Bridge harmless from all costs, loss, liability and expense
(including court costs and reasonable fees of attorneys and other professionals)
from any claims, demands or proceedings brought against or incurred by Bridge
arising from or in connection with the use, modification, distribution and
support of the Software or Documentation by Transfer Corp. or its sublicensees,
agents or distributors or end-user customers, including Transfer Corp.'s
obligations hereunder in connection with the existing licenses and customer
support agreements for the Software and Documentation, but excluding any claims,
demands and proceedings to the extent covered by Bridge's indemnity obligations
under Section 3.2.
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SECTION 4
CONFIDENTIALITY
4.1 OBLIGATIONS. "Confidential Information" consists of the source code
of the Software. Except as expressly authorized in writing by Bridge or except
as reasonably required by Transfer Corp. to exercise its rights under the
licenses granted in this Agreement (and subject to a confidentiality agreement
with any third party to whom such information is disclosed), Transfer Corp. will
keep confidential and will not directly or indirectly divulge to any person or
entity or use the Confidential Information.
4.2 EXCEPTIONS. The foregoing restrictions will not apply to information
that (i) is known to Transfer Corp. at the time of communication to Transfer
Corp., (ii) has become publicly known through no wrongful act of Transfer Corp.,
(iii) has been rightfully received from a third party authorized to make such
communication without restriction, (iv) has been independently developed by
employees of Transfer Corp. not having access to Confidential Information or
(v) has been approved for release by written authorization of Bridge.
4.3 SOURCE CODE PROTECTION. Transfer Corp. agrees to use the source code
of the Software under carefully controlled conditions in accordance with and for
the purposes of this Agreement and to inform those employees and contractors who
are given access to the source code by Transfer Corp. that such materials are
the confidential and proprietary information of Transfer Corp. and its licensor
and disclosed to the employees as such. Transfer Corp. agrees to limit access
to the source code strictly to those employees and contractors who require
access in order to carry out the purposes of this Agreement. Transfer Corp.
shall be fully responsible for the conduct of all its employees, agents and
sublicensees who may in any way breach this Agreement. Transfer Corp. shall
enter into its standard written nondisclosure and assignment of inventions
agreement with its employees and contractors who are granted access to the
Confidential Information.
4.4 REMEDIES. Any breach of the restrictions contained in this Section 4
is a breach of this Agreement which may cause irreparable harm to Bridge
entitling Bridge to obtain injunctive relief in addition to all legal remedies.
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SECTION 5
TRADEMARKS AND MARKETING
Transfer Corp. will have the right to distribute and market the Software
and Documentation under its own trademarks, service marks and logos or under
the BRIDGE and FASTLOAD trademarks of Bridge (the "Bridge Marks"). Upon
Bridge's request, all representations of the Bridge Marks used or to be used by
Transfer Corp. will be submitted for approval of design, color and other
details.
SECTION 6
SOFTWARE SUPPORT
Transfer Corp. will assume all responsibility for maintenance and support
of the Software and Documentation for itself, its sublicensees and end users.
In addition, Transfer Corp. agrees to take over Bridge's responsibilities under
existing license and/or support agreements with licensees, all of which are
listed in Exhibit A, and perform all obligations thereunder for all existing
licensees of the Software. Bridge hereby assigns and delegates all such
obligations and duties and all related rights to Transfer Corp., and Transfer
Corp. agrees to assume such obligations and duties. Transfer Corp. will notify
such customers in writing of its assumption of such responsibilities promptly
after receiving from Bridge a list of the customers' names and addresses.
Transfer Corp. will have the right to enter into new support agreements in its
own name and on its own behalf with such customers upon expiration of existing
agreements. Bridge shall have no liability under any such new agreements.
SECTION 7
TERM AND TERMINATION
7.1 TERM. Unless earlier terminated this Agreement shall remain in effect
perpetually.
7.2 TERMINATION FOR DEFAULT. This Agreement will terminate automatically
if either party defaults on any of its material obligations hereunder and fails
to remedy such default within one hundred twenty (120) days after written notice
of such default given by the nonbreaching party.
7.3 TERMINATION ON PURCHASE OF THE SOFTWARE. This Agreement will
terminate upon purchase of the Software by Transfer Corp. pursuant to Section
1.6.
7.4 EFFECT OF TERMINATION. Upon termination of this Agreement for
default, the licenses granted herein and any sublicenses of the rights granted
hereunder shall terminate, except that end users may continue to use the
Software under sublicenses granted prior to the date of termination. In
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case of the purchase of the Software by Transfer Corp., the licenses granted
herein to Transfer Corp. shall terminate upon the closing date of such
purchase transaction, but sublicenses granted by Transfer Corp. and Transfer
Corp.'s obligations to continue to support existing licensees of the Software
shall survive. Transfer Corp. shall, at Bridge's option, return to Bridge
or destroy the original and all copies of Confidential Information and
certify in writing as to its destruction, except that in case of purchase of
the Software by Transfer Corp., Transfer Corp. may retain the source code
and Documentation of the Software and such other Confidential Information
related to the Software and Documentation as is necessary to continue to
license and support the Software.
SECTION 8
GENERAL PROVISIONS
8.1 GOVERNING LAW AND JURISDICTION. The rights and obligations of the
parties under this Agreement shall be governed by and construed under the laws
of the State of California without reference to conflict of laws principles.
8.2 ASSIGNMENT. This Agreement may not be transferred or assigned by
Transfer Corp., without the prior written consent of Bridge. Any such attempted
transfer or assignment will be void. Notwithstanding the foregoing, Transfer
Corp. may assign this Agreement and its rights and obligations thereunder to an
entity that succeeds to all or substantially all of its assets or business,
provided that the assignee or transferee agrees in writing to comply with all
the terms and restrictions contained in this Agreement. Subject to the
foregoing provisions, this Agreement will be binding upon and inure to the
benefit of the parties hereto, their successors and assigns.
8.3 EXPORT CONTROL. Any and all obligations of Bridge to provide the
Software and Documentation will be subject in all respects to such United States
laws and regulations s will from time to time govern the license and delivery of
technology and products abroad by persons subject to the jurisdiction of the
United States, including the Export Administration Act of 1979, as amended, any
successor legislation and the Export Administrations issued by the Department of
Commerce, Bureau of Export Administration. Transfer Corp. agrees not to export
the Software or Documentation or any technical data related thereto except in
conformity with such laws and regulations.
8.4 MODIFICATION. No modification to this Agreement, nor any waiver of
any rights, will be effective unless agreed in writing by the party to be
charged, and the waiver of any breach or default will not constitute a waiver of
any other right hereunder or any subsequent breach or default.
8.5 LIMITATION OF LIABILITY. IN NO EVENT WILL BRIDGE BE LIABLE FOR ANY
LOSS OF DATA, LOST PROFITS, COST OF PROCUREMENT OF SUBSTITUTE TECHNOLOGY OR
SERVICES OR FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES
ARISING IN ANY WAY OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY, WHETHER FOR BREACH OF
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CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE. THIS LIMITATION WILL
APPLY EVEN IF BRIDGE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
8.6 NOTICES. Any required notices hereunder will be given in writing at
the address of each party first set forth above, or to such other address as
either party may substitute by written notice to the other in the manner
provided herein, and will be deemed served when delivered or, if delivery is not
accomplished by reason or some fault of the addressee, when tendered.
8.7 SURVIVAL PROVISIONS. The following provisions will survive
termination of this Agreement for any reason: Section 3 (Warranty Disclaimer
and Indemnification), 4 (Confidentiality), 7.5 (Effect of Termination) and 8
(General Provisions), as well as any payment obligations that have accrued prior
to termination.
8.8 ENTIRE AGREEMENT. This Agreement, including Exhibit A, which is
incorporated herein by reference, constitutes the entire and exclusive Agreement
between the parties hereto and supersedes any and all prior proposals,
agreements and representations between them, whether written or oral, with
respect to its subject matter.
8.9 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
8.10 SEVERABILITY. All terms and provisions of this Agreement shall,
if possible, be construed in a manner which makes them valid, but in the event
any term or provision of this Agreement is found by a court of competent
jurisdiction to be illegal or unenforceable, the validity or enforceability of
the remainder of this Agreement shall not be affected so long as neither party
is thereby denied the material economic benefit intended by this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
PEREGRINE BRIDGE SUBSIDIARY, INC. PEREGRINE/BRIDGE TRANSFER CORPORATION
By: /s/ AUTHORIZED SIGNATORY By: /s/ JOHN WOODALL
_________________________ _________________________
Name: _______________________ John Woodall
Title: ____________________ President
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<PAGE>
EXHIBIT A
PRODUCTS TO BE LICENSED TO TRANSFER CORP.
1. Bridge/Fastload for DB2/2 Server Edition
2. Bridge/Fastload for DB2/2 Mainframe Edition
3. Bridge/Fastload for DB2/2/6000 Server Edition
4. Bridge/Fastload for DB2/2/6000 Mainframe Edition
5. Bridge/Fastload for SYBASE Server Edition
6. Bridge/Fastload for SYBASE Mainframe Edition
7. Bridge Monitor for DB2/2/6000
EXISTING BRIDGE SOFTWARE LICENSE AGREEMENTS
ABSA Bank
Denel Properties
African Explosives and Chemical Industries
South African Airways
BMW South Africa
EDS
Computer/Alliance/Information Technologies
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<PAGE>
EXHIBIT B
SKUNKWARE ASSETS AND LIABILITIES
ASSETS
Furniture & Fixtures -- Texas 33,056.26
Accum Depr -- Furn & Fix -- Texas (1,813.00)
Office Equipment -- Texas 12,214.36
Accum Depr -- Off Equip -- Texas (1,379.00)
Data Processing Equip -- Texas 70,083.00
Accum Depr -- DP Equip -- Texas (9,528.00)
Software -- Texas 26,054.32
Accum Depr -- Software -- Texas (2,085.00)
Leasehold Improvements -- Texas 14,621.50
Accum Depr -- Lease Imp -- Texas (1,706.00)
----------
139,518.44
Purchases by Peregrine for Skunkware 189,121.03
Purchased Cap Software 102,252.34
Amortization -- Cap Software (84,544.03)
----------
Net 17,708.31
Deposits
Office lease -- Irving, TX 6,283.50
Office lease -- Austin, TX 1,401.84
Furniture rental -- Irving, TX 857.34
----------
Total deposits 8,542.68
----------
TOTAL ASSETS 354,890.46
----------
LIABILITIES
Accrued Vacation -- TX Employees 32,578.74
Accrued Vacation -- JO 4,260.13
----------
36,838.87
Deferred Maintenance -- Bridge 7,618.00
----------
TOTAL LIABILITIES 44,456.87
----------
NET ASSETS 310,433.59
==========
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<PAGE>
EXHIBIT B
TECHNOLOGICAL SOFTWARE ASSETS
(excluded from the definition of "Software Products"
under Section 1.2 of the Skunkware Acquisition Agreement)
Purchased Computer Programs:
1. IPS Data Base Performance, Space Management and
Integrity Monitor for IMS and CICS, OL/1 and DEDB
Data Bases.
2. IOVF EXTENSION Extending a DEBD without data base reorganization.
3. D.P. AUDITOR Auditing IMS and CICS DL/1 systems.
4. C.A.S.S. Change Accumulation Sub-system. Real-time change
accumulation sub-system.
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<PAGE>
EXHIBIT B
OTHER ASSETS TO BE TRANSFERRED
ASSETS:
Software License Agreements:
ABSA Bank
Denel Properties
African Explosives and Chemical Industries
South African Airways
BMW South Africa
EDS
Computer Alliance/Information Technologies
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<PAGE>
EXHIBIT C
PEREGRINE/BRIDGE TRANSFER CORPORATION
EMPLOYEES
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<PAGE>
PEREGRINE/BRIDGE TRANSFER CORPORATION
EMPLOYEES
Jack Olson
Wayne Fisher
Tom Harper
Rickey Chevrie
Kevin Cogley
Dempsey Darrow
Tom Hintz
Craig Knutson
Molly Markley
Tom McMillan
Tom Price
Gerald Tavolino
Craig Taylor
Robert Young
Jane McMaster
Dana Ponder-Henson
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